There is no secret, our Planet is currently facing lots of environmental concerns: global warming, air pollution, water pollution, waste invasion, ozone layer depletion, climate change, etc. These issues affect every human being, every animal, every living thing on this planet. Resources are over-exploited, leading to a deterioration of the environment. Just in the last few years, we have witnessed many natural disasters directly linked to this: floods, tsunamis, forest fires, and cyclones.
Thanks to the new media, people are becoming more and more aware of these environmental issues. Many consumers now take into account the environmental impact of the products they are purchasing. Companies have to show how environmentally friendly their manufacturing and supply chain processes are: low carbon footprint, good waste management, recycling processes, etc.
An optimized supply chain means delivering the right product, at the right time, at the right place, at the right cost. Fast and low-cost supply chain are usually preferred over environmental performances. However, they are compatible.
When the Supply Chain Goes Green
Companies need to analyze their end-to-end supply chain processes, from forecasting, planning, purchasing, and material management to distributing products all over the global network. Increased profits are generated when savings are made by implementing green policies. In fact, improved environmental performance leads to less waste. The cost of waste is not just the wasted cost of sourcing, manufacture, packaging, and disposal. Increasingly, throwing something away also means obtaining costly environmental permits to do so. These costs are increasing all the time.
For instance, General Motors have reduced their disposal costs by $12 million by launching a reusable container program in partnership with their suppliers. Simple, efficient!
Trends With Benefits
A better planning process, supported by the right tools, is also a good way to align profits and environmental performances. By optimizing the production, the amount of waste is minimized, so are the costs associated with purchasing and waste management. With better distribution planning, the number of shipments is drastically reduced, meaning less fossil fuel usage and less packaging products consumed. Not such small savings.
If the market knows that the company is saving the environment X tons of packaging material and Y barrels of fossil fuel every year with your green supply chain initiatives, it will definitely resonate in the mind of customers.
Also, the cost savings generated will make the finance department really happy, and so too the general management and all the shareholders. It is truly a win-win situation for the company, the customers and Mother Earth.
However, improving the company’s environmental performance is not the priority of most supply chain executives… yet. But it should be. Once we start to ask questions about our supply chain in a different way, we start to generate new ideas and solutions. These tend to save us money. Let’s just spread the word about the benefits of a green supply chain.