Four ways to improve supply chain energy efficiency

15 August 2013

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16 August 2013 | Will Green

Improving the energy efficiency of the supply chains of SMEs will be a “Herculean” challenge, according to a report.

Supply Chain Energy Efficiency pointed to a “persistent gap between economically justifiable and implemented energy efficiency investments” but says rising costs, government regulations and incentives, corporate environmental responsibility and customer demands have “pushed energy-efficient manufacturing and production into the spotlight”.

The report, produced by the University of Minnesota's Northstar Initiative for Sustainable Enterprise and the Environmental Defence Fund, said: “The gap between potential and actual savings is exacerbated among SMEs.”

It recommended:

1.    Engaging leading companies to identify high-quality suppliers to pilot supply chain efficiency improvements.

2.    Creating one or more sector-based collaborations to enable benchmarking, process capability analysis and best practice sharing.

3.    Increasing transparency and standardisation of energy use, audits and supply chain information.

4.    Creating new finance and credit risk models and approaches.

The report accepts the recommendations represent “Herculean efforts across multiple actors, multiple sectors and multiple regions” and are “largely focused on the development of institutional infrastructure and shared informational assets facilitating implementation”.

The work was based on a two-day workshop involving 31 representatives from energy companies, financiers, retailers, NGOs, government and academia from around the world.

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