Business to Business: the Heart of the Revolution?
Walmart grabs the headlines with its sustainability policies, but it is their suppliers - not just of the goods they stock - but also energy, buildings, transportation and so on, who have to meet these targets. We have seen a quiet revolution over the last ten years in the corporate supply chain. My prediction for 2009 is that we will see the sustainability/efficiency revolution now diffusing into smaller businesses; often in the form of aggregators, internet exchanges and buying co-operatives which can bring your non-core functions ‘Fortune 500’ level efficiency and costs. Why pay more, after all?
Energy. Larger companies such as BT, Ford and Timberland are securing their energy costs and supply, by investing in building wind farms and similar. The global IT industry, is a bigger user of energy than the global airline industry (according to Gartner research). As the balance of costs shifts from hardware to energy use, we see many more initiatives both on energy (Google’s Renewable Energy Cheaper than Coal) and also on energy using technology; with the likes of IBM and Cisco reasserting the need to buy on lifetime cost and impact, not price.
Communication and transportation. Large companies can save millions in costs, plus a corresponding amount of time, by building more flexibility and remote working tools, and less travel into their business. Supply chain transportation is in revolution, with moves to manufacture closer to markets, to rationalise the movement of goods and also to build ‘a second supply chain’ to bring back and re-use valuable materials in used goods.
Built environment. Companies are learning that sustainable working environments are healthier, more productive and cheaper to run. The standards used to be set by developers, seeking to minimise their costs, but now – for instance with LEED building standards – a much more user centred (and sustainable) approach is becoming the norm.
Printing and packaging. Printing is the fifth most harmful industry; although improving rapidly and some British printers (eg Seacourt) are among the most sustainable in the world. Don’t expect 2009 to be an easy year for direct mail, packaging, point of sale, but correspondingly look for many breakthrough innovations, ranging from hyper efficient post office vehicles, through to re-usable packaging and stationary.
Sourcing. Sustainable sourcing of all materials is now in the spotlight. Witness the protests over palm oil, biofuels, water and so on – this is ‘the new child labour’. Business has run out of places in the world to go to get costs down and avoid regulation. 2009 could also be the year when business models that are unsustainable start to get exposed. And with costs and financing already under strain, who can afford to get found out?
The network procurement revolution is at least as big a deal as ‘the long tail’ in consumer markets. Its implications include open innovation, reducing barriers to entry to firms of any size, increasing co-operation between buyer and seller, and avoiding waste by finding new uses for it in the business ecosystem – for instance wood waste is already used for products ranging from equestrian flooring to biofuels.
Sharing and barter. The same networks that enable open procurement also hold the potential for businesses to cooperate and share resources. The clustering of businesses - either in physical locales or online communities of interest - can enable them to co-operate in purchase power aggregation, barter, trading in surplus stock and resources, sharing delivery vehicles and many other such ways.
1 comment:
Of the money we have seen thrown around thus far let me ask you this, that 168 billion that our country borrowed to give away to us in the form of an "economic stimulus package" ...did it do a darn thing to create jobs or stimulate our economy? NO, nothing. And we borrowed the money from China.
This past year the high cost of gas nearly destroyed our economy and society. More people lost jobs and homes as a direct result of that than any other factor in our history.
Fannie and Freddie continue to get all the blame. Of all the homes I have seen lost in my area SW FL and believe me I have seen many, none were due to an adjustable mortgage. They were due to lack of work.
Families went broke at the pump alone. Then added to that most saw record rate hikes at their utility companies. The high cost of fuel resulted in higher production and shipping costs that were passed on to the consumer, in most cases higher prices for smaller packaging.
Consumers tightened their belts, cut back, went out to eat less or stopped totally. Drove around on tires that needed replacing longer, some even quit buying medicines they really need.Unfortunately cutting back and spending less results in even more layoffs. A real economical catch-22.
And, as we are doing the happy dance around the lower prices at the pumps OPEC is planning to cut production to raise prices. They are even getting Russia in on the cutbacks. Oil is finite. We have used up the easy to get to reserves already. It will run out one day.
We have so much available to us. Solar and Wind are free sources of energy. Of course to get the harnessing process set up is somewhat costly it is still free energy.
It would cost the equivalent of 60 cents per gallon to charge and drive an electric car. The electricity to charge the car could be generated by solar or wind at least in part and in most cases totally.
If all gasoline cars, trucks, and suv’s instead had plug-in electric drive trains, the amount of electricity needed to replace gasoline is about equal to the estimated wind energy potential of the state of North Dakota. What a powerful resources we have neglected.
Jeff Wilson has a profound new book out called The Manhattan Project of 2009 Energy Independence Now. www.themanhattanprojectof2009.com Powerful, powerful book! Also, if you think electric cars are way out there in some futuristic lala land please check out the web site for a company Better Place. http://www.betterplace.com/ they are setting up infrastructures in San Francisco, San Jose and Oakland as well as the state of Hawaii to accommodate electric car use.
I think we need to rethink all these bailouts and stimulus packages. We need to use some of these billions to bail America out of it's dependence on foreign oil. Create clean cheap energy, create millions of badly needed new green collar jobs and get out from under the grip foreign oil has on us. What a win -win situation that would be for America at large
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