Green logistics: Industry expert cites ways of going green and cutting costs at the same time

WALTHAM, Mass.-It's possible to save money and the environment at the same time, and if you need proof, just look at the Green Machine.

That was the message Jack Ampuja, president of the consulting firm Supply Chain Optimizers, and executive director of the Center for Supply Chain Excellence at Niagara University in Lewiston, N.Y., was trying to get across at a Council of Supply Chain Management Professionals (CSCMP) New England Round Table event in Waltham, Mass. Tuesday night.

The event featured, among other things, a description of a new type of tractor for hauling freight, which Ampuja dubbed the "Green Machine" because of its environmentally-friendly design.

The tractor, he said, was conceived and built by a number of former trucking industry workers and veterans in Michigan. The tractor, Ampuja said, contains a long list of "green" enhancements, including nitrogen-filled tires (ordinary air escapes through the rubber over time), carbon-fiber springs, and a special hydrogen injector system for the engine.

Right now, companies like office furniture maker Hayworth, along with Pepsi, Anheuser-Busch and other companies, are expecting to save thousands of gallons of fuel per truck per year, and cut greenhouse gas emissions by amounts measured in metric tons.

But Ampuja was selling a point, not a truck: for all the cutting-edge improvements and patented design, Ampuja said the tractor is built out of off-the-shelf parts, and therefore costs the same as any other tractor on the market, so using them will not cost extra. If anything, Ampuja said, using them will save money long-term.

And that, Ampuja told the packed room, is the reality of the green movement in the corporate world.

"They (cutting costs and helping the environment) are not at odds," he said. "They complement each other."

Ampuja cited a recent study by the Aberdeen Group which found that leading companies are "greening up" by, among other things, redesigning logistics systems and redesigning packaging.

In addition to technological advances, Ampuja challenged the audience of supply chain managers, consultants and vendors to look to their own operations for other ways to go green and save money. Network optimization applications, he said, will be another major component of a green plan in the future, especially with oil prices expected to rise.

This week, prices passed the $80/barrel mark, and the room was silent when Ampuja asked if anyone thought prices would fall anytime soon. That will become a big problem, he said, for unprepared companies with poorly-organized supply chains.

"Most networks are built around lower energy costs," he said.

Right now, Ampuja said, the smart companies are working on "what if" plans for oil prices at $100, $120, or even $150/barrel, ready to implement when and if prices go that high. With each plan, companies have to think about how many distribution centers they have, how efficient the routes are between them, how they manage inventory to feed those routes, and other issues.

Read the rest of the logisticsmgmt.com article here.