A Macro Perspective
March 20, 2013
When trying to detail trends of greening a supply chain it is imperative to first understand that a supply chain is a network of activities that deliver a finished product or service to the customer. With that said, I find the concept of greening a supply chain very fascinating. The reason I found this concept so interesting has to do with how does one define, at what point and/or what unique initiative greened a supply chain. One may be able to say if I were a supplier would not my efforts to green my own company essentially green my supply to my customer? To take this one step further, (based on our definition) would not Walmart who sells Coke act as a supplier to the customer? Walmart engages in activities (along with Coca-Cola and their suppliers) to deliver a finished product. So then, if Walmart were to green their activities to supply the Coke, they would be making efforts to green their supply chain of that product. Through my search for relevant information there seemed to be an overwhelming sense that the efforts of individual companies contained within the continuum of a supply chain were really what greened the chain. The list of techniques ranged from reducing waste, Leaning processes, changing product design and production, modifying delivery systems and routes, utilizing alternate sources of energy, and managing inventory; to just name a few. Of all the resources describing the activities and benefits related to companies going green, few really provided a good handle on what was driving the trends, to what extent are companies greening their supply chain, and what more can be done? In an effort to address these questions I will provide examples of green efforts and initiatives companies have undertaken to green their activities; however, a macro approach will be used to discuss the corporate trends of greening supply chains.
What is driving the Greening Supply Chain trend?
Excluding the overwhelming amount of scientific data regarding the plausible correlation between carbon emissions and increases in global temperatures, I was curious as to, “what were some of the factors driving corporations to green their supply chain?” I really anticipated finding direct Federal Government mandates ordering companies to do so, but to my surprise I did not find direct involvement. However, I found what could be interpreted as a potentially significant factor contributing to the start of the corporate trend. Back in 1998 president Clinton signed a federal policy “Federal Executive Order 13101” strengthening the government’s commitment to, “Greening the Government Through Waste Prevention, Recycling, and Federal Acquisition” (Federal Executive Order 13101, 1998). Then in 2009 President Obama signed a similar Executive Order, “13514” containing language for “Recommendations for Vendor and Contractor Emissions” (Federal Executive Order 13514 Section 13, 2010). Now, these orders do not mandate private companies to change their practices, but do require government agencies to create strategic sustainability performance plans, including lifecycle return on investments. The plans also include greenhouse gas (GHG) 2020 reduction goals and reporting of Scope 1 and 2 emissions, with additional separate supply chain Scope 3 emission reduction plans. One may conclude this is not significant and/or suggest what real impact could this have on the private sector; however, as stated by Sutley, chair of the U.S. General Services Administration, “The federal government is the single largest energy consumer in the U.S. economy and purchases more than $500 billion in goods and services every year,…”(GSA #10693, 2010). Seeing that the U.S. Federal Government is a key purchaser of goods and services, should a company chose not to comply, being cut out as a supplier could have a devistating impact to...