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Top green supply chain software best practices

Green supply chain software is a valuable tool for cutting waste and costs. Manufacturers can get the most out of their green supply chain software with these top best practices.

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When it comes to getting the most out of green supply chain software it's critical to keep in mind four best practices: use what you have, optimize technology, avoid unnecessary activities and buy green throughout the entire supply chain .

By following these best practices, manufacturers will achieve high rewards in direct ROI as well as soft-dollar branding and public relations.

Leverage what you have.

Contrary to what many vendors say, green supply chain software tools do not require a new category of investment, at least not in most cases. First and foremost, look to existing classes of applications to enable your corporate social responsibility (CSR) initiatives rather than selecting unproven new products. Existing procurement, supplier management, product / specification management and supply chain management tools all provide the foundation for CSR supply chain success.

Use technology to engage, manage, measure and communicate.

A frequently overlooked CSR supply chain success criteria is the importance of direct stakeholder and supplier engagement at the start. By this I don't mean rigging SharePoint in a new way. Direct stakeholder and supplier engagement centers on implementing technology that helps define and establish goals, tracks and measures performance, rolls up this information in the aggregate and then allows integrated collaboration and process improvement activities among partners.

Avoid unnecessary haste, waste and movement.

Just as we are taught in Six Sigma training to avoid unnecessary activities that result from hasty or subjective decisions, it's critical to apply these principles to extended green supply chain initiatives. It's true that technology can aid the implementation of CSR supply chain programs that cut waste out of the system and avoid unnecessary rework that adds to costs and environmental footprints. But the key in all of these approaches is to start with measuring and analyzing information. Then, work backwards from the customer's end goals in a demand-driven supply chain model. In other words, if the customer is willing to tolerate less packaging or longer fulfillment times to save money and create less environmental impact, then supply chain activities should map to the customer's requirements.

Get end customers to buy green.

One of the best kept secrets of the green movement is that CSR initiatives often serve as stealth cost reduction programs. The redesign of gallon milk jugs in wholesale retailing and popular single-serve water bottles are perfect examples. Both formats reduce resin consumption. In the case of wholesale milk containers, they also lower logistics costs and save money.

A final note:

With respect to software, it is critical to keep in mind that green practices should not stand apart from IT and company best practices. If organizations keep their corporate objectives in mind and apply their stated goals and ambitions to their supply chain management solution, they are far more likely to derive bottom and top line results and do right by the environment.

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 last published in March 2010

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