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SGM Supply Chain Project Cuts Energy Use by 80M kWh

Shanghai General Motor’s (SGM) supply-chain initiative has yielded a reduction of more than one million tons of water, more than 80 million kWh of energy and more than 55,000 tons of greenhouse gas (GHG) emissions.

SGM, in partnership with the World Environment Center, launched the “Greening the Supply Chain Initiative” (PDF) project in 2009 with 125 tier 1 suppliers. These suppliers make a variety of automotive parts for SGM-produced automobiles in China’s domestic market.

The supply-chain project also reduced more than 9,300 tons of solid waste and more than 137,000 kiloliters of liquid waste per year. Other benefits include reduced raw material costs per unit of output, improved cycle time and improved responsiveness to customers needs.

Many of the projects implemented by SGM’s suppliers had payback in less than one year.

SGM’s initiative is touted as the most comprehensive among all Chinese automotive manufacturers. In 2005, GM China introduced the best practices for a green supply chain to SGM with the help of GM’s global public policy team. It was initially implemented as a small pilot program with eight suppliers.

SGM is a joint venture between General Motors and Shanghai Automotive International.

The automobile industry leads the trend toward ‘green’ manufacturing and energy production, according to Ioxus.

As an example, Ford plans to initially survey 35 top global suppliers on their energy use and estimated GHG emissions in an effort to reduce carbon emissions in the automotive industry. These suppliers represent nearly 30 percent of Ford’s $65 billion in annual procurement spending.

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