Supply Chains Going Green
Making your processes environmentally friendly
Supply chains are critical links that connect an organisation’s inputs to its outputs, which is why organisations should consider sustainability in this process. The benefits are often highlighted as reduced carbon footprint, reduced energy usage and reduced resource consumption. If you’re looking to implement sustainable strategies, you need to understand what supply chain sustainability is.
Three tiers of sustainability
In 2008, The Future Laboratory produced a ranking system for the different levels of sustainability being achieved by organisations. This was called the ‘Three Tiers of Sustainability’:
- Getting the basics right
Simple measures are employed such as switching lights and PCs off when not needed, recycling paper and using greener forms of travel, with the purpose of reducing your company’s day-to-day carbon footprint. Some companies also employ self-service technologies such as centralised procurement and teleconferencing.
- Learning to think sustainably
This is where the company begins to realise the need implement sustainable processes within their business. By assessing the ecological impact across a range of operations, companies can see exactly how their practices impact the environment on a local and global level. Changes in supplier management, product design, manufacturing practices, and shipping and distributing happen at this tier.
- The science of sustainability
This goes beyond the obvious, or the observable, and includes a full-scale audit of how things are run and how they can be run. At this level, companies map out a plan for long-term sustainability and establish milestones and markers to assess their progress over time. This assessment plans in depth, how implementing sustainability over time warrants adjustments to cost, agility, flexibility and efficiency. The regulation of several types of businesses by government agencies, along with the overall cost savings of going green in the long run, is a major push for companies to achieve this final tier.
Challenges during supply chain sustainability implementation
This includes lowering costs, ensuring just-in-time delivery, and shrinking transportation times to allow better reaction to business challenges. However, the increasing environmental costs and growing consumer pressure for eco-friendly products has led many companies to look at supply chain sustainability as a new measure of profitable logistics management. This shift is reflected by an understanding that sustainable supply chains frequently mean profitable supply chains.
Many companies are limited to measuring the sustainability of their own business operations and are unable to extend this to their suppliers and customers. This makes determining their true environmental costs difficult and reduces their ability to remove waste from the supply chain. However, progress has been made in defining supply chain sustainability, and benchmarking tools are now available that enable action plans to be developed and implemented.
Sustainability is more than just a fad. By thinking sustainably, your business should be analysing the value you stand to gain through implementing sustainable initiatives.
Contact AMCAP Distributors to find out more about sustainable supply chain management solutions.