Once it was enough to have an efficient supply chain, but competition has raised the bar again. Now, customers not only judge companies on quality, price and delivery lead times, they also look at supply chain sustainability. Companies that are able to point to their Green supply chain have an edge over their competition, and consumers look more favorably on the brand when they know that the company practices Green supply chain management.
Very few supply chain solutions incorporate green analytics into their application, which means much of the burden of developing and maintaining a sustainable supply chain falls on the company itself. Although some supply chain consulting firms specialize in working with companies hoping to develop a Green supply chain, most companies are able to incorporate green supply chain management principles into their current practice with a few adjustments.
1. Sustainability as a core value
Many companies have incorporated sustainability as a core value over the last several years, but it is much easier to practice sustainability within your own four walls, and quite another thing to impose it as a core value on every member of the global supply chain. Companies trying to develop Green supply chain management as a core competency need to start by incorporating sustainability and Green thinking throughout the entire culture.
This shift in thinking may require the company to take a long-term view on many initiatives rather than the “quarterly results” trap that some companies find themselves mired in. The company must value quality over expediency, and Green thinking and sustainability must be part of the definition of quality. In addition, employees must be rewarded for doing more with less and finding ways to improve efficiency that don’t require generating waste, whether that waste is scrapping existing equipment or a by-product of the process.
2. Communication and collaboration
Supply chain practitioners have been proclaiming the benefits of communication and collaboration for years, but communication and collaboration move beyond “best practice” into “must do” territory if a company wants a Green supply chain. The company must make it clear to all its suppliers that it is determined to have a sustainable supply chain. The company must also be prepared to work with its suppliers to help them develop the same passion for Green values that it has for quality and zero defects.
The company may have to provide Green supply chain consulting to help educate the suppliers who are not yet aware of its value and importance. This may require a great deal of consciousness-raising in some parts of the world where the ramifications of non-Green methods and products are unknown or of little concern. The company must make it very clear to all suppliers that sustainability and minimizing waste are as important to the value of its brand as price and quality are. In some cases, if suppliers are unwilling or unable to support Green supply chain management practices, then the company may have to switch suppliers.
3. Visibility is key
Companies learned the hard way that supply chain visibility is imperative to ensure high quality and brand integrity. From dog food, to pharmaceuticals to baby food and children’s toys, there are horror stories about what happens when companies turn a blind eye to the supply chain beyond its immediate control. The same vigilance and visibility is a necessity for supply chain sustainability. Fortunately, nearly all supply chain solutions provide visibility as a key feature.
4. Brand impact
If a company chooses to make environmental sustainability or “Green” part of its brand message, it must be aware that consumers who value the environment and make a commitment to sustainability part of their own value systems will be more attracted to the product. If consumers later learn that the green supply chain claim was false or overstated, the backlash is usually swift and extensive. Some brands may never recover, and there will always be the taint of broken promises attached to the brand, even after the company takes steps to correct the issue.
Companies hoping to remain competitive should consider moving to green supply chain management as a way to improve quality and differentiate themselves from other companies who have not yet made the commitment. However, companies that do adopt sustainable supply chain practices should be prepared to make changes in the supply chain that may increase costs in the short run but that will pay off in the long run. They also need to ensure that they have visibility throughout the supply chain and that they stay in constant communication with all suppliers so they know that the entire supply chain is adhering to the core value of sustainability. In addition, the company should be prepared to mitigate risks that may jeopardize the supply chain during the transition. By preparing carefully for its own transition to a Green supply chain, the company will be able to enhance its brand’s reputation with today’s eco-savvy consumers without compromising quality or cost.