New currency to replace euro
Pounds are becoming kilos. You are probably thinking that I am about to re-launch the debate of imperial versus metric. I'm not. I'm talking about the latest currency used to express our supply chain performance.
Carbon emissions are the new obsession for businesses. Whether they are expressing genuine environmental convictions or trying to comply with new EU regulations is beside the point. A client recently said to me: for us supply chain people, it is just a matter of replacing euros with carbon dioxide kilos. And I would tend to agree.
A leaner and more effective supply chain is likely to be greener too. In fact, many articles and white papers on reducing the carbon footprint tend to sell it as a bundle: 'cut carbon emissions and make cost savings'.
What I find most interesting is that this new unit of expressing supply chain performance forces many issues with which Sterling or euros had struggled.
Take the idea of planning for instance. In private, even the big corporations will admit that supply chain planning in the medium or long term does not come naturally. Yet in carbon dioxide terms, businesses are starting to use methodologies and software to calculate the carbon footprint through the lifetime of their products.
The green unit is also taking supply chain collaboration to a new level. Indeed, the footprint of a product tends to be looked at as a whole, not on a 'which bit did you generate' basis.
So businesses are keen to get their suppliers to adopt leaner and greener ways, because it will ultimately reflect back on them. In fact, with the carbon dioxide coins in circulation, the extent of the supply chain to be planned and managed has grown; it now includes post-consumption considerations, such as recycling and packaging disposal.
My client was right: you more or less replace our currency with the new unit - even sales and operations planning process works well with carbon dioxide kilos.
Hugh Williams is founder of supply chain planning specialist Hughenden.
