+ Strategy + Business: The Energy-Efficient Supply Chain

When we think about reducing energy consumption, we usually think about things we can do around the house: turning off the lights, shorter showers, better insulation, and so forth. Those things help, of course, but the truth is that industrial supply chains offer perhaps the biggest opportunity, if for no other reason than their immense scale. Shaving one or two grams of material off of a product can mean enormous savings when multiplied by 100 million units a year.

The always-excellent Strategy+Business offers a fascinating and deep overview of some of the ways the supply chain can be optimized for energy efficiency:

As concerns mount about fuel prices, long-term energy availability, and climate change, companies’ attention is finally turning toward one of the most pervasive places where energy can be conserved: the industrial supply chain. Simply put, the supply chain is the production and distribution network that encompasses the sourcing, manufacturing, transportation, commercialization, distribution, consumption, and disposal of goods, from the ore mine to the trash can.

In particular, I really appreciated the details like this anecdote:

For example, in 2006, the Carbon Trust, a United Kingdom–based research and advisory group, discovered a “perverse incentive” in the sourcing of raw potatoes for manufacturing snack foods. (The analysis appeared in the group’s report, “Carbon Footprints in the Supply Chain: The Next Step for Business.”) Charged with studying the carbon footprint of potato chips, the Trust’s researchers found that because prices are set by weight, farmers typically control humidification to produce moister and therefore heavier potatoes. Even within the strictly limited specifications of moisture content set by the food manufacturers, these few grams of extra water are significant. The extra cooking needed to burn them off accounted for an unexpectedly high percentage of the chips’ energy consumption.

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