Sustainability

LGO students can combine their engineering and MBA knowledge to advanced problems related to managing the environmental impact of a global operations system. Students work with renewable energy sources, measure the impact the company’s operations has, and can make suggestions based on rigorous data analysis. Many of the projects we currently have that focus on energy also have a sustainability component, usually working with renewable energy sources.

Exploring the Business Case for LEED Certification

Brendan Carroll (LGO ’13)

Company: Raytheon
Location: Los Angeles, CA

Problem: Raytheon SAS wanted to pursue LEED certification, which is usually reserved for residential or standard commercial buildings. Raytheon’s buildings, however, are “mixed use,” consisting of laboratories, high-tech manufacturing, offices, and warehouses. For LEED certification to make sense, the operational savings and “soft benefits” gained must be worth the upfront investment. Even though Raytheon is applying the LEED framework to evaluate the energy and environmental performance of its building portfolio, it might make sense from an environmental and economic perspective to prioritize energy efficiency projects over LEED certification.

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Three buildings (X4, X5 and X6) with their assessed LEED credits.

Approach: Brendan determined that Raytheon’s buildings, despite being mixed-use, are eligible to apply the LEED framework. His analysis revealed there were three buildings that met a key LEED energy prerequisite, qualifying them as good candidates for certification. Many other buildings were ripe for energy efficiency projects. Working with experts within Raytheon, he validated the potential LEED points for each building and found that Raytheon could possibly achieve certification at low to medium cost.

The findings convinced Raytheon to fund American Society of Heating, Refrigerating and Air-Conditioning Engineers (ASHRAE) Level 1 energy audits for two buildings, one a prime LEED candidate and the other a relatively energy-inefficient building. The objective of this strategy was to meet a prerequisite for the LEED candidate while also determining the magnitude of savings opportunities associated.

Impact: One of Raytheon’s buildings will act as a pilot program for Raytheon to gain a better understanding of the benefits associated with LEED certification. While there will be some upfront to certify the building, this cost will most likely be surpassed by brand image and will not be greater than resulting savings from implementing no- to low-cost energy efficiency projects in other buildings. Raytheon can also defray these costs by applying the knowledge gained from this project to other, larger buildings as the company scales the process.

Carbon Footprint Measurement and Analysis

Adam Miller (LGO ’14)

Company: General Motors
Location: Detroit, MI

Problem: General Motors does business in over 120 countries, requiring a complex supply chain. Operating with a focus on environmental impact has become a key strategic pillar within the company, both in its products and in its supply chain. Specifically, GM global logistics drives greater emissions visibility and works to identify CO2 reduction opportunities within its network.

GM asked Adam to create business tools and processes to record global logistics emissions data, allowing GM logistics to:

  • Accurately report emissions and reduction efforts to shareholders
  • Track network emissions over time
  • Pinpoint carbon reduction opportunities and align with cost reduction efforts
  • Understand and mitigate future risks to the business

Approach: Adam broke down his project into three parts:

  1. Develop a global carbon footprint model
  2. Analyze emissions generated during network change activities
  3. Implement industry-recognized methods and processes

Adam used industry research, data analysis, and internal data to develop carbon measurement tools. This model can estimate how much CO2 logistics operations emit globally and the resulting changes in mass emissions after network changes.

Impact: Adam collaborated with logistics providers, which enabled GM to become an official shipper partner of the U.S. EPA’s SmartWay program. The GM logistics team used the data for global reporting and benchmarking. Management developed stronger network change proposals and encouraged suppliers to improve their processes. Finally, General Motors now has a determined amount that it saves from increased fuel efficiency in its operations.