Profit Point announced that it has successfully completed a distribution network optimization project with the hydrogen peroxide business team at Arkema Inc. Arkema is a global chemical company and France’s leading chemicals producer. Profit Point is a leading supply chain optimization company, delivering solutions to global manufacturers to optimize their supply chain networks, distribution plans and S&OP processes using a combination of targeted software and consulting services.
In the very competitive hydrogen peroxide market, Arkema’s objective is to continuously improve product availability and customer service across North America, while simultaneously managing costs throughout the supply chain. Profit Point examined Arkema’s distribution options from manufacturing to the end customer to develop supply chain options to provide the right level of customer service at the best total delivered cost.
“The team at Profit Point developed an understanding of our business and they analyzed complicated data and made it easy to understand,” noted Ed Gertz, Arkema’s Director of Supply Chain for hydrogen peroxide. “They made it easier for us to see how different distribution infrastructure options impacted our cost and our service, which gave us the confidence we needed to make significant changes in our terminal network.”
The solution combined Profit Point’s supply chain design software, Profit NetworkTM, and the consulting team’s supply chain optimization expertise. By leveraging existing enterprise data, Arkema was able to develop an actionable infrastructure plan that meets the business’ strategic objectives.
“This is a classic example of the type of benefits large manufacturers can see when they bring together the right stakeholders and the right process, ” added Ted Schaefer, Director of Logistics and Supply Chain Services at Profit Point. “It reminds me a lot of what my Italian grandmother used to say about cooking, ‘If you choose the best ingredients, you will like the result.”
About Profit Point
Profit Point Inc. was founded in 1995 and is now a global leader in supply chain optimization. The company’s team of supply chain consultants includes industry leaders in the fields infrastructure planning, green operations, supply chain planning, distribution, scheduling, transportation, warehouse improvement and business optimization. Profit Point has combined software and service solutions that have been successfully applied across a breadth of industries and by a diverse set of companies, including Dow Chemical, Coca-Cola, Lifetech, Logitech and Toyota.
A global chemical company and France’s leading chemicals producer, Arkema is building the future of the chemical industry every day. Deploying a responsible, innovation-based approach, we produce state-of-the-art specialty chemicals that provide customers with practical solutions to such challenges as climate change, access to drinking water, the future of energy, fossil fuel preservation and the need for lighter materials. With operations in more than 40 countries, some 14,000 employees and 10 research centers, Arkema generates annual revenue of $8.3 billion, and holds leadership positions in all its markets with a portfolio of internationally recognized brands.
What kind of risks are you prepared for?
As a supply chain manager, you have profound control over the operations of your business. However, it is not without limits, and mother nature can quickly and capriciously halt even the smoothest operation. Or other man-made events can seemingly conspire to prevent goods from crossing borders, or navigating traffic, or being produced and delivered on time. How can you predict where and when your supply chain may fall prey to unforeseen black swan events?
Prediction is very difficult, especially about the future. (Niels Bohr, Danish physicist) But there are likely some future risks that your stockholders are thinking about that you might be expected to have prepare for. The post event second guessing phrase: “You should have known, or at least prepared for” has been heard in many corporate supply chain offices after recent supply chain breaking cataclysmic events: tsunami, hurricane, earthquake, you name it.
- What will happen to your supply chain if oil reaches $300 / barrel? What lanes will no longer be affordable, or even available?
- What will happen if sea level rises, causing ports to close, highways to flood, and rails lines to disappear?
- What will happen if the cost of a ton of CO2 is set to $50?
- What will happen if another conflict arises in the oil countries?
- What will happen if China’s economy shrinks substantially?
- What will happen if China’s economy really takes off?
- What will happen if China’s economy really slows down?
- What will happen if the US faces a serious drought in the mid-west?
What will happen if… you name it, it is lurking out there to have a potentially dramatic effect on your supply chain.
As a supply chain manager, your shareholders expect you to look at the effect on supply, transportation, manufacturing, and demand. The effect may be felt in scarcity, cost, availability, capacity, government controls, taxes, customer preference, and other factors.
Do you have a model of your supply chain that would allow you to run the what-if scenario to see how your supply chain and your business would fare in the face of these black swan events?
Driving toward a robust and fault tolerant supply chain should be the goal of every supply chain manager. And a way to achieve that is to design it with disruption in mind. Understanding the role (and the cost) of dual sourcing critical components, diversified manufacturing and warehousing, risk mitigating transportation contracting, on-shoring/off-shoring some manufacturing, environmental impacts, and customer preferences, just to begin the list, can be an overwhelming task. Yet, there are tools and processes that can help with this, and if you want to be able to face the difficulties of the future with confidence, do not ignore them. The tools are about supply chain planning and modelling. The processes are about risk management, and robust supply chain design. Profit Point helps companies all over the world address these and other issues to make some of the of the best running supply chains anywhere.
The future is coming, are you ready for it?
DC Velocity featured an article entitled A Network Design is Never Done. The article, which included an interview with Profit Point’s Alan Kosansky, touches upon on the trend of large manufacturers to move from designing their supply chain networks once to continuously improving the design to meet customer demand and supplier mix, among other things.
You can read the complete article here.
July 30th, 2012 12:56 pm Category: Enterprise Resource Planning, Global Supply Chain, Jim Piermarini, Network Design, Operations Research, Optimization, Profit Network, Profit Vehicle Planner, Profit Vehicle Router, Risk Management, Supply Chain Improvement, by: Jim Piermarini
There is nothing like a bit of vacation to help with perspective.
Recently, I read about the San Diego Big Boom fireworks fiasco — when an elaborate Fourth of July fireworks display was spectacularly ruined after all 7,000 fireworks went off at the same time. If you haven’t seen the video, here is a link.
And I was reading an article in the local newspaper on the recent news on the Higgs: Getting from Cape Cod to Higgs boson read it here:
And I was thinking about how hard it is to know something, really know it. The data collected at CERN when they smash those particle streams together must look a lot like the first video. A ton of activity, all in a short time, and a bunch of noise in that Big Data. Imagine having to look at the fireworks video and then determine the list of all the individual type of fireworks that went up… I guess that is similar to what the folks at CERN have to do to find the single firecracker that is the Higgs boson.
Sometimes we are faced with seemingly overwhelming tasks of finding that needle in the haystack.
In our business, we help companies look among potentially many millions of choices to find the best way of operating their supply chains. Yeah, I know it is not the Higgs boson. But it could be a way to recover from a devastating earthquake and tsunami that disrupted operations literally overnight. It could be the way to restore profitability to an ailing business in a contracting economy. It could be a way to reduce the greenhouse footprint by eliminating unneeded transportation, or decrease water consumption in dry areas. It could be a way to expand in the best way to use assets and capital in the long term. It could be to reduce waste by stocking what the customers want.
These ways of running the business, of running the supply chain, that make a real difference, are made possible by the vast amounts of data being collected by ERP systems all over the world, every day. Big Data like the ‘point-of’sale’ info on each unit that is sold from a retailer. Big Data like actual transportation costs to move a unit from LA to Boston, or from Shanghai to LA. Big Data like the price elasticity of a product, or the number of products that can be in a certain warehouse. These data and many many other data points are being collected every day and can be utilized to improve the operation of the business in nearly real time. In our experience, much of the potential of this vast collection of data is going to waste. The vastness of the Big Data can itself appear to be overwhelming. Too many fireworks at once.
Having the data is only part of the solution. Businesses are adopting systems to organize that data and make it available to their business users in data warehouses and other data cubes. Business users are learning to devour that data with great visualization tools like Tableau and pivot tables. They are looking for the trends or anomalies that will allow them to learn something about their operations. And some businesses adopting more specialized tools to leverage that data into an automated way of looking deeper into the data. Optimization tools like our Profit Network, Profit Planner, or Profit Scheduler can process vast quantities of data to find the best way of configuring or operating the supply chain.
So, while it is not the Higgs boson that we help people find, businesses do rely on us to make sense of a big bang of data and hopefully see some fireworks along the way.
Upgraded Vehicle Route Planner Software Improves Decisions in Distribution Planning, Fleet Sizing, Driver Productivity and Transportation Cost Reduction
Profit Point announces the introduction of Profit Vehicle Planner™ 3.1, a major upgrade to our distribution analysis and design software. Profit Vehicle Planner is designed for Strategic Logistic and Transportation Managers that have large fleets with multiple daily delivery stops and changing logistics processes. The software update includes a combination of new features and technical enhancements which combine to support richer scenario modeling for larger large fleets with multiple daily delivery stops and changing logistics processes.
Designed to be highly accessible and customizable, Profit Vehicle Planner (PVP™) uses standard Microsoft business tools for calculation and display of information, including Excel, Access and MapPoint. The software automatically creates and designs the optimal sales/distribution territories. It does this by dividing customers into territories and days of service, with each territory representing the volume delivered by one delivery vehicle and one driver over the course of the planning horizon. The objective of the proprietary heuristic algorithm used in Profit Vehicle Planner is to assign customers to territories that will minimize the number of trucks required to serve the customer volumes while delivering within the various common and business-specific constraints, including customer frequency of service, hours available per day, volume available per truck, unique equipment requirements and virtually any other custom constraint required.
“With 12 years in the field, Profit Vehicle Planner has been put to the test against some of the world’s largest supply chain distribution problems,” noted Jim Piermarini, Profit Point’s Chief Technology Officer. “Transportation best practices have expanded over time, so decision makers are looking for more comprehensive strategic logistics and transportation modeling solutions.”
With the new release, PVP’s expanded features include extensive customization of the software to tailor the territory planning solution to be cost and time effective to meet your unique and specific distribution requirements and the ability to use imported address data to automatically geocode customers for whom lat/long data is missing.
For companies that perceive distribution as mission critical, users have the option to integrate PVP deeply into their supply chain systems to import and export data in to their ERP system. Companies that seek the most cost-effective solution have the ability to import virtually any relevant data from an Excel template that includes the following:
- Customer data such as address, location, frequency of service, volume per stop, time required per stop, other data as needed
- Truck data such as size, days of the week that it is available, order in which it is to be scheduled, hours available each day, special equipment, other data as needed
- Warehouse and district data such as location and characteristics of associated trucks and drivers
- Time related data such as start date of planning horizon and number of weeks in the planning horizon.
- Product specific data such as unit of measure of the product being delivered
- Any other data required to accurately model unique constraints
Once optimized, users have the ability to review and assess the characteristics of the territories that are created using tables and maps to provide an enhanced visual experience. And to ensure the optimal distribution plan, users can manually move customers from one territory to another or from one service day pattern to another (e.g. from Monday-Thursday to Tuesday-Friday), if desired.
June 22nd, 2012 3:46 pm Category: Distribution, Enterprise Resource Planning, Global Supply Chain, Green Network, Green Optimization, Network Design, Optimization, Supply Chain Agility, Supply Chain Improvement, Supply Chain Planning, Transportation, Vehicle Routing, by: Editor
Supply Chain optimization is a topic of increasing interest today, whether the main intention is to maximize the efficiency of one’s global supply chain system or to pro-actively make it greener. There are many changes that can be made to improve the performance of a supply chain, ranging from where materials are purchased, the types of materials purchased, how those materials get to you, how your products are distributed, and many more. An additional question on the mind of some decision makers is: Can I minimize my environmental footprint and improve my profits at the same time?
Many changes you make to your supply chain could either intentionally – or unintentionally – make it greener, so effectively reducing the carbon footprint of the product or material at the point that it arrives at your receiving bay. Under the right circumstances, if the reduced carbon footprint results from a conscious decision you make and involves a change from ‘the way things were’, then there might be an opportunity to capture some financial value from that decision in the form of Greenhouse Gas (GHG) emission credits, even when these emission reductions occur at a facility other than yours (Scope 3 emissions under the Greenhouse Gas Protocol).
As an example, let’s consider the possible implications of changes in the transportation component of the footprint and decisions that might allow for the creation of additional value in the form of GHG emission credits. In simple terms, credits might be earned if overall fuel usage is reduced by making changes to the trucks or their operation, such as the type of lubricant, wheel width, idling elimination (where it is not mandated), minimizing empty trips, switching from trucks to rail or water transport, using only trucks with pre-defined retrofit packages, using only hybrid trucks for local transportation and insisting on ocean going vessels having certain fuel economy improvement strategies installed. These are just some of the ways fuel can be saved. If, as a result of your decisions or choices made, the total amount of fuel and emissions is reduced, then valuable emission credits could be earned. It is worth noting that capturing those credits is dependent on following mandated requirements and gaining approval for the project.)
If your corporate environmental strategy requires that you retain ownership of these reductions, then you keep the credits created and the value of those credits should be placed on the balance sheet as a Capital Asset. Alternatively, if you are able, the credits can be sold on the open market and the cash realized and placed on the balance sheet. Either way, shareholders will not only get the ‘feel good’ benefit of the environmental improvement, but also the financial benefit from improvement to the balance sheet. If preferred, the credits can be sold to directly offset the purchase price of the material involved, effectively reducing that price and so increasing the margin on the sales price of the end-product and again improving the bottom line. If capital investment is required as part of the supply chain optimization, the credit value can also be a way to shorten the payback period and improve the ROI, or to allow an optimization to occur
So, when you consider improving your environmental impact or optimizing your supply chain, consider the possibility that there might be additional value to unlock if you include both environmental and traditional business variables in your supply chain improvement efforts.
Written by: Peter Chant, President, The FReMCo Corporation Inc.
“Network structure, which determines 75%-80% of total supply chain costs, offers the biggest opportunity to reduce those expenditures.”
A recent study of supply chain activities indicated that as much as 80% of total supply chain costs are determined by the network in place and not by the decisions the supply chain team makes on a daily basis within that network. The cause can be attributed to infrastructure, which significantly determines the types of decisions and degrees of freedom that are available to supply chain decision makers. As a result, many companies have literally stumbled into pitfalls associated with warehouses, distribution centers and sources of supply (manufacturing, supplier locations, etc.) because they lacked thoughtful design.
There is help available for vigilant executives in the form of 10 guidelines to implement necessary cost saving measures. All are applicable whether the company is pursuing a growth strategy or struggling with underutilized assets in a challenging economy. Keeping these guidelines at the forefront of consideration can create opportunities to ease pressures on margin and the bottom line.
1. Network structure, which determines 75%- 80% of total supply chain costs, offers the biggest opportunity to reduce those expenditures.
That’s because when manufacturing and distribution assets are in place, and major transportation contracts are negotiated, actions to improve operations and efficiencies in the supply chain are limited. The time to discover the biggest supply chain improvement opportunities is during assessment or reassessment of the infrastructure in place; e.g. manufacturing capability, raw material sourcing, major transportation lanes, distribution facilities and delivery to customers.
2. Optimize supply chain infrastructure to realize maximal cost savings.
A company’s existing supply chain infrastructure is a primary cause of daily disruptions and short-term challenges. Those companies that experience the smoothest and most profitable operations are the ones who routinely re-evaluate both operations and infrastructure. Those who reevaluate as a matter of procedure tend to become supply chain and profitability leaders. A recurring evaluation of infrastructure should be considered a necessity.
3. Understand the changes that can be impacted.
Change is inevitable, and the response to it will determine a company’s profitability. First assure that the processes and tools are in place to recognize the changes occurring in the supply chain. Then identify and analyze potential courses of actions and communicate the execution plan.
4. Consider technological analysis to make the supply chain decisions.
Spreadsheet analysis can evaluate a potential change in a business plan or supply/demand balance and perhaps project the impact of a given course of action. However when decisions involve multiple products made across multiple manufacturing sites, shipping and distribution point issues while serving thousands of customers, companies need sophisticated tools to effectively consider all the options to assure maximization of every supply chain infrastructure.
5. Modern infrastructure planning requires a collaborative effort.
Good supply chain operations happen because the people in charge of different aspects (sales, manufacturing, logistics, procurement and finance) are effectively communicating by:
- Providing the critical data necessary to make the best overall decisions.
- Understanding how each critical decision \impacts them.
- Informing each department of every decision and the steps they need to implement.
6. The planning process needs to include many different scenarios to ensure a robust solution.
Even with collaboration across all of the stakeholders, the supply chain infrastructure design process depends on forecasts of the future that will not all prove to be accurate; e.g. customer demand, competitors’ actions, cost of raw materials and transportation. Those who recognize the uncertainty of the data that drives their business planning can use supply chain tools to explore different possible futures and evaluate a course of action. That way they can confidently make decisions that will perform well across a wide range of possible futures and position themselves for a positive return.
7. Consider hybrid solutions to ensure low-cost, high level customer service.
Simplified assumptions are quite common during evaluation and analysis of complex supply chain operations. These may cause managers to overlook opportunities that are combinations or hybrids. For example, instead of sourcing 100% of a raw material from a low-cost country, perhaps optimal customer service at lower costs can be achieved by sourcing 80% to the low-cost provider and 20% to a higher cost and more reliable alternate supplier. Another example is demand variation by day of the week, which may warrant different operations on different days. Hybrid solutions are frequently solutions for optimal mix of customer service and cost, however they are often difficult to identify and evaluate.
8. Models and analysis mean nothing without implementation.
A good supply chain infrastructure planning process begins with solid analysis and evaluation of various scenarios to identify an optimal course of action. However, it is not complete without implementation planning, which must address the cultural and organizational issues that too often prevent companies from achieving the gains that have been projected. If there is resistance within the organization to change, it may be necessary to stage the implementation in increments to gain credibility before tackling the more strategic approach.
9. Optimized supply chains minimize inefficiencies.
A good supply chain infrastructure planning process goes beyond elimination of waste to analysis of benefits and tradeoffs among the different drivers of sustainability in the supply chain. This by definition means that you are creating a greener and more sustainable operation. One example is analysis of tradeoffs between profit and other sustainability measures (for example CO2emissions). Using tools to analyze the total impact of different courses of action can optimize decision making to meet the overall objectives.
10. The answer is in the data.
Assure the accuracy of the data, and then present it to the right people (See #5).
Roadmap for the Future
Supply and logistic executives recognize the importance of developing new and improved ways to understand and use the volumes of data to help them find and utilize the best approach. It is incumbent upon them to ensure that each aspect of the operation is fully aligned to business strategy and goals, which is the purpose of these guidelines. They should be considered a roadmap combining sound business management practices with the newest technologies and tools as a path to success.
Alan Kosansky, Ph.D., is president and Ted Schaefer is director of logistics and supply chain services of Profit Point Inc.. Profit Point, based in North Brookfield, Mass., is a provider of supply chain optimization systems providing such services as infrastructure and supply chain planning, scheduling, distribution and warehouse utilization improvement.
We recently attended a discovery meeting that was focused on how to conduct a strategic optimization planning study of an existing distribution network. The company wanted to know what changes needed to be made to lower the distribution costs. Several members of the management team were present and there were many questions regarding the ideal business process, study approach and modeling tools to be used to insure a successful project.
What was interesting to me was the overwhelming focus on the modeling tool. Questions about who would be on the project, the timeline, the types of scenarios, data gathering and validation were secondary. It may be important to have the right tool to model your infrastructure, but the real focus should be on the experience and modeling capabilities of the users of the tool.
These are the Critical Success Factors
- Full participation in data gathering and results review by the project team and management.
- Clear definition of the key questions to be addressed and the related scenarios required by the Project Sponsor early in the project timeline.
- Availability of leadership resources within the company throughout the project to review assumptions and to ensure integrity and quality of the input.
- On time delivery of a complete set of all required data by Project Team members.
- Acceptance and agreement on the variable, fixed and capital cost assumptions of existing and potential new facilities.
- Availability, communication, and collaboration of the Project Team members, support staff, and consultant for all working sessions, conference calls, and follow-up between meetings.
It’s important that the optimization modeling tool can incorporate the variables and constraints associated with your supply chain, but the real focus should not be on the tool, but rather on the experience of the users of the tool and their ability to deliver the results of a project. If I were to set out on a network optimization planning project to model my entire supply chain, then my primary focus would be on developing an experienced team of individuals that had the skills to minimize the above risks.
Okay. I am an anomaly. I live in Utah and drink coffee. The majority of the people that live in Utah do not drink coffee, and that is OK, but I do. So, is there a shortage of coffee Cafés in Utah? No. There are many cafés and several that serve outstanding coffee.
We have an exceptional espresso café downtown, located on a side street off of Main. They roast their own coffee and use triple certified organic grown beans. It is the type of place the local coffee lovers go to hang out and have good conversation over a morning or afternoon latté or espresso. Possibly the best coffee I have ever had. What is interesting to me is that a large percentage of the residents in my area do not even know that this café exists.
So what is my point? When it comes to outstanding services or products most people are unaware of what is available, primarily because it does not fit into their lifestyle or what they’re accustomed to. I believe you can transfer this similarity to the business world. Manufacturing logistics and transportation people become accustomed to doing things a certain way. Over time they may become blind to ideas for improving the supply chain. They are unaware of an exceptional Supply Chain Café, even when it is located just seconds from a combination of keystrokes and Google.
It is not their fault they are missing the best latté available. We, as consultants, who prepare those delightful solutions from the Supply Chain Café menu, have probably not done the finest job of promoting our services and software to your neighborhood, but that is changing.
There are many empty cups in the supply chain, waiting to be filled with successful solutions. Supply Chain and Logistic managers tackle difficult supply chain problems every day, but they are so focused on getting their job done and making it through the day that they have little time to think of alternatives that may improve their processes and well being. I am not sure how we can help everyone, so let’s focus on the window shoppers. These are the ones that are aware of the café, but have never been inside. Maybe you are one?
If you are reading this blog, then you must be a window shopper. I am guessing you are looking for a better espresso. OK, you found “Profit Point”, although you may not know what we do. Guess what? Help is on its way. We can share our menu with you. We just published four videos that will introduce you to the Profit Point team and what we do. Embrace three minutes out of your day, select one of the videos, and watch it. Learn how we help companies improve their supply chain, by serving the best coffee with a smile.
Yes, you can improve your supply chain with our help. The supply chain solution that you are looking for, is about to be yours. And if you place an order, we can fill your cup to the top, with the “good triple certified” stuff. If you cannot seem to find that special item on our Supply Chain menu, then no fear, we love special orders.
So, is there a shortage of Supply Chain Cafés? No. You just need to find the one that serves the optimal latté. I know it’s out there somewhere.
When making infrastructure planning decisions regarding adding new facilities, or adding capacity to existing facilities, you will want to take into account a variety of facility costs to ensure you make the right decisions. These costs include…
- variable cost, dependent on the volume through the facility
- operating fixed cost, to cover costs such as taxes, security, leases, etc.
- depreciation, based on the life of the equipment, and
- cost of the capital used to construct / purchase the facility
In an optimization model you can capture all of these costs separately, or perhaps you will want to consider the fixed costs as a “lump sum”.
Here are two ways that you could build the cost of capital into the decision-making process:
- Add a Capital Recovery Cost to the objective function, to reflect the cost of the capital required to build or expand a facility. One way to do this is the approach used in the Microsoft Excel PMT function, which asks for four inputs to the calculation of recovery cost for a time period:
- capital cost of the asset to be added, e.g. a plant, production line, distribution facility, waste water treatment facility, etc.
- useful life of the asset - the entry here for the number of time periods should be consistent with the frequency of time in your model
- salvage value at the end of the asset’s used useful life, if any
- capital cost charge (interest) rate to be charged in each time period – again, the entry here should be consistent with the frequency of time in your model. (This number could be annual, monthly, or based on another frequency, depending on how you have defined your model.)
The Capital Recovery Charge can be thought of as a loan repayment for the amount of capital required in purchase and install the facility. Excel has help files describing the details of the PMT function, so we will go into more detail here.
- Use Economic Profit as the objective of the model, or as a measure that you use to compare alternative solutions. Economic Profit is your standard accounting profit, less the opportunity cost of capital invested in the business. The opportunity cost is the return that the company would have been able earn if it had invested in the next best alternative project. For instance, if you consider a future alternative where
- the accounting profit for the time period (say, year) is 100, with the additional asset, but
- the asset has a capital cost of 1000, and
- the opportunity cost for capital is 15% per year (the company could have received a 15% return by investing the capital elsewhere) , then
- the Economic Profit for the year is 100 – .15*1000 = -50.
If you are minimizing cost rather than maximizing profit in your model, then you can calculate Impact on Economic Profit for a given alternative, adjusting the operating costs from the model for the effective tax rate, and subtracting the capital charge.
Including the cost of capital appropriately will allow you to present a more complete analysis.
“Going Green” is becoming a higher priority for companies large and small, as regulatory bodies and consumers around the world push for more readily-available information on corporate carbon footprints and companies’ plans to control / reduce their carbon emissions. But how do you do this most cost-effectively? Optimization is a tool that can lead to better “green” decision-making.
First, let’s review of the types of decisions that companies are making today. Here are some real world examples from recent press reports…
Dole Food Company, the world’s largest producer of fruits and vegetables, has committed to make its banana and pineapple business in Costa Rica carbon neutral over the next decade. Dole social responsibility officials Sylvain Cuperlier and Rudy Amador recently highlighted their priorities in achieving this in an interview :
- measurement of current carbon footprint and activities, such as the use of fertilizers,
- research into and collaboration on mitigation and sequestration projects, and
- improved operations, including increased use of rail transportation on land and more energy-efficient refrigerated containers for maritime shipments.
Tyco Waterworks, a worldwide supplier of water system equipment based in the UK, has documented its consolidation of multiple manufacturing plants into a single Manufacturing Centre of Excellence for meter boxes, plastic injection molding and gunmetal products in Bridgend, South Wales. Having all its manufacturing under one roof results in a reduction in the company’s overall energy consumption and transport, with a resulting positive impact on its carbon footprint (as well as giving operational efficiency benefits.)
Xerox Corporation, which provides document services and equipment around the world, maintains a fleet of 5,000 vehicles used by its technicians in the United States as they respond to customer requests for service. Tony Rossi, Xerox’s manager of programs and operational support, said in an interview that his programs, which have reduced fuel consumption over the last several years by 10%, and have a goal of a 25% reduction, can be grouped into four categories:
- pairing each driver with the best-sized vehicle for his / her needs,
- improving the fleet’s fuel efficiency as vehicles are replaced,
- tracking driver routes and distances traveled on a daily basis, and
- using GPS systems to match available technicians against pending requests as they are dispatched during the day.
The common thread? These companies have made progress towards their cost and carbon goals by
- understanding their current situation, and what their options include,
- implementing more efficient operations over their existing supply chain (thus generally using less energy and lowering their footprint), and
- making the most effective capital additions to their supply chain systems when justified.
Optimization techniques can allow you to identify the best solutions that are possible in improving efficiency and implementing capital projects. Thus you can make the best choices for meeting your goals from the options that you have at hand.
In making decisions for a manufacturing-oriented supply chain like the one described for Tyco Waterworks above, a network design tool like Profit Network can help you evaluate the benefits of:
- keeping or consolidating existing facilities, as well as,
- opening potential manufacturing sites, taking into account
- capital costs,
- shutdown charges,
- manufacturing rates and costs,
- freight costs, and
- and a host of other costs and constraints on operations.
Profit Network uses a combination of linear and mixed integer programming and related optimization techniques to guarantee that you evaluate a range of solutions and identify those that are best for your particular needs. Potential decisions that can be evaluated include both operational changes and choices among proposed capital projects that will lead to greater efficiency.
Xerox and Dole have scheduling problems that can be solved by both optimization and heuristic means. The Xerox technician dispatching problem is a variation on the mathematically well-studied Assignment Problem, which can be solved using “greedy” algorithms (which pick off the “low hanging fruit” but are not guaranteed to give the absolute best solution) or more comprehensive methods that can give the best solution, at perhaps a longer solve time. Transportation scheduling problems again can be solved through these methods. Using the technology of the 21st century will be critical for businesses to meet their “green” objectives. Optimization technology is one of these new technologies that will help you reach these goals.
This article was written by Dr. Gene Ramsay, Profit Point’s Infrastructure Planning Practice Leader. To learn more about Profit Point’s Supply Chain Sustainability services, please call (866) 347-1130 or contact us here.
Image courtesy of Gavin Schaefer.
North Brookfield, MA (PRWEB) February 4, 2010 — Profit Point, a leading Supply Chain Optimization company, today announced the introduction of Profit Network 4.5, a major upgrade to their award-winning supply chain network design and modeling software. The software update includes a combination of new features and technical enhancements which combine to support richer scenario testing for larger supply chains over a longer time periods.
“With almost 10 years in the field, Profit Network has been put to the test against some of the world’s largest supply chains,” noted Jim Piermarini, Profit Point’s Chief Technology Officer. “But best practices have expanded over time, so decision makers are looking for more integrated and comprehensive modeling solutions.”
Profit Network 4.5, which is used by many Global 2000 companies to model supply chain plans, has been enhanced to integrate better capital planning, greater control over facilities decisions and improve tracking and modeling of sustainability initiatives. The modeling software now includes improved options for integrated capital spending, facilities decisions, natural resource planning and emissions mitigation.
“Ultimately, the number one priority for our customers remains capital planning and return on investments” said Piermarini. “A company’s infrastructure plan will dictate 80% or more of future costs. So, we added several features that help analysts understand the capital impact of decisions to control costs and maximize the long-term logistics benefits.”
The software update also includes several technical enhancements to improve planning for the largest supply chains, over longer periods of time. “We’ve added a new core optimization process into Profit Network 4.5,” stated Piermarini. “Customers will now have 50% more addressable memory capacity, which will yield deeper visibility in to larger networks and the long term tradeoffs that are being modeled.
To learn more about Profit Network and Profit Point’s supply chain software, visit www.profitpt.com.
About Profit Point:
Profit Point Inc. was founded in 1995 and is now a global leader in supply chain optimization. The company’s team of supply chain consultants includes industry leaders in the fields infrastructure planning, green operations, supply chain planning, distribution, scheduling, transportation, warehouse improvement and business optimization. Profit Point’s has combined software and service solutions that have been successfully applied across a breadth of industries and by a diverse set of companies, including Dow, The Coca-Cola Company, General Electric, Logitech, Sealed Air, Bridgestone and Toyota.
The new year is upon. But for supply chain professionals like you, many of the challenges from 2009 remain.
To help our clients navigate the uncertain future, we conducted a survey in 2009. The survey included supply chain decision makers from large multi-national organizations to small domestic concerns.
Our goal was to extract the top risks and opportunities for 2010 and beyond. Our final report for the survey has been compiled in summary form and highlights several of the top keys to success. You can download the report by clicking the link below:
I hope you find value in the report. And, as always, if you have questions or concerns about your supply chain, please feel free to call us at (866) 347-1130.
President, Profit Point, Inc.
Below is a video interview with Ted Schaefer, Profit Point’s Director of Supply Chain Services, discussing supply chain optimization including cost reduction and supply chain sustainability issues for greener decisions with Xpress Optimization Suite.
In this video interview with CSCMP’s Supply Chain Quarterly, Ted Schaefer, Supply Chain Practice Leader at Profit Point, offers practical advice on how to make supply chains both “green” and profitable.
Watch the video interview to learn more about the ways leading companies are cutting costs and emissions:
This month’s issue of Supply & Demand Chain Executive features an informative article entitled The Future of Network Planning. The article, which was co-authored by Profit Point’s President, Dr. Alan Kosansky, and the firm’s Director of Supply Chain Services, Ted Schaefer, looks at the emerging trend towards a more “local” supply chains.
You can read the complete article here.
This month’s issue of Manufacturing Today features an informative article entitled You Can Go Green. The article, which was co-authored by Profit Point’s President, Dr. Alan Kosansky, and the firm’s Director of Supply Chain Services, Ted Schaefer, reviews the trade-offs and consequences of improving financial performance of the supply chain footprint, while also reducing the environmental impact.
You can read the complete article here.
Posted with permission from Manufacturing Today.
We’ve heard a lot about supply chain agility over the past decade. While many companies have taken steps to improve their agility, how many actually achieve their agility potential? So, in light of the current economic situation, this brings the following question to mind, “Is your company’s supply chain as agile as you thought it was?”
If today’s economic doldrums aren’t a good litmus test for your organization’s true agility, then what is?
What is Supply Chain Agility?
First off, what is supply chain agility anyway, and what does it mean to be agile? We most closely associate the term agility with some type of athletic endeavor, so let’s frame our understanding of agility from that perspective. Referencing Wikipedia, we can find the following definition: “Agility is the ability to change the body’s position efficiently, and requires the integration of isolated movement skills using a combination of balance, coordination, speed, reflexes, strength, endurance, and stamina.”
So, agility has something to do with responsiveness, presumably to respond to an internal or external stimulus.
What does agility mean in business terms, more specifically what does agility have to do with a supply chain? Again referencing Wikipedia, “In business, agility means the capability of rapidly and cost efficiently adapting to changes.”
For businesses, agility reflects the supply chain’s ability to deliver in a rapid and cost efficient manner, through the integration of physical infrastructure and processes that govern supply chain execution.
Theory is well and good, but the real question decision makers like you are concerned with is “How agile is my supply chain?” Is your business capable of making adjustments during periods of slower economic activity without sacrificing its principles – loyalty to employees, customers and stockholders – and remaining fiscally viable? Are you well-positioned to react to an uncertain, but eventual economic turnaround? And, how do manage the trade-offs associated with these uncertainties?
If you are concerned with these questions, then use what follows as your own litmus test to challenge or verify your perceived agility. If you’re not too concerned, then hopefully you’ll gain some insights on where you can focus your energies to move your organization to a more responsive and agile supply chain network.
What is a Supply Chain?
In order to apply agility to a supply chain, we need to know a little more about what we’re dealing with. For purposes of this article, a simplified description of what is needed to make a supply chain work yields the following elements:
- Physical infrastructure
- Organization and people
- Business systems
- Processes, policies and business rules
In essence, a supply chain is comprised of the physical network infrastructure and the people, processes and systems that govern it.
Most advice on supply chain agility focuses on one or many of these aspects providing enlightened visions of how to make the world better, stronger, faster. While much of this advice is well formed and well intentioned, very little addresses what to do when the purse strings are drawn. Let’s take a look at these four factors that make a supply chain tick and see what can be done to improve agility in a capital constrained environment.
Opportunities to Improve Agility
We’ve all heard the saying “there’s no such thing as a free lunch”. While, for the most part this may be true, it is also said that you have to “spend a buck to make a buck.” Agility improvements don’t come for free, but there are areas where you can get substantial returns on your investment and others that just require you to roll up your sleeves. Endeavors related to the 4 factors can vary significantly in cost but that does not imply that one should start seeking improvement in less expensive areas simply because they are less expensive. Rather, focus on areas where you expect the greatest leverage and return, or where you are currently feeling the most pain.
Physical Infrastructure (Network Design)
The physical infrastructure or network design consists of production facilities and equipment, storage and distribution facilities, etc. The agility of a supply chain’s physical infrastructure relates to the age old question, “Do you have the right assets in the right place at the right time?” Well, do you? How well does your ability to supply match your projected demand? Do you need to restructure your physical infrastructure to better align supply with demand? The name of the game here is low cost and short lead times. Unfortunately, when it comes to infrastructure, we’re usually talking big bucks. The flip side is that the money spent restructuring to improve operational and economic efficiencies has the potential to save far more than you spend.
But how do you know what to do? The best way to accomplish this is through a network design (infrastructure) study. Even a back of the envelope effort can yield target areas for improvement, rough estimates of the magnitude of potential cost reductions or savings, and the anticipated ROI for restructuring physical assets. If the time isn’t right for capital improvement, at least you know where your strengths and weaknesses lie, and you can focus on the remaining three factors accordingly.
Organization and People
How important are the people in your Supply Chain Management team to your organization? The answer is often reflected in your organizational philosophy and the mindset of the people within the organization. Does your company promote or inhibit cross-functional communication and decision making? Does your company have consistent objectives from top to bottom that ensure aligned decision making? An agile organization promotes communication through interdisciplinary teams capable of establishing operational and financial objectives good for the organization as a whole. Incentives should be designed to eliminate conflicting objectives and allow functional departments to have a common goal.
Your test for agility here is how quickly information flows to the stakeholders and fuels decisions that can be put into action. The frequency of interactions between product development, marketing, sales and operations must increase to elevate your agility index. If the right people can’t congregate to make the right decisions, how can you expect to respond in an expedient, profitable manner? While organizational alignment is not without pain, it does not have to be financially burdensome. To add another cliché, “no pain, no gain.”
Business systems include information systems, decision support systems, execution systems, etc. Here are some more questions for you to ponder: Do you know what tools your organization has in place to manage your supply chain? The end game here is decision making and execution. Business systems cover a diverse range of technology and functionality but ultimately their collective purpose is to provide capabilities to collect, store, manage, synthesize and propagate information to promote sound decision making and timely execution of core business activities.
Modern organizations have configured database applications or ERP systems at the
core of their business system network, with integrated peripheral systems designed to perform more specific, detailed tasks. In regard to supply chain management, these systems provide tools for operations and finance to plan and manage customer activity, distribution, production, and procurement. Agility is dictated by how flexibly these systems are architected. Software design and integration are key. Do your systems talk to each other? Are data exchanges dynamic and generic or are they fixed and unresponsive?
Are your planning and scheduling systems capable of rapidly responding to shifts in demand, product or process changes, and evolving business priorities? Or are system updates and new integration goals costly and drawn out? If so, you may not be reaching your agility potential.
What can you do? Start with the mindset of “continuous improvement.” Business systems should be treated as living entities that require monitoring and nurturing to stay consistent and relevant to an ever-changing business environment. Choose software carefully and put design and maintenance in the hands of those who embrace the philosophy of the Agile Manifesto.
Unfortunately, business systems can also require big dollar investments with ERP systems costing tens or hundreds of millions of dollars. Start your quest by looking for low hanging fruit. Ask yourself, Which decisions make or lose the most money? What information is needed to make sound operational or financial decisions? Is the information current and readily available? Can the information be synthesized to answer the right questions within the necessary timeframe? While many systems are expensive, spreadsheets are not and you’d be surprised at the power of a spreadsheet application embedded in the right set of business processes.
Processes, Policies and Business Rules
Here is where you can make a big impact without breaking the bank. If your situation is not conducive to infrastructure or business system reengineering, consider improving the way you make use of what you already have in place. The process, policies and business rules that govern a supply chain’s behavior are referred to here as Supply Chain Management (SCM), as opposed to supply chain management software which falls under the business systems umbrella. Here we refer to the processes which make use of said software and the set of business constraints that guide decision making.
SCM processes usually take the form of strategic and tactical planning, scheduling and execution. They address the links in the supply chain from supplier to customer (in some instances supplier’s suppliers and customer’s customers). Agility is enhanced through vertical and horizontal process integration as well as decision propagation to other parts of the organization.
Vertical integration is how well connected your business processes are from strategic planning to execution. Does your organization connect these functions? How well do stakeholders follow the plan? How realistic is the plan? To become vertically agile, the first step is to align the frequency of each planning process with the frequency the issues addressed by that process significantly change. Second, information exchange, or feedback loops, must be bi-directional and immediate.
For example, if demand is highly uncertain, an S&OP (Sales and Operations Planning) process should capture the changes and reflect the consequential changes to distribution, sourcing and production. These needs are then conveyed to transportation and production to make the necessary routing and scheduling adjustments. Conversely, real time dynamic constraints recognized by these lower level functions should be communicated back to planning to alter sourcing plans if necessary.
Vertical integration promotes a responsive system with the agility to handle uncertainty at the customer or supplier end of the supply chain, as well as points in between.
Horizontal integration ensures the integrity of the supply “chain.” Procurement, production, distribution and sales are not independent activities. The processes that govern these activities should not be treated independently either.
Horizontally integrated processes allow visibility into the “ripple effect” that decisions or actions in one “link” of the supply chain have on preceding or subsequent activities. Horizontal agility is the ability to anticipate and manage consequences before they happen. While agile SCM business systems are designed to be reactive, agile SCM processes should be proactive so that business users spend their energies avoiding unwanted situations instead of fire fighting.
Policies and business rules determine everything from customer priorities to re-order points and policies, batch sizing to procurement policies. It is these policies, when applied in the planning processes, that influence your actual customer service levels, inventory levels, production line or asset utilization, and purchase material availability. The execution and adherence to these policies directly relates to your unit costs and profitability.
This can be a good thing or a bad thing. If your processes, policies and rules stay fixed, then they will not reflect changing business conditions. To attain high levels of agility, a policy of continuous review is necessary.
Start with knowing your customers, since without them you wouldn’t be in business. Review high cost activities on a regular basis to ensure the policies driving decision making are relevant and cost effective to your customer service goals.
Business process integration and a continuous review philosophy don’t cost much to implement but they can have a huge impact on your bottom line. What they do require, however, is discipline. If economic conditions do not allow for necessary physical infrastructure or business system alterations, then a methodical, disciplined approach to execute the supply chain’s governing business processes will put you in control of your supply chain’s agility.
At Profit Point, we understand supply chains and we’re mindful of your supply chain needs. Contact us to see how we can help you reach your agility potential.
This article was written by John Muckstadt, Profit Point’s Infrastructure Planning Practice Leader.
What is a Monte Carlo model and what good is it? We’re not talking a type of car produced by General Motors under the Chevy nameplate. “Monte Carlo” is the name of a type of mathematical computer model. A Monte Carlo is merely a tool for figuring out how risky some particular situation is. It is a method to answer a question like: “what are the odds that such-and-such event will happen”. Now a good statistician can calculate an answer to this kind of question when the circumstances are simple or if the system that you’re dealing with doesn’t have a lot of forces that work together to give the final result. But when you’re faced with a complicated situation that has several processes that interact with each other, and where luck or chance determines the outcome of each, then calculating the odds for how the whole system behaves can be a very difficult task.
Let’s just get some jargon out of the way. To be a little more technical, any process which has a range of possible outcomes and where luck is what ultimately determines the actual result is called “stochastic”, “random” or “probabilistic”. Flipping a coin or rolling dice are simple examples. And a “stochastic system” would be two or more of these probabilistic events that interact.
Imagine that the system you’re interested in is a chemical or pharmaceutical plant where to produce one batch of material requires a mixing and a drying step. Suppose there are 3 mixers and 5 dryers that function completely independent of one another; the department uses a ‘pool concept’ where any batch can use any available mixer and any available dryer. However, since there is not enough room in the area, if a batch completes mixing but there is no dryer available, then the material must sit in the mixer and wait. Thus the mixer can’t be used for any other production. Finally, there are 20 different materials that are produced in this department, and each of them can have a different average mixing and drying time.
Now assume that the graph of the process times for each of the 8 machines looks somewhat like what’s called a ‘bell-shaped curve’. This graph, with it’s highest point (at the average) right in the middle and the left and right sides are mirror images of each other, is known as a Normal Distribution. But because of the nature of the technology and the machines having different ages, the “bells” aren’t really centered; their average values are pulled to the left or right so the bell is actually a little skewed to one side or the other. (Therefore, these process times are really not Normally distributed.)
If you’re trying to analyze this department, the fact that the equipment is treated as a pooled resource means it’s not a straightforward calculation to determine the average length of time required to mix and dry one batch of a certain product. And complicating the effort would be the fact that the answer depends on how many other batches are then in the department and what products they are. If you’re trying to modify the configuration of the department, maybe make changes to the scheduling policies or procedures, or add/change the material handling equipment that moves supplies to and from this department, a Monte Carlo model would be the best approach to performing the analysis.
In a Monte Carlo simulation of this manufacturing operation, the model would have a clock and a ‘to-do’ list of the next events that would occur as batches are processed through the unit. The first events to go onto this list would be requests to start a batch, i.e. the paperwork that directs or initiates production. The order and timing for the appearance of these batches at the department’s front-door could either be random or might be a pre-defined production schedule that is an input to the model.
The model “knows” the rules of how material is processed from a command to produce through the various steps in manufacturing and it keeps track of the status (empty and available, busy mixing/drying, possibly blocked from emptying a finished batch, etc.) of all the equipment. And the program also follows the progress and location of each batch. The model has a simulated clock, which keeps moving ahead and as it does, batches move through the equipment according to the policies and logic that it’s been given. Each batch moves from the initial request stage to being mixed, dried and then out the back-door. At any given point in simulated time, if there is no equipment available for the next step, then the batch waits (and if it has just completed mixing it might prevent another batch from being started).
What sets a Monte Carlo model apart however is that when the program needs to make a decision or perform an action where the outcome is a matter of chance, it has the ability to essentially roll a pair of dice (or flip a coin, or “choose straws”) in order to determine the specific outcome. In fact, since rolling dice means that each number has an equal chance of “coming up”, a Monte Carlo model actually contains equations known as “probability distributions”, which will pick a result where certain outcomes have more or less likelihood of occurrence. It’s through the use of these distributions, that we can accurately reflect those skewed non-Normal process times of the equipment in the manufacturing department.
The really cool thing about these distributions is that if the Monte Carlo uses the same distribution repeatedly, it might get a different result each time simply due to the random nature of the process. Suppose that the graph below represents the range of values for the process time of material XYZ (one of the 20 products) in one of the mixers. Notice how the middle of the ‘bell’ is off-center to the right (it’s skewed to the right).
So if the model makes several repeated calls to the probability distribution equation for this graph, sometimes the result will be the 2.0-2.5 hrs, other times 3.5-4.0 hrs, and on some occasions >4hrs. But in the long run, over many repetitions of this distribution, the proportion of times for each of the time bands will be the values that are in the graph (5%, 10%, 15%, 20%, etc.) and were used to define the equation.
So to come back to the manufacturing simulation, as the model moves batches through production, when it needs to determine how much time will be required for a particular mixer or dryer, it runs the appropriate probability equation and gets back a certain process time. In the computer’s memory, the batch will continue to occupy the machine (and the machine’s status will be busy) until the simulation clock gets to the correct time when the process duration has completed. Then the model will check the next step required for the batch and it will move it to the proper equipment (if there is one available) or out of the department all together.
In this way then, the model would continue to process batches until it either ran out of batches in the production schedule that was an input, or until the simulation clock reached some pre-set stopping point. During the course of one run, the computer would have been monitoring the process and recording in memory whatever statistics were relevant to the goal of the analysis. For example, the model might have kept track of the amount of time that certain equipment was block
ed from emptying XYZ to the next step. Or if the aim of the project was to calculate the average length of time to produce a batch, the model would have been following the overall duration of each batch from start to finish in the simulated department.
The results from just one run of the Monte Carlo model however are not sufficient to be used as a basis for any decisions. The reason for this is the fact that this is a stochastic system where chance determines the outcome. We can’t really rely on just one set of results, because just through the “luck of the draw” the process times that were picked by those probability distribution equations might have been generally on the high or low side. So the model is run repeatedly some pre-set number of repetitions, say 100 or 500, and results of each of these is saved.
Once all of the Monte Carlo simulations have been accumulated, it’s possible to make certain conclusions. For example, it might turn out that the overall process time through the department was 10 hrs or more on 8% of the times. Or the average length of blocked time, when batches are prevented from moving to the next stage because there was no available equipment, was 12 hrs; or that the amount of blocked time was 15hrs or more on 15% of the simulations.
With information like this, a decision maker would be able to weigh the advantages of adding/changing specific items of equipment as well as modifications to the department’s policies, procedures, or even computer systems. In a larger more complicated system, a Monte Carlo model such as the one outlined here, could help to decrease the overall plant throughput time significantly. At some pharmaceutical plants for instance, where raw materials can be extremely high valued, decreasing the overall throughput time by 30% to 40% would represent a large and very real savings in the value of the work in process inventory.
Hopefully, this discussion has helped to clarify just what a Monte Carlo model is, and how it is built. This kind of model accounts for the fundamental variability that is present is almost all decision making. It does not eliminate risk or prevent a worst-case scenario from actually occurring. Nor does it guarantee a best-case outcome either. But it does give the business manager added insight into what can go wrong or right and the best ways to handle the inherent variability of a process.
Climate change – or global warming – and the effort to curb the impact of human activities thought to contribute to it – are continuously becoming a higher priority on the agendas of governments, commercial and non-governmental organizations and individuals around the world. In the United States of America the Environmental Protection Agency, the main federal government environmental watchdog and regulator, recently issued a report finding that projected future levels of greenhouse gases (GHGs) “endanger the public health and welfare of current and future generations”, setting the stage for a more intense GHG regulatory regime in the future in a country that has lagged behind imposing the regulatory restraints now in place in many other parts of the world.
A combination of internal and external factors have motivated many companies to work towards better measurement, and control, of their impact on the environment, whether in the areas generation of greenhouse gasses, emission of waste water and other effluents or consumption of renewable and non-renewable resources. But as always, companies need to ensure that they make changes in their activities in a cost-effective, as well as environmentally-effective, manner. We at Profit Point recognize the need to move towards a green supply chain, and are working with our clients to help them make the best decisions in this regard.
Our Profit Network supply chain planning software has helped various clients make such decisions as:
- how do we consolidate separate distribution systems after a merger of two organizations, or
- where to produce and how to ship new products coming into the marketplace?
However, Profit Network is capable of taking into account not only the cost of such plans, but also the environmental impact. We recently worked with a client who had significant environmental constraints at both the entrance to and exit from their factories – they had significant limits on the amount of source water (a key raw material required for their manufacturing) that they could draw from surface and underground sources, and also had constraints at many facilities regarding the amount for waste water they could dispose of. Both of these constraints varied over the course of the year and geographically over the service territory. Using Profit Network they were able to see the cost and production location impact of the environmental constraints, and make choices regarding how to respond to their situation.
Another major concern of companies is their levels of emissions of greenhouse gasses. A major corporation in the United States of America recently announced that it was working to reduce its GHG impact through
- Retiring less efficient and higher-emitting production facilities;
- Reducing leakage of GHGs from its production and distribution systems;
- Increasing energy efficiency in its buildings;
- Increasing the fuel efficiency of its vehicle fleet.
Profit Network will allow you to evaluate the effectiveness of these types of activities. You can define the environmental impact of your own activities (such as your production and distribution, and fleet delivery to customers), and those of your suppliers (such as when you purchase electricity). For instance, you could use Profit Network to determine the impact on your carbon footprint (and cost) of switching to a source of electricity that had a lower GHG emissions rate (such as company-produced solar, or purchased nuclear), or moving towards a transportation fleet that had lower emissions per unit of distance traveled.
Profit Point is here to help our clients make better decisions – this includes making better decisions regarding the many environmental choices that companies have in today’s increasingly regulated environment.
1. Reference for the company mentioned in the text above: http://www.eponline.com/.
2. Reference for the EPA announcement: http://www.mercurynews.com/politics/ci_12168524.