globe cradled in handsSupply chains are frighteningly fragile. They are becoming increasingly global and highly extended networks that are prone to natural disasters, climate change, civil conflict, and a variety of common risks. They account for approximately 50 percent of business expenses and 75 percent of greenhouse-gas emissions for most manufacturers.1 And half of their revenues can be easily spent on just raw materials and packaging.2

Looking at the state of today’s supply chain, it’s quite obvious to many corporate leaders that there’s a link between sustainability efforts and operating a highly efficient supply chain. According to the study UN Global Compact–Accenture CEO Study on Sustainability, 93% of CEOs see sustainability as important to the future success of their business. However, approximately one-third of the CEOs surveyed indicated that their businesses are making sufficient efforts to address global sustainability challenges and are able to quantify the value of their sustainability initiatives back to the business.

Let’s face it: A sustainable supply chain is no longer just an optional nice-to-have – it’s a critical business imperative. And for many businesses, they are accepting this reality head on. They understand that the ability to produce quickly, innovate, and meet customer demands shouldn’t leave out green, responsible practices. In fact, it’s these progressive companies that are realizing that operating more sustainably can also benefit their bottom lines.

Yes, you can save money and the environment with these 4 approaches

Want to be one of these progressive companies? Try out these four sustainable supply chain experiments:

  1. Pinpoint inefficiencies through your carbon footprint. By monitoring carbon use of your entire product line, supply chain inefficiencies can be detected and fixed quickly and less expensively. Companies, like Danone, who decided to undergo this effort were able to not only boost their bottom line, but they were able to reduce its carbon and related energy consumption by 40%.
  1. Disrupt your industry with a greener product or service. Believe it or not, taking advantage of the latest crop of new technological innovations can really help you create a sustainable, profitable business. For example, Skype radically changed the telco industry by seizing the opportunity presented by the existing IP infrastructure of the public Web. This enabled Skype to offer free voice-over-IP calls with minimal overhead and pass those savings to customers.
  1. Transform products into services. Reduce emissions and make a few extra bucks without disrupting the entire supply chain. Selling a service that supports your products can not only be perceived a better customer service, but it’s also a sustainable model. Take, for instance, an appliance manufacturer. This type of business can offer a full lifecycle service of its products by maintaining appliance from installation and replacement to recycling at the end of use. This gives the manufacturer and retailer more control of the brand by making customers feel secure that their new purchase is installed properly and safely and former appliance is disposed of responsibly.
  1. Use shared resources. Access to resources is increasingly strained. But instead of this situation being a problem, business should consider it as an opportunity. Innovation expert and business consultant Don Tapscott claims that businesses should “shift the way that we manage resources from a traditional industrial batch kind of model to a real-time interactive and collaborative model.”

Sources:
[1] Accenture, 2012
[2] U.S. Environmental Protection Agency, 2010