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Tuesday, September 14, 2021

Standardizing CO2 Emission in the Supply Chain – The Calculation

ChemicalCo. has outsourced its outbound logistics to a third-party service provider. And SAP manages its transportation data. The company did not enjoy visibility as far as data related to the movement of its freight was concerned. 

Also, it had a bleak overview of its alignment across the geographical terrains and various modes. There were discrepancies in the data that the company obtained and this, in turn, could not provide an accurate figure related to carbon accounting. 

So, it availed the services of SCG or StrategyCo.Global so that it could get an accurate insight into the same. SCG started by seeking inaccurate records that existed in the company so that it could create and calculate the emissions rightly. 

What did ChemicalCo. want to know from SCG?

ChemicalCo. was interested in understanding the present emissions to develop its internal target. Not only that to find out the same, but it was also looking for a method that would find acceptance in the European Union as well. This would enable ChemicaCo. to follow the same method for calculations in the future. 

How did Strategy Co.Global approach the problem?

SCG approached the problem in phases. It made attempts at conducting time-bound so-called sprints that would provide results that would give clarity in decision making. Let us find out more about the different phases. 

  1. Phase 1 comprised understanding the emission framework
  2. Phase 2 comprised calculating the emissions for the mode of transportation individually. 
  3. Phase 3 was all about summarizing the results of the calculations that they obtained. 

So, let us take one phase at a time. 

Phase 1

As mentioned above, this phase was about understanding the emission calculation framework. SCG had to understand the method for calculation for all the modes that include Intermodal, Maritime, Rail, and Road. It was done using the CO2 intensity factor. SCG identified the specific criteria for each mode of transport above so that default intensity factors could be chosen from the emission framework. 

Phase 2

In this phase StrategyCo.Global based on the method of calculation that was opted for, the emission framework for each mode of transportation was found out with inputs from the professionals of ChemicalCo. Interviews were conducted with the managers of the company that monitored each mode of transportation in the company and the SCG team tried to gather the variances that existed in each mode. Hereafter, the emission calculations that were found out from each mode of transportation underwent fine-tuning based on the ChemicalCo.’s feedback. 

Phase 3

In the last phase of the solution, results obtained from studying the final emissions were put forward or presented before ChemicalCo. The results were essentially based on the fine-tuning that was done in the earlier phase. it was also assumed that the same calculation methodology would be applied year after year and for all calculations related to the same in the future. 

What was the outcome of working out the solution by SCG?

Employees of StrategyCo.Global was able to find out a standard calculation method for finding out CO2 emissions for the company’s outbound logistics. ChemicalCo, followed the new calculation methodology, which it also uses for future projects and calculations. By doing so, accurate results for total emissions were obtained, and results improved remarkably. 

The three factors based on which StrategyCo.Global was found to calculate the total emissions was done by taking into account all the modes of transportation aside from product line and region. 

About StrategyCo Global

This is an on-demand strategy workforce service provider with headquarters in Helsinki, Finland. Set up in 2018, the company aims at supporting executives so that their company’s high-priority analytical and strategic projects can get a boost. It also aims at improving the “employability” of graduating students using upskill and project-based experience across industries.

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Josie Patra
Josie Patra is a veteran writer with 21 years of experience. She comes with multiple degrees in literature, computer applications, multimedia design, and management. She delves into a plethora of niches and offers expert guidance on finances, stock market, budgeting, marketing strategies, and such other domains. Josie has also authored books on management, productivity, and digital marketing strategies.

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