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Green Supply Chain Expert Insight
By Kevin Harris
Aug. 6, 2009
Green Supply Chains are Smart Business – Get Suppliers on Board
Green Supply Chain Strategies Require Tools to Manage and Measure Supplier Performance; Results in 120 Days

Green initiatives aren’t just good for the environment and customer relations. Business, in particular the supply chain and logistics industry, has learned that green initiatives also contribute to efficiency and profitability. As it turns out, what is good for the environment is often good for business. Green initiatives promote lean operations, earn the admiration and loyalty of customers, and improve profitability.

According to Dr. Bruce Piasecki, founder and CEO of AHC Group and author of World, Inc., “the 300 largest corporations on Earth are now exploring this new world order, a new social frontier, if you will. In order for them to survive and prosper further, they need to develop and further refine the business art of innovation for social needs -- they need to find a new and socially responsible way to fill the hole our depleting oil supply is leaving.”

Today, many companies give green issues great consideration and weight when devising their business strategies. According to a July 2007 eyefortransport survey of 271 supply chain and logistics professionals (in transportation and logistics, hi-tech and electronics, food, retail and consumer packaged goods, automotive, chemical, and healthcare/pharmaceutical sectors), over half (59%) of respondents reported that green issues are either important or very important to their companies’ overall strategy, 20% reported green issues as fairly important, 15% as somewhat important, and only 6% designated green issues as not important.

According to the eyefortransport study, there is a direct correlation between a company’s prioritization of green issues and their revenues and business success. In fact, key drivers for green initiatives include government compliance, improved customer and public relations, a decreased fuel bill and financial ROI.

Further, increasing supply chain efficiency, improving investor relations, decreasing risk and a larger Corporate Responsibility agenda were also important factors in the strategic decision to go green.

Most, if not all, green initiatives in the supply chain and logistics sector are directly facilitated by Vendor Compliance Optimization. A best-in-class Vendor Compliance Optimization program (also known as Supplier Performance Management) can enable retailers and manufacturers to decrease costs, increase revenues, and mitigate risk. It will enable them to measure supply chain performance and align their vendor community with the organization’s strategic goals.

Supply chain performance has been shown to improve in as little as 120 days.

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Kevin Harris is Director of Marketing for Compliance Networks, a provider of supply chain visibility and collaboration solutions, including Green supplier scorecard technology.
Harris Says:

Most, if not all, green initiatives in the supply chain and logistics sector are directly facilitated by Vendor Compliance Optimization.