Our world is currently undergoing major environmental change-researchers claim that the extreme weather occurring of late is caused by our lack of concern for the Earth. We tend to take our resources for granted considering the growing world population, resulting in resource depletion. Legislation enforcing stricter environmental regulations will soon be passed in America. The concern for environmental issues has also caught the eye of the corporate world. Companies are quickly realizing that green supply chains will help them reduce costs while helping save the environment.
Green Supply Chain: What is it, and Why use it?
A green supply chain is the process of using and transforming environmentally friendly inputs through change agents, whose byproducts can be used to improve the environment, or be recycled. Companies in the corporate world are realizing that using a green supply chain can be a competitive advantage in the marketplace; they are coming up with innovative solutions for which a green supply chain will help them save money and help the environment. For example, some companies are focusing on indirect purchases to help prevent environmental issues. Reducing the amount of cardboard used for packaging, and creating “smart packages” will help the company save money, and contribute to the environmental cause. Another way sustainability can be profitable is through the organic food craze- grocery stores charge high prices, and make a large profit off organic food that consumers are willing to pay much extra for. The green supply chain phenomenon also gives rise to a new industry- companies specializing in sustainability training and certification.
Real World Examples
The concept of the green supply chain has already spread to several Fortune 500 companies. General Motors (GM) reduced disposal costs by $12 million by establishing a reusable container program with its suppliers. PG&E has also been supporting green supply chain efforts- it gave its first Green Supply Chain award to Southwire Company. Southwire Company converted 1/3 of its cars to hybrids, thereby reducing landfill waste by 27%. It also eliminated lead activities from its products. Walmart has also begun implementing the green supply chain, and has seen an increase in profits by 7% ever since.