Supply Chain Management

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A Green Sustainable Supply Chain can be defined as "the process of using environmentally friendly inputs and transforming these inputs through change agents - whose byproducts can improve or be recycled within the existing environment. This process develops outputs that can be reclaimed and re-used at the end of their life-cycle thus, creating a sustainable supply chain." The whole idea of a sustainable supply chain is to reduce costs while helping the environment. Many people would argue that being environmentally friendly increases your costs. In the past, most companies were focused on reducing unit costs. Many companies later evolved into looking at total landed costs with the on-set of global trade. Companies also started looking at the usage costs with a piece of equipment (i.e. what are my cost per copy when using a copier). In today's "sustainable" world the thinking should be what is the life cycle costs of this part, piece of equipment or supply chain process. {draw:frame}

The chart to the right shows what a Green Sustainable Supply Chain looks like within a company. Sustainability could be a tremendous weapon for companies to reduce costs. There are many facets of the supply chain that could be improved by looking at it from a sustainability standpoint. The first issue that sustainable companies are focusing on is the design and production of the product. "Interface Corporation is a leading maker of materials for commercial interiors. In its new Shanghi carpet factory a liquid had to be circulated through a standard pumping loop similar to those used in nearly all industries.

A top European company designed the system to use pumps requiring a total of 95 horsepower. the Interface engineer working on the project re-designed the system by using "fatter pipes" and straightening/shortening the length of the pipes used in the system. The overall horsepower requirement was now 7 horsepower or a 92 percent reduction. His re-designed system cost less to...
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