Supply chain management traditionally focuses on coordinating the flow of goods and services from suppliers to manufacturers, to wholesalers to retailers, and retailers to consumers. However, the 21st century supply chain comes with a few added layers of complexity. In recent years the evolution of the green supply chain or green procurement, have become incredibly popular. Making your supply chain green requires integrating multifaceted environmental concerns relating to product design, materials sourcing, manufacturing, transportation, and end-of-life product and resource management.
Implementing green procurement practices can seem overwhelming. After all, you’re already trying to maximize your bottom line with a complex set of existing variables. However, there are multiple benefits to be obtained: positive PR, improved consumer relations, and positive contributions to the bottom line.
If you want to “greenify” your supply chain solutions and practices, here are five places to start:
1. Product Design
To implement your green supply chain to the best effect, products must be designed to take maximum advantage of it. This has been an increasingly hot topic in design circles, especially since the 2002 publication of Cradle to Cradle: Remaking the Way We Make Things by Michael Braungart and William McDonough. Billed as a “manifesto for a radically different philosophy and practice of manufacture and environmentalism,” it promotes the concept of “reduce, reuse, and recycle.”
For example, Adobe Systems recently began to incorporate Martini Design’s cutting-edge work to greatly reduce the amount of plastic used in many of their products. In addition, one-layer cardboard overwraps are now used on discs instead of three. These may seem like relatively insignificant changes, but Adobe’s scale of production means that even these small changes can have big impacts.
2. Sustainable Materials
It is tempting to think our planet has infinite resources. After all, as long as there are enough raw materials for the next production cycle or order, it can be hard to worry about the big picture that's five, ten, or twenty years down the road. However, being a proactive steward of natural resources is a key part of green supply chain solutions.
Each year IKEA uses 1% of the world’s lumber to produce over 100M pieces of furniture. So they are working with lumber producers around the world to meet Forest Stewardship Compliant (FSC) standards: maintaining well-managed forests that provide environmental, social, and economic benefits.
The “green” factory balances business and environmental concerns through energy efficiency and sustainable production. However, before manufacturing begins, the eco-factory starts with careful facility planning to produce cost savings — such as reduced energy requirements — and other environmental protection contributions like waste reduction and disposal.
By retooling its production processes, global glass manufacturer Schott created the first glass-ceramic cooktop, which did not require heavy metals such as antimony and arsenic. On a larger scale, British retailer Marks and Spencer partnered with supplier MAS to open four eco-factories in Sri Lanka that are carbon neutral, thanks to state-of-the-art waste reduction processes and renewable energy.
Sustainable transportation deals with the types of vehicles (ground, air, or water) used for transport and their energy sources. Short-term strategies include fuel standards (such as miles per gallon) while long-term solutions include moving away from fossil-based fuels.
Computer manufacturer and retailer Dell revamped truck-loading processes to achieve greater packing density, which reduces overall fuel consumption. In a related move, UPS, the shipping and logistics company, recently added 700 18-wheeler trucks powered by liquefied natural gas (LNG).
Just as our planet doesn’t have unlimited resources, it’s also not a bottomless pit to throw trash into. As part of their commitment to recycling, Nike’s headquarters in the Netherlands utilizes recycled aluminum in its construction. Meanwhile, automaker GM generates $1B a year by recycling waste, including paint sludge, cardboard boxes, old tires, and scrap metal.
(And the book Cradle to Cradle mentioned above? Instead of being printed on paper, it uses biodegradable sheets of plastic which decompose more quickly once copies of it inevitably end up in landfills.)
Implementing green procurement practices to your supply chain can seem daunting, but consumers both want and expect it as climate change and carbon emissions become increasingly global conversations. Whether you’re doing it to lesson your company’s global foot print or trying to appeal to the up and coming millennial generation, there’s never a bad reason to go green.