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					                 GB601:
Systems Thinking and Sustainable Business



      Springs Window Fashions Project




         By: Timothy Breitag, Maia Donohue,
           Shelby Mason, and Nick Melin




                    April 25, 2011
Introduction:

       In our increasingly globalized world, products for sale in a local store often come from all
over the world. Wal-Mart bought $15 billion worth of Chinese products for sale in US stores last
year. Each mile that a product travels en route to a final customer adds additional expense and
environmental impact to the end product. A major component of this environmental impact is the
release of carbon dioxide (CO2) emissions into the atmosphere. More than a third of worldwide
carbon release comes from the combustion of liquid fuels1. In 2009, international shipping emitted
870 million tons of CO2. This is an 85% increase since 1990 and accounts for 2.7% of emissions
worldwide. There is the potential for international shipping to represent 18% of worldwide
emissions by 20502.

         The main drivers of a carbon footprint in the transportation of good are mode, mileage, and
weight of product moved3. The simplistic solutions to reduce carbon footprint are to move a
product fewer miles, or move less product. All else being reasonably equal, a product that has
traveled fewer miles to market will have a smaller CO2 footprint than another comparable product.
This is not a feasible option for the scope of this report and as such, will not be addressed any
further. We will, however, focus on viable solutions to reduce Springs Window Fashions carbon
output and how their current footprint compares to those of an Asian competitor.

       This paper will cover several factors of carbon footprinting and Springs Window Fashions, as
well as sustainable forestry issues. We will address the differences in carbon footprints between
the two products, along with our rationale and assumptions behind our calculations. We will
further provide recommendations on how Springs can reduce the carbon footprint of their products
to both contribute less CO2 to the atmosphere and appeal to an environmentally conscious
customer.

Background:

        Springs Window Fashions is a sustainable window blinds and shades manufacturer
headquartered in Middleton, Wisconsin. Being a leader in their competitive market, Springs
Window Fashions excels in sustainable practices, specifically in the areas of manufacturing and
transportation. Completing all aspects of wood blind production in North America, Springs is ahead
of other blind manufacturers that source raw materials from foreign sources. Springs Window
Fashion harvests wood from sustainable, U.S. Forest Stewardship Council (FSC) forests, trucks raw
materials to and from their plant in Mexico, and delivers finished products to customer throughout
the United States. Springs has multiple production facilities in the US along with warehouses where
1
  http://www.carbonearth.co.uk/carbon-footprint-facts.htm
2
  http://www.noordzee.nl/upload/dossiers/Leaflet_CO2_shipping_2009.pdf
3
  http://www.gsb.stanford.edu/ser/documents/SER08-Maersk.pdf
steps of the manufacturing process take place. These warehouses promote many sustainable
features, such as recycling all sawdust from production, utilizing motion-sensor lighting throughout
the spaces, and encouraging innovative green thinking and idea generation by their employees.

Forestry:

Competitive Analysis:

        The World Bank referred to forestry sectors in Asia as “Anarchic4.” Our research has
certainly confirmed this, as progress on sustainable forestry in Vietnam and China varies by who is
issuing the report, and when. Both nations claim to have reduced illegal logging and expanded
sustainable forestry. However, differing reports can be found from within both governments
shedding uncertainty on claims of better forestry practices. Both China and Vietnam claim to be
increasing protected areas.

         China banned logging in natural forests in 19985, and claims to be expanding their wood
plantations. Yet research by China’s own State Forestry Administration has documented 39,000
cases of illegal logging in the most recent two-year period6. In China, forestry is also in the hands of
local officials, who have more incentive to allow logging than to enforce the law7.

        The story is similar in Vietnam, where illegal logging has undermined claims of responsible
forestry. According to Vietnam’s Agriculture and Rural Development Ministry, illegal logging
increased 10% from 2009 to 20108. The reason for this dissonance is that in both countries the
intentions of central governments are undermined by lack of integrity on the local levels.
Vietnamese local forestry offices are often corrupt9 and poorly staffed. Recent attempts to enforce
logging bans have lead to injury and even death10.

         In the United States, when environmental regulators fail, citizen groups and NGOs have
been effective for decades in battling illegal logging and other environmental violations. However,
in Vietnam these groups are not robust, and in China they are almost non-existent and toothless
when they do exist11. Poor government management coupled with a lack of effective citizen legal
suits leads to a great deal of doubt concerning the sustainability of Asian wood.


4
  http://bit.ly/fUw6sn
5
  http://www.fao.org/docrep/003/x6964e/X6964E01.htm
6
  http://www.eeo.com.cn/ens/homepage/briefs/2010/08/25/179151.shtml
7
  http://www.youtube.com/watch?v=y-vCc6CvfKc
8
  http://bit.ly/f8ly7z
9
  http://www.informaworld.com/smpp/content~db=all~content=a935246598
10
   http://news.mongabay.com/2010/1101-vietnam_illegal_logging.html
11
   http://www.youtube.com/watch?v=y-vCc6CvfKc
Springs Window Fashions Analysis:

        Springs has an advantage in forestry as all of their raw material wood comes from USA, and
all domestic wood has to be sustainably forested. According to WWF, USA is at very low risk of
logging violations12. This gives Springs a distinct advantage over a competitor’s wood product that
come from Asia, where sustainability measures have been anarchic and difficult to enforce when
they exist at all. Due to the federal level protection on forestry practices, there is no concern about
Springs using unsustainable practices. Springs should consider including this in its Green By Nature
section, with an emphasis on knowledge and familiarity with the North American forests that supply
its wood.

Methodology:

          We set out to measure the CO2 output of producing and transporting one window blind
from its origin to the final customer. This proved to be problematic as raw materials make up a
large proportion of the shipping and as such, are hard to measure as finished blinds while still in raw
form. Based on this, we chose to measure the CO2 output of a full container load. This allowed us
to keep a consistent weight, whether it be of wood or finished blinds, and have a comparable
baseline to use against competitively produced blinds (as one blind may not always weigh same
across brands, but a full container would). To make our calculation as comparable as possible, we
chose to calculate the CO2 output for one full container to a final destination. We chose Denver, CO
as it is in the middle of the country and requires multi-segment shipping for both sets of blinds and
multi-modal shipping for the foreign blinds.

         Our calculation is based off of CO2 produced per ‘ton-mile’, which is defined as a ton of
freight traveling 1 mile. The calculation takes into account number of shipments, weight of
shipments, and shipment distance.

        To calculate the amount of CO2 released during transport we used a shipping calculator
found at www.carbonfund.org13. The site assigns the following emission factor (EF) multipliers for
our calculation:
    ● Truck - 0.3725 lbs CO2 per Ton-Mile
    ● Train - 0.2306 lbs CO2 per Ton-Mile
    ● Sea freight - 0.0887 lbs CO2 per Ton-Mile

Other assumptions used are as follows:

12
     http://bit.ly/gzCs9g
13
     http://www.carbonfund.org/site/pages/carbon_calculators/category/Assumptions#ShippingCalculator
         40ft shipping container
         Container weight was 15.88 tons or 35,000 pounds
         Shipping mileage from Shanghai, China to Los Angeles, California is 6,49114
         Mileage from Los Angeles, CA to Denver, CO is 1,032 miles.
         Mileage from Grayling, MI to Reynosa, Mexico is 1,789 miles
         Mileage from Reynosa, Mexico to Denver, CO is 1,192 miles

We used the following formula to calculate carbon outputs:

CO2 Emissions = # of shipments x Distance x Weight (# of TEUs) x Emission Factor
                                      2204

Results:

        In our example of a 35,000 lb shipping container, this equates to 15.88 metric tons. This will
be the number used throughout our calculations.

CO2 released in shipping from Shanghai, China to Denver, CO by ocean cargo ship and truck is
15,247.82 lbs, calculated as:

             (6,491 miles * 15.88 tons) * 0.0887 EF + (1,032 miles * 15.88 tons) * 0.3725 EF

CO2 released in shipping from Grayling, MI to Denver, CO through Reynosa, MX by truck is
17,633.51 lbs, calculated as:

             (1,789 miles * 15.88 tons) * 0.3725 EF + (1,192 miles * 15.88 tons) * 0.3725 EF

         As can be seen from the above numbers, Springs has a slightly larger carbon footprint in our
scenario. This is largely due to higher emission factor of shipping by truck. The truck EF is 4.19x
that of the ocean cargo EF. Even though the foreign blinds travel about 2.5 times as many miles,
the lower EF causes the reduced carbon footprint.
Shipping from China results in a large amount of carbon dioxide emissions. Despite traveling far
fewer miles, the higher carbon output of trucks per ton-mile is the main cause of the higher
number.

Recommendations:



14
     http://www.timeanddate.com/worldclock/distance.html
1. Include provenance of wood products on advertising materials or packaging.

        We recommend that Springs include information on sustainable forestry as an advantage
over competitors who source their wood in Asia. Include a portion of the Green website on
sustainable forestry asserting that Springs wood is forested in the US, and all US wood is sustainably
forested. Competitors who operate in Asia suffer from a lack of supply chain integrity. The
sustainability of this wood is far from certain. Due to the fact that Bali blinds are constructed of
wood that isn’t included in the FSC chain of custody, such a claim must be made with care and
nuance. Enough discerning factors exist, however, that environmentally conscious customers
should know the difference.



2. Investigate alternate shipping modes for raw materials.

         Springs Window Fashions should investigate shipping their lumber via rail instead of truck.
Shipping via train to Reynosa, MX and then truck to Denver, CO would produce 13,602.23 lbs of CO 2
per shipment. This would make Springs carbon footprint lower than Asian competitors. Springs
typically ships two trucks per week, which is 104 shipments per year. If these products were
shipped by partially by train as recommended, the reduction in CO2 would be 419,253.12 pounds
per year. To reduce this much CO2 a company would have to plant over 8,400 trees15. Shipping by
train can prove problematic as it is both slower and less reliable than truck transportation.
However, if time is not a critical factor, train shipment is advantageous in that is it normally cheaper
and has a smaller carbon outlay.

Conclusion:

        Based on all of the above information, we feel that Springs Window Fashions has been
doing an admirable job of attempting to reduce their carbon footprint and practice sustainable
business practices. We did not see moving production as a viable option, and thereby, feel that
reducing carbon footprint during the transportation phase would be Springs’ only option. While
Springs Window Fashions has taken many steps to be more sustainable and lessen their carbon
impact, we feel that they could still benefit by implementing our recommendations.




15
     http://www.planttrees.org/resources/Calculating%20CO2%20Sequestration%20by%20Trees.pdf

				
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