Tuesday, January 22, 2013

Supply Chains Go Green

          New product design gives way for products to become more effective, more efficient and more green!  Over the past few years going green has become an important component of many companies business strategies.  The supply chain is a great place to make green improvements as it creates one of the largest carbon footprints though the production, storage and transportation of goods[1]. In addition to companies reducing costs by improving on areas such as carbon emissions produced by transportation, consumers may also be willing to pay more to purchase green products.  Therefore companies will benefit from reducing costs and wastes, increasing consumer’s willingness to pay and assisting the environment through their company strategy.
          Going green has been a major initiative in companies including Whole Foods, IBM and Walmart.  However, this initiative is not limited to larger or more successful companies who can afford to make large investments.  Initiatives that increase awareness such as eco-driver training and campaigns like “Switch Off” can save 5% and 20% on fuel and energy costs respectively[2].  Therefore revamping or making simple improvements to one supply chain can have significant impacts.  It can also lead to serious cost savings which is a key element for companies in today’s economy.  Other reasons companies choose to have green supply chains include to achieve regulatory compliance, to fulfill customer requirements, to improve the company's image, etc [3].
          Despite the strong reasoning to do so, the U.S. is lagging behind globally in terms of possessing companies who have the largest environmental footprint.  IBM was the only U.S. company to appear in a 2012 Newsweek ranking of the top 10 greenest global companies[4].  With profit and the environment becoming intertwined components, it is not logical for more companies in the U.S. to not do even more to improve their environmental footprint, including greening their supply chains.





[1] http://www.logisticsit.com/articles/2008/04/21/3539-going-green-in-the-supply
[2] https://www.dhlsupplychainmatters.dhl.com/sustainability/article/10/going-green
[3] https://new.edu/resources/using-supply-chains-to-create-value-for-customers--2
[4] http://www.thedailybeast.com/newsweek/2012/10/21/newsweek-greeen-rankings-2012.html

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