IBM Unveils New Carbon Management Analysis Tool to Optimize Supply Chain Efficiencies

May 23, 2008
The Carbon Tradeoff Modeler can quantify the tradeoffs between CO2 emissions reductions and other supply chain metrics such as inventory levels, and on-time delivery.

IBM, on May 22, announced the Carbon Tradeoff Modeler, a tool that enables organizations to analyze and manage the climate impact of their supply chains.The tool allows organizations to understand the outcome of critical tradeoffs to make smarter energy choices and better economic decisions by optimizing on service levels, quality, cost and carbon dioxide emissions.

The Carbon Tradeoff Modeler models the complex interaction of factors driving supply chain carbon dioxide (CO2) emissions from both a manufacturing and distribution perspective. It can also quantify the tradeoffs between CO2 emissions reductions and other supply chain metrics such as inventory levels, and on-time delivery. The tool also identifies areas where carbon dioxide emissions and costs can be reduced simultaneously.

"To achieve a carbon efficient supply chain, companies need to assess the CO2 emissions impact of their end-to-end operations," said Sanjeev Nagrath, Global Leader, Supply Chain Management, IBM Global Business Services. "By incorporating Research-based tools to model the cost and carbon impact of key steps in the supply chain, organizations now can take action to reduce CO2 emissions and influence suppliers' behavior toward reducing their own greenhouse gas emissions."

IBM's carbon management analysis tool models the cost and carbon impact of several key levers and provides insights for balancing cost and carbon management objectives. Key factors the tool captures include: packaging options, alternative operational processes, alternative transportation modes and energy sources, inventory policies and sourcing policies. The Carbon Management Analysis Tool can identify and recommend the most desirable actions to take among the many that can be used to achieve carbon dioxide emissions reduction.

For example, shipment and package consolidation is one of the major opportunities to reduce CO2 emissions. Quantifying the impact of shipment frequency on cost and emissions can help establish a more energy efficient inventory replenishment policy. Some levers such as better routing can create a win-win case for reducing both CO2 emissions and cost in the supply chain.

In addition, IBM released further analysis from the Institute for Business Value, entitled "Mastering Carbon Management." The paper emphasizes how carbon management, energy consumption and other environmental issues should be analysed and approached in an integrated manner -- evaluating overall performance goals (cost, service, quality and carbon dioxide emissions) in terms of their relationship to one another. A trade-off model looks at these areas and considers relevant factors such as design, packaging and processes. These options represent the "levers" available to influence cost, quality and service, as well as greenhouse gas (GHG) emissions.

To view the IBM Global Business Services Paper on Mastering Carbon Management please visit

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