The most beneficial green supply chain technology creates sustainable environmental benefits as well as improve company bottom (and even top) lines. That's why, across industries, companies are extending corporate social responsibility (CSR) and green activities to their suppliers.
Here are four examples of how to apply green technology in the extended supply chain:
Packaging engineering and redesign. A range of retailers, consumer packaged goods (CPG) and food manufacturers have actively engaged partners to redesign packaging to reduce the use of materials and, in some cases, logistics costs. These companies use sourcing optimization tools and product lifecycle management (PLM) applications to aid in the process.
Materials substitution. Both manufacturers and end consumers such as telecom providers are working with suppliers to identify substitute materials like recycled plastics that are environmentally friendly and durable. For example, a titanium fastener may cost more initially, but provides significantly longer durability than steel while delivering the same performance characteristics at a lighter weight. Sourcing optimization tools, supply management suites, product lifecycle management tools and supplier collaboration applications all play a part in materials substitution.
Certification. Companies -- especially those selling into the EU -- are required to certify that their products meet specific environmental criteria (e.g., are lead-free or not a hazardous substance). Supplier information management (SIM) solutions help companies survey and manage the certification process in their supply chains by documenting that both tier one and sub-tier suppliers avoid the use of banned materials or production processes.
- Logistics optimization. By strategically locating distribution facilities and warehouses and reducing LTL (less than truckload) small parcel and air freight shipments, manufacturers can reduce their environmental footprint and also prop up the bottom line.
About the author: Obsessed with how companies manage, spend and save money, Jason Busch writes about procurement, trade and supply chain issues on his blog Spend Matters. He is also Managing Director of Azul Partners, an advisory firm.
This was first published in March 2010