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Schenker, Inc. Environmental and Supply Chain Considerations in Planning Large Scale Construction Projects 10 June 2008.

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Presentation on theme: "Schenker, Inc. Environmental and Supply Chain Considerations in Planning Large Scale Construction Projects 10 June 2008."— Presentation transcript:

1 Schenker, Inc. Environmental and Supply Chain Considerations in Planning Large Scale Construction Projects 10 June 2008

2 The Integrated Logistics Group Slide 2 Structure of Today’s presentation What’s driving the change agenda? What can we do now? What’s the business context?

3 The Integrated Logistics Group Slide 3 What’s driving the change agenda? Drivers Considerations Project Complexity Fixed Schedule Geography Technology Supply Chain Costs Marine Rail Truck Air Modal Energy and GHG Impact

4 The Integrated Logistics Group Slide 4 But Large Scale Construction Projects Have a Life of Their Own Time Definite  economic value of coming on stream on schedule  supply constraints – mix of long-lead items (ETO), JIT/off-the-shelf,  opportunity cost of failing to meet schedule, which  affects technology decisions (tried & true vs new, leading edge) Processing Technology selection  impacts construction strategy - whether constructed on site or modularized off-site  affects sourcing decisions, which  affects transportation decisions Geographic Specific – ie. Where resources are  infrastructure access to site governs modal choice both for finished/processed goods and inbound equipment and materials  E.g. upgraders located in Fort McMurray area or in Edmonton area

5 The Integrated Logistics Group Slide 5 And Companies Have to Consider the Business Context “Competition” “Conventional”“Proprietary!” “Public Policy” No. of Years of Project Activity Learning curve, develop support infrastructure No. of Projects Underway in Region Competition for infrastructure Few Many 1-25-50 CONTEXT MAP

6 The Integrated Logistics Group Slide 6 Then recognize that our transport mode choices affect the environment Source: Energy Use Data Handbook, 1990-2005, Transportation Tables 8 and 9. “Better”

7 The Integrated Logistics Group Slide 7 For the most part – projects are concerned with modal combinations Road Ocean-Rail-Road Via west coast ports Ocean-Rail-Road via Gulf Coast Ocean-Rail-Road Via east coast ports /St Lawrence Seaway Air-Road Rail-Road Sourcing decisions: - AsiaPac - Europe and Baltic States - The Americas

8 The Integrated Logistics Group Slide 8 But it Does Boil Down to the Last Mile – Rail vs Road?

9 The Integrated Logistics Group Slide 9 And, Road Infrastructure Needs Upgrading

10 The Integrated Logistics Group Slide 10 We need to remember what costs we are talking about…. $ Cost Volume/Shipment Size Transportation Warehousing & Handling AirTruckRail MarinePipeline Total Logistics Cost Add in Environmental Costs

11 The Integrated Logistics Group Slide 11 Consider alternatives - direct delivery vs a staged delivery…. $ Cost Volume/Shipment Size AirTruck Rail Add in Environmental Costs Cost = either truck or rail+handling Vs portfolio of direct and staged deliveries

12 The Integrated Logistics Group Slide 12 What can we do now?  Improve logistics planning early in the project management cycle to reflect effect of environmental issues on mode choice and direct delivery vs staged deliveries decisions.  Increase use of the Athabaska Northern Railway Ltd. (CN Rail) line – use domestic containers operating in a closed loop between Edmonton and construction sites in Fort McMurray area.  Adapt carrier selection criteria to include environmental considerations on fuel management and GHG emission controls.  Watch use of bio-fuels (“good” and “bad” sources)  Go paperless – electronic invoices and EFT  Select terminal/warehouse operators considering their “green” programs.  Facility design  Energy management  Water management  Waste management


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