“When it comes to energy usage and waste in supply chains, we have a major problem” – Paul Brody, 2008. (Environmentalleader.com, 2016).
Today, many consumers are conscious to make ethical decisions when purchasing goods and services – this could include anything from buying organic milk from a local farm, purchasing from a company that does not test on animals or vowing to only buy sustainable materials. Companies that produce ethical goods can compete on their Corporate Social Responsibility (CRS) rather than price, as studies suggest that at least 50% of people are willing to pay more for their goods when it is has been produced by an ethical company (MarketingCharts, 2015).
So, what makes a ‘green’ supply chain green?
From the production of a product to the way it is packaged and the method of its transportation, there are a few factors that play a vital part into the nature of the supply chain. A lot of different methods can be implemented to improve the sustainability of a company’s supply chain. Innovative thinking can design smart supply chains, where waste is minimised and sustainability is a core goal along with efficiency. Smart thinking can include having production factories close to warehouses, located on by great transport links, this will, in turn, minimise the fuel costs of transporting goods around the country.
While the transportation of a product seems to be a large factor in the sustainability of a supply chain, it might not always be the largest contributing factor. A company needs to evaluate the complete product life cycle to assess where the majority of each product releases the most carbon dioxide. A company looked into the product life cycle of the ice-cream brand and found that “only two percent of its carbon output came from manufacturing” (Environmentalleader.com, 2016) whereas the majority of it came from retail operations such as refrigeration (Environmentalleader.com, 2016).
Where do we go from here?
To have a global influence to make supply chains greener companies need to re-evaluate their current methods of operations and implement effective changes to each and every component of the supply chain. With a gradual transition to greener supply chains, will come with increased education on the importance of creating an ethical and sustainable company, thus making the next generation of business leaders more inclined to pursue a green supply chain.
Environmentalleader.com. (2016). 12 Steps To A ‘Greener’ Supply Chain · Environmental Leader · Environmental Management News. [online] Available at: http://www.environmentalleader.com/2008/11/30/12-steps-to-a-greener-supply-chain/#ixzz4KWQHlNHT [Accessed 17 Sep. 2016].
MarketingCharts. (2015). Will Consumers Pay More For Products From Socially Responsible Companies?. [online] Available at: http://www.marketingcharts.com/traditional/will-consumers-pay-more-for-products-from-socially-responsible-companies-60166/ [Accessed 17 Sep. 2016].
Image: http://www.supplychain247.com/special/green [Accessed 17 Sep. 2016].
By Alice Hunt