Sustainability Implies Aligning your Supply Chain Goals with your Business Goals.
The purpose of a green supply chain is to help your company achieve its business objectives, by stimulating innovation, improving productivity, reducing cost (waste) and thereby improving organizational sustainability. If a company decides to use biodegradable packaging for its products that costs 25% more than traditional packaging, and this goes against the businesses goals of being the low cost supplier, the business goal is not satisfied. If a business has an overall goal to reduce costs then the move to a green supply chain should dovetail with the business goal. A company should look at its overall business goals and identify how a transition to a green supply chain can help achieve those goals.
Similarly, if a business wants to reduce its energy costs it should start by looking at the consumption to see if a reduction can be made by using more energy efficient and greener equipment. Applying green supply chain thinking to existing processes can identify opportunities that my have significant long term benefits such as effective recycling programs, alternative energy sources, reduction in scrap. One example is that ineffective processes in the US automotive industry allowed the innovative Japanese automakers to become market leaders. Their ability to reduce scrap, eliminate rework, and improve product quality provided an opportunity to surpass their American counterpart.
Businesses that want to transition to a green supply chain should take the opportunity to review all their business processes and identify areas where adopting a greener outlook can actually improve their business. Companies should review each process along the supply chain to identify if a more environmentally sound approach will help cure the inefficiencies that occur. Many companies that have been through this exercise have identified processes where raw materials were wasted; resources underutilized and unnecessary energy used due to inefficient equipment.
Green Suppliers and material refurbishment companies reviewing their business processes should look beyond their factory walls. When reviewing purchasing processes the aim of any company, looking to transition to a green supply chain, should be to find suppliers who have minimized their environmental impact without reducing the quality of their product or significantly raising costs. By purchasing products from green suppliers businesses can then begin their green supply chain before any material reaches their site.
At the opposite end of the supply chain businesses should look at their return process. Many businesses have not developed a successful refurbishment program for their products that have been returned or exchanged. By offering refurbished items businesses can increase purchasing options to their customers and widen their customer base, whilst improving the environmental impact of their products. There are many ways in which businesses can transition to a green supply chain; however it is important to realize that it is difficult to achieve results without strong focused leadership. Senior management has to lead the effort to move to a green supply chain and provide the resources for the transition. Many businesses have documented a intent or plan to implement a green supply chain, but without the necessary resources, both financial and manpower, any impact will be minimal.
If your company is considering implementing a green program , I would suggest you contact Supply Chain Experts, they can help you design a program that delivers both immediate and long term benefits. The program will be designed to shift your organizations thinking, improve innovation, and implement a program that will optimize operational performance and satisfy the requirements of your customers.
Productivity Constructs, Inc.
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ed@edwardknab.com
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Dr. Knab is an academic practitioner and seasoned Global Supply Chain expert whose company, Productivity Constructs, is focused on driving cost and inefficiency out of the Global Supply Chain. Dr. Knab can be contacted for speaking engagements, coaching, or consultation at efk@productivityconstructs.com, ed@ewardknab.com or www.edwardknab.com.
Tags: control, distribution, efficiency, management, system, warehouse, WMS
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