Is supply chain sustainability more than a marketing ploy?
“Being a good steward of the environment and in our communities, and being an efficient and profitable business, are not mutually exclusive. In fact they are one in the same.”
— Lee Scott, CEO Wal-Mart, Twenty First Century Leadership, October 24, 2005
Whatever you believe about the issues surrounding climate change, sustainability, and all things “green”, there are certainly people paying attention, and if your business serves consumers, they may be paying attention to the way you conduct business, from the way you make things, handle them in your operations, ship, and handle them.
According to Industry Week, there has been a near-300% increase in climate change regulations since 2002. More importantly, 17 percent of the market identify themselves as green buyers. The biggest example of a company understanding this trend and responding to it, is of course, Wal-Mart. The retail behemoth is doing everything from pushing eco-friendly products like compact florescent lightbulbs or reduced-packaging detergent to enhancing the efficiency and reducing the carbon footprint of its shipping and warehousing operations. Others, like Home Depot have deployed an “Eco Options” program identifies environmentally friendly products for its customers.
For supply chain, manufacturing and distribution people, the Wal-Mart story is interesting because not only is the retailer changing its supply chain, it is moving toward its suppliers doing the same. Wal-Mart says that it’s saved 478 million gallons of water, 20 million gallons of diesel, 128 million pounds of plastic resin, and the number of trucks it uses since it began.
INSIDE YOUR OWN WALLS
Most of these savings came on the road and at the manufacturing level. If you’ve ever seen the inside of a Wal-Mart DC, you know that it’s also a model of efficiency, and that’s only smart business. Saving energy at the distribution center level is not as cut and dried, nor does it have the public relations impact of saving it by cutting packaging or making your truck fleet more efficient. But it’s much more within your control than the intricacies of suppliers and truck fleets and fuel prices. Quite truthfully, if you don’t own your fleet, how much control over its efficiency do you have?
Lean manufacturing solutions ensure that plants, lines and machines are running at peak efficiency. Everything makes sense. Everything is in alignment. The same can be said of lean principles applied to distribution and warehousing. It is “the production of goods using less of everything.” which sounds pretty green to me, and also pretty smart.
Whether or not you think the entire thing is P.R. hype designed to put an environmentally friendly aura for consumer-goods companies, or a sincere commitment to doing the right thing, the idea of using less to get the same result is something any company wants. In our world, the world of material handling, we attempt to make companies more effective and efficient. If your conveyor system uses less energy, if you can store more goods in precious freezer room square footage, if you are able to inventory fewer products and save on energy costs because of it, if you use energy-saving, alternative facility cooling methods, you’re saving money and you are probably also saving energy. You’re being green.
Your may or may not care, but it’s a good bet that a growing number of your customers do. If you are walking the walk, why not talk the talk?
Scott Stone Cisco-Eagle's Director of Marketing. He has over 25 years of experience in the industry.