When seeking cost savings from environmental initiatives, focus on areas that have the greatest impact and one of these is the supply chain.
June 30, 2011
by Brett Wills
When seeking cost savings from environmental initiatives, focus on areas that have the greatest impact and one of these is the supply chain. That’s where your company is linked to extraction, processing or assembly and transportation of raw materials. Here are some suggestions for greening the supply chain:
1. Leverage learning. Organize monthly/quarterly meetings with suppliers to facilitate the sharing of best green practices. Suppliers will learn from each other, leverage resources and accelerate the reduction of their own footprints. Even small reductions from each supplier add up to significant savings.
2. Source locally. Foreign suppliers pick up a lot of contracts because many purchasing decisions are based mostly on price. Looking at total cost may reveal that local suppliers are actually more economical. Look at inventory carrying costs, material management requirements, warranty and repair costs. Buying locally also supports the local economy and strengthens brand reputation.
3. Reduce packaging. Much waste is generated from unnecessary packaging. It generates greenhouse gas emissions and adds to the overall cost of the materials. Look for ways to eliminate packaging, transition to re-usable packaging or redesign to use less material. Reducing the thickness of cardboard, for instance, is not a huge change but significant savings quickly add up.
4. Optimize material consumption. There is a huge amount of energy and carbon embedded in a material by the time it arrives at a dock door. Reducing material consumption by even 2% will have a greater impact on your carbon footprint than reducing energy consumption by 20%. Ensure only the required amount of materials are being used and work with suppliers to meet specifications with less.
Brett Wills is the director of the Green Enterprise Movement and a senior consultant with High Performance Solutions in Cambridge, Ont. E-mail email@example.com.