Reduce Business Costs: the experts may not be helping

Most businesses rely upon their service providers to help them to manage non-core costs. Take waste management as an example. Waste is not core to your business, but it is often a bi-product and it may be costly.

The chances are there are savings that can be made, there will be no need to change service provider, other help is available.

Imagine having an agent who is rewarded for reducing your waste charges. Do you think they can really help? If they do not save you anything they do not get paid. So what is the risk? The answer there is no risk.

If you think you are paying too much for waste management contact Scoord. We will perform a free appraisal of your waste management operations, provide you with a financial appraisal, highlight the cost saving potential, then you decide.

Other companies have benefited from this program, on average 20% savings have been realized.  In one case a company in Southern California enjoyed a 52% saving on its waste management contract.  In another, a healthcare company, in the middle of a 5 year contract, saved 17%.

Ask yourself why you get your waste management invoices in hard copy, one at a time, and how much time is spent processing these.  We can reduce these costs as well. What have you got to lose? Contact Scoord today for more information on this money saving, Lean program.

Moving From Supply Chain to Supply Pipe Management

In our current business world when we refer to the processes that encompass the planning, sourcing, manufacturing, storing and delivering of goods we call this supply chain management.

For a chain to be effective each link intertwines with the next.  Each link needs to be as strong as the other links.

So when we think of supply why do we think of this as a chain?  If the chain is a loop that moves around a circuit there is no beginning or end.  If the chain is laid out in a line it serves the purpose of pulling something along or tethering between two points. Neither the loop or the tether really represent the physical supply so this leaves us to consider information, the other fact of supply management.

Information sharing between each process - plan, source, manufacture, deliver, sell can be thought of as a loop with plan being the first link and sell the last.  When sales information is received the plan is reviewed and, if necessary adjusted. Sourcing receives adjusted plan information, reviews inventory on hand and executes new purchases. Manufacturing receives the new purchase information, reviews finished goods and plans resources for production.  So, maybe supply chain refers relates more as information.

In reality, for many businesses, the information does not flow between entities.  Maybe the information does not exist, or it is considered unreliable or simply their is no good process for sharing information.  So now we have a set of chain links tied together with string.  The physical product does not flow, instead each process almost acts as a silo, building inventory to deal with uncertainty.

When businesses began to globalize their sourcing activities they often added more days to the physical process cycle and any inadequacies in information became magnified.  As a result huge investments have been made in improving visibility through each process.  Where these investments were not made there have been huge investments in inventory.  In short most supply management processes have become disintegrated and a huge amount of $ have been spent on attempting to fix problems or simply adding more inventory.

The challenge that faces supply managers is how to redesign the processes to become a pipe.  The volume of the pipe represents inventory capacity, the amount of consumed capacity equals the inventory and flow through the pipe is determined by demand.  Clearly, in this model, the trick is to manage input into the pipe.  Input can be determined by understanding the rate of flow (consumption) and the relative level of pipeline supply (inventory, in all forms).  Supply Pipe Management becomes infinitely easier than all the attempts to create a Supply Chain.

 

Bond Financing For Solar Energy Developments

In this last week Lean and Green noted a report where a bond financing deal is paving the way for a community solar energy farm.

In Brick, NJ the township council were seeking ways to safely develop a capped landfill.  The township will borrow the cost to build the solar field at a special low interest rate only available to municipalities. Standard Alternative, LLC, the company selected to redevelop the site, will then reimburse the township as money is disbursed.

The township will benefit from an upfront $2.5 million payment from Standard Alternative as well as annual rent of the property between $50,000 and $85,000, depending on how much energy the site produces. After 15 years, the township will own the property outright, and will be able to generate electricity for property owned by the township and BTMUA, as well as sell solar energy credits to the power company for a profit,

In exchange, Standard Alternative will make money from the deal over the next 15 years by selling its own energy credits generated by the site.

During the 15 year period, the township and BTMUA will also be able to purchase energy for about 40 percent less than the rate at which they are currently paying, saving a minimum of about $300,000 per year.

Could this form of financing offer additional impetus to the installation of community solar farms?

ACCELERATING GROWTH IN SOLAR ENERGY

I recently met with an executive from the solar energy industry, the company portfolio supports solar developments in one US state.  In our conversation I was provided with insights on how new solar installations get started.  My feeling was whilst the company was doing a great job installing solar systems large scale projects required special investment.

I began to investigate how large scale solar projects can be funded by Solar Investment Bonds that offer a great return of 10% annual interest .  A scheme like this has been created in Europe with a 50 MW solar power site in Spain .

Here in the US Solar Millennium AG and solarhybrid have issued a bond for a US solar power site the plan is to develop a 2.25 gigawatt project.  Solarhybrid expects to begin construction on the first US project as early as 2013, this will be with the 1,000 MW Blythe solar plant in California.

Keystone Pipeline: Permit Denied

The future of 1,700 mile pipeline, designed to carry oil from Alberta, Canada, to refineries on the Gulf of Mexico, has been decided, at least for now.

President Obama attributed the decision to block construction to "the rushed and arbitrary deadline insisted on by Congress" saying it "prevented a full assessment of the pipeline's impact, especially on the health and safety of the American people, as well as our environment".

House Speaker John Boehner says this decision "destroys tens of thousands of American jobs".

The furor is set to continue.

What does the public think?  The Environmentalists clearly care, 12,000 turned up to demonstrate in Washington.  So far, the public opinion has been muted. There is no doubt that the GOP are going to use this as an issue in the 2012 campaign.  The question remains will this only serve as rhetoric for the GOP faithful, or can the undecided population be gullible enough to be convinced by the GOP that President Obama does not really care about the unemployed?

Measuring Performance: Deutsche Post DHL Performance to Date.

Deutsche Post DHL have gone to great lengths to describe how they calculate their Carbon Emmisions and Efficiency Index . The company set up, in 2010 a dedicated Carbon Accounting and Controlling Department. The department is responsible for reporting the index following Greenhouse Gas Protocol and ISO 14064 standards.

Auditing of the performance data has been assigned tp PWC (Price Waterhouse Coopers) who state in their report :
Based on our assignment, selected web-pages and performance indicators presented on the "Responsibility" web sites of the DPDHL corporate website www.dp-dhl.com have been subject to our assurance engagement. Where our assurance engagement covered full web-pages these are labeled with the symbol “√”, while the symbol “[√]” labels web-pages on which only selected information - as 
specified at the end of the respective web-pages - have been subject to our engagement.

The Performance Summary web page does not bare the “[√]” label so, I deduce, that this is not PWC assured information. What is interesting to note is that the performance index is already at 88 (2020 goal = 70). Is this surprising? The company is reporting that they are almost half way to achieving their goal to reduce carbon emissions by 30%.

Why did PWC not audit the all important performance index? Maybe it was so complex a task they could not complete the audit in time or maybe DPDHL determined that these were web pages not selected for audit.

I will endeavor to secure a comment from PWC and DPDHL to help answer these questions.

 

Deutsche Post Approach to Sustainability

Deutsche Post DHL has published the study Delivering Tomorrow: Towards Sustainable Logistics . The study highlights key trends and expert opinion to guide the role of logistics in moving to a low-carbon future.

Deutsche Post DHL are implementing a program,Go Green introduced in 2010. The program has been launched group-wide with an updated Environmental Policy.  Deutsche Post DHL core businesses, mail and logistics, result in emissions of carbon dioxide (CO₂), making climate protection the primary focus of their efforts. However, the environmental protection program, Go Green, also sets the stage for  environmental management systems, covering the local management of aspects such as water, waste, noise, the use of natural resources and local air pollution.


Specifically the policy aims to;

• Improve carbon efficiency by 30% by 2020 compared to 2007. This includes emissions from subcontracted transportation.
• Comply with applicable international, regional and national environmental regulations, and taking additional measures to continually improve environmental performance.
• Develop and maintain an environmental management system which is ISO 14001 compliant.
• Work with suppliers to minimize the environmental impact of the goods and services procured.
• Considering environmental aspects in all major investment and procurement decisions.
• Offer carbon-neutral, carbon-reduced and environmentally-friendly products and services to help customers to “go green”, and to generate value.
• Work with customers to assess and reduce their environmental footprint and to achieve their environmental goals.

To implement GoGreen successfully across the Group, the program is driven by dedicated departments at corporate and divisional level and strongly linked with the Group’s management processes.