ARE GREEN SUPPLY-CHAINS MORE EXPENSIVE?

GREEN WATCH Jul 27, 2016 No Comments
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This is the second article discussing the results of our ongoing survey examining what Supply-Chain professionals in North America are thinking and (more importantly) doing about greening their supply-chains.

 

The first article, How important is a Green Supply-Chain in North America?, focused on the perceived importance of a green supply-chain, homing in on senior management’s expectations, as well as our own attitudes towards suppliers with green credentials.

The survey asked how strongly participants agreed or disagreed with the following statements:

I believe greening the supply chain could have the following effects on our business:

    • Reduce Costs
    • Improve brand image
    • Generate new business opportunities
    • Help recruitment and retention of staff
    • Help manage risks
    • Drive product innovation
    • None that I can think of

In this article we are focusing on the respondants attitude to reducing costs.

 

Findings:

We separated responses into two categories:

    • People already personally involved with Greening their company’s supply chain

Personally involved

    • People not personally involved with Greening their company’s supply chain

Not personally involved

There was a clear difference:

People already involved were more likely to agree that greening actually reduced costs (37% versus 27%).

 

Conclusions

This survey was about perceptions and it shows that purchasers who have started to implement a greening process are undoubtedly more positive about the cost implications of doing so. This is not unexpected because the process of being green is often about maximizing resource efficiency and reducing waste.

Does this mean you can always “have your cake and eat it too?”

Not necessarily. Clearly, not all projects or changes save money and in some cases it may cost more in the short term. However the survey suggests that once a company starts to actually implement ‘Green’ initiatives in their supply chain there can often be cost benefits.

In the next article, we examine results for other questions on the list– does a greener supply-chain help brand image, new business, etc? As a preview, we found that this ‘pleasant surprise’ pattern applies to areas other than costs. In general, it appears that actually engaging in projects yields better-than-expected results.

 

More Information

Read more GREEN WATCH articles on the ProPurchaser blog for tips and advice.

Tom Bowers

Tom is an environmental and life cycle analyst and a supply-management advocate. He believes that Purchasers are in a great position to deliver sustainability goals and objectives for all types of organization. He has worked for over 10 years in Policy and Research in government, the 3rd sector and private sector. More importantly, he has a wealth of ideas to share with the supply chain profession.

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