Green supply chains present challenges, promise


green supply chainOne of the new facets of supply chain management is the attempt to "go green," using sustainable methods to accomplish logistics goals. There are many reasons to make the switch. One of the most notable is changing customer awareness and preference. In an age of widespread information, people care about where the products they consume come from. This has led to both soul-searching and process changes within supply chains large and small.

Report finds opportunities

The University of Pennsylvania's Wharton School recently published a report delving into the new supply chain management processes taking hold among companies eager to make themselves environmentally friendly. The researchers interviewed General Electric's Rajat Kapur, who expressed the belief that efficient processes and environmentally-friendly practices are not necessarily a dichotomy. The question of supply chain sustainability is large and complex and includes every section of a company.

[W]e'll begin to approach the question of global sustainability when we carry this discussion back to the beginning of the supply chain, because in every case but two [water and oxygen], we are extracting natural resources at rates that far exceed the rate at which they are being replenished," University of Pennsylvania professor Robert Giegengack told the Wharton researchers.

While the issue of supply chain greening is large and open-ended, the Wharton team offered companies a likely place to start. They stated that a firm's choice of supplier can set the tone for environmental efforts, but that different industries have different concerns in regard to supply decisions.

The report drew a distinction between large companies, which are able to hold out their purchasing and partnership as enticements for suppliers to follow environmental rules and smaller companies that have to take a more diplomatic and nuanced approach. Tim Riordan, supply chain president, told the source that a formalized request for a proposals system can help firms lay down guidelines and change relationships.

Progress in disclosure

According to GreenBiz, there has been a large response to the need for sustainability transparency in supply organizations. The source stated that more companies than ever are filing disclosure of their possible environmental impact. The source stated that 54 large firms have asked their supply partners to disclose their carbon emissions status. In total, the surveys went out to over 6,000 individual firms, signaling wide support for reporting and transparency efforts.