Tags: Supply Chain
What are Sustainable Supply Chain Practices?
At Group O, we help businesses incorporate sustainable and green practices into their supply chains. While sustainable and green practices are similar, there is a difference. Sustainable practices focus on reducing impact, while green practices focus on improving environmental health.
The goal of these practices is to decrease carbon emissions and waste, while also maintaining (and sometimes increasing) profit. From an implementation perspective, both can be leveraged across multiple areas of an organization - from purchasing and manufacturing to warehousing and distribution.
Fully executing these practices can be a potentially lengthy endeavor but a very impactful one. This article discusses the fundamentals of supply chains going green and the beneficial results it has on the environment.
Types of Green Supply Chain Practices
In order to achieve a sustainable and green supply chain, it’s important to implement environmentally-conscious practices within every stage of the process, from initial concept to a solidified process. Below are a few areas within supply chain and how to make them green!
Green purchasing involves finding supplies with environmentally sustainable products. Sourcing your materials sustainably lays the foundation for the rest of your supply chain operations, making it a crucial first step when going green. A few examples of green purchasing are procuring recycled or remanufactured materials and seeking raw materials that have been sustainably harvested, I.e. purchasing wood from suppliers who protect and preserve wildlife habitats.
The focus of green manufacturing is to reduce energy consumption and limit reliance on fossil fuels, all in an effort to increase sustainability and preserve natural resources.
Primary focal points include:
- Use of renewable energy
- Boosting energy efficiency
- Conserving natural resources
- Reducing pollution
Supply chains require a significant amount of energy, from powering equipment and lighting to controlling the temperature of large factories and facilities. With green manufacturing, businesses are able to update existing production processes with greener alternative solutions. A great example would be the implementation of alternative energy sources, such as hydropower, wind energy, or solar energy within a given supply chain process. Integrating these new technologies can be a simple start to a greener future.
Green packaging focuses primarily on the materials used for the packaging itself. Implementing an eco-friendly packaging process involves using post-consumer recycled materials or biodegradable packaging materials. Furthermore, post-consumer recycled materials consist of a variation of recycled paper and corrugated cardboard filler, while biodegradable materials consist of decomposed organic products such as mushrooms and corn.
Another important aspect of green packaging is providing clear directions for consumers on the best methods for recycling. In order to complete the green packaging life cycle, this final step is crucial to ensure said materials can be re-gathered and used time and time again.
With green warehousing, the target is to create energy efficient warehouse operations by reducing waste and energy use. The best way to do this is through constructional upgrades, as older warehouses tend to be obsolete. Renovations typically consist of installing insulation (or improving the amount of insulation), using alternative energy sources like hydro or wind power, and utilizing more natural light via large windows. Another eco-friendly tactic is to locate warehousing facilities in key distribution hubs, as it requires less energy to transport products.
Transportation is the largest cause of greenhouse gas emissions, which is why opting for environmentally conscious transportation methods can be incredibly impactful. There are many viable options for greener transportation, such as investing in electric trucks or trucks that run on alternative fuels, consolidating goods to minimize trips, rail transportation, and so forth. For example, trains have the ability to carry much more cargo than trucks and require less fuel, which ultimately reduces gas emissions and overall transportation costs. These alternative methods are environmentally sustainable solutions.
6. Life-Cycle Management
The design of sustainable and green products always considers the complete life cycle of each material, as most materials typically serve more than one purpose. For example, recyclable materials like wood can be used to create paper, furniture, and mulch. By managing the life cycle of materials, precious resources can be reused or reallocated, all contributing to a more sustainable future with less waste.
Factors Affecting Green Supply Chain Practices
Green supply chain practices have the power to protect the planet and make a lasting impact for future generations. Through sustainable practices, supply chains can reduce waste and increase cost efficiency – plain and simple. With that being said, it takes the right people and a lot of coordinated effort to ensure processes are modernized and that they meet sustainable standards. Below are factors to ensure successful implementation of green supply chain practices.
1. Strong Leadership
Having executives and managers who are committed to creating a green supply chain is essential. With their support (and hopefully enthusiasm), sustainable and green initiatives get the backing they need and can be rolled out in unison with other high level objectives.
2. Efficient Technology
Advanced technology and software systems support green supply chain practices instrumentally. Whether it’s utilizing warehouse management systems to increase efficiencies or implementing new manufacturing technologies that reduce the use of hazardous materials – technology is crucial for going green.
3. Strong Company Culture
When corporate culture supports the green initiatives taking place, the process of implementing new practices goes more smoothly. Additionally, including the human resources team to recruit green supply chain experts will set the company up for success.
4. Cost and Investment
The costs associated with green supply chain practices can seem intimidating, but there are advantages. In recent years, new government subsidies and tax breaks have been implemented for those utilizing clean and renewable energy. Furthermore, certain investors and consumers actively search for businesses implementing green practices to invest in or buy from.
5. Professional Expertise
When implementing green practices in a supply chain, involving an expert (or team of experts) will ensure the transition from traditional to sustainable practices goes smoothly. On top of initial implementation, having a trained person or group of people over a period of time will help ensure efficiency and make adaptations to optimize process and output.
Trends in Green Supply Chain Practices
Due to pressing needs, green supply chain practices are showing up more and more in facilities across the globe. Every year, human demand exceeds the planet's natural resource supply – only furthering the need for sustainable practices. Fortunately, many have risen to the occasion and have developed new processes and technologies to put us on track to meet sustainability goals and to foster real change. Listed below are a few of these trends.
1. Investing in Transportation Infrastructure
Building more efficient transportation will result in fewer carbon emissions. Right now a lot of goods travel by air; which may be time-efficient but isn’t exactly energy-efficient. By offsetting air freight with ocean freight and rail freight, companies are reducing their environmental impact while meeting customer demand.
2. 3D Printing
3D printing is a rising tool across multiple industries, as it's proven to be energy efficient and cost effective. The use of 3D printing is commonplace in industries like aerospace and medical device manufacturing, but many supply chains around the globe are finding new uses for it as well. The new tech allows for the creation of products on demand and reduces the possibility of overproduction. Overall, 3D printing is more precise and creates less waste, ultimately lowering carbon emissions.
3. Circular Supply Chains
Circular supply chains involve recovering and recycling waste material to create a saleable product. For example, old products such as furniture, phones, or clothes can be refurbished and made new. The circular chain model can be a profitable method for companies, while also reducing waste and keeping valuable materials out of landfills.
4. Carbon Emissions Trading
Carbon emissions trading is when carbon credits are exchanged among nations to minimize carbon emissions. Each country has a certain amount of carbon emissions it can use, which can be raided with other countries. The idea behind putting a price tag on the amount of carbon emissions, is to give an incentive to reduce carbon emissions.
Sustainable and Green Supply Chain Practices to Help Your Business
There is a large opportunity for organizations of all sizes to embrace sustainable practices and use them to their advantage. Switching to biofuels, reducing energy use, and incorporating recycled materials are just a few examples of how companies can implement sustainable and green practices into their supply chain.
Group O helps businesses of all kinds implement environmentally sustainable practices into their supply chains. Contact Group O today to learn more about sustainable and green supply chain practices. Our experts are happy to help you discover the green solutions you need for your supply chain. For more information on how Group O can help your company, contact us through our website or give us a call at 866-476-8761.