By Chet Chaffee
July 18, 2013
There’s simply no question that companies must assess, evaluate and optimize their supply chain operations in order to reduce their carbon footprint. In fact, government and industry are strongly urging the issue; today’s customers like green business; and optimized supply chains with smaller carbon footprints are more efficient, less costly and less likely to experience sudden changes in energy and fuel prices.
Identifying, tracking and managing supply chain emissions is essential to optimization efforts, with the primary goal of detecting inefficiencies in fuel, electricity and water consumption and then correcting those inefficiencies to help eliminate waste and reduce costs. In addition, companies need to be aware of various reporting requirements, identify opportunities for improvement and reducing costs.
Monitoring and reducing carbon footprints also makes good business sense. Not only does it help eliminate waste and reduce costs internally, it also can help companies choose more efficient business partners and better mitigate risks caused by sudden changes in energy and fuel prices. In addition, lower carbon footprints can improve corporate brands, and companies can gain an advantage over competitors by providing comprehensive emissions information.
During supply chain optimization efforts, it’s important for executives to be mindful that when improving one benchmark, it may adversely impact another.
Companies need to look holistically at the supply chain to balance any tradeoffs that will have to be made. Successful companies often find incremental solutions that gradually improve environmental performance while minimizing burden in other areas.
To fully understand the tradeoffs inherent in their choices, executives must be able to analyze the entire value chain of a product or service in terms of cost and environmental impact. In doing so, they can make certain that various components in that chain interact in ways that benefit the whole system. Ultimately, no green initiative will succeed unless it has a proven value: better economics for the company, improved benefits to the customer, and a marketing advantage for the products and services.