How to grow a green supply chain

We all know that it’s important to build green methodologies into your supply chain. There are plenty of stories in the media about endangered species losing their habitats as a result of the industrial world’s hunger for raw materials and resources. One of the latest examples I’ve seen is the plight orangutans in the Sumatran jungle face due to aggressive palm oil harvesting. As a result, both customers and industry regulators are increasingly applying pressure on firms to become greener.

As my colleague David Weaver pointed out in a recent blog post—when it comes to the food industry— not only do we need to worry about where the raw elements come from in the first place, but there’s also the startling fact that globally, around one third of all food produced for human consumption goes to waste. How can we reduce waste at one end of the supply chain and more efficiently gather resources at the other?

Combating these issues needn’t simply be a tick-list chore. If you’re willing to sow the seeds of sustainability from the outset, you can reap significant benefits from your green supply chain. The way I see it, there are three immediate focus areas that can help you get there.

1. Be resourceful with manufacturing process

Think about any changes you could make for the greater environmental good. This could involve altering the materials you use in your manufacturing process to use more environmentally friendly or recycled alternatives, for example (and before you think big companies can’t do it too) check out Lego’s story.

Alternatively, making a slight change to the product design can help reduce energy consumption and waste throughout the lifecycle. For example, can you cut the amount of plastic packaging required to wrap your fresh vegetables? Some organizations can eliminate components or ingredients completely, shortening the supply chain and saving significant carbon emissions. Freisland Coberico Dairy Foods in the Netherlands cut its transport needs by 127,000km per year, simply by adjusting its recipes and production methods.

Where components can’t be eliminated, can you replace them with recycled alternatives? Ford has managed to incorporate old plastic bottles into its manufacturing process, for instance. Not to be outdone, GM has managed to turn its own leftovers into income. It makes $20,000 per month from cardboard recycling and $1billion per year from selling scrap metal. It’s not only helping its own finances, but making materials available to another company as well.

2. Enable collaboration and communication with peers and suppliers

After addressing in-house sustainability plans, there may be more that can be done to spread the word and encourage others to incorporate sustainability into their operations by working with your industry peers or suppliers.

You can promote your organization’s own green objectives directly to your ecosystem. Not only does this help you set and stick to your goals, but it also positions your brand as a green champion to customers, suppliers and peers. Think about creating a supplier code of conduct based on international guidelines from the likes of the UN Global Compact publications, which outline best practices and common standards for sustainability priorities ranging from water and sanitation to human rights. Once you’ve set the guidelines you want your own suppliers to follow, you should monitor their performance (simple industry-specific benchmarking questionnaires can help accomplish this) to ensure standards are maintained.

For those of you that are feeling particularly inspired, you could even think about challenging your industry peers to support a broader collaborative drive for greater greenness. Some industries have seen high-profile efforts by leading players to set official quality and performance standards for all suppliers. A great example is the Zero Discharge of Hazardous Chemicals Programme (ZDHC) in the fashion industry.

3. Make use of the tools available to you

There are a range of inventory management and enterprise resource planning solutions that can help you plan your stock levels more efficiently. By getting a clear view of how much of a certain item you have in your warehouse and at other points in the supply chain, you can make more informed planning decisions. This can, in turn, reduce the amount of supply chain waste along the way.

By integrating an inventory optimization system with your wider ERP environment and other business intelligence sources, you can tie your supply chain decisions to real-time business insights and make your stock types and volumes as relevant as possible. Having this sort of visibility and control over your supply chain ultimately means you can cut down on the costs involved in transporting unwanted stock or having to scrap surpluses of unused material or unshipped products.

As we move into summer, now’s a great time to start thinking about what you can be doing to help make your supply chain that little bit more sustainable. Whether your main objective is cutting energy costs throughout your ecosystem or reducing waste in your distribution center, going green can help get you there.

What are some other ways that can help grow a green supply chain?