Here’s a cool story I found about two competitors working together for a greater benefit: Nestlé and Mars join forces in logistics collaboration. Nestle and Mars are sharing trucks to deliver combined loads of chocolate. In the past 11 weeks, over 60 loads have been combined, and approximately 7,500 miles of duplicate truck journeys have been eliminated. Not only to both companies save money by doing this, the overall environmental impact has been reduced. Big props to Nestle and Mars!
To stay with this week’s theme of establishing an environmentally-friendly supply chain, here are a few more tips from Logistics Management on going green while at the same time cutting costs: Green logistics: Industry expert cites ways of going green and cutting costs at the same time. In the article, supply chain expert Jack Ampuja discusses strategies such as redesigning packaging and logistics systems, and the effect that oil price fluctuations can have on supply chains:
Right now, Ampuja said, the smart companies are working on “what if” plans for oil prices at $100, $120, or even $150/barrel, ready to implement when and if prices go that high. With each plan, companies have to think about how many distribution centers they have, how efficient the routes are between them, how they manage inventory to feed those routes, and other issues.
“The (plan based on) $150 oil is going to give you a different network than $80, I guarantee,” he said.
Another area that companies need to revisit is packaging optimization. Ampuja said packaging can cost companies much more money than it needs to, and use too many raw materials. Companies that cut packaging down to size can cut as much as 40 percent of their shipping costs.
While there has been a buzz across the industry about the environmental sustainability issue for quite some time now, I have noticed that press coverage on the topic has picked up significantly in the past few weeks. Many of these articles, including the one above, cite presentations that various supply chain experts have given at industry events (a lot of big industry events and conferences are held around this time of year). To me, the fact that this has become such a recurring theme among industry experts is an indication that in upcoming months, “going green” will start to become the norm, and not just a competitive advantage that companies can have, as their customers will start to expect it.
Here’s a video I found that explains how Walmart plans to track supply chain emissions in order to provide carbon footprint information for all of their products. This follows up on a couple of blog posts I’ve made recently on this topic. Enjoy!
In last week’s post about greening the supply chain, I referenced an article that suggested starting with overseas suppliers (specifically those in China) to increase the supply chain’s energy efficiency. The article also discusses how Walmart has established a supplier energy efficient program in China, where the company has set a target of improving the energy efficiency of 200 factories by 20 percent over the next three years.
Today I found a bit more info on setting up a sustainability program such as Walmart’s. This article from Logistics Management explains that the benefits go beyond being good environmental citizens:
“Shoppers are looking for a good deal, but they also expect transparency,” she said. “They want to know that retailers are sensitive to global warming and other threats to future generations.”
Regina Edwards, director, supply chain compliance, for MeadWestvaco, concurred, stating that shippers were asking for “green” metrics placed on suppliers.
“Given the fact that we are so diversified and global, our leadership realized that we had to develop a principal code of conduct for suppliers that included more than just basic compliance,” she said.
It would not surprise me if, before long, going green becomes standard operating procedure, rather than something companies implement when they can.
In a Reuters article posted yesterday, Laura Ediger and Ryan Schuchard discuss companies reducing their carbon footprint by focusing on their foreign operations and supply chain. The article, A Green Supply Chain Starts in China, starts out by stating that the easiest ways to ‘green’ up a company is usually to look at your home operations, however the biggest impact could be made by looking a little farther away, say to China. China, as a very large country with a high population as well as being a world leader in manufacturing, is highly polluted. Companies, therefore, will be able to make a bigger impact more easily in China than if they focus their efforts at home. Some of the tips they provide for companies interested in a more efficient and energy conscious supply chain in China are: Be flexible with your goals, focus on people and systems not new technology, get management on board, explore cost-sharing options, and focus on multiple benefits. Reducing our carbon footprint is something everyone should work on, so why not start at the beginning? Go green all the way around the globe!
According to a recent supply chain study, visibility and environmental responsibility are the two areas that could use the most improvement. A write-up of the results in Supply & Demand in Executive reports that two-thirds of supply chain and operations professionals have marginal or no visibility across all tiers and levels of their value chain. Please read the full story here.
Concerned that you fall into this group? Try using a software solution to optimize your supply chain visibility.
Lately, there have been two big corporate trends we’ve been hearing a lot about. The first is to conserve the environment by “going green.” The second, in light of current economic conditions, has been to re-evaluate spending, and cut costs where ever possible. One would not immediately think that these two things could go hand-in-hand. However, it is possible for both principles to be successfully applied to the supply chain. A more efficiently-run supply chain can lead to less waste, less fuel, and lower costs. This article from Industry Week discusses the idea of controlling supply chain costs through the synergies involved in being green: Can You Have a Lean-Green-Global Supply Chain?
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In a Reuters article posted yesterday, Laura Ediger and Ryan Schuchard discuss companies reducing their carbon footprint by focusing on their foreign operations and supply chain. The article, 
Lately, there have been two big corporate trends we’ve been hearing a lot about. The first is to conserve the environment by “going green.” The second, in light of current economic conditions, has been to re-evaluate spending, and cut costs where ever possible. One would not immediately think that these two things could go hand-in-hand. However, it is possible for both principles to be successfully applied to the supply chain. A more efficiently-run supply chain can lead to less waste, less fuel, and lower costs. This article from Industry Week discusses the idea of controlling supply chain costs through the synergies involved in being green: 