Companies Mostly Giving Lip Service on Greening their Supply Chains

chain.jpgOnly one out of 10 companies actively manage their supply chain carbon footprints, and about one-third have no idea what level of emissions come from their supply networks.
Greening the supply chain has been a buzz-phrase in the logistics and transportation sectors for some time now. The idea is that by creating sustainable supply chains long-term cost savings, environmental benefits and greater reliability will follow.
It turns out that it’s somewhat more complicated, falling squarely into the “easier-said-than-done” and “window-dressing” categories. That’s because manufacturer supply chains and the rise of global outsourcing have made their chains longer, increasingly complex and difficult to monitor along each link, from supplier to manufacturer to transport, warehousing and distribution.

Now the global recession is weakening green chain links even further, according to Accenture, the global management consulting, technology services and outsourcing firm.

Its recent research indicates that the greening the supply chain is falling prey to the necessity to maintaining revenue and profits. An Accenture survey of 250 supply chain executives found that only 10% of companies even track and model their carbon footprints and follow up with successful sustainability initiatives.
And only 20% of the top, so-called best-in-class supply chains as defined by Accenture are more likely to model their carbon footprints and sustainability projects than other supply chains. Just 9% of those not-as-best-in-class “others” are likely to be involved in that activity.
The study also found that 37% of those surveyed don’t have a clue about the level of emissions in their supply chain network. At least those responding are doing a better job at greening their warehouses, with 86% of them recycling and using natural light, lighting management systems and energy-efficient bulbs.
Accenture said 38% of supply chains have undertaken at least one green initiative in their transport fleet, such as streamlining vehicle design, adopting green fuels and vehicles with hybrid engines.
“The study findings demonstrate that the vast majority of organizations are taking steps to reduce carbon emissions,” said Jonathan Wright, senior executive in Accenture’s Supply Chain Management practice. “However, most are implementing carbon-reduction solutions without understanding their carbon footprint and are therefore unable to measure the real impact those solutions are having on their emissions.”
The logistics industry loves to survey and benchmark itself and spends a lot of time and energy in these activities each year. Exercising a more comprehensive and coordinated approach to measuring emissions and saving energy across entire supply chains would be time better spent and is long past due. And in the long run it will save their bottoms, er, bottom lines.

writer, editor, reader and general good (ok mostly good, well sometimes good) guy trying to get by

3 responses

  1. Supply chains can be mindblowingly complex. Not the least of the problems is this – many companies share suppliers, therefore sharing data across your supply chain is sharing data with your competition. That’s something most companies are terrified of. I wonder if a better approach is international agreement where all companies in a supply chain are treated separately and identically in terms of reporting. Wouldn’t that take the pressure off the companies at the top of the chain?

  2. The vast majority of a company’s carbon footprint is embedded in its supply chain, so any business that’s serious about sustainability needs to begin focusing its efforts there. A comprehensive sustainability platform must address the environmental impact of products upstream and downstream, throughout the entire value chain.

  3. There is substantial documentation that proactive procurement focused on green, whole-chain optimization typically results in 10%-20% cost savings and a substantially greater increase in profits. In addition effective collaboration with suppliers can cut time to market by 25%. To me, this means that a company is more efficient and competitive.
    This short term view of sustainable chain undermines the intrinsic value of sustainable supply chain in the long-term marketplace.
    Also, sustainable supply chain is SO much more than managing a company’s carbon footprint. Traditional methods such as Design for Environment and life cycle assessment capture chemical use, energy consumption, materials inputs, and waste outputs etc….all critical elements of an effective sustainable i.e. green supply chain.
    Please supply chain professionals, don’t cut your own value short…you are the gatekeepers to a company’s creativity and innovativeness in lean economic times.

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