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Think Green: 7 Green Supply Chain Best Practices

Green supply chain practices incorporate sustainability concepts into traditional supply chain management. The goal is to help industries reduce their carbon emissions and minimize waste while maximizing profit. Every area of the supply chain has room for green improvements—from manufacturing and purchasing to distribution, warehousing, and transportation. In this article we'll share 7 ways you can make your supply chain greener.

1. Redesign the Product

Even simple changes to product design – from reducing weight to making it easier to disassemble — can reduce energy consumption and waste throughout the product life cycle. In some cases, innovation or new technologies may make it possible to eliminate components or ingredients entirely and thereby shorten the supply chain. Dutch food maker Friesland Coberico Dairy Foods reduced its transportation needs by 127,000 miles per year by adjusting recipes and production processes.

2. Shrink Packaging

New materials and designs allow companies to make packages smaller and lighter, allowing shipping containers to hold more and trucks to carry more products in a load. Improved package designs can also reduce the burden of recycling or eliminating packaging materials at the end of the chain. UK retailer Tesco asked suppliers to provide lighter weight wine bottles, reducing its annual glass usage by 2,600 tons per year and lowering carbon emissions from transportation by 4,100 tons.

3. Reusing waste

Think creatively about what your company is throwing away—whether that’s at the manufacturing stage or during distribution. It’s possible to reuse waste you’d otherwise discard or even unlock new revenue streams from recyclable materials. For instance, some food manufacturers supply local farmers with organic waste to use as fertilizer. And with closed-loop recycling, manufacturers can turn recycled products made of materials like glass or metal into the same products without sacrificing quality. So it may be possible to salvage excess materials or broken products from the manufacturing process and use them to make new goods.

4. Optimizing Transport

Streamlining your transportation logistics offers many ways to save money and shrink your carbon footprint. For instance, you could use load-planning software to not only make logistics planning easier but utilize cargo space more efficiently and reduce the number of trips you must make to transport your products. In addition, making the change from primarily using air freight to shipping goods via another method, such as ocean freight, is better for the environment and easier on your bottom line.

5. Working with Green Suppliers

Although some may have higher costs, green suppliers can have a big effect on the carbon implications of bringing products to the market. An analysis of alternative suppliers may uncover potential benefits that justify making a change, such as helping you meet new government regulations or appealing to new categories of consumers.

6. Implementing green manufacturing process

Streamlining production steps, reducing energy use, and limiting the use of pollutants and toxic materials can have a big impact on how green the supply chain is. Employing a product lifecycle management process that takes into account green considerations is the key. Canadian pulp and paper company Catalyst Paper Corporation reduced greenhouse gas emission by 70 percent and saved $4.4 million by reusing waste products and heat from its manufacturing processes and switching to natural gas.

7. Start now

The ability to eliminate waste and pollution is becoming an increasingly important criterion for buyers. Making progress reinforces a positive impression of your brand and is a source of pride for employees. For many businesses, mandated changes are inevitable. Start by analyzing which opportunities deserve investment now and which should wait. First, focus on the opportunities you control, then reach out to the opportunities upstream and down in your supply chain.

Each company will have different green SCM goals, depending on their particular circumstances. However, all companies can benefit from reduced costs, improved efficiency, and a smaller environmental footprint. It has the potential to improve not only a company’s bottom line but also its relationships with suppliers, consumers, and other stakeholders. Implementing green supply chain management practices can be a challenge, but the rewards are definitely worth it.

Related: 5 Easy Ways to Reduce Supply Chain Waste

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