6 Sustainability Practices In Green Supply Chain Management

Posted in Operations Improvement on March 29, 2013

greren-supply-chain-management-practices | Photo Courtesy of Kapitall Screenshots http://www.flickr.com/photos/kapitall_screenshots/4971596532/sizes/q/

Today, businesses are facing increasing sustainability demands. However, an article on the MIT Sloan Management Review website says “companies need not see these demands as a cost burden nor respond to them with tweaks to their businesses or ‘greenwashing.’ Sustainability is both a business necessity and an opportunity.”

Many companies are profiting from sustainability using green supply chain management. Even companies that make moderate sustainability changes to their business model are getting a big payback. Here are five practices they follow.

  1. Use analytics: The key is to know how you’re going to measure and track the effectiveness of the program. Manufacturing resource planning software sets the guidelines, tools and metrics to determine if you’re successful.
  2. Collaborate outside your business:Find outside advisory groups that can help you shape sustainability objectives.Having corporations partner with non-governmental organizations (NGOs) is a good thing. It’s great to talk to people on the front line when it comes to social responsibility. Social channels open the door for so many more people to meet at the table. That input is vital as you’re building and going through these channels.
  3. Be prepared to change things up: You know a company will profit from sustainability efforts if it’s willing to change its business model. Such change usually needs backing from corporate leaders, so organizations must recognize the need for speed. Set multiyear sustainability goals and have management regularly review the business model.
  4. Lead then integrate: Though sustainability efforts start from the bottom up, sustainability-driven innovators lead from the top. Executives ensure goals are set and tied to strategy, while steering committees coordinate plan rollouts. The article says that sustainability must be “integrated into the business and its operations with clear accountabilities.”
  5. Measure and track: Use KPIs and any reporting tools to track your performance against goals. These make it clear that management is focused on sustainability, and they can become an element in performance reviews and compensation.
  6. Understand your customer’s thoughts on sustainability: What do your customers think about sustainable business practices? Will they pay more for a green product or service? Those are important questions to consider.

Source: MIT Sloan Management Review, February 2013

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