IBM Launches Supply Chain Carbon Analysis Tool

By GreenBiz Staff
Published May 22, 2008

Business Operations

Supply Chain

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ARMONK, N.Y. -- IBM's new tool for monitoring and analyzing supply chain emissions is designed to go above and beyond simply calculating carbon emissions.

The company's Carbon Tradeoff Modeler allows companies to tweak their operations and see how changes to packaging, transportation and inventory policies can affect their CO2 emissions.

The Carbon Tradeoff Modeler looks at the tradeoffs, good and bad, when trying to cut CO2, improve packaging and change shipping routes. Developed by IBM Research and IBM Global Business Services, the tool looks at emissions from manufacturing and distribution, and it quantifies the trade-offs between carbon reductions and other factors such as on-time delivery.

"One action causes unintended consequences. You have to weigh all of that and this tool helps measure all those different variables," said Michael Maloney, IBM Media Relations.

Shipping less frequently, according to IBM Research, typically reduces transportation costs and carbon emissions, but increases inventory costs and carbon related to warehousing.

Working with IBM, companies can plug in data on their operations, then model different variables to see the results of different actions. The Carbon Tradeoff Modeler uses information on packaging options, alternative operational processes, alternative transportation modes and energy sources, inventory policies, and sourcing policies to identify what actions can be taken to reduce emissions.

Issues within those areas that the Modeler looks at include the impact on cost and CO2 emissions from changing packaging size and materials, the impact of consolidating orders and what affect inventory replenishment policies have on emissions.

IBM started an internal pilot program using the tool, but does not have the results of the test yet.

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