How IBM Is Cutting CO2 Emissions in the Pharmaceutical Industry

McKesson building

If an industry can streamline its distribution network, CO2 emissions (and overall energy use) will probably drop as a result. That's why IBM is working with McKesson—a Fortune 500 company that supplies and transports a third of all prescription drugs used in North America—to improve its distribution network, supply planning, inventory positioning, vehicle routing and more.

McKesson will use IBM's Supply Chain Sustainability Management Solution (SCSM), a new web-based analytics platform that leverages sales, supply chain, and geographic data to come up with "what if" scenarios for the company's decision-making. Everything is taken into account—from warehouse hours of operation to the energy consumption of forklifts. IBM explains:

McKesson could use the system to determine the value of keeping pharmaceuticals that need to be kept cold, such as insulin in one central refrigeration facility. The engines in the tool calculate the inventory cost and the potential reduction in carbon emissions against the option of keeping such products in all its warehouses. Based on such comparisons the system provides recommendations to allow for increased efficiency with minimal environmental impact.

IBM's technology could be used in a number of other ways as well. For example, McKesson could use SCSM to determine the impact of using solar panels on a warehouse or filling up trucks with alternative fuel on any given route.

McKesson will be the first company to use IBM's new technology, but it won't be the last. IBM is making SCSM available worldwide through its Global Business Services. "This system will be valuable to any business seeking ways to achieve both their financial and carbon reduction goals," said Don Walker, McKesson's senior VP of distribution operations, in a statement. Indeed, we imagine that the ability to predict the monetary and environmental impact of every step of the supply chain would be invaluable to any industry.

Ariel Schwartz can be reached on Twitter or by email.

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