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SAP moves Green IT focus to logistics

Organisations seeking ways to conserve energy and profit from being green may find the true gains won't come from "greening" their data centres, but rather by maximizing the efficiency of their supply chains, said Peter Graf, the chief sustainability officer for SAP.

"I find [green IT] a little bit exaggerated. Green IT is usually positioned as reducing the energy consumption of the data centre," Graf said, speaking at the National Retail Federation's annual convention. Only an average of 2 percent of the world's greenhouse gas emissions are created from computers, he noted. "I'm not dismissing it, but the real opportunity is in logistics, production, in distribution and production."

The theme for the opening keynotes for the 99th annual NRF conference is sustainability, or the drive to improve profitability through greater efficiency. Matt Kistler, the vice president in charge of Wal-Mart's sustainability efforts, spoke at the show about the retail giant's own efforts in cutting inefficiencies, and Graf's own talk positioned SAP as being a "leading provider of solutions for sustainability."

SAP released a sustainability performance management package in 2009 and plans to introduce some more sustainability-related supplemental software packages this year, Graf said.

All these packages are designed to give organisations reports on how efficient their business processes are and how much waste is being created in day to day operations.

Graf, who drives the company's sustainability marketing effort, said the term "sustainability" is more suitable than the term "green" because it is more encompassing. Green may be just about saving energy and reducing waste. Sustainability balances this goal against keeping a business profitable.

Staying green and maximizing profitability are not as mutually exclusive as one might imagine, Graf told the audience of retailers. Reducing waste reduces costs. Also, today's Internet-driven economy promotes transparency, so retailers shouldn't risk the bad publicity that may come from environmentally detrimental practices.

Kistler noted that Wal-Mart has been working on various sustainability projects for about five years. The retail giant had found that, of its own carbon footprint, only 8 percent came from its own infrastructure, such as stores, trucks and so on. The rest came from suppliers. As a result, the company has put a program in place to encourage suppliers to manufacture goods more efficiently.

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