WHY GREEN SUPPLY CHAIN MANAGEMENT IS IMPORTANT
Supply Chain Sustainability/Circular Economy
Green supply chain management means making transportation more sustainable
Making responsible environmental practices part of supply chain management isn’t just the moral thing to do, it’s also good business. A more sustainable supply chain is also a less wasteful supply chain, and reducing waste can lower a business’ total cost of business (TCOB) while also enhancing industry reputation. This is just one of many reasons why green supply chain management is important.
Crucially, implementing these practices is often a lot less difficult than managers expect. Overweight shipments, product damage, and rejected loads all contribute to increased costs and should be easy to avoid once they are identified. Making green supply chain changes like switching to plastic pallet pooling, improving warehouse lighting, and adopting better recycling practices help improve supply chains from beginning to end.
Three Reasons Why Green Supply Chain Management Is Important
Sustainable supply chain management has wide-reaching effectsThe most obvious reason supply chain management is important is the environment. Cutting back on carbon emissions and conserving natural resources matters to everyone. But these are just some of the reasons why companies choose to “go green.”
Eighty-one percent of consumers around the world believe that businesses need to help improve the environment.
Aside from the environmental benefits, green supply chain management can offer:
Reduced Waste: Millions of tons of food is wasted within the supply chain every year. By making efforts to reduce that waste through improved process management and the adoption of lean policies, managers can eliminate costly losses that reduce their TCOB.
Lower Transportation Costs: Companies typically try to bring down the weight of shipments as well as making trips shorter when they’re trying to reduce their greenhouse gas emissions. This results in lower transportation costs, as trips use less fuel and trucks suffer minimized wear and tear.
Enhanced Reputation: Eighty-one percent of consumers around the world believe that businesses need to help improve the environment. This belief factors in to buying decisions and can hurt companies that don’t adopt sustainable practices. It also affects even businesses that don’t sell directly to consumers, as businesses seeking to reduce their environmental impact will look into their vendors’ policies on sustainable business practices.
Green supply chain management offers far more benefits than its name implies, as managers also gain dividends from improved productivity and reduced bottom-line costs. Nor does implementing green policies have to be a complex endeavor.
What Supply Chain Managers Can Do to Improve Their Environmental Impact
Plastic pallets can make supply chain management more greenWhile many managers look to technology when it comes to improving the sustainability of their supply chains, these high-cost upgrades aren’t the only solutions. In some cases, smaller changes to existing business practices can still reduce environmental impact significantly. Some options to consider include:
Updating warehouse lighting: Lighting a large facility like a warehouse or distribution center is a major energy drain which is made worse when warehouse managers use outdated metal halide bulbs. Compared to modern LED lighting options, these bulbs require far more energy and have a much shorter lifespan. A quality LED lighting fixture can last more than five times as long as a metal halide fixture while consuming less energy and maintaining a consistent lumen output.
Expanding upward rather than outward: When more room is needed in a warehouse or distribution center, the most environmentally friendly (and often, the most cost-effective) option is to maximize the facility’s cube utilization by adding vertical storage racking. Mezzanines can also be used to add extra floors for additional storage while staying energy efficient.
Establishing a recycling plan: Cardboard and paper are generally recycled in the warehouse setting, but other items used in the supply chain are often simply thrown away. The plastic film used to wrap pallets can be recycled, it just requires extra effort in the form of collecting and baling the plastic and finding a recycling company willing to reclaim and process it. The same is true for recyclable plastic slip sheets. While some effort is required to set up a recycling program for these materials, the result can be a big step toward creating a supply chain for the circular economy.
Choosing plastic pallets over wood: Pallet supply provides an excellent opportunity for managers to improve their green practices. While wood is the most commonly used pallet material, wood pallets contribute to ongoing deforestation, pile up in landfills when no longer usable, and, in the case of reusable block pallets, may weigh more than 80 pounds, contributing to heavy fuel consumption and carbon emissions during transportation. Wood pallets also contribute to product damage that causes rejected loads and wasted products. Plastic pallets, on the other hand, don’t leave behind debris, are lighter than wood, better protect their cargo, and are recyclable, making them a green choice and a good way to improve the sustainability of your supply chain.
Pallet pooling is already putting the tenets of the circular economy into practice.
It’s not hard to understand why green supply chain management is important when one considers the impact of sustainable practices not just on the environment, but also on overall business costs. Plastic pallets have the power to transform the practices of a warehouse, distribution center, or an entire supply chain to make it greener and more efficient. Using a plastic pallet pooling program takes this one step further. While the business world is looking for ways to make their business practices more circular, pallet pooling is already putting the tenets of the circular economy into practice. A pallet pooling company is able to minimize transportation and empty miles by moving pallets among customers in the most efficient way possible. Plastic pallets make pooling even more sustainable because of their durability, light weight, long lifespan, low maintenance, and recyclability.