Top 10 Reasons to Green Your Supply Chain

image: green linkSupply Chain Management (SCM) over the past few decades has proven there to be opportunity to reduce cost and add value in the supply chain.  However, traditional Supply Chain SCM has focused primarily on cost, with professional consulting targeting costs (including transport, inventory, and administration) of 7% to 9% of revenue.

The recent emergence of Green SCM provides the opportunity to review processes, materials, and operational concepts from a different perspective.  It incorporates the role of the environment in supply chain value creation. 

Leading companies are finding unique value opportunity in Green SCM: Pepsi-Cola Saved $44 million by switching from corrugated to reusable plastic shipping containers for one liter and 20-ounce bottles, conserving 196million pounds of corrugated material.

Below are the top 10 reasons why most companies are incorporating eco awareness into the supply chains.
  1. Increase Profitability - Proactively incorporating sustainability concepts into your supply chain will decrease cost and add the value to operations.
  2. Asset Utilization – Incorporating greater eco awareness into transportation and inventory practices will increase utilization of key assets.
  3. Risk Mitigation – Promoting greater understanding of sustainability with in the company’s supply chain will mitigate environmental, social, and market risks.
  4. Innovation – Incorporating sustainability concepts into the supply chain will be a catalyst for supplier innovation.
  5. Alignment - Negotiating business sustainability policies with suppliers and customers will promote alignment across the supply chain.
  6. Continuous Improvement - A common understanding of sustainability concepts, goals and objectives provides a platform for continuous improvements.
  7. Customer Service - Implementing sustainable best practices within the supply chain will standardize operations and allow for improve customer service.
  8. Regulatory Compliance - Green supply chain management will help ensure regulatory compliance.
  9. Product Differentiation – Creating uniquely different green supply chain practices will differentiate the company and its products in the market place.
  10. Enhance Reputation – Demonstrating green business practices will promote business sustainability and enhance company reputation.

Adding general eco awareness or simply incorporating a few sustainability concepts into and existing supply chain process can have immediate affects.  Taiga Company provides professional consulting and small business resources to companies seeking to make significant changes in their operations. 

Comments for Top 10 Reasons to Green Your Supply Chain

Name: Tim Albinson
Time: Tuesday, March 24, 2009

Great list! It’s interesting to note that these ten reasons also illustrate how greening your supply chain can help your company survive these tough economic times.