Supply Chain Update - Perspective: Green is the New Gold

Perspective: Green is the New Gold

Logistic operations are eager to get their operations stamped with non-indelible ink and approved with biodegradable carbon certificates - but the green term has become overtraded and its value diluted in its abundance. While you may argue that better more than less, the need to present an environmentally friendly face has resulted in qualitative, rather than quantitative, changes to organisations.

The supply chain is no different – more so, as the extensive length and depth of the chain requires a high degree of visibility across multiple operations and organisations in order to be truly environmentally conscious. John Wilkerson, Vice President of Bellwether Services, a strategic management consulting firm, recently dealt with a number of challenges facing management of green supply chains.

While there were a number of challenges that raised crucial points – for example, understanding the standards and legislation that applies to your organisation – I believe the most crucial aspects highlighted is the need for corporate awareness and the business case.

If you were a fleet operator and with the aid of a carbon emissions tracker were able to get a good handle on how much carbon your vehicles are generating during their day-to-day operations, what would you like to do with the carbon emissions data you obtain? If it is purely for marketing purposes, very well; ensure that your sales and marketing teams are on board and have a defined plan in place for marketing your operations with the data.

But you could use this sort of data to start defining contractual obligations for your 3PL providers and suppliers. As supply chains become increasingly constrained by external pressures, the need for a competitive edge becomes increasingly important, and by implementing a long-term strategy of, as John describes, “Tying carbon to future supplier contract,” you ensure your company has the expertise and know-how of integrating future legislative requirements and obligations at a supplier level. The business case for your environmental policies must be sound, comprehensive and long-term: anything else is just green icing on an otherwise typical non-environmental cake.

The quantitative value of such projects is evident: creating a framework in which your 3^rd party organisations are expected to operate creates a model that can be employed with experience in the years to follow, and provides a form of accountability that leads into the need for awareness. John’s further point about standards, awareness, and communications planning all relate to the same point. The knee-jerk need to “be green” and get quick feedback results in quite a number of tree-planting ceremonies, but a lack of real, long-term, sustainable change in a organisations green corporate policy.

The “feel-good” factor of such initiatives can often lead to a company believing they’re actually compliant, rather than the less marketable but more impactful changes that can be made by understanding, for example, the ISO 14065 (Requirements for greenhouse gas validation and verification bodies for use in accreditation or other forms of recognition) standard in the context of your operations.

Ultimately, the companies that will succeed are the ones that not only use effective measurement tools but who are willing to forgo the PR boosts of short-term environmental initiatives in favour of a more realised environmental programme that incorporates an implementation, communication and control programme.

Contributed by: Rick de Klerk, technical writer, Opsi Systems