While environmental groups have long touted going green to conserve resources and reduce carbon footprints, is it also possible to save money by adopting green measures throughout the supply chain? While every industry has unique needs and circumstances requiring consideration, the bottom line is that, with proper green measures in place, organizations can realize greater long-term profits.
RBC Royal Bank, in an article providing a wealth of information supporting the move toward greening the supply chain, mentioned several important points. The article argued that organizations and individuals are increasingly paying more attention to the behaviors of companies to ensure green practices are employed.
Regulators, as an example, are scrutinizing the practices of organizations and individuals to pinpoint areas where green measures can reduce the amount of waste channeled to landfills. Measures to control the amount of electronic waste are routinely being targeted.
The RBC publication also points to the bottom line benefits of electing to take advantage of green supply chain options. Even when the green option is more expensive initially, the total life cycle expense is often lower. Companies must also consider whether or not the product is recyclable at the end of its useful life as part of the sustainability issues organizations are facing.
Consumers are also becoming more environmentally conscious, overtly seeking providers of services and products designed to have a reduced impact on the environment throughout the product’s supply chain. Not only are consumers demanding information on the company producing a specific product, they also want data on upstream suppliers to ensure the entire supply chain is aware of and actively dealing with sustainability issues.
Alternatives Journal, in a January 15, 2015, article, discussed the changing landscape of waste reduction issues within supply chains. The article pointed out that for years it was primarily non-governmental organizations (NGOs) that were attuned to issues directly related to green practices. Now, companies like Coca-Cola are facing the necessity of greening their supply chain. Other industry articles refer to the efforts of companies like Frito Lay Canada and the Marriot hotel chain to significantly reduce waste throughout their supply chains.
The RBC article describes Frito Lay Canada’s goal of reducing its fleet tailpipe emissions by 50 percent no later than 2020 by adopting newly developed emission reduction practices. Marriot, by purchasing goods using recycled materials, is eliminating tonnes of plastic being dumped into area landfills. While each of these goals is worthy of mention, there are undoubtedly additional options for further reducing wastes in those organization’s supply chains.
Savings can be realized throughout virtually any organization’s supply chain. Those savings can occur upstream, but many practices are designed to reduce energy costs and other expenses both in-house and downstream. Even taking relatively simple steps, like encouraging the use of electronic payments instead of relying on paper statements, reduces the amount of energy required for operations. Costs for paper production and distribution, as an example, are greatly reduced when organizations become proactive with their green practices.
While every industry’s supply chain requirements are different, analyzing the components with the goal of becoming greener is the first step to saving both natural resources and money. That includes a careful examination of the net costs (or savings) for employing sustainable, green practices at each step of the manufacturing or service delivery process. Current practices often prove more costly, in the long run, than adopting green supply chain practices.
