IT Industry Talk: Supply Chain Professionals as Protectors of Mother Earth?

19th April 2017

Logistics BusinessIT Industry Talk: Supply Chain Professionals as Protectors of Mother Earth?

A personal view by Henry Canitz of Logility


I grew up in a time when people didn’t think that often about one’s impact on nature. When the first Earth Day took place in the US in 1970, it was a very small that event compared with the world-wide phenomenon it has become today.

A common definition of being Green is “the quality of not being harmful to the environment or depleting natural resources,” and thereby supporting long-term ecological balance. I care about the environment and do what I can to minimize my impact because living in Beautiful Colorado I benefit from being surrounded by some of Mother Earth’s finest scenery.

Younger generations who have grown up with the threat of climate change, holes in the ozone layer, greenhouse gases, Polar ice cap melting, polluted water systems and oceans and dying coral reefs, to name a few, have a much sharper focus on what it means to be eco-friendly. Our kids and grandkids regularly discuss the topic of sustainability and being eco-friendly in K-12 education. The Millennial generation, which makes up an ever-growing percentage of the workforce, has a strong desire to not only make a valuable contribution at work but also to society including in the area of protecting the Earth. If you type, “Protecting the Earth” into Google you will get about 83,400,000 results in less than a second. When you think about the implications of a growing awareness of sustainability it quickly becomes evident that as supply chain professionals, we can have a huge impact on protecting Mother Earth. For more than a decade, supply chain teams have worked diligently to reduce the impact of operations.

What is a “Green Supply Chain”?

Green supply chain management can be defined as integrating environmental thinking into supply-chain management, including product design, material sourcing and selection, manufacturing processes, delivery of the final product as well as a product’s end-of-life management. There are many opportunities for supply chain professionals to influence how “Green” your supply chain operates. In fact, almost every supply chain decision made in an effort to reduce costs has a beneficial side effect of also greening the supply chain. For example:
 Optimizing a distribution network may reduce logistics costs and improve customer service but in most cases, doing so also reduces carbon emissions through fewer transportation miles and/or less inventory holding facilities.
 Higher forecast accuracy allows a company to hold less inventory, run more efficient plants, and improve transportation efficiency. Optimizing the supply chain reduces costs but also reduces greenhouse gases and decreases your company’s carbon footprint.
 Scenario planning enables a company to find the most efficient and effective solution to unexpected events ensuring a high-level of customer service while minimizing costs.Often the least cost scenario is also the best one from a Green standpoint.

Being able to claim your company follows “Green Supply Chain” practices is important to a growing portion of the population and can positively affect brand awareness and market share. There is growing evidence that brands that can substantiate eco-friendly policies can charge more for their products. The results from a recent study showed that 89% of the U.S. population is willing to purchase at least one kind of product that has a positive impact on the environment. The results from another study showed that nearly three-quarters of people surveyed feel that they are aware of the positive and/or adverse environmental effects of products they purchase every day. There is literally Green to be made by being Green.

As with other supply chain related initiatives, Greening your supply chain is a journey, not a destination. The important thing is to get started and a good place to start is to focus on initiatives that will improve end-to-end operational efficiencies. Unfortunately, many functionally focused efficiency improvement projects just lead to inefficiencies in other areas of the supply chain. For example, maximizing plant efficiencies often leads to larger inventory holdings and less efficient distribution.

Your ability to improve end-to-end supply chain efficiencies is greatly enhanced if you utilize a Supply Chain Planning (SCP) System of Record (SOR) (see All I Want in My Easter Basket is a Supply Chain Planning System of Record). A SCP SOR provides one place to visualize, plan, and optimize all your supply chain enabling system-wide efficiency improvements.

Supply chain professionals should measure and publicize not only the economic but also the ecological impact of their supply chain improvement efforts. On Earth Day, and every other day of the year, supply chain management professionals should proudly stand up and proclaim that we are protectors of Mother Earth.