5 Ways Companies are Thinking Green in Logistics

( Listen to this article )

Prior to the last decade the discussion about green logistics has often been segmented from traditional supply chain management. As concerns about environmental impact, fuel cost, and distribution methods have come into the purview of the public eye the way company's operate their supply chains are changing.

Let's face it, there was even a bit of a stigma attached to the term "green supply chain", as if it were synonymous with regulatory clutter, limited options, complicated logistics strategies, and additional costs and delays. Fortunately, the methodology behind green supply chains is being rethought and the positive impacts are going beyond corporate PR and environmental altruism...the results are finding their way to the bottom of the balance sheet.

Thinking green in the context of supply chain optimization means reviewing all aspects of a product's life cycle. As customers and companies become more conscious of green practices the planning and management of each link of the supply chain is open to review.

Design – It doesn't matter if you're making cars or software. The drafting table is the best place to start when you're trying to make improvements. An automobile manufacturer deciding on fuel efficiency and hybrid engine systems is fairly obvious. We see any number of Teslas or Toyota Prius everyday on the road. In October, Tesla is expected to announce an electric based short haul semi-truck. What we may not always consider are less obvious design decisions. In 2012, American software company and makers of popular products such as Photoshop & Acrobat, Adobe completely redesigned their packaging to be environmentally sensitive. Gone were excessive plastics and redundant cardboard. The end result is a package that maintained durability and the surface area needed to draw attention to store shelves while eliminating waste and reducing cost.

Raw Materials / Sourcing – Green thinking isn't just about how something is made but what it is made from and how those resources are acquired. Reebok just launched a line of athletic shoes made entirely out of cotton and corn. Two materials that grow naturally and can be replenished. Better yet, once these sneakers have worn out they can be composted.

Manufacturing – Efficient, modern, and sustainable factories offer a variety of benefits to importers. From lowering energy consumption through the use of clean technologies to reducing production waste and providing safer work spaces, companies are looking for ways to operate more efficently. More so than ever, importers are working with their suppliers to select and often times build their own green factories. For a company like Marks and Spencer, the result has been factories that use 40% less electricity while allowing them to make and market the first carbon neutral products of their type.

Distribution - How's it going to get here and then how will it get there? As far as green initiatives go this is often the first place companies will look. You don't have to be Elon Musk to realize that all these megaships, airliners, and semi-trucks on the waterways, in the air, and on the roads have to be burning some major fossil fuels. One of the world's largest container ship lines, Maersk, signed up 1500 of its largest suppliers for its Responsible Procurement program. By 2012 they already reached their 2020 target of reducing CO2 emissions by 25 percent per container from 2007 levels. Tesla and Cummins are both preparing all electric fleets of semi-trucks. But even if you don't have space age technology there are a number of strategies that can go a long way towards both lowering your shipping costs while also reducing your carbon footprint. Shipping consolidations will reduce the number of miles your goods need to travel along with the amount of turns they need to make.

Product Recovery - Consumer demand has changed the scope of corporate thinking. In the past, the supply chain ended when the customer bought the product. Now, there is an ever -increasing demand by the public to know about a product's afterlife. How can I dispose of this? Is it recyclable, reusable, reclaimable? Will my garbage dump even accept this? As we mentioned earlier, Reebok has created shoes you can simply throw in the compost pile instead of the Hefty bag. Companies like SodaStream have this process built into their business model. Bring an empty CO2 cartridge to a participating retailer and receive a new one at a discounted rate.

Green thinking in logistics can go a long way towards building consumer confidence in your brand, reduce waste and emissions, while creating cost-saving opportunities. How Green is your supply chain? Reach out to Aborn & Co. today for a free consultation.

Listen to this article on our podcast!