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How Business Leaders Cut Carbon, Cut Costs & Create a Stronger Supply Chain
!
The Road to Sustainable Freight Transportation:
V E R G E 2 0 1 4 !
{ } Why Should You Take On Supply Chain Sustainability?!
1. Next logical step!2. Right thing to do!3. Big opportunities for improvement!
!
{ } Why You Might NOT Be Taking On Supply Chain Sustainability?!
1. Yet another thing…!2. How to get buy in/resources/support
for yet another thing…!3. Not sure where to begin…!
!
{ } Supply Chain Sustainability Case Study:
Freight Supply Chain at Hewlett Packard
VP of Americas Supply Chain Operations, Hewlett Packard!
Mark Bakker
© Copyright 2014 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice. 8
HP’s portfolio of businesses Enterprise Group
Printing & Personal Systems
Software
• Strong enterprise-grade services portfolio
• Advising our clients and helping them transform and manage their IT environment and services to deliver industry-leading business outcomes
• World-class IT operations and projects
• Deep relationships across the world’s largest enterprises
• Global scale and presence
• Industry-leading innovation in design and ease of use
• Strong product quality, compatibility and security
• Lower costs and reduced environmental impact
• Significant, leading share positions
• Unmatched scale, distribution, and IP in the industry
• Optimizing the user experience through modern IT applications, operations, and cloud management
• Industry leading IP with capabilities across Cloud, IT Management, Security, and Big Data
• Platform agnostic and open standard-based software
• Unmatched assets in storage, networking and servers
• Industry leading Converged Infrastructure, Software-defined Data Center, and Converged Cloud
• Modern architectures across infrastructure stack, based on open systems
• Strong share position
Enterprise Services
$23B
$56B $28B $4B
VP of Hi Tech & Sustainability, !Menlo Logistics!
Lonny Warner
Menlo Logis+cs Global Non-‐Asset Based Third Party Logis8cs Provider
| Menlo Logis+cs | Proprietary and Confiden+al | Page 10
Geographic scope 20 countries / five continents Global warehousing 20 million ft2
Global Purchased Transportation $1.5 billion 2013 Revenue $1.5 billion (€1.1 billion)
Sydney
San Francisco
Monterrey Guadalajara Mexico City
Auburn Hills Aurora Toronto
San+ago
Delhi
Mumbai
Singapore Kuala Lumpur
Hong Kong
Shanghai Guangzhou
São Paulo
Beijing Xian
Chengdu
Ürümqi
Wuhan
Bangkok
Shenyang
Amsterdam
RoRerdam Eersel Hahn
Prague Dublin
Lima
11 © Copyright 2011 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.
“The betterment of our society is not a job to be left to a few. It is a responsibility to be shared by
all” David Packard
© Copyright 2014 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.
HP Living Progress: Action + Innovation HP drives progress on multiple fronts through action and innovation
Human Progress
Environmental Progress
Economic Progress
The Three Pillars of Menlo’s Sustainability Program
| Menlo Logis+cs | Proprietary and Confiden+al | Page 13
People Planet
Commitment to Planet includes the conserva+on of natural resources and suppor+ng business
prac+ces that protect our natural environment.
Commitment to Prosperity means we foster crea+vity and innova+on to enable
future growth while protec+ng the
environment and increasing profits.
Prosperity
Over the past decade, Menlo’s commitment to sustainability and reducing waste grew from our Lean opera+ng culture and objec+ve to be a leader in supply chain sustainability.
Commitment to People means fostering
contribu+ons from associates, vendors and supply chain partners to achieve sustainability
goals within our communi+es and
opera+ng environments.
Our principles improve our collec+ve ability to achieve our customers sustainability goals
| Menlo Logis+cs | Proprietary and Confiden+al | Page 14
Contribute to our Communi+es
Reduce greenhouse gas (GHG) emissions
Reduce Natural Resource Consump+on
Strive to contribute zero waste to landfills through preven+on, minimiza+on, reuse and recycling
Give priority to sustainable products and partners
© Copyright 2014 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice. 16
Goals: Percent reduction in GHG emissions intensity by 2020 (from 2010 baseline)
20% 20% 40%
© Copyright 2014 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice. 17
HP Carbon Footprint – Product Transportation Goal
Drive a 20 percent decrease in its first-tier manufacturing and product transportation-related GHG emissions intensity by 2020, compared to 2010
- Increase the efficiency of our product transportation network (minimize size/weight of shipments, decrease distance products travel, shift towards environmentally friendly transport modes)
Opportuni+es to improve supply chain sustainability exist across the value chain
| Menlo Logis+cs | Proprietary and Confiden+al | Page 18
Supplier
Commercial Documenta+on Repor+ng &
Performance Metrics FORECAST TO SUPPLIER
Visibility and Tracking
Origin Consolida+on Supplier
Assembly Pick-‐up/ Transfer Delivery Inbound
Warehouse Customs Clearance Transporta+on
ADVANCE SHIPMENT NOTICE (ASN) STATUS UPDATE
EVENTS AND MILESTONE STAGES
Menlo TMS ADVANCE SHIPMENT NOTICE (ASN)
MATERIAL MANAGEMENT & CONSOLIDATION
DOCUMENTATION, TRACKING, AND REPORTING SHIPMENT RELEASE
TRANSPORTATION MANAGEMENT REGULATORY
MANAGEMENT FREIGHT PAYMENT TOTAL LANDED
COST ANALYSIS
SUPPLIER ORDER MANAGEMENT SYSTEM
ORDERING & PLANNING SYSTEMS
EDI FORECAST/RELEASE
OEM ERP SYSTEMS MANUFACTURING PLANT MRP SYSTEM
ORDERING & PLANNING SYSTEMS
INVENTORY MGMT. • Safety Stock • Buffer Stock • Min/Max Release Triggers
A materiality assessment allowed us to priori+ze what key stakeholders want
| Menlo Logis+cs | Proprietary and Confiden+al | Page 19
Note: Numbers correspond to GRI V3 Environmental Indicators
Material GRI Environmental Indicators
SMARTWAY
SHIPPERS
3rd PARTY LOGISTICS
COMPANIES
CARRIERS
How SmartWay Works
SmartWay Partner Companies… Measure and
Reduce Carbon Footprint
Benchmark Performance
Report Results
Innovate Operations
Improve Efficiency
© Copyright 2014 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice. 22
HP’s Global Supply Chain…
Daily – We transport more than 1M products globally Ship to 170+ countries worldwide Track annual Product Transport CO2 footprint since 2009
Reduce GHG Emissions by 20% by 2020 – HP Company Goal US / Canada transportation network utilizes 100% SmartWay Partners Since 2008 SmartWay Logos on HP Product Packaging Our Customers Care… - Billions of Dollars of RFQs (Environmental Components) - Sustainability a Differentiator
105 PCs
7 Servers
880 Ink / Toner Cartridges
Every 60 Seconds...
88 Printers
Strategic collabora+on fosters impacjul changes across the supply chain
| Menlo Logis+cs | Proprietary and Confiden+al | Page 23
Lean tools and approach enable year over year gains in sustainability performance
| Menlo Logis+cs | Proprietary and Confiden+al | Page 24
Create Current State Value Stream Map (VSM)
Iden+fy Kaizen Opportuni+es
Establish Con+nuous Improvement Roadmap (CIR) Conduct Kaizens events
Design Future State VSM
Update CIR and communicate with internal Team and Leadership Monthly
Update VSM every 6 months
Opportuni+es to improve supply chain sustainability exist across the value chain
| Menlo Logis+cs | Proprietary and Confiden+al | Page 25
Supplier
Commercial Documenta+on Repor+ng &
Performance Metrics FORECAST TO SUPPLIER
Visibility and Tracking
Origin Consolida+on Supplier
Assembly Pick-‐up/ Transfer Delivery Inbound
Warehouse Customs Clearance Transporta+on
ADVANCE SHIPMENT NOTICE (ASN) STATUS UPDATE
EVENTS AND MILESTONE STAGES
Menlo TMS ADVANCE SHIPMENT NOTICE (ASN)
MATERIAL MANAGEMENT & CONSOLIDATION
DOCUMENTATION, TRACKING, AND REPORTING SHIPMENT RELEASE
TRANSPORTATION MANAGEMENT REGULATORY
MANAGEMENT FREIGHT PAYMENT TOTAL LANDED
COST ANALYSIS
SUPPLIER ORDER MANAGEMENT SYSTEM
ORDERING & PLANNING SYSTEMS
EDI FORECAST/RELEASE
OEM ERP SYSTEMS MANUFACTURING PLANT MRP SYSTEM
ORDERING & PLANNING SYSTEMS
INVENTORY MGMT. • Safety Stock • Buffer Stock • Min/Max Release Triggers
Improve vehicle fuel efficiency
Improve load factor Reduce ton-‐
miles
Mode Shio
SmartWay procurement
goals
Warehouse resource efficiency
GHG repor+ng
| Menlo Logis+cs | Proprietary and Confiden+al | Page 26
DC’s
Center Pools
West Coast Hub San Bernardino –
Menlo
El Paso/Socorro
Indianapolis Sandston
We have been able to successfully reduce GHG emissions over 12,000 MT for HP
© Copyright 2014 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice. 27
HP’s New Logistics Gateways… Trans-Eurasian Rail -Chongqing, China to Western Europe Port of Piraeus (Greece) -Asia to Europe, Middle East and Africa Panama Canal -Expansion program completed by end of 2015 Benefits: • Simplify Global Network • Improve End to End Transit Times • Reduce Inventory Costs • Decrease CO2 emissions
! Mode Conversion ! Decrease Distance
© Copyright 2014 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice. 28
HP Global Logistics Environment Associations
Trucking
Air Freight
Ocean Freight
US EPA SmartWay
Global Logistics Emissions Council
Climate and Clean Air Coalition (UN)
Clean Cargo Working Group
Green Freight Europe
Green Freight Asia
International Air Transport Assoc.
Green Freight Latin America
China Green Freight Initiative
! Industry Leadership
CarbonNet helps our customers track emissions across the supply chain
| Menlo Logis+cs | Proprietary and Confiden+al | Page 29
Interna+onal Supplier
15 MT CO2
Port of Exit
3,500 MT CO2
Port of Entry
1,500 MT CO2
Rail Yard
60 MT CO2
Warehouse
2,700 MT CO2
Retail #1
825 MT CO2
CarbonNetTM supports emission reduc+on strategies by analyzing warehouse and carrier emission data and visualizing performance across the en+re supply chain
Understanding and proac+vely managing your SC CO2 footprint will improve resilience as requirements + expecta+ons increase
© Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice. 30
HP Logistics Environmental Opportunities… Environmental Criteria Utilize environmental factors in the LSP selection process
Total Cost of Busines
s
Cost Savings " CO2 Reductions Network Enhancement and Optimization Programs Drive CO2 Reductions Weight / Distance / Mode of Transport
Logistics CO2 Reduction Programs Increase the efficiency of our product transportation network • Minimize size/weight of shipments • Decrease distance products travel - consolidate
shipments • Shift towards environmentally friendly transport
modes - Air to Ocean, Truck to Rail, etc.
• Influence our logistics services providers (LSPs) to decrease emissions
• Redesign product packaging to optimize product transportation
© Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice. 31
Making a Positive Impact Around the World
Environment We’re transforming how people live and work to be more sustainable, with tools and solutions that allow them to achieve more with less.
Education We’re empowering the next generation of innovators with breakthrough products and solutions that advance STEM teaching and learning.
Healthcare We’re making a positive impact on global health, helping to save lives thorough our partnerships, technology, and mobile health solutions.
Community Engagement We’re making a positive impact through 330,000+ employees who give their time and talent to make a difference.
“Global Citizenship one of seven Corporate Objectives since 1957”
© Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice. 32
1. Assess supply chain efficiency gaps 2. Set standards and goals 3. Benchmark supplier performance and engage suppliers in
improving 4. Leverage government programs and resources 5. Measure progress/make continuous improvements 6. Collaborate with suppliers, government and industry leaders
Six Steps to A More Sustainable Freight Supply Chain
For more information:
www.epa.gov/smartway
[email protected] SmartWay Helpline 734-214-4767 Tracie Jackson Hall 734-214-4871 [email protected]
THANK YOU