@ Supply Chain Management


Building a resilient Supply Chain

Building a resilient supply chain is a report (freely available) published by Marsh (MMC) which focuses on supply chain risks as assessed in a free wheeling interview with a panel of six experts.

Karen Avery : National practice leader for Marsh

Reducing U.S. Greenhouse Gas Emissions: How much at what cost?

Reducing U.S. Greenhouse Gas Emissions: How much at what cost? is a report put together by the consulting firm McKinsey & Co. (from December 2007) that takes up this issue. The full report can be accessed here. The central conclusion of this report states:

The United States could reduce greenhouse gas emissions in 2030 by 3.0 to 4.5 gigatons of CO2 using tested approaches and high-potential emerging technologies. These reductions would involve pursuing a wide array of abatement options available at marginal costs less than $50 per ton, with the average net cost to the economy being far lower if the nation can capture sizable gains from energy efficiency. Achieving these reductions at the lowest cost to the economy, however, will require strong, coordinated, economy-wide action that begins in the near future.

Strong, coordinated, economy-wide action that begins in the near future?


Double Ouch!!

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Supply Chain : Pros to know

SDCExec.com has published its annual list of Pros to know in its article: 2008 Supply & Demand Chain Executive Pros to Know. An exhaustive list to be sure and it should point you towards personalities as well as up and rising firms that they lead and/or represent.

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Supply Management Talent Crunch

This story is not new but like all truths, it bears repetition – again and again and again…

I came across this story via Supply Excellence, which tagged a story in WSJ (registration required) and Aberdeen (free report available until April 28, 2008 with registration),

The professors from the business and management schools of Florida State and North Carolina State University note that managing the supply chain in the face of globalization, offshoring, and an ailing economy

Warming up to Sustainability

After a month of being deluged at work, I could do with a bit of warming – Will this Winter ever pass? I could do with a little bit of Global Warming right now. I’d settle for Local Warming too. Ahhhh Spring – How sweet thy sound? The title of this post is a little misleading though – I’m not warming up to Sustainability of any sort. I have no idea what it is that I’m supposed to be sustaining to begin with other than some mythical notion of some state of the world prior to the industrial age or the medieval age. Or the dark ages. Or …

For example, I, for one, would contend that it would be impossible to run out of oil as long as it is sold on the open market. Cheap oil? Sure, we could run out of cheap oil – cheap as we knew it once (there is no $10 a barrel oil available anywhere, no $40 a barrel and no $65 a barrel oil to be had). Perhaps one day in the near future, we might have $200 a barrel oil – we would still be pumping gas into our cars, I certainly don’t think that it would be half of what we do right now (assuming nothing else has changed). We’d still be driving. There is one switch that Americans hold when it comes to the price of oil – as one of the major consumers of oil. Threaten to go on a diet, get moody and pessimistic about the world at large, oil speculators fearing a top and the price of oil might just crash.

Here’s something to read from just ten years ago about how oil was viewed: Living with $10 oil

On the other hand it’s equally hard to see a sustained bounce back to $20 a barrel levels. OPEC only accounts for 40%of world production. Total stocks are high. And demand is barely growing.

Also, the temptation among cash-strapped producers to break ranks and start pumping more oil remains strong. It’s worth recalling that OPEC’s 1998 package of cuts achieved only 65% compliance.

So, being prudent, our financial planning continues to be based on the challenging assumption that Brent-based crude oil prices will average around $11 a barrel.

Today’s price of oil is about 10 times what it was less than 10 years ago. Dr. Smith contended then that demand for oil was barely moving then – demand for oil is booming today. Other than the threat of terrorism and political instability in oil producing countries, what accounts for a ten fold increase in oil prices in the face of burgeoning demand? Are we getting to Peak Oil? I think we’re about to find out soon enough. Why? As Dr. Smith points out in the article above, oil companies really didn’t want to make any investments in oil production when the price of oil was low and the profit margins to be had were slim. That is not the case right now – we’re at the threshold of determining the truth about Peak Oil.

On the other hand, did you notice that we’re not driving that much lesser either in the face of a ten fold increase in the price of oil?

Keeping with the notion of Sustainability from the previous threads – Sustainability – Solutions in search of problems and A brief background on sustainability issues, my intention was to delve a little deeper into the issue of Global Warming. I have no idea whether Global Warming is occurring or not – for the time being, let me take the word of scientists that it is happening and furthermore that human beings are causing it as well. So I pose this question to you – If you buy into the notion of global warming, what is the one thing that you should see happening (or will see happening in the years to come)?

Read the rest of this entry »

Sustainability – Solutions in search of problems

In the last post of this series – A brief background on Sustainability Issues, I tried to outline the various streams of thought flowing about the issue of Sustainability, specifically through the notion of Sustainable Development . I also touched upon a few metrics/indices surrounding sustainable development and linked to a number of reports from a select group of multinational firms as well.

However, it occurs to me that sustainable development is a response to some problem – what, in very broad strokes, problem (or problems)? Much of the discussion around sustainable development starts off without a statement of the problem and with the ready assumption that there is a problem to be solved, and therefore a series of policy visions, suitable solutions and metrics/indices are proposed. Take the following pithy summary (I’m using the summary only to broadly outline the purpose of sustainability) from the Brundtland report:

"Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs."

which is a great idea until one realizes that we don’t know what the needs of the future generations are – not in any specific sense anyway. Perhaps, we can hazard a guess about some vital ingredients of life no matter what form, where and when. Suppose we were to cut down drastically on the use of crude oil so that future generations have access to it – What use will crude oil be to a future generation that have technologies that do not even use crude oil in any form to generate power or harness mobility needs? The crucial (unstated) assumption in the above summary is technological stasis which is an idea that shouldn’t be sustained. In fact, it points to a deeper issue with the very language of sustainable development – that most proponents of sustainability miss out on the fundamental nature of technology (and its abstraction which is human creativity).

Imagine the following scenario about 150 years in the past – A B

A brief background on Sustainability issues

I think that it is a necessary first step to outline the scope of what Sustainability entails. Before I begin this first rough cut exploration, let me reiterate the context of this post i.e. the first blog carnival of 2008 hosted at Sourcing Innovation by Michael Lamoureux. To that end, I reiterate my solicitation from you my readers toward contributions, comments, disagreement (mild or vehement), skepticism et al.

So, what is Sustainability? In some sense, Sustainability is a superset of a Sustainable Development, which is the most common route of foundational definition that I have come across so far. Even so, different individuals and committees (on account of their professions, persuasions etc) define it in different ways but here’s a first stab at it:

"Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs."

This definition of Sustainable development owes its elucidation to the Brundtland Report (Brundtland Commission, formally the World Commission on Environment and Development (WCED), known by the name of its Chair Gro Harlem Brundtland, convened by the United Nations in 1983).

Here is a graphic that succinctly describes the UN’s hopes concerning sustainable development. I used the word "hopes" quite deliberately because that is the reality of it.

UN’s view of Sustainable Development - Licensed under Creative Commons License (Original - 

But do take heed,

Sustainable Development is an ambiguous concept, as a wide array of views fall under its umbrella. The concept has included notions of weak sustainability, strong sustainability and deep ecology. Different conceptions also reveal a strong tension between ecocentrism and anthropocentrism. Thus, the concept remains weakly defined and contains a large amount of debate as to its precise definition.
During the last ten years, different organizations have tried to measure and monitor the proximity to what they consider sustainability by implementing what has been called sustainability metric and indices.

Nevertheless, such a concept – Sustainable Development would be a cause dead on arrival if there were no metrics/indices to track where the world at large is with respect to it. And exceeding one’s expectation, there are a host of them – some of them being (summarized from Sustainability metric and indices):

1. The "Daly Rules" – suggested are the following three operational rules (or more like guidelines)

    1. Renewable resources such as fish, soil, and groundwater must be used no faster than the rate at which they regenerate.
    2. Nonrenewable resources such as minerals and fossil fuels must be used no faster than renewable substitutes for them can be put into place.
    3. Pollution and wastes must be emitted no faster than natural systems can absorb them, recycle them, or render them harmless.

2. The Natural Step/System Conditions of Sustainability – Within this framework, In a sustainable society, nature is not subject to systematically increasing:

    1. concentrations of substances extracted from the Earth’s crust;
    2. concentrations of substances produced by society;
    3. degradation by physical means and, in that society. . .
    4. people are not subject to conditions that systematically undermine their capacity to meet their needs.

3. Life Cycle Assessment – The resultant is a composite measure of sustainability.

It analyses the environmental performance of products and services through all phases of their life cycle: extracting and processing raw materials; manufacturing, transportation and distribution; use, re-use,maintenance; recycling, and final disposal.

4. Energy, Emergy and Sustainability Index (SI) – Emergy (Embodied energy) is defined as,

the quantity of energy required to manufacture, and supply to the point of use, a product, material or service.

Emergy Yield Ratio is Emergy of an output divided by Emergy of all inputs and Environmental Loading Ratio is purchased and nonrenewable indigenous emergy to free (or renewable) environmental emergy.

Sustainability Index (SI)

5. The World Business Council for Sustainable Development approach – Lastly, since everyone has so far been talking about how to let businesses run, how long would it be before businesses themselves got into the act.

    1. Throughout the economy there are widespread untapped potential resource productivity improvements to be made to be coupled with effective design.
    2. There has been a significant shift in understanding over the last three decades of what creates lasting competitiveness of a firm.
    3. There is now a critical mass of enabling technologies in eco-innovations that make integrated approaches to sustainable development economically viable.
    4. Since many of the costs of what economists call

About me

I am Chris Jacob Abraham and I live, work and blog from Newburgh, New York. I work for IBM as a Senior consultant in the Fab PowerOps group that works around the issue of detailed Fab (semiconductor fab) level scheduling on a continual basis. My erstwhile company ILOG was recently acquired by IBM and I've joined the Industry Solutions Group there.

@ SCM Clustrmap

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