I think that all of us agree that environmental and sustainability initiatives have been front and center for many management teams in the last few years; but the question is how these inititatives will fare in the face of todays economic downturn.
A former colleague of mine used to say that green initiatives will be a non-issue in the future; I believe his view was that the market would find a common view on these issues and that the problem would solve itself, yet most reports on the issue all point in the same direction; green initiatives might be good for the planet, but as a business opportunity (or differentiator) it’s as good as a dead duck.
Take the results of the recent “2008 3PL Provider CEO Perspective” (a well researched short take on the report can be found WSJ MarketWatch. Although the 3PL industry has really taken up the gauntlet and established environmental responsibility as part of their corporate strategies few actually track any performance in the area and few (if any) of the CEO’s surveyed believe that the initiatives are significant in winning new business (or even retaining the existing customers).
But one interesting aspect of the findings is that many of the initiatives have come into focus not because the customers wanted it; instead many are primarily instigated from inside, as part of the companies corporate social responsibility initiatives.
The question is; especially in these times of economic downturn; will this trend have the perseverance to really reshape logistics (and other parts of the supply chain) or will customer demands for lower prices knock environmental issues down the corporate agenda. I; for one; hope that this will not happen and that the ethics and morality (as displayed by the urge for companies to establish CSR-agendas) will prevail over the short term goal of lower costs.
October 21, 2008 at 3:18 pm
The question is not “Who Wants a Green Supply Chain?” but instead “Who Needs a Green Supply Chain?”
I agree that the main driver for those organisations that have implemented any form of ‘green’ or ‘climate-friendly’ initiative has, so far, been internal…
But that is a good thing, as a growing number of companies are coming to realise that the mantra of corporate ‘tree-huggers’, such as our own organisation – Reduce, Reduce, Recycle – applies to a commercial strategy to, first and foremost, reduce consumption.
This can only be achieved by having full visibility and control of spend. In an ideal world your employees would only buy what you want them to buy from pre-approved suppliers and at prices negotiated and agreed centrally. Using technology, that’s what we help companies to do – eliminating leakage and wastage, providing data that can be acted on instantly to eliminate unnecessary spend, etc., etc. with clients saving upwards of £500,000 per annum.
And there is technology which out there, which does not have to cost more than ‘non-green’ technology (when are the large suppliers going to realise that green can no longer command a ‘trendy buy’ premium?!) which reduces energy consumption, uses less consumables, lasts longer, etc. which, by its nature is xetremely climate-friendly and so reduced costs.
Your question at the end of the article, “[] will customer demands for lower prices knock environmental issues down the corporate agenda?” is easily answered… if you want survive and thrive, especially in this current economic climate of panic-mongering, implementing climate-friendly will reduce your cost-base and allow you to meet those (short-term) demands from customers to reduce your price; win them with a fair-profit price nad keep them with a demonstration of climate-friendly action that is genuine to them and sustainable for you.
October 22, 2008 at 8:30 pm
I definitely agree here – still I fear that there is a gap between the strategies (at the management level) and the actually doing (at organization level). And this applies to purchasing as well – as you say; purchasing should: “eliminating leakage and wastage, providing data that can be acted on instantly to eliminate unnecessary spend”. But if the information from management is not clear enough – or if the function has a cost at all costs approach – chances are that long acting strategies; such as sustainability; get lost in the hunt for quick savings.