Presented by Group 2

Background
• This case study focuses on a business initiative
aimed at strengthening its thriving business of
Photovoltaic (PV) panel and understand
consumer preferences for Sustainable
Development.
• Han Solar, a San Francisco based a multinational
clean energy company as well as the world’s
leading solar power company, is committed to
changing the world by clean power.
• Previously, the company had positioned itself as
one of the least expensive solar panels.
 Background (Contd..)
• After their profit started to drop, they decided to
increase their focus on the environment (one of
the 3 P’s in Triple Bottom Line concept)
• This case examines the following -
– the process how a company decides photovoltaic
panels to look beyond the ease of its manufacturers
– to understand the environment impact on its supply
chain
– to improve its sustainability performance
– to review their operations, reduce their carbon
footprint, and integrate sustainability criteria in its
strategy
Supply Chain Sustainability
• Han solar group members decided to perform an extensive
study of the manufacturing process and make suggestions to
‘green’ it.

• Supply chain sustainability begins with ‘life cycle thinking’ or

considering the impact before the actions are taken.

• If the efficiency of production of an item is improved, then

supplier will get the item more quickly and the customer will
be happier with the quality. Changes in the upstream can be
felt all the way in downstream.
Supply Chain Sustainability
• Recent literature shows that it is not uncommon to see that
the advantages of being more environmentally conscious for a
company outweigh the costs.

• Garrett Green & his team conduct a life cycle analysis on the
solar panels which deals with all the stages of a product’s life
from cradle-to-grave.

• Te result of the analysis can help the company making a more

informed decision on how to make its product line more eco
friendly.
Supply Chain Sustainability

• Generating electricity from fossil fuel reserves emits far more

CO2 equivalents as compared to solar panels. Despite the
benefits of solar panel, that could be more expensive and less
efficient than other energy counterparts.

• Green & his team discovered that the emission of carbon

dioxide occur mostly during the manufacturing process, not
during the use phase.

• Then the research group decided to investigate the

manufacturing process further in order to decide where
improvements could be made.
 Manufacturing Process

1
Operation
Silica
Extraction and
Refining

Transformation
2
Operation
of Silica to
Silicon

Purification of
3
Operation
Mg-Si to sog-
Si

4
Operation
Casting and
Water
Production
 5
Operation
Chemical
attack and
texturing

6
Operation
N-Film
Formation

Application of
7
Operation
electric
contacts

8
Operation
Passivation
and ARC

9
Operation
Panel
Assembly
 Activities such as reading electricity bill, data from
different equipments and direct measurements are to be
analyzed to gather estimations of energy consumption for
each steps. This also includes fuel needed for transport
Process Energy required [MJ/Panel]
Silica Extraction and Refining 0.71
Transformation of Silica to Silicon 93.78
Purification of Mg-Si to sog-Si 280.54
Casting and Water Production 83.62
Chemical attack and texturing 12.22
N-Film Formation 48.41
Application of electric contacts 48.41
Passivation and ARC 12.23
Panel Assembly 62.66
Total energy 642.58
 The Transportation
• After the manufacturing process is finalized,
Green and his team decided on the following
routes of transport:
– Mexico (MX, Northwest Border) to California (CA)
– China(CH) to California
– China to Mexico and Mexico to California (CA)
– Germany(GE) to New Jersey(NJ) and New
Jersey(NJ) to California (CA)
 DISTANCE OF THE ROUTES
Route Air Ship Rail Truck
MX to CA - - - 200
CH to CA 12000 - - -
CH to CA - 12220 - -
CH to MX 12150 - - -
CH to MX - 12500 - -
GE to CA 8500 - - -
GE to NJ - 6300 - -
NJ to CA - - 3860 -
NJ to CA - - - 3750
 Cargo Details
• Load Cargo is 1000 panels fitting into 40’
container
• Each panel weighs 12.5 kg
• Cost quotes for different modes of transport:
– Long distance truck costs $170 + $1.85 per mile
travelled
– Intermodal rail costs $250 + $0.45 per mile travelled.
– Ocean Freight costs $600 + $0.04 per mile travelled.
 Cost of the Routes
Route Air Ship Rail Truck
MX to CA - - - 500
CH to CA 11000 - - -
CH to CA - 900 - -
CH to MX 12650 - - -
CH to MX - 1100 - -
GE to CA 11150 - - -
GE to NJ - 750 - -
NJ to CA - - 1330 -
NJ to CA - - - 3500
 Lead Time of the Routes
Route Air Ship Rail Truck
MX to CA - - - 4
CH to CA 6 - - -
CH to CA - 21 - -
CH to MX 6 - - -
CH to MX - 22 - -
GE to CA 11 - - -
GE to NJ - 20 - -
NJ to CA - - 8 -
NJ to CA - - - 6
 GHG Emission Calculation
Emission factors for several transport modes were
gathered from scientific databases.
Costs, distances, lead times for different routes
were various factors used to determine the GHG
emission.
 GHG factors were calculated per 1000kg package
of solar panels in CO2eq/Km.Kg.

Ship transoceanic Air cargo Truck lorry 3.5 to Train, Diesel , US

freight intercontinental 16 ton
11 1068 334 50
Analysis of Different Electricity
Mixes
 Energy Mix
• Types of Energy sources for electricity
generation- both Renewable & Non-
renewable
• Fossilized fuels dominate the Energy Mix for
most of the industries and countries
• Non-renewables consist of solar, wind,
geothermal, bioenergy, nuclear
 Challenges
• Company operates across various countries
each with different energy mix
• For calculation of GHG emissions for Han
Solar, the energy mix of all the countries that
it operates in has to be taken into account.
 Exhibit 8: Electricity GHG factors
[g-CO2eq/kWh]

China Germany Mexico- Mexico- NW Norway USA-

average grid average
788 349 515 298 6 573

1,000 MJ is equivalent to 277.78kWh

• The factor for China is highest as its energy mix includes

large shares of coal and other fuel sources.
• Germany, Norway have lower factor value as their energy
mix includes predominantly the renewable sources like
wind, water and geothermal sources
 Recommendations
• Adherence to a reporting standard would
standardize the calculation of GHG emissions
of various countries.
• Resorting to renewable sources based on the
location of the facility and the sources
available- this would help in reducing the GHG
emission by reducing the dependency on
fossilized fuels
 Questions
1. Do you think Han Solar's green strategy will
increase shareholder returns? List some
other possible impacts of sustainability
efforts.
 Solution
• Our view is that Green strategy will definitely help the company
realize the gains however Han Solar should try to provide
environment friendly products at a cost as low as possible
• Once, they were one of the least expensive producers of solar
panels but over a period of time customer preferences moved
towards environment friendly products, which not only harms the
environment but also have manufacturing processes involving
emission of green-house gases.
• This is evident from the fact that despite economy going down,
which they thought was the reason for bad performance, their
competitors were doing really well in solar panel business and they
were essentially branding themselves as environment friendly
• Han Solar decided to formulate a Supply Chain Management
strategy to reduce green house gas emissions wherever possible by
analyzing Manufacturing and Distribution process
 Other possible impacts of SCM strategy could be economic
and social impacts.
• Economic
– Change in process of manufacturing or method of delivery will
reduce the overall cost making the business more profitable.
– Government might come up with certain schemes to incentivize
such companies in future having low GHG emissions.
• Social
– The process to be followed will lead to less Greenhouse Gas
Emissions which will lead to better safety and health for
employees.
– Employees will be more satisfied with the work since their
contribution to the Green house gas emission will go down.
Question-2
What is the corporate carbon footprint of their
manufacturing & distribution process?
Assuming one shipment of 1,000 PV panels
produced in China and delivered to California.
Explain how you identified the different
elements that make up the total footprint.
Solution
 Q.3. International Company favor air
freight over shipping, when delivering
final goods from china?
1. Lead time from China through air is much more less than through ship. It is almost
3 times less than shipping

Route AIR Ship

China to California 6 21
China to Mexico 6 22
2. The process is generally very simple, when compared to other modes of
transportation and it is standardized, and follows a procedure that require minimal
involvement from the importer.
Q4. Between Cost, Distance and lead time, which
is the most important criteria in deciding which
transportation network to take and why??
• Distance is the most important criteria in deciding
the most important transportation network when
we consider carbon foot print and the company is
leaning towards a green supply chain.
• Ship Fright & Train being the lowest in generating
carbon footprint among the transport modes.
Design the locations of the various
plants for the entire manufacturing
processes
Germany(2,3, China (1)
4)

USA (NJ &

CH) – (9)

Mexico NW
(7,8)
Mexico (5,6)
Q5.Overall, what should Han Solar do in order to become the
leading company in the PV space again?
 Company’s major strength was it is one of the least expensive solar panels.
Maintaining that price range or near to it while repositioning it as a more
sustainable organisation.
 To reduce carbon foot print move manufacturing to countries with lowest GHG
factors such as Germany, Norway.Using ships for international transportation and
train in US.
Solution to Question 6
 Process Improvement
• Increasing efficiency of the production line ensuring
lesser defects (quality issues) and reduced wastes
(waste to landfill)
• Alternate Energy sourcing for instance using
geothermal energy for Mexico facility
• Implementing JIT across the supply chain
• Encouraging and engaging suppliers and distributors to
reduce their carbon footprint. This will help Han Solar
to reduce their GHG emissions. As emissions from
supplier and distributor are classified as Scope-2 and
Scope-3 emissions for Han Solar
 Emission & Production Cost reduction
in tandem
• Switching to renewable energy sources (location specific)-
reduces the dependency on fossilized fuels and hence
immune to price fluctuations to some extent
• JIT implementation & supplier and distributor engagement
across the supply chain for reduction of emissions and also
lowering the inventory costs
• Increasing efficiency and quality of the production line-
reduces rework and scrap & reduced consumption of
resources
• Extended producer responsibility- with LCA can plan the
disposal of the panels after use. This reduces the
environmental impact and improves branding for the
company.