Developing a greener and more sustainable supply chain has been on the agenda of CEOs for many years and in fact just looking back through my archive of blogs that I have written over the years, the first green related blog that I wrote was in 2007. This was at a time when companies were being made to think more carefully about how they design their supply chains to help reduce carbon emissions.
Back then, our company issued supply chain sustainability assessments to demonstrate how much greener a business would become by automating their manual B2B transactions by sending them electronically across our global B2B network, Trading Grid. Even though sustainability has pretty much become engrained within every CEO’s corporate agenda now, I just thought it would be useful to remind you of the benefits of B2B automation.
Using a very smart website developed by the Environmental Paper Network, a coalition of over 100 non-profit organizations working towards the sustainable production and consumption of pulp and paper, it is possible to calculate the environmental savings that can be made by removing paper-based transactions from a business. Each transaction would use the same size piece of paper, i.e. an invoice, purchase order etc and each electronic transaction equates to 2 pieces of paper. Rather than having an exhaustive maths lesson on how I derived the figures below, I have merely highlighted the key figures for each of the two scenarios, but I can provide evidence of my calculations if you need it.
Scenario 1 – a manufacturing company currently processes 1 million invoices per year across their European based supply chain. Using the criteria above, this then equates to a total paper weight of 9 metric tons or the equivalent of 228 trees. Now by automating these 1 million paper-based transactions via a B2B network such as Trading Grid, it will provide the following reduction in the company’s impact on the environment
Reduction in Net Energy Used
The Paper Calculator includes an energy credit for energy that is created by burning paper – or the methane that decomposing paper creates – at the end of its life. The Net Energy takes the total amount of energy required to make the paper over its life cycle and subtracts this energy credit. If most of the energy used to make the paper is purchased, then the energy credit might make the Net Energy lower than the Purchased Energy. The average U.S. household uses 91 million BTUs of energy in a year.
– Scenario 1 saves 375 million BTU’s, the equivalent of about 4 homes/year
Reduction in Greenhouse Gas Emissions
Greenhouse gases, including carbon dioxide (CO2) from burning fossil fuels and methane from paper decomposing in landfills, contribute to climate change by trapping energy from the sun in the earth’s atmosphere. The unit of measure is CO2 equivalents. The average car emits 11,013 pounds of CO2 in a year.
– Scenario 1 saves 55,877 pounds CO2 equiv., the equivalent of about 5 cars/year
Reduction in Water Consumption
Water Consumption measures the amount of process and cooling water that is consumed or degraded throughout the life cycle of the paper product. The largest components of water consumption come from the production of purchased electricity, and the use of process and cooling water at pulp and paper mills. Water volume indicates both the amount of fresh water needed and the potential impact of discharges on the receiving waters. 1 Olympic-sized swimming pool holds 660,430 gallons.
– Scenario 1 saves 186,117 gallons, the equivalent of < 1 swimming pool
Reduction in Solid Waste
Includes sludge and other wastes generated during pulp and paper manufacturing and used paper disposed of in landfills and incinerators. 1 fully loaded garbage truck weighs an average 28,000 pounds (based on a rear-loader residential garbage truck)
– Scenario 1 saves 22,215 pounds, the equivalent of < 1 garbage truck/year
Scenario 2 – OpenText Trading Grid, the world’s largest cloud based B2B network, connects over 600,000 businesses and processes over 16 billion transactions per year. So, assuming we are removing the equivalent number of pieces of paper from a supply chain this would equate to a total paper weight saving of 145,151 metric tons or the equivalent of 3,647,010 trees per year. I think you will agree these numbers are quite astounding, but let’s look at the environmental impact for the equivalent paper-based transactions:
• Reduction in Net Energy Used– Scenario 2 saves 6,008,526 million BTU’s, the equivalent of about 66,022 homes/year
• Reduction in Greenhouse Gas Emissions– Scenario 2 saves 894,034,654 pounds CO2 equiv., the equivalent of about 81,175 cars/year
• Reduction in Water Consumption– Scenario 2 saves 2,997,875,351 gallons, the equivalent of about 4,511 swimming pools
• Reduction in Solid Waste– Scenario 2 saves 355,449,950 pounds, the equivalent of about 12,701 >garbage trucks/year
So, as you can see, the numbers speak for themselves, automating supply-chain transactions can help your business to develop a greener and more sustainable supply chain. In my next blog I will discuss how moving from software to a cloud based B2B environment can help to develop greener supply chains.