New Way to Optimize Carbon Emission Levels in the Supply Chain

March 27, 2008
ILOG's new Carbon Footprint lets companies set a cap on carbon emissions in the supply chain.

Companies designing and planning their supply chains with environmental concerns in mind just got a little help from a new solution that can help them evaluate the impact of various supply chain network configurations and transportation strategies on their carbon footprint. The help comes from ILOG's LogiCTools of Supply Chain Applications, which is offering a new extension, Carbon Footprint, that helps support green supply chain initiatives.

"The level of a supply chain's carbon footprint reflects not only potential current and future liabilities in taxes and offset costs, but may reflect inherent inefficiencies in their operations," said David Simchi-Levi, professor at MIT and product strategy consultant to ILOG. "Moreover, the ability to quantify and reduce carbon dioxide may allow companies to earn credits that can be traded with less-efficient companies, as is evident by the 40 billion Euro world-wide market for carbon emission permits in 2007."

The new Carbon Footprint includes:

  • Out-of-the-box resource data regarding the carbon emissions associated with various supply chain activities: This built-in capability to incorporate standard data provides the user with valuable resource data regarding the carbon emissions associated with various supply chain activities in plants, warehouses and various modes of transportation.
  • Reporting capability helps users assess carbon emission levels of different supply chain configurations: This report shows the relationship between carbon emissions and supply chain activities, enabling customers to make more environmentally-sound decisions and comply with certain regulations that require carbon emissions inventory reporting, such as the Kyoto Protocol. In essence, users can now easily evaluate trade-offs between cost and service levels and can better understand the environmental trade-offs as well.
  • Ability to set a cap on carbon emissions in the supply chain: With this extension, users can set a cap on carbon emissions, and it will act as a non-negotiable constraint when evaluating trade-offs. For example, the extension allows users to optimize their logistics network by incorporating government-imposed caps on carbon dioxide, i.e., the Kyoto Protocol, or through supply chain partners scorecards.

ILOG based in Sunnyvale, Calif. and Paris, provides software and servicest including business rule management systems (BRMS), supply chain planning and scheduling applications as well as optimization and visualization software components.

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