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Renewable Energy Offers Supply Chain Benefits

For electronics OEMs hoping to leverage the supply chain as a strategic advantage, a study of the use of renewable energy may be the next place to innovate. 

By replacing oil, coal, natural gas, and nuclear power with renewable energy sources, such as solar, biomass, hydro, or wind, organizations can position themselves as good corporate citizens by achieving low or zero carbon emissions. At the same time, there are several business benefits to be had as well. Leveraging renewable energy insulates manufacturers and suppliers from shifting oil prices. It sets the stage to create strong partnerships and win business with other companies who want to focus on sustainability. By some measure, organizations may also drive growth and stay competitive by leading in the use of sustainable business practices. 

In a recent report, Deloitte said:

When treated as a strategic asset rather than a tactical expense, renewable energy provides cost and risk benefits across the supply chain. In addition, renewables can offer secondary, intangible benefits, including enhancing company culture and employee engagement, advancing your sustainability agenda and helping achieve sustainability goals, strengthening corporate reputation, and driving corporate growth by keeping pace with competitors and signaling leading environmental stewardship to customers.

Already, leading electronics OEMs are leading the charge. In April, Apple announced that, worldwide, 96% of its electrical energy use comes from renewable sources, compared to 93% in 1995. In the U.S, that figure is 100%. Manufacturing is a huge part of that since those activities account for more than three quarters of the company’s carbon footprint. 

Further, it’s encouraging its supply chain partners to set similarly lofty goals. “We’re pushing our manufacturing partners to join us in the fight against climate change,” said Lisa Jackson, Apple’s vice president of environment, policy, and social initiatives said. “Seven major suppliers have now pledged to power their Apple production entirely with renewable energy by the end of next year.” 

For example, Jabil Circuit was among the first in that number. The contract manufacturer has promised to power 100% of its Apple-related operations with renewable energy by the end of 2018.  Jabil makes the aluminum housing for iPhones, as well as other parts. Now, 87% of the 705 partners that Apple asses were compliant with the company’s environmental policies, the OEMs most recent sustainability report said.

The infographic below from the New Jersey Institute of Technology’s Online Masters in Electrical Engineering Program outlines the potential benefits of renewable energy sources, considering the cost of fuel, production, and environmental impact. What place does renewable energy have in your company and supply chain? Let us know in the comments section below.

— Hailey Lynne McKeefry, Editor in Chief, EBN Circle me on Google+ Follow me on Twitter Visit my LinkedIn page Friend me on Facebook

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