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VERGE 2014!
The Road to Sustainable
Freight Transportation:
How Business Leaders Cut Carbon, Cut Costs &
Create a Stronger Supply Chain
!
{
Why Should You Take On Supply
Chain Sustainability?!
}
1.  Next logical step!
2.  Right thing to do!
3.  Big opportunities for improvement!
!
{
Why You Might NOT Be Taking On
Supply Chain Sustainability?!
}
1.  Yet another thing…!
2.  How to get buy in/resources/support
for yet another thing…!
3.  Not sure where to begin…!
!
{
}
Supply Chain Sustainability Case Study:
Freight Supply Chain at Hewlett Packard
Mark Bakker
VP of Americas Supply
Chain Operations, Hewlett
Packard!
HP’s portfolio of businesses
Enterprise
Services
$23B
•  Strong enterprise-grade
services portfolio
•  Advising our clients and
helping them transform and
manage their IT environment
and services to deliver
industry-leading business
outcomes
•  World-class IT operations and
projects
•  Deep relationships across the
world’s largest enterprises
•  Global scale and presence
8
Printing &
Enterprise
Personal Systems Group
$56B
•  Industry-leading innovation in
design and ease of use
•  Strong product quality,
compatibility and security
•  Lower costs and reduced
environmental impact
•  Significant, leading
share positions
•  Unmatched scale,
distribution, and IP in the
industry
$28B
•  Unmatched assets in
storage, networking and
servers
•  Industry leading Converged
Infrastructure, Softwaredefined Data Center, and
Converged Cloud
•  Modern architectures across
infrastructure stack, based on
open systems
•  Strong share position
© Copyright 2014 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.
Software
$4B
•  Optimizing the user
experience through modern
IT applications, operations,
and cloud management
•  Industry leading IP with
capabilities across Cloud, IT
Management, Security, and
Big Data
•  Platform agnostic and open
standard-based software
Lonny Warner
VP of Hi Tech &
Sustainability, !
Menlo Logistics!
Menlo Logis+cs Global Non-­‐Asset Based Third Party Logis8cs Provider
Amsterdam
Dublin
Prague
San Francisco
Guadalajara
Toronto
Aurora
Ürümqi
RoRerdam
EerselHahn
Auburn Hills
Monterrey
Xian
Delhi
Mumbai
Mexico City
Beijing
Shenyang Wuhan
Shanghai
Chengdu
Guangzhou
Hong Kong
Bangkok
Singapore
Kuala Lumpur
Lima
São Paulo
Sydney
San+ago
Geographic scope
Global warehousing
Global Purchased Transportation
2013 Revenue
20 countries / five continents
20 million ft2
$1.5 billion
$1.5 billion (€1.1 billion)
| Menlo Logis+cs | Proprietary and Confiden+al | Page 10
“The betterment of our society is
not a job to be left to a few. It is
a responsibility to be shared by
all”
David Packard
11 © Copyright 2011 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.
HP Living Progress: Action + Innovation
HP drives progress on multiple fronts through action and innovation
Human
Progress
Economic
Progress
© Copyright 2014 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.
Environmental
Progress
The Three Pillars of Menlo’s Sustainability Program
People
Commitment to People means fostering contribu+ons from associates, vendors and supply chain partners to achieve sustainability goals within our communi+es and opera+ng environments.
Planet
Commitment to Planet includes the conserva+on of natural resources and suppor+ng business prac+ces that protect our natural environment. Prosperity
Commitment to Prosperity means we foster crea+vity and innova+on to enable future growth while protec+ng the environment and increasing profits.
Over the past decade, Menlo’s commitment to sustainability and reducing waste grew from our Lean opera+ng culture and objec+ve to be a leader in supply chain sustainability. | Menlo Logis+cs | Proprietary and Confiden+al | Page 13
Our principles improve our collec+ve ability to achieve our customers sustainability goals
Reduce Natural Resource Consump+on
Contribute to our Communi+es
Give priority to sustainable products and partners
Strive to contribute zero waste to landfills through preven+on, minimiza+on, reuse and recycling Reduce greenhouse gas (GHG) emissions
| Menlo Logis+cs | Proprietary and Confiden+al | Page 14
Goals: Percent reduction in GHG emissions
intensity by 2020 (from 2010 baseline)
20%
16
20%
© Copyright 2014 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.
40%
HP Carbon Footprint – Product Transportation
Goal
Drive a 20 percent decrease in its first-tier
manufacturing and product transportation-related GHG
emissions intensity by 2020, compared to 2010
- Increase the efficiency of our product transportation
network
(minimize size/weight of shipments, decrease distance
products travel, shift towards environmentally friendly
transport modes)
17
© Copyright 2014 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.
Opportuni+es to improve supply chain sustainability exist across the value chain
Pick-­‐up/ Transfer
Origin Consolida+on
Supplier
Transporta+on
Inbound Warehouse
Customs Clearance
EVENTS AND MILESTONE STAGES
SUPPLIER ORDER MANAGEMENT SYSTEM
ORDERING & PLANNING SYSTEMS
ADVANCE SHIPMENT
NOTICE (ASN)
MATERIAL
MANAGEMENT & CONSOLIDATION TRANSPORTATION
MANAGEMENT REGULATORY
MANAGEMENT Supplier Assembly
ADVANCE SHIPMENT
NOTICE (ASN)
STATUS UPDATE
Menlo TMS
SHIPMENT RELEASE Delivery
FREIGHT
PAYMENT TOTAL LANDED COST ANALYSIS
DOCUMENTATION, TRACKING, AND REPORTING
OEM ERP SYSTEMS
MANUFACTURING
PLANT MRP SYSTEM
ORDERING &
PLANNING SYSTEMS
INVENTORY MGMT.
•  Safety Stock
•  Buffer Stock
•  Min/Max Release Triggers
EDI FORECAST/RELEASE Commercial Documenta+on
Visibility and Tracking
Repor+ng & Performance Metrics
FORECAST TO SUPPLIER
| Menlo Logis+cs | Proprietary and Confiden+al | Page 18
A materiality assessment allowed us to priori+ze what key stakeholders want
Material GRI Environmental Indicators
Note: Numbers correspond to GRI V3 Environmental Indicators
| Menlo Logis+cs | Proprietary and Confiden+al | Page 19
How SmartWay Works
3rd PARTY
LOGISTICS
COMPANIES
SHIPPERS
CARRIERS
SMARTWAY
SmartWay Partner Companies…
Measure and
Reduce Carbon
Footprint
Improve
Efficiency
Innovate
Operations
Benchmark
Performance
Report
Results
HP’s Global Supply Chain…
Every 60 Seconds...
105
PCs
88
Printers
880
Ink / Toner Cartridges
Daily – We transport more than 1M products globally
Ship to 170+ countries worldwide
Track annual Product Transport CO2 footprint since 2009
Reduce GHG Emissions by 20% by 2020 – HP Company Goal
US / Canada transportation network utilizes 100% SmartWay
Partners
Since 2008 SmartWay Logos on HP Product Packaging
Our Customers Care…
- Billions of Dollars of RFQs (Environmental Components)
- Sustainability a Differentiator
22
© Copyright 2014 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.
7
Servers
Strategic collabora+on fosters impacjul changes across the supply chain
| Menlo Logis+cs | Proprietary and Confiden+al | Page 23
Lean tools and approach enable year over year gains in sustainability performance
Iden+fy Kaizen Opportuni+es
Design Future State VSM
Create Current State Value Stream Map (VSM)
Update VSM every 6 months
Conduct Kaizens events
Update CIR and communicate with internal Team and Leadership Monthly Establish Con+nuous Improvement Roadmap (CIR)
| Menlo Logis+cs | Proprietary and Confiden+al | Page 24
Opportuni+es to improve supply chain sustainability exist across the value chain
Pick-­‐up/ Transfer
Origin Consolida+on
Supplier
Transporta+on
Inbound Warehouse
Customs Clearance
Delivery
Warehouse resource efficiency
Improve vehicle fuel efficiency EVENTS AND MILESTONE STAGES
ORDERING & PLANNING SYSTEMS
Reduce ton-­‐
miles
ADVANCE SHIPMENT
NOTICE (ASN)
SHIPMENT RELEASE TRANSPORTATION
MANAGEMENT REGULATORY
MANAGEMENT FREIGHT
PAYMENT TOTAL LANDED COST ANALYSIS
DOCUMENTATION, TRACKING, AND REPORTING
GHG repor+ng
Improve load factor
SmartWay procurement goals
ADVANCE SHIPMENT
NOTICE (ASN)
STATUS UPDATE
Menlo TMS
MATERIAL
MANAGEMENT & CONSOLIDATION Supplier Assembly
Mode Shio
SUPPLIER ORDER MANAGEMENT SYSTEM
OEM ERP SYSTEMS
MANUFACTURING
PLANT MRP SYSTEM
ORDERING &
PLANNING SYSTEMS
INVENTORY MGMT.
•  Safety Stock
•  Buffer Stock
•  Min/Max Release Triggers
EDI FORECAST/RELEASE Commercial Documenta+on
Visibility and Tracking
Repor+ng & Performance Metrics
FORECAST TO SUPPLIER
| Menlo Logis+cs | Proprietary and Confiden+al | Page 25
We have been able to successfully reduce GHG emissions over 12,000 MT for HP
Indianapolis
West Coast Hub San Bernardino – Menlo
Sandston
DC’s
El Paso/Socorro
| Menlo Logis+cs | Proprietary and Confiden+al | Page 26
Center Pools
HP’s New Logistics Gateways…
Trans-Eurasian Rail
-Chongqing, China to Western Europe
Port of Piraeus (Greece)
-Asia to Europe, Middle East and Africa
Panama Canal
-Expansion program completed by end
of 2015
Benefits:
•  Simplify Global Network
•  Improve End to End Transit Times
•  Reduce Inventory Costs
•  Decrease CO2 emissions
!  Mode Conversion
27
!  Decrease Distance
© Copyright 2014 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.
HP Global Logistics Environment Associations
Clean Cargo
Working Group
International Air
Transport Assoc.
Global Logistics
Emissions Council
Green Freight
Europe
China Green
Freight Initiative
US EPA
SmartWay
Green Freight
Asia
Green Freight
Latin America
Truckin
g
Air
Freight
Ocean
Freight
!  Industry Leadership
28
© Copyright 2014 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.
Climate and Clean
Air Coalition (UN)
CarbonNet helps our customers track emissions across the supply chain
CarbonNetTM supports emission reduc+on strategies by analyzing warehouse and carrier emission data and visualizing performance across the en+re supply chain
Interna+onal Supplier
15 MT CO2
Port of Exit
Port of Entry
3,500 MT CO2
1,500 MT CO2
Rail Yard
Warehouse
2,700 MT CO2
60 MT CO2
Retail #1
825 MT CO2
Understanding and proac+vely managing your SC CO2 footprint will improve resilience as requirements + expecta+ons increase
| Menlo Logis+cs | Proprietary and Confiden+al | Page 29
HP Logistics Environmental Opportunities…
Environmental Criteria
Logistics CO2 Reduction Programs
Utilize environmental factors in the LSP selection
process
Increase the efficiency of our product transportation
network
•  Minimize size/weight of shipments
Total
Cost of
Busines
s
• 
Decrease distance products travel - consolidate
shipments
• 
Shift towards environmentally friendly transport
modes
- Air to Ocean, Truck to Rail, etc.
• 
Influence our logistics services providers (LSPs) to
decrease emissions
Redesign product packaging to optimize product
transportation
• 
Cost Savings " CO2 Reductions
Network Enhancement and Optimization Programs
Drive CO2 Reductions
Weight / Distance / Mode of Transport
30
© Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.
Making a Positive Impact Around the World
Education
Environment
Healthcare
We’re empowering the next
generation of innovators
with breakthrough products
and solutions that advance
STEM teaching and
learning.
We’re transforming how
people live and work to be
more sustainable, with tools
and solutions that allow
them to achieve more with
less.
We’re making a positive
impact on global health,
helping to save lives
thorough our partnerships,
technology, and mobile
health solutions.
Community
Engagement
We’re making a positive
impact through 330,000+
employees who give their
time and talent to make a
difference.
“Global Citizenship one of seven Corporate Objectives since 1957”
31
© Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.
Six Steps to A More Sustainable Freight Supply
Chain
1. 
2. 
3. 
4. 
5. 
6. 
32
Assess supply chain efficiency gaps
Set standards and goals
Benchmark supplier performance and engage suppliers in
improving
Leverage government programs and resources
Measure progress/make continuous improvements
Collaborate with suppliers, government and industry leaders
© Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.
For more information:
www.epa.gov/smartway
[email protected]
SmartWay Helpline 734-214-4767
Tracie Jackson Hall 734-214-4871
[email protected]
THANK YOU