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How Four Leading Companies Manage Water Resources

by APICS staff |   2013 | 13 | 18

Securing water resources is a growing problem for many organizations, and soon a greater number of companies will have to adapt, writes Alejandro Litovsky, founder and director of the Earth Security Initiative, for the Guardian. He shares how some of today’s top businesses are managing challenges surrounding water security.

Assess risk to neighbors. At Coca-Cola, risk is evaluated for not only its own systems, but also its neighboring communities. Coke looks at vulnerabilities to quality and quantity of nearby water sources and strives to pioneer local resource sustainability programs.

Measure and reduce water withdrawals. Nestlé is actively focusing on water withdrawals, setting a goal to reduce withdrawals per ton of its products by 40 percent from 2005 to 2015.

Innovate to discover efficiency. One PepsiCo initiative is to remove some of the company’s potato chip factories from water mains, replacing this water with that extracted from potatoes. “We had that eureka moment of realizing we use 350,000 tons of potatoes a year and 80 percent of a potato is water, so we set ourselves the challenge of capturing that water and using it in our operations,” says Walter Todd, vice president for sustainability at PepsiCo.

Find interconnections. UK brewer SABMiller looks at its water and energy as connected inputs and seeks ways to discover byproducts of the brewing process to generate renewable energy. The company also reduces the water it uses in brewing and packaging, lessening the energy requirements to heat and cool that water.
Scarcity challenges are likely to dominate the future operating environments of many resource-intensive production sectors, Alejandro writes. Business leaders will discover the necessity of committing time, money, and human resources to relieve these pressures.

End in Sight for BMW’s Supply Chain Woes  

According to BMW representatives, a supply chain crisis that delayed global deliveries of spare parts is expected to be resolved by the end of September, Bloomberg News reports. The issues occurred after a changeover to a new logistics management system at a central warehouse in June.

Thousands of BMW customers experienced long waits for components, which caused ripple effects across the supply chain, as each of the company’s 40 distribution centers receive goods from a central facility in Dingolfing, Germany. Reports indicate that some customers waited as long as three months to receive repair components.

“Parts logistics is among the most complex topics I know,” says Peter Schwarzenbauer, head of after sales for BMW. He acknowledges the company should have completed the logistics overhaul two-to-three weeks earlier.

Amazon’s Logistics a Model for Retailers Looking to Compete

Brick-and-mortar retailers are playing catch-up as e-commerce giant Amazon’s online sales continue to grow, Reuters reports. Companies such as Macy’s and Walmart are linking online and in-store inventory systems in an effort to compete with Amazon’s shipping times and promotions. 

“There’s no question that the vast majority of retailers need to focus on the digital channel,” says Sucharita Mulpuru, analyst at Forrester Research. “The ability to buy online and pick up inventory in stores is important for maintaining sales.”

Although it still is a small part of overall retail transactions, online is a fast-growing category. Forrester Research estimates online purchases will climb 10 percent this year. Many mainstream retailers look for online sales to boost weaker in-store sales.

The next phase of the movement appears to be omnichannel retailing, a model that encompasses physical stores and online sales from both desktop computers and mobile phones.

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