Ian
What a Green and Sustainable supply chain can do for you (and the planet)?
A green supply chain is inherently sustainable in the long term.
Statistics throws a lot of important facts at us. The World Bank states that 80 countries now have water shortages that threaten health and economies while 40 percent of the world (that is more than 2 billion people) have no access to potable water or sanitation. This means that we will run out of resources very soon. That IS scary.
A Green Sustainable Supply Chain is defined as the process of using environmentally friendly inputs and transforming these inputs through change agents whose byproducts can improve or be recycled within the existing environment. The said process develops outputs which can be reclaimed and re-used at the end of their life-cycle thus, creating a sustainable supply chain. Building a green, sustainable supply might incur a lot of initial costs but it is cost effective in the long term. More importantly, it hugely benefits the environment.
People work on existing systems, interfaces and units to make them greener and hence more sustainable. This is an ongoing process and every level of optimization is welcomed. For example, something as small as opting to reduce the amount of cardboard in packaging can reduce carbon footprint significantly and can contribute to a green and sustainable supply chain. If you are an organization that ships regularly, you can try to fill your trucks as fully as possible. Dell is a forerunner in building green and sustainable supply chains. They use green packaging material, have upped their average truck load from 18,000 to 22,000 pounds and have worked with UPS to optimize delivery strategies.
Many organizations that encourage a green and sustainable supply chain make use of this fact as their USP. People are willing to pay more for organic produce, ethically sourced materials and energy optimized industrial products.
How is this done?
Map your supply chain
Step one is to inventory suppliers and identify the most significant environmental and social challenges they have. Reinforce relationships with suppliers who run green, sustainable businesses themselves. And let go of suppliers who refuse to adhere to green norms.
Communicate expectations
Educate your customers on green and sustainable practices. Let them know of its long term benefits and cost efficiency. Involving your suppliers is a critical step here and without a green supply chain, there is no going green for you.
Set standards
Set compliance standards. Collect data from suppliers with a simple benchmarking questionnaire. Once that is done, analyze the data and come up with green optimization techniques that the supplier can follow. Evaluate periodically.
Develop training programs
Develop training programs for suppliers via conferences, online training modules and through capacity building campaigns. Highlight success stories of selected suppliers in these programs.
Carrot and Stick approach
Make it clear that you prefer suppliers who adhere to the green and sustainable supply chain model. Non compliant suppliers can be weeded out gradually. This makes people realize that green is the way to go.
Read more on going green here and here.
Read more on SCM.
Image source: Inventory and Supply Chain Blog
