Information Technology Unlocks the “Green” Potential In Supply Chains

Save money and save the planet at the same time? It sounds like an impossible task, but new innovations in information technology (IT) infrastructure and applications are enabling enterprises to cut energy costs and achieve competitive advantages while reducing their carbon footprints and conserving natural resources.

Eco-friendly IT solutions are helping major enterprises balance environmental responsibility with profitability and growth. Retailers and consumer packaged goods (CPG) companies are among those with much to gain from “going green.” In particular, the way these businesses get their products to store shelves can have a tremendous impact on their environmental and financial well-being.

Changes In Supply Chains Can Enable Green Operations

Consumers are realizing the need to make the most of their resources. Every gallon of gasoline and every kilowatt of electricity counts. And the way people perform the simplest of chores can make a difference in their total consumption.

Environment-conscience consumers would never waste water and electricity by running a half-full dishwasher. They would never waste valuable gasoline by making multiple trips to the grocery store for small purchases when they could make a single trip and stock up on all of their needs.

So, why would a company that stocks those grocery store shelves distribute its goods from trucks that are only half full? Why would a manufacturer of those dishwashers buy and transport parts in small orders as opposed to bulk shipments?

Making the most of your resources means putting efficiency first in everything you do. To that end, a thorough examination of the extended end-to-end supply chain can reveal multiple opportunities for retail and CPG companies to uncover potential savings while implementing green business strategies.

Rethinking Inventory and Transportation Can Cut Costs and Carbon

Consider the fact that a relatively small number of items account for the majority of sales at most major stores. The average large volume U.S. grocery store carries more than 50,000 items, but it will sell only about 12,000 different items on a typical day.

Most major retailers established their distribution strategy, facilities and inventory systems at a time when the cost of diesel fuel for their trucks was relatively cheap. Because most stores try to avoid holding large volumes of inventory over an extended period, they tend to prefer smaller shipments at more frequent intervals. However, with skyrocketing oil prices and punishing prices at the gas pump, those outdated practices must change.

With retail systems capable of providing accurate point-of-sale data and complete visibility throughout the supply chain, retail chains could reap substantial savings and significantly reduce the environmental impact of their trucking fleets by actually increasing their inventory of quick-selling items and maximizing their transportation assets. Better and broader operational data and richer analysis can enable retailers to plan fully loaded trucks to deliver the best mix of items while minimizing out-of-stock incidents and maximizing supplies of top-selling products.

Technology Can Enable a Green Transformation

Quality data and timely information are keys to unlocking the green potential within business processes. Fortunately, a host of IT products and services are available to help enterprises wring the waste from their supply chains and establish more eco-friendly business models.

For example, elaborate data warehouse applications with enhanced forecasting abilities can assist retailers in making critical inventory decisions based on store-by-store information. That means every store's stock is determined through a point-of-sale analysis for each location as opposed to assumptions based on averages across the entire retail chain.

With more than 45 years of IT outsourcing experience, EDS, an HP company, has the proven methodologies and expertise to assist enterprises in finding the right combination of applications, infrastructure and business processes to support growth and productivity while promoting earth-friendly initiatives.