Getting the Green Light
Environmental Success Stories from the Supply Chain Consortium
By Chris Ferrell, Principal, Supply Chain Consortium
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Environmental supply chain initiatives are real. Companies in all industries and segments are dedicating resources and yielding improved results.
But according to the recent Supply Chain Environmental Hot Topic Survey Report, formal environmental program participation varies greatly: 20% have had one in place for more than three years, 40% have recently begun a program, and 40% do not have one at all. Additionally, almost a quarter of the survey participants have as much as five percent of their budget allocated for environmental initiatives. On the other extreme, nearly 50% of companies either do not have any budget allocations toward green initiatives or do not know if their company has funds reserved for a program.
Two classic supply chain core competencies -- minimizing total transportation and waste elimination -- are the most commonly cited initiatives. These save more green than just the environment; monetary savings are also a benefit. While many companies do not have formal programs, the Consortium survey reveals that other companies are leading the pack in implementing customized solutions for greener supply chains. A few of these success stories include:
- Joining the U.S. Environmental Protection Agency's (EPA) SmartWay Transport Partnership, which is an innovative collaboration between the EPA and the freight industry that increases energy efficiency while significantly reducing greenhouse gases and air pollution.
- Installing Alternative Power Units (APUs) in Private Fleets for heaters, air conditioners, etc. in sleeper units. One company reports an 80% reduction in engine idle time after installing APUs.
- Installing energy efficient lighting. After replacing lighting at all plants and DCs with energy efficient alternatives, one company reports a payback time of less than two years.
- Engaging in proactive recycling. One beverage company notes contracting with a company specializing in recovery of recyclable materials to build a plant that will specialize in making food-grade, highly-recyclable bottles out of previously used containers. The facility will be able to make approximately two billion bottles per year using essentially no new raw materials.
- Near-sourcing air-intensive components. Another company in the beverage industry receives plastic bottles in compact, un-blown, "test tube" format. The bottles are blown into shape on-site, reducing the number of truckloads required to deliver bottles to the plant by 90%.
- Driving environmentally-friendly company cars. After switching over its fleet of company cars, one company's sales team only drives Toyota Prius hybrids.
- Printing two-sided. One company mandates the use of two-sided printing, a feature commonly available on many late-model laser printers.
- Efficiently routing and loading transportation. Multiple companies reduce out-of-route and empty miles, increase cube utilization, and emphasize multi-stop shipments.
- Working with builders for a green facility. When building a new facility, work with architects, contractors, suppliers, and every level of government to ensure the facility is as environmentally friendly as possible.
- Implementing Specific, Measurable, Achievable, Relevant and Time-bound (S.M.A.R.T) Environmental Objectives. One world-class participant has the following objectives to complete by 2015: 25% carbon footprint reduction, 25% waste reduction, 100% of paper originating from sustainable sources.
These are only a few of the ideas being implemented as environmental initiatives. More environmentally friendly alternatives are unfolding as we become more conscious of our impact on the planet. However, we still have a long way to go. According to the survey, companies are as likely to begin an environmental initiative to improve brand image, as they are to achieve regulatory compliance or satisfy customer expectations (View chart below).
Nevertheless, some companies have either a full-time individual or department dedicated to implementing environmental initiatives, and as the pressure from the global community and industry increases, the Consortium expects this trend to continue.
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This article is available for re-print with attribution. If you would like more information or an interview, please contact Keri McManus, (919) 855-5516.
The Supply Chain Consortium is the premier source for supply chain benchmarking and best practices knowledge. With more than 200 participating retail, manufacturing and wholesale/distribution companies, the Consortium sponsors a comprehensive repository of 17,000-plus benchmarks complemented by search capabilities, online analysis tools, topic forums and peer networking for supply chain executives and practitioners. The Consortium is led by the needs of its membership and an Advisory Board that includes executives from Campbell Soup, Hallmark Cards, Ingram Micro, Mervyn's, Molson Coors Brewing Co., Target, The Pep Boys, and Coca-Cola Co. To learn more about how your company can become a member of the Supply Chain Consortium, contact John Foley, 919-855-5461 or visit www.supplychainconsortium.com.
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