This post is the third in a series dealing with supply chain sustainability. The first post, “Why Is Supply Chain Sustainability Becoming a Crucial Part of Manufacturing?” highlighted the four pillars of sustainability. The second discussed the benefits of traceability to maintaining or developing a sustainable supply chain.
Today’s post will address another of the four pillars (and some would argues the most important of the four pillars) environmental protection and progress. Corporate social responsibility can be a complicated — and controversial — topic. Many believe that businesses have an obligation to do more than just earn money, putting the public good ahead of financial concerns when possible. Others find this concept contradictory to the very nature of private business.
The argument for environmental protection and sustainable development stems from the fact that our world has finite resources — wasteful or damaging practices now can be detrimental to the very future of our society.
This argument was easy to ignore in years gone by, as successes in what was then the present were more than enough to justify the potential damages that would exist some undetermined amount of years into the distant future (or so it seemed).
Suddenly though, the ill-effects of climate change seem to be closer to the present than expected, and the science behind it is getting difficult to ignore. The world is continuously re-setting the global record for 12-month temperature average. Droughts and forest fires are increasing in both frequency and severity, and sea levels are rising at an unprecedented rate. Concerns over resource availability are also high, with many fearing supplies of commodities like oil will be exhausted within a few decades.
This has interest in green technologies and sustainable development at an all-time high, and the good news is that this means introductory costs are decreasing significantly. Many businesses actually find that ‘going green’ can directly benefit the business, through increased efficiency and decreased waste/expenses.
Going Green Can Save You Green…
If your concern for humanity wasn’t enough to get you to care about the environment, you may be interested to know that the decision to go green can actually be profitable. There are three main reasons this is true:
Sustainability and Efficiency Go Hand In Hand
A move to more environmentally friendly procedures will almost always mean addressing inefficiencies in your supply chain. While these will decrease the ecological footprint of your business, they will also save you money. For example, optimized transportation routes will decrease fuel consumption, lowering both carbon emissions and fuel costs.
Sustainability Measures Can Increase Brand Value
While sourcing environmentally friendly materials can increase expenses, the amount people are willing to spend on your product will typically increase as well. You may even attract additional customers just by supporting environmental causes that they also support. Many businesses find that this increase in sales more than offsets any additional expenses they incur.
There Are Tax Benefits for Environmentally Friendly Businesses
Tax credits exist for everything from producing or using energy from renewable sources to using hybrid cars for company vehicles. Be sure to review what is available in your state to see how much you could potentially save.
How To Green Your Supply Chain
If the benefits above have you interested in improving your supply chain’s sustainability, here are tips on how to get started.
Switch To Renewable Energy
The majority of carbon emissions from human sources come from the use of fossil fuels, so making a switch to renewable energy can make a big difference. Keep in mind that this is not an all-or-nothing deal. Using solar panels to decrease your normal power consumption is a step in the right direction, and the expenses associated with the initial investment can earn you tax credits.
Optimize Transportation Routes
By optimizing transportation routes, you will decrease your business’s fossil fuel consumption, carbon emissions, and expenses all in one move. This has the additional benefit of decreasing lead times which delivers more value to the consumer. Software advancements have made this process very easy, so this option makes a lot of sense for many different reasons.
Anything that uses more resources than necessary to deliver value to the customer is wasteful. Time, materials and money can all be wasted. Complex supply chains can be difficult to analyze, so visibility is key in successfully optimizing procedures. This is another example of where going green will end up saving you money. As resource consumption goes down, so do expenses.
Use Environmentally Friendly Materials
Sourcing materials that are environmentally friendly will often increase expenses, but consumers value this above other measures so your brand value will increase as well. Always make sure supplier claims are backed by third-party certifications so that you are able to use the claims as part of your own marketing.
Traceability refers to your ability to track a product's movement through the supply chain with as much detail as possible in order to verify sustainability claims. The information collected through improved traceability will help measure the progress of any sustainability initiative you incorporate into your supply chain, and it will also help you build trust with your customers.
These ideas should have given you a good deal to think about regarding the ecological footprint of your own business. If you determine that there is a good reason to ‘green’ your supply chain, don’t forget that it will need to be a collaborative effort. Reach out to the other businesses that you work with and discuss the goals you would like to reach. Joint ventures into sustainability can even help drive down initial costs.
As always, make sure any changes to operating procedures are worthwhile and cost effective!
Editor’s Note: This post was originally published August 2nd, 2016 and revised September 30th, 2018.