Welcome to myjunction ~ the junction for junctionites!

Monday, June 9, 2008

eCommerce reduces Global Warming ~

By Deep Banerjee: The harmful effects of global warming on daily life are already showing up, and within a couple of decades hundreds of millions of people will not have enough water, say top scientists.

At the same time, tens of millions of others will be flooded out of their homes each year as the Earth reels from rising temperatures and sea levels, according to a draft of an international scientific report.

Tropical diseases like malaria will spread. By 2050, polar bears will mostly be found in zoos, their habitats gone. Pests like fire ants will thrive.

For a time, food will be plentiful because of the longer growing season in northern regions. But by 2080, hundreds of millions of people could face starvation, according to the latest UN report, which is still being revised.

The draft document by the authoritative Intergovernmental Panel on Climate Change focuses on effects of global warming and is the second in a series of four being issued this year. Written and reviewed by more than 1,000 scientists from dozens of countries, it still must be edited by government officials.

Global average air temperature near Earth's surface rose 0.74 ± 0.18 °C (1.3 ± 0.32 °F) during the last century. The Intergovernmental Panel on Climate Change (IPCC) concludes, "most of the observed increase in globally averaged temperatures since the mid-20th century is very likely due to the observed increase in anthropogenic greenhouse gas concentrations," which leads to warming of the surface and lower atmosphere by increasing the greenhouse effect.

The Difference eCommerce can make

Given these circumstances, it becomes imperative for us to shift to business processes which help in reducing global warming.

Virtually unimaginable a half century ago was the extent to which concepts and ideas would substitute for physical resources and human brawn in the production of goods and services. The displacement of human physical effort by ideas is, of course, also evident in changed production processes.

eCommerce experts have uncovered a great many unexpected opportunities for generating “Internet efficiency,” which have begun saving some energy today and have the opportunity to save vast quantities of energy in the future. The Internet holds the potential to eliminate waste from needless overproduction or mistaken orders. Consider under-utilization: online auctions, popularized for the public through eBay, allow companies to hold auctions for excess capacity, including airline seats, empty space on trucks, manufacturing capacity, and such energy intensive goods as steel and paper.

Dematerialization saves energy. eMaterialization of paper alone holds the prospect of cutting energy consumption by a significant amount. The Internet Economy could render unnecessary as much as 3 billion square feet of buildings which would likely save a considerable amount of construction-related energy.

Business-to-business eCommerce is estimated at five to 10 times the size of business-to-consumer eCommerce. As traditional manufacturing and commercial companies put their supply chain on the Internet, and reduce inventories, overproduction, unnecessary capital purchases, paper transactions, mistaken orders, and the like, they achieve greater output with less energy consumption.

Newer technologies and foreshortened lead-times have, thus, apparently made capital investment distinctly more profitable, enabling firms to substitute capital for labor and other inputs far more productively than they could have a decade or two ago. Few things have a larger environmental benefit than pollution prevention, especially in the energy-intensive manufacturing sector. Not making products that wouldn’t have been sold or not building manufacturing plants that aren’t needed is pure prevention.

The Internet may already be reducing the energy intensity of the industrial sector, and it holds the potential to have its most significant impact in this area. If so, this would be the Internet’s biggest impact on the environment, since this sector is responsible for air pollution and the vast majority of its hazardous waste and other pollutants. The Internet could significantly reduce the contribution of the commercial building sector to the energy intensity and that gains in this sector will likely outweigh increases in electricity use in residential buildings.

IBM is one of the leaders in corporate energy management, with major successes using technologies like efficient lights and motors in its office buildings and factories. At the same time, it has had one of the most ambitious programs in corporate America to use laptop computers and other information technologies to allow a significant fraction of its sales and service organizations to work outside IBM’s buildings (i.e. to telework). In addition, the company has been using its electronic network to improve inventory management and production planning, which has allowed it to better utilize existing manufacturing capacity and thereby lower investment and operating costs. Together, all of these efforts have allowed IBM to reduce corporate energy consumption by 4 per cent per year throughout most of the 1990s. Moreover, IBM projects that it will be able to continue reducing energy consumption for the foreseeable future, even as it continues to experience significant growth.

Online auctioning is a particularly potent example of the Internet’s network effect. The Internet is beginning to create almost a virtual nationwide barter economy for a wide variety of goods and services. Basic commodities like steel, coal, paper, and even empty space on cargo trucks are being auctioned which alone could potentially save a great deal of energy.

For tangible goods, business-to-consumer eCommerce can replace retail stores with Web sites and warehouses. For intangible goods, it may replace facilities like banks entirely. Business-to-business eCommerce dramatically reduces inventories. If the Internet is increasing the percentage of workers who work at home, particularly full-time, it will substitute incremental residential energy consumption for probably much larger commercial energy consumption.

Using the Internet for bill presentment and payment dramatically reduces the amount of paper-based processing, resulting in potential savings. For consumers, the benefits include “convenience of day or night access,” “getting up-to-date information” and ability to “balance accounts more easily.”

The benefit of not having buildings is being touted by some online banks. One Internet bank took out a full-page ad in the Wall Street Journal that blared in large type: “Sure, we could build expensive branches (but, we figured you'd just rather have the money).” The ad boasted “Lower overhead, higher rates. Any questions?”

While reducing paper consumption clearly helps the environment, the primary reason many companies will end up reducing paper use is because paper-based systems tend to be inefficient and require far more labor than electronic systems. For instance, General Electric is simultaneously achieving a variety of benefits, including productivity gains and paper reduction, from its Trading Process Network (TPN), a suite of Internet-based purchasing and supplier productivity solutions. Prior to eMaterializing its procurement system, GE’s system was exceedingly inefficient.

Advantages of eSourcing

Cycle time is greatly reduced

100 per cent removal of paper and mail costs

The sourcing department gains hugely in productivity. They have at least six to eight extra days a month to concentrate on strategic activities, rather than the paperwork, photocopying, and envelope stuffing the department did when the process with manual.

The labor costs and material costs involved in procurement declines because the company could now reach a wider base of suppliers online.

Because the transaction is now handled electronically from beginning to end, invoices are automatically reconciled with purchase orders and reflect any modifications that happened during the process. The error rate drops sharply.

The Internet allows vastly superior supply chain management, which can dramatically reduce inventories, improve forecasting, and eliminate mistakes and wasted production. It also allows sophisticated bartering, which also increases capacity utilization, and holds the potential for increased material reuse. All of this fosters capital deepening and a saving of resources that, in the aggregate, is reflected in higher levels of productivity.

The Internet reduces transportation energy intensity by replacing some commuting with telecommuting, replacing some shopping with teleshopping, replacing some air travel with teleconferencing enabling digital transmission or eMaterialization of a variety of goods that are today shipped by truck, train and plane, including formerly printed material, software, construction materials, and the like improving the efficiency of the supply chain increasing the capacity utilization of the entire transportation system.

Keeping pace with developmental work on this front, mjunction too plays a pivotal role in addressing issues related to global warming. Our processes, be it the Enterprise Procurement System (EPS), Aggregated Rate Contract (ARC), Online Auctioning or even Financial Services follow the energy conservation path.

Each of our services has been uniquely designed with the view to conserve time and energy. Our EPS service addresses the need for an online procurement/tendering system and follows a uniform procurement process. This ensures that a single instance is extended to all clients and repetitive activities such as taking multiple prints and maintaining hard copy data are eliminated. It creates a scenario in which digitally authenticated information is accessed and transmitted between user entities (buyers and sellers) through the World Wide Web.

The ARC was built on the premise of ‘consortium buying’ where buyers with common needs come together and buy their product. If we draw an analogy, it is similar to a car pool system where commuters with a common destination, travel together instead of commuting alone, thereby reducing pressure on the available resources, which is exactly what ARC does. Even our Financial Services hold the energy conservation banner flying high with reduction in paper work and reduction in GHG emissions since most work is shaped online.

With our services in place we are all set to redefine Globalisation and contribute our bit in helping reduce global warming!

No comments: