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Menlo is Tracking Supply Chain Sustainability

Menlo Worldwide Logistics, the global logistics subsidiary of Con-way Inc. introduces CarbonNet. Combining newly developed software with expertise in lean tools and continuous improvement processes, CarbonNet is a carbon management technology that gives Menlo the ability to capture, calculate and manage emissions activity across the value supply chain.

“One of Menlo’s primary business priorities is to drive Sustainability practices throughout our operations, with a goal of zero waste,” said Anthony Oliverio, vice president, supply chain services, Menlo Worldwide Logistics. “We developed CarbonNet with this goal in mind, so we can first accurately benchmark and measure the carbon footprint of our operations today, and then identify and capture reduction opportunities,” he explained. “In effect, we are using ourselves as the pilot customer. As we map and measure our facilities and operations, we are applying lessons learned and refining the program. Our goal is to provide this as a service to our customers as well.”

Oliverio noted that the data and findings Menlo obtains in measuring natural resource consumption and associated carbon output of its own operations will be immediately valuable to customers for whom Menlo provides warehousing and transportation management services. Many of Menlo’s industrial customers are pursuing similar Sustainability initiatives and are seeking accurate, validated data, measurement tools and solution capabilities that can identify and deliver reductions in supply-chain-related carbon output.

Menlo has been piloting CarbonNet at 60 of its facilities in the United States for the past year. Emission source data was collected on each facility and an emissions baseline established. Measurements are currently being made against published industry indexes and standards to identify reduction opportunities to meet emissions reduction goals.

How it Works

CarbonNet is supported by a team of Menlo Lean and process management experts using a cloud-based software program developed exclusively by Menlo and its IT team. The application is designed to be highly configurable, and can accept a wide variety of data inputs to catalog key emissions characteristics of a facility and the activities performed within, as well as the transport of products and materials between such locations. It can accept input as well from suppliers, vendors and other third parties whose activities could contribute to the makeup of a supply chain carbon footprint.

As it calculates values, the application takes into consideration the type of operation, design and size of facility, area of the globe in which it operates, number of employees, operating hours and other contributing factors. Additional elements which are captured for the emissions profile can include the energy impact of power equipment used in a facility, such as forklifts and pallet jacks, as well as heating and lighting systems, computing systems, water use and recycling programs. Another module of the application provides similarly configurable data capture capability, visibility into and measurement of transportation resources, such as airfreight, truckload or LTL trucking services, and what portion of the carbon footprint can be attributed to the energy use of these operations.

Ultimately, the system bundles all the inputs, provides an output which catalogs energy type and usage, and then calculates a carbon equivalency number to provide the initial baseline carbon footprint for the facility or the transportation operation. The “supply chain profile” and baseline emissions output represent the first two phases of a five-step, Lean-based work process to define and establish a continuous improvement solution for carbon management in the supply chain.

Phase three involves analyzing the baseline outputs. This phase uses value stream map methodologies to assess the outputs against internal and external standards. The value stream map accomplishes two goals: identifying inefficiencies or waste in the “current state,” and projecting a “future state” solution to enable improvements. The solution becomes the roadmap for changes or new processes that under the future state will capture the savings and drive continuous improvements.

One example would be electricity usage. By comparing the kilowatts/hour consumed per square foot in a facility against a benchmark standard—in this case the Department of Energy’s (DOE) Commercial Building Energy Consumption data—it can be determined if energy consumption is in line with industry norms for similar facilities—or not. Where an exception is identified, the next step is finding the root cause and then developing a continuous improvement plan. The plan may be as simple as discovering the facility’s heater needs maintenance or repair that, if done, will bring the heater’s energy consumption use back into compliance—and reduce associated carbon emissions.

The DOE index is just one of many benchmarking data sources incorporated into the program. Others include the Greenhouse Gas Protocol and energy use definitions published by the World Resource Institute, as well as standards for trucking emissions published by the EPA’s SmartWay program. In addition, CarbonNet captures data that supports reporting under the Global Reporting Initiative (GRI).

Phases four through five involve implementing the designed solution and monitoring results to ensure the intended goals are achieved. With Menlo’s CarbonNet technology, supply chain sustainability is achieved through a flexible and focused platform and process technology that is sustained by Lean practices and a team of committed individuals.

“We already are seeing significant, validated results from applying our Lean methodologies and the CarbonNet software to our own operations,” Oliverio noted. “That’s generated interest from several current customers who want us to expand the program outside of our four walls, and help them utilize these tools and processes for carbon profiling and management of their supply chain activities.”

“This is an exciting, emerging area that’s ripe for innovative solutions,” Oliverio added. “Our approach represents a unique and interesting combination of purpose-designed software complemented by Lean tools and practices, and proven expertise in using them. We plan to commercialize CarbonNet and bring this service to the broader external market early in 2013,” he concluded.

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