IBM will take its well-honed machine for streamlining supply chains to see if it can squeeze out some fuel.
The computing giant has begun to offer sustainable procurement consulting services to help companies migrate from traditional products and practices, like fossil-fuel-based resins or how frozen food gets inventoried, to more carbon-light ones.
But this is more than just swapping paper towels in the break room. Approximately 80 percent of the greenhouses gases associated with a particular product are emitted by third-party vendors and, typically, a company has little control or even knowledge of what's going on behind its back. Walmart is one of the few retailers that can impose packaging and manufacturing standards on partners and often – as the foiled RFID trial showed – it's heft is limited too.
Reducing carbon will help companies therefore avoid costs under cap-and-trade or carbon tax systems. IBM claims that established guidelines can reduce carbon emissions by ten percent. Logistical planning can conceivably also reduce the impact of commodity price swings.
The same system can also be used to better track health, employment practices and other issues. The E. coli outbreaks of recent years have demonstrated how large food retailers are unaware of the water and sanitary practices of their suppliers that, ultimately, they will be held accountable for.
Creating the databases and computer simulations necessary for devising these types of strategies is right up IBM's alley. Not only does it employ a veritable army of consultants, but it has thousands of computer scientists adept at analyzing complex fluid systems. What will be the impact on operational costs of shifting to a green-based coating for the inside of Mountain Dew cans? Currently, the coating is only available in limited supplies but may expand to several million tons over the next five years, depending on pricing pressures from the building industries for the same Malaysian raw materials. IBM lives for these problems.
For the past several years, Big Blue in fact has also been trying to promote supply chain management as an academic discipline at Michigan State, Penn State and other universities.
IBM, of course, isn't alone in green consulting. NEC, the Japanese conglomerate, had an internal team study its own sprawling operations in an effort to come up with a plan to get to carbon neutral by 2011. It liked the results and so it is now offering consulting based on its own experiences.
Carbon software companies that tackle some element of the carbon chain have also proliferated like organic bagel left out in the rain. Some of the more notable names are AMEE (fans include Radiohead and Google!), Carbonetworks, and Carbonflow.