But sustainability has an open-door policy to new industries, and global logistics is no different. Forward-thinking consulting firms like Sunnyvale, California-based Ariba Inc. are offering answers to clients’ green questions—often before they even ask them.
“We have been struck by the extent to which this is not hype,” says Kris Colby, senior manager in Ariba’s spend management services group. “People are putting money behind it; they’re putting effort behind it; they’re putting their goals and objectives behind it.”
Industrial real estate stands as one of the largest cost buckets in the global supply chain, and it represents a single sub-industry that can benefit from a determined greening effort. Colby’s firm recently published a list of 10 tips to green the supply chain, and he says the research has takeaways that are 100 percent relevant to the real estate industry.
“If you’re looking at warehousing and logistics, the primary focus so far has been on the fleet, and what we can do to increase the fuel efficiency of the fleet,” he explains.
But there’s more beyond that. Bulk warehousers can go green under the US Green Building Council’s LEED rating system. Locations can be chosen that are closer to major metro areas to encourage shorter travel times. Products can be sourced from companies and suppliers that use more carbon-friendly production methods. Above all, says Colby, decision makers should realize that it’s no longer about green for the sake of green. There is a growing global industry built around sustainability, and it needs savvy businesspeople almost as much as it needs committed worldchangers.
“If you’re trying to do something altruistic, chances are you might get some press out of it, but it’s not going to stick,” Colby says.
1. Know where you stand
Understanding your organization consumption patterns is the first step because you can't affect what you can't see. A simple assessment of your organization’s green status (and then a more detailed carbon footprint study) will provide you with the information you need to determine how well your supply chain is positioned for the changes on the horizon.
2. Have a plan
Once you know where you stand, create a set of goals and (even more important) metrics that can be used to track progress against these goals.
3. Have a single point of accountability
Many organizations have appointed chief sustainability officers to oversee their green efforts. The appropriateness of this specific position will depend on your organization and industry, but the key is to have a single point of accountability empowered to effect change.
4. Market your progress internally and externally
Half the battle is getting the word out and bringing people on board. Be sure to communicate to all levels why green efforts are being undertaken, what will be measured and how the company is going to get there.
5. Incorporate green into your existing sourcing and procurement processes
Sourcing and procurement have always been about more than just price. Be sure to include green criteria in your requests for proposals and create clear metrics for measuring them as part of supplier performance management.
6. Communicate your goals and standards to your supplier community
By setting clear expectations of your supply base during the sourcing process and proactively monitoring compliance/progress, you can quickly improve your sustainability performance. Outline what suppliers will be expected to provide and how they will be measured to ensure that they are delivering and putting in place the processes and procedures to drive compliance.
7. Stay up-to-date with global regulations
Environmental regulations such as the Restriction of Hazardous Substances directive in the European Union will increasingly affect how your supply chain functions regardless of your location. You need a method for keeping up with changes in this rapidly evolving area to avoid costly mistakes in your supply chain.
8. Keep up with new materials, technologies and processes
Significant work is being done to develop new approaches that can effectively address the challenges and opportunities that green initiatives present. Stay up-to-date in your industry, participate in trade groups and do whatever it takes to maintain your competitive advantage and not be left behind.
9. Do the easy stuff first
You don't need to overhaul your supply chain to see gains from sustainability efforts. Instead, identify quick wins such as simple improvements in energy efficiency that can both deliver bottom-line results and kickstart your green initiative.
10. Get everyone involved
As with any broad initiative, it is nearly impossible for just one functional area to have an impact on the entire organization through its efforts alone. To be effective, get engineering, design, sales, finance, operations and everyone else involved.
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