One way organizations can take advantage of supply chain optimization is by being more cognizant of their greenhouse gas emissions, which Green Biz said can become significant for any supply chain. At Oregon's Portland Community College, which has 10 campuses and covers more than 2.2 million square feet, school administrators decided to report their supply chain-related emissions.
The school committed to attempting to lessen emissions in 2006 via the American Colleges and Universities Presidents' Climate Commitment. Since then, the school has completed four emissions inventories and reported progress each year. Other organizations can implement systems to keep watch over their supply chain and follow in these footsteps to achieve a cleaner way of working. The school made goals of lessening emissions 10 percent between 2006 and 2012, 40 percent by 2030 and 80 percent by 2050, and data collection was the first step to achieving these benchmarks.
Erin Stanforth, the sustainability manager for Portland Community College, wrote on Green Biz that his team gathered all of the purchasing records and had more than 750,000 lines of data collected. They grouped this data and deleted anything that was not necessary or pertinent and used a calculator to find their carbon emissions to dollar amounts.
"Because PCC is a community college, our assumption was that our highest sources of emissions would be commuting," she wrote. "That indeed was true, but the surprise for us was that supply chain emissions followed so closely behind. In 2012, 37.6 percent of PCC's total emissions were attributed to commuting, while 37.3 percent were supply chain emissions. Because of these high numbers, PCC's Sustainability Council was forced to re-focus the work of its subcommittees on the highest emissions sources."
By accessing more accurate information through the data collection solution, the school was able to focus on areas where it could cut down emissions across the supply chain. In addition, PCC was able to focus on natural gas, electricity and sustainability.
Best Practices for a Greener Supply Chain
VIjay Kanal of Kanal Consulting wrote on Sustainable Minds that some big steps can be taken in supply chain and warehouse management to cut down on emissions. Selecting and prioritizing the top 15 to 20 percent of purchases, prioritizing the most sustainable and setting expectations for going green are key steps, he said.
"Companies should communicate their expectations with a sustainability code of conduct, and require a commitment in writing," Kanal said. "Suppliers who refuse should be considered for replacement. In most cases, suppliers will commit, but some may fail to comply. Periodic audits are vital, to ensure compliance with the code of conduct, or to identify areas for remedial action."
Other steps can include:
- Developing a partnership with suppliers and other businesses to have a sustainable relationship.
- Using data collection and other tools to dig deeper and figure out which areas the company can save on.
- Being transparent across the company and reporting areas that need to be fixed.
Kanal said organizations that have not looked at supply chain optimization to go green should know now is a good time to start, as they can more easily get a jump on what technology can be adopted and keep a competitive advantage over other organizations.
Businesses Want a More Sustainable Supply Chain
The good news for the environment is that 42 percent of supply chain executives across multiple industries find that sustainability is "highly important" for their company, according to a report from PricewaterhouseCoopers. The company said this will likely play an even more important role in the future, as 87 percent of those who find it important said optimizing their carbon footprint is the top priority for making the supply chain greener.
Ninety-five percent of companies want to see costs minimized, 90 percent want better deliver performance and 79 percent want more volume flexibility. All of these and becoming more sustainable can be achieved via supply chain management software, which is readily available to every supply chain willing to make an effort to adopt it.
"The leaders focus on collaboration with key suppliers and vendor-managed inventory and continue to place great importance on continuous improvements in production efficiency and inventory management," PwC's report stated.