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Increasing Marketplace Demands for Environmental Awareness

ILOG(R) today announced a new Carbon Footprint extension that will help companies make environmentally-sound choices when designing and planning their supply chains. Available as an extension for LogicTools' market-leading network design and planning solution, LogicNet Plus(R) 6.0 XE is a key offering in ILOG's LogicTools Suite of Supply Chain Applications. The new extension helps companies evaluate the impact of various supply chain network configurations and transportation strategies on their carbon footprint, allowing companies to quickly and easily implement green supply chain initiatives.

Increasing global environmental awareness, along with increased regulatory and governmental pressures in many countries, as well as carbon limits or carbon trading markets, have provided large incentives to companies to reduce their carbon footprints. However, few solutions have been available to help companies evaluate environmental impact, along with cost, when designing their supply chain networks.

"The level of a supply chain's carbon footprint reflects not only potential current and future liabilities in taxes and offset costs, but may reflect inherent inefficiencies in their operations," said David Simchi-Levi, professor at MIT and product strategy consultant to ILOG. "Moreover, the ability to quantify and reduce carbon dioxide may allow companies to earn credits that can be traded with less-efficient companies, as is evident by the 40 billion Euro world-wide market for carbon emission permits in 2007."

For over a decade, LogicNet Plus has been offering advanced optimization technology to help users manage complex supply chains by allowing supply chain managers to do an analysis of the trade-offs between production, warehousing, transportation costs and service requirements, as well as the calculation of the optimal network configuration for different cost and service objectives.

The new Carbon Footprint enhances these capabilities with the following features:

-- Out-of-the-box resource data regarding the carbon emissions associated with various supply chain activities: This built-in capability to incorporate standard data provides the user with valuable resource data regarding the carbon emissions associated with various supply chain activities in plants, warehouses and various modes of transportation. This helps companies get a head start on their Carbon Footprint assessment, which is critical in order for companies to comply with regulatory caps, gain financial benefit through a carbon trading market and align with corporate environmental goals.

-- Reporting capability helps users assess carbon emission levels of different supply chain configurations: This report shows the relationship between carbon emissions and supply chain activities, enabling customers to make more environmentally-sound decisions and comply with certain regulations that require carbon emissions inventory reporting, such as the Kyoto Protocol. In essence, users can now easily evaluate trade-offs between cost and service levels and can better understand the environmental trade-offs as well.

-- Ability to set a cap on carbon emissions in the supply chain: With this extension, users can set a cap on carbon emissions, and it will act as a non-negotiable constraint when evaluating trade-offs. LogicNet Plus 6.0 XE has the ability to determine the low- cost solution, while not exceeding the specified limit. For example, the extension allows users to optimize their logistics network by incorporating government-imposed caps on carbon dioxide, i.e., the Kyoto Protocol, or through supply chain partners' scorecards.

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