Green revolution in supply chain

These days, being environmentally conscious and “green” goes beyond individual efforts. As consumers become more environmentally conscious, they expect businesses to be more socially responsible and conscious about their impact on the environment.

Hence it has become more important than ever for businesses to minimise their carbon footprint and to conserve natural resources, especially within supply chains.

 

By implementing sustainable practices and observing greater transparency across the global supply chain network, businesses can not only win the support of value-driven customers; they can also better manage the risks of supply chain disruption caused by natural disasters. In other words, “greening” the supply chain could potentially increase profits, cut costs and help a company move ahead in a competitive economy.

Green Toys, which produces toys for tots made from 100% recyclable materials in the US, is one such prime example. Originally a niche brand that started in 2007 because co-founder Laurie Hyman could not find environmentally sustainable US-made non-toxic toys for her children, Green Toys has since become a global company that sells its products in over 70 countries.

With its environmentally friendly yet sustainable business model, Green Toys proves that going green does not mean that quality is compromised. Even big names like General Motors, Marks and Spencers and Apple, are realising the importance of “greening” their respective supply chains. PUMA, for one, published an Environmental Profit and Loss statement in 2012 to translate the environmental impact caused by its operations and supply chains into monetary terms.

The aim of this exercise is to re-evaluate the different processes within the supply chain such as product development and commercialisation, procurement, and transportation so that hundreds of billions of dollars can be saved by utilising greener methods. It is also vital to track how materials are procured, used and generated—ensuring that by-products are disposed of carefully whilst refining design processes to create less waste.

Starting green

It all begins with sourcing for materials that are recyclable or recycled, and then tailoring the product to be made with the material. Green Toys, for instance, does not use paint, screws, glue and metal to put their toys together. This is to ensure that they reduce waste when the products are disposed.

Home-made

Many businesses are also starting to move manufacturing facilities back into their home country, reducing the need for logistics and freight which helps to cut on energy and fuel usage. This can help to reduce their carbon footprint and fuel emissions.

Pack with care

For companies that are not ready to go all the green way, they can consider using sustainable material when packaging their products. Hewlett-Packard is a good example of a company that has successfully reduced its carbon footprint by 20% by changing the material of their packaging. Cutting down on the use of polystyrene computer packaging and PVC packaging has also helped the company increase their profits significantly.

Doing the green thing is no longer a tree-hugger's prerogative; companies are now jumping on the bandwagon because going green no longer comes at the expense of profits, with the reverse being true. With climate change increasingly disrupting supply chains and causing tens of billions of dollars in losses, the Green Revolution is definitely here to stay and companies need to know how to react and take advantage of the current phenomenon.