Sydney, May 25, 2011
One of Australia’s leading experts on corporate financial sustainability is alerting procurement and supply chain practitioners to the urgent need to lift their organisations’ priority for end to end efficiency within the supply chain. The potential for its positive impact on an enterprise’s ongoing profitability is not being realised.
The recently released 2011 Global Sustainability Readiness Index has highlighted how far behind Australian manufacturing, wholesale/retail and logistics companies are when compared against results from their global counterparts.
Speaking at the SMART Supply Chain Conference in Sydney today, Trevor Barrows, Principal Consultant – Sustainability at Fujitsu Australia Limited, said: “There has been much talk about what could be achieved at the supply chain level but what I’m seeing is that it is still viewed in silos and that an end to end approach has not been achieved by mainstream business in this country.
“Australia is a laggard compared with the rest of the world largely due to the fact that we have been insulated from the worst of the global financial crisis. We’re not pushing hard enough on the efficiency and waste management front. And the unhelpfully confusing political messages surrounding carbon pricing are not encouraging Australian companies to move on from business as usual.”
Barrows encourages supply chain management to act now so their companies are prepared for when the inevitable Australian carbon pricing scheme is introduced, or to be able to react to the next shift in the marketplace such as if the northern hemisphere returns to recession.
“Carbon will soon be another column in the balance sheet and it will provide a double win for smart operators. The cutting of waste from the supply chain reduces direct costs to the company and provides opportunities for rebates. But to qualify for a rebate you’ll need to create a baseline measurement now to show improvement,” Barrows said.
The delivery mechanism then looks at the drivers, strategic actions, implementation framework and the business benefits of an end-to-end sustainability business model. Fujitsu’s enabling projects provide a complete circle from the clean-up of operations and facilities to optimised infrastructure, managed energy use and rationalised procurement and supply.
The improved energy efficiency, reduced carbon emissions and waste, and improved overall environmental performance leads to a full bank of benefits to the organisation across reduced costs and risks, increased compliance and improved reputation.
Rapidly rising energy costs and the introduction of major pieces of legislation related to energy use and waste disposal, slated for later this year, will see an irrevocable shift in buying decisions away from buying on initial price to total cost of ownership.
“Within the next two years you’ll be penalised for sending potentially recoverable materials to landfill. You’ll be obliged to recover, recycle, reuse, which maybe a cost factored into a vendor contract or a cost that needs to be factored into the operations of an organisation,” Barrows said.
Nothing Wasted, Everything Gained
To achieve zero waste requires a strategic, whole of business approach and collaboration across the supply chain. From ICT to human resources and physical infrastructure, energy consumption must be measured, managed and mitigated. The fact that sophisticated, cloud and wireless enabled integrated solutions, which were once within reach of only the largest enterprises, are now also affordable to SMEs will power these changes.
Supply chain professionals are being asked to become sustainability experts too. But Barrows says “don’t be bamboozled by Green. You are measured by how you manage costs. Whether its fuel use, vehicle optimisation or warehouse pick accuracy, it’s about making assets sweat better, using leaner approaches. Efficiency actions will show an overall reduction in carbon footprint for per thousand manufactured goods or per thousand kilometre vehicle travelled. Financial sustainability automatically leads to a reduction in your company’s environmental footprint.”
Waste from operations and asset ownership should be considered part of the supply chain. And it is now providing innovative opportunities for businesses to use it as a new and significant revenue generator. With working examples of end to end sustainability in action Fujitsu is demonstrating how supermarkets, factories and distribution centres can install tri-generation power units to convert expensively removed organic waste into a revenue stream. A $500,000 capital equipment investment is paying back within 1-2 years, through returning electricity to the grid, providing heating/cooling to the building and the sale of agricultural biochar.
About the Green IT: Global Benchmark Report
The Green IT: Global Benchmark Report, released in April, contains the findings of the first ever, multi-country survey to determine the maturity of Green IT practices and technologies across all industry sectors in the United Kingdom (UK), the United States of America (USA), Australia and India.
Funded by Fujitsu, the Green IT benchmarking process quantifies current practices to better understand the role IT can play in maximising energy efficiencies and returning significant cost savings.
The research compared Green IT maturity in the four countries under five categories: lifecycle (procurement and disposal); end user IT efficiencies; enterprise and data centre IT efficiencies; use of IT as a low-carbon enabler; measurement and monitoring.
While the manufacturing sector rated 58.1 which was above the average of 56.4 (with the ICT sector ranked highest at 62.6), the wholesale, retail and logistics enterprises surveyed across all countries, was the lowest ranked sector at 51.1. But within that Australia ranked a lowly 47.6, far behind the UK the USA and India.
“The research clearly shows that while every sector, in every country the average level of Green IT maturity is low, the Australian statistics, and particularly those the in the manufacturing and logistics sectors are lagging very much behind. Fujitsu sees this as providing broad and positive opportunities for improvement,” Barrows said.
The global benchmarking is based on detailed research, conducted by Connection Research and RMIT University (Melbourne, Australia) of more than 630 CIOs and senior IT managers across industry sectors in the four countries.
Phone: +61 2 9113 9225
E-mail: tracy.mccormack@au.fujitsu.com
