In recent times, the issue of climate change and global warming has become an increasingly important board room topic as businesses become ever more aware of how their operations impact the world around them. As a result, organizations are seeking new ways to improve their green credentials. Whilst implementing green technologies undeniably helps businesses improve their impact on the environment, could more effective supply chain management hold the key to a truly efficient and green operation?
For many years, green issues have been in the media spotlight, but extreme weather such as the droughts across Africa and giant storms like sandy which gripped America’s east coast, have opened the worlds eyes to the devastating impact of climate change. Further evidence shows that 2012 was the warmest year in history in the United States and the 10th warmest worldwide since 1880. As a result, international leaders have renewed commitments to even stricter climate change targets. Businesses are under increasing pressure to introduce greener and more efficient operations in order to meet the targets set.
Many businesses have responded by implementing green technologies that offer lower emissions, improved energy efficiency or even whole new sources of sustainable energy. For example Toyota has invested heavily in solar technology and managed to cut 2000 tons of carbon emissions per year. Whilst no doubt such technologies improve green credentials, I strongly believe businesses must first ensure their supply chain management supports this move toward efficiency before true benefits of green technology can be realized.
Within the supply chain for example, a huge investment in time and resources is required to transport, store and maintain stock. This is especially true if the stock requires special environmental conditions such as in the food industry where stock must be kept refrigerated or frozen to maintain quality. Furthermore, over ordering could be equally detrimental to green efforts. Holding too much stock may mean the business unnecessarily wastes more resources managing stock, which is not required and may not sell. I strongly believe that better supply chain management could offer businesses a huge opportunity to improve efficiency.
Through optimizing the supply chain, businesses can cut unnecessary excessive buffer stock and reduce total stock holding whilst still maintaining service levels. This could potentially lead to huge competitive advantages as organizations can better satisfy customers and other stakeholders with a more effective, more efficient and greener operation.
However to achieve effective optimization, businesses must implement intelligent tools that offer greater visibility over the supply chain. Through achieving a better understanding of supply and demand, businesses can cut unnecessarily wasted resources by planning for demand with greater precision.
Failing to take action today could leave your organization lagging behind as competition take control of their supply chain and lead the way in business efficiency. Businesses that take full advantage of optimizing technologies will set the foundations for a truly efficient supply chain in the future.