Monday, November 08, 2010

Top Story

Tech summit focuses on eco-supply chain and the cloud

A panel examining China's energy future has come to the conclusion that what retailers spend to reduce their supply chains' carbon footprint, they might more than make up in sales as consumer demand for "green" products grows. The panel was conducted at a Silicon Valley conference focusing on technology opportunities in Asia.

"Retailers can compete on carbon and water content … in the manufacture, transport and delivery" of their goods, said Lawrence Goldenhersh, the chief executive of Enviance, a Carlsbad, California-based company that develops software tools for environmental management. "Consumers will be allowed to cast their vote at the cash register."

Goldenhersh and other panelists were referring specifically to the Chinese market. Whether such thinking is taking hold in the United States remains open to question, at least where some sectors are concerned.

Their observations came during the annual Connect conference that the Asia America MultiTechnology Association held at the Computer History Museum in Mountain View, California. Speakers at the daylong event said technology business opportunities abounded in China and India, not only in the environmental field but also in the information, energy and biology sectors.

Some participants in the discussion of China's energy future suggested that intellectual property issues be made part of the equation, and one of them, business consultant Jill Buck, said General Motors was lagging in developing clean-energy vehicles.

Buck, head of Go Green Initiative in San Francisco, agreed with Goldenhersh's suggestion that the United States and China arrange to swap technology-related intellectual property for carbon credits.

"We need more bilateral conversations to figure these things out together, just the two of us," she said, adding that when investment mogul Warren Buffett "plunked down $10 million to fund EV (electronic vehicle) development in China, GM didn't catch on."

Matthew Denesuk, a partner in IBM Venture Capital Group, sounded a cautionary note on IP transfer. "You want to work out compensation for IP that's comfortable to all parties," he said.

Supply chain executive Greg Stein said he hoped to capitalize on the growing consumer demand for goods whose production, distribution and use are environmentally safe.

"Some of the better supply chains I've built have strong ecosystems around their manufacture," said Stein, vice president of global supply chain at Better Place, a Palo Alto, California-based company that provides network infrastructure for EV production.

Those supply chains differ in character from what has evolved in the freight community. But they have some relevance, providing a broader context for companies active in international business, judged from what Stein later told Cargo Business News.

The ecosystems, he said, include product and component manufacture and service elements, including third-party logistics, distributed among four quadrants:

  • Product and service suppliers.
  • "Solution partners," such as providers of hardware tailored to specific software programs.
  • "Go-to-market partners," who not only develop marketing strategies and campaigns but also invest in their execution.
  • Investors – individuals or companies involved "in direct or indirect investment in your company's success. This is not a supply chain partner as much as it is somebody who's funding the supply chain," Stein said.
Supply chains have become very sophisticated, with individual partners playing multiple roles, he said. "The stakes are much higher. There is more interdependency, so companies are raising the bar on the criteria to select those partners."

For Better Place's industry, promoting electricity-based transportation, the challenge is not confined to China and the United States, but is global, he said. The market "is real and it's taking hold," and it extends to the consumer products segment as well as to the transportation systems sector, he said.

"Cloud" computing – the use of third-party services such as Internet service providers and social networks for data storage, retrieval and application, and for communication – received a good deal of attention during the conference, but how soon it gains widespread acceptance in the freight community remains to be seen.

Mu Li, senior director of strategy and corporate development at Hewlett-Packard, described cloud computing as "the promise that the Internet finally delivers."

Steven Powell, a leading spokesman on data automation matters for a freight service providers' organization told Cargo Business News that while cloud computing might have some appeal to small and midsize companies with limited resources, it carries some data security and reliability concerns.

"There is a control aspect – access to data, the ease of manipulating data," said Powell, who co-chairs the freight forwarding committee of the Washington-based National Customs Brokers and Forwarders Association of America. He is also information technology director of C.H. Powell Co. in Canton, Massachusetts.

Companies such as "have to adopt security measures and protocols. They have to be able to ensure the reliability and security of that data," he said.

His company, which is midsize, is "committed to the in-house solution as opposed to the outsourced or cloud solution. It allows us … to take advantage of technologies, enabling quicker response to customer demand," he said.

Cloud computing enables companies to let employees work from home, but "telecommuting doesn't work for all operations," he said. Especially in the freight sector, where some paper documents still move, companies need in-house personnel to handle scanning and imaging, he said.

-By Richard Knee for CBN in San Jose



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