When “I want it now” morphs into “Get it here on-time, in the right quantities, ready for assembly, with a low carbon footprint, in as green a process as possible, logistics professionals may see this as just another spec preference. However this entire procurement method is becoming more than a preference. Many clients are promoting it to a contract requirement!
How green can a process be that includes gigantic farm processes, factories, tractors, trailers, carbon fuel and electric powered machinery, diesel locomotives pulling miles of freight trains, ocean freighters stacked high with containers, giant cargo jets flying across oceans and countries, and every imaginable type of motorized handling equipment moving freight in and out of storage containers and temperature controlled warehouses with the doors open most of the time?
Better control? Maybe. Improved processes? Perhaps. How about the really scary thought of re-vamping the entire international supply chain?
Yossi Sheffi, PhD and Edgar Blanco, PhD are both professors at MIT who published a paper in the "Harvard Business Review" to discuss just this subject last October. These two logistics experts described how a broader definition of corporate responsibility everywhere is causing companies to transform their traditional supply chains and logistics systems. They stated that the new “green” supply chain extends corporate social responsibility back to how their suppliers use energy and forward to how customers use and dispose of products. As public awareness grows, companies who embrace this change will win competitive advantage and financial reward.
Quoting from their white paper, they continue on the finer points. To the traditional business hurdles of meeting and exceeding competitive and governmental demands, managers must now add the social demands of civil society and the finite nature of resources. In this context, corporate social responsibility becomes a bottom-line matter of:
- Reputation enhancement, leading to quicker local permitting and favorable regulatory treatment. This can range from the Warner Foundation’s philanthropy to Cisco’s networking academy for disadvantaged students.
- Human resources development, stimulating employee pride, retention, and positive work attitudes. Costco shows the way here.
- Partner loyalty, enabling greater supplier cooperation. During a crisis, Toyota’s long-time suppliers trusted the manufacturer’s intentions.
- Brand cultivation, trading on the perceived value of fair procurement and environmentally responsible manufacturing. Starbucks is a model for this.
- Risk mitigation, recognizing that, while costs might be somewhat higher for ethically produced products, the economic penalties for unethical behavior are far larger.
Remember, though, that any corporate moves in this direction establish future public expectations; once you start, you must continue. Wal-Mart impressed the public with its response to Hurricane Katrina; now its prompt involvement in disasters is expected.
OK, get out there and make the green changes! I know, I really didn’t know where to start either. To be fair, very few companies and logistics professionals do. In Part Two we’ll continue with the strategies to move to greener logistics in the frenetic global market. You will see that committed partnering is KEY!
You can do this!
By K.B. Elliott
K. B. Elliott is a freelance writer for LogisticsJobSite.com. Working various supply positions in the Detroit area for over 30 years gives him a unique perspective on the process. On the chance occurrence of spare time, you will find him building computers and airplanes, or restoring antiques. To read more of his blogs, please go to LogisticsJobSiteblog.com, and be sure to check out the postings for jobs in nearly any industry at Nexxt