Generating income is the fundamental requirement of any business, so there is no shame in admitting you are looking to make a profit in the way in which you conduct your operations. But are your operations harming the environment? What are you prepared to do to reduce your carbon footprint?
As green-thinking consumers demand more from manufacturers and suppliers, Jane Thomson, MD, Softworx (an EOH company), says the time is now for stakeholders across supply chains in South Africa to develop a culture of trust and shared information, using technology to drive efficiencies to minimise environmental damage.
"Organisations across all sectors face soaring energy costs from basic utilities, such as lighting and heating, ventilating, and air conditioning, to the assets that enable their critical business operations, like manufacturing equipment and refrigeration coolers. In addition to reining in high energy costs, organisations are seeking to reduce their energy consumption as part of sustainability initiatives to minimise carbon emissions and offset the impact of their operations on the environment," Thomson says.
In an effort to help local companies across a range of sectors manage uncertainty in the supply chain arena, Barloworld Logistics initiated the supplychainforesight survey in 2003. For the past five years, this groundbreaking study has provided much-needed information on trends and issues that provide companies with strategic insight into this key business area.
One of the main findings of this year's survey was that supply chain managers and directors in South Africa are becoming more concerned with creating a "leaner" supply chain, as well as with aligning their supply chain strategies with their business strategies, in light of the global economic slowdown.
The survey had looked at the importance of "green" supply chains and found that while many considered environmental issues important, the implementation of any drastic initiatives would probably only take place in the long term. In the short term, most companies would only focus on improving their transportation efficiencies.
"Judging by these findings, the trend in South Africa is towards a more manageable goal, focusing greening efforts on one or two processes to start with. Managing the transportation carbon footprint first is a popular starting point because of its synergy with retailers wanting to make product footprinting information available to consumers, and because of its alignment with transportation efficiency and rising transportation costs."
To reduce carbon footprints, companies can view carbon emissions as an additional cost when optimising transportation networks. Thomson says that so far, most efforts have focused on scope one and two emissions – greenhouse gas (GHG) emissions a company produces or buys directly. The bigger challenge is to gauge the scope three footprint – emissions caused by suppliers and trading partners in the extended supply chain.
What piqued Thomson's interest in this specific report is that it notes that organisations that had integrated systems that could turn fixed costs to variable costs through in- or outsourcing, and those that have strategic relationships with supply chain partners that given them a virtual "best of breed" team were better able to react to the change.
"The single most important strategy a company can undertake is to create a frictionless channel between its suppliers and customers, thus eliminating many obstacles to profitability. Regardless of the industry, providing an easy path for doing business always reduces costs and increases market share and customer satisfaction. And, there's no better way to improve operating efficiencies than to optimise both the demand and supply chains that allow collaboration of business processes and data – not only internally, but also externally among suppliers, manufacturers, and distributors," Thomson says.
As it is now increasingly recognised that an efficient supply chain is also a green supply chain, Thomson adds that specialist software solutions which optimise resource usage, product distribution and service quality, and minimise fuel usage, reduce carbon emissions, and lessen waste, need to be part and parcel of your journey to a greener future.
With the right technology, a company can:
* Measure the carbon emissions of its distribution supply chain and optimise its transportation network to reduce fuel usage and carbon footprint.
* Use carbon miles or footprint calculation in trade-off analysis, helping them understand what is required to achieve a reduction in emissions.
* Improve scheduling of manufacturing facilities to minimise waste and reduce number of changeovers to keep machinery operating at optimum energy efficiency.
* Use forecasting tools and reports to accurately predict, and help shape, customer demand to minimise excess inventory, which in turn reduces waste and obsolescence.
* Evaluate energy use, carbon miles, and waste as part of multi-plant sourcing analysis, and evaluate supplier environmental stewardship when determining sourcing priorities.
"What is important to bear in mind is that greening the supply chain cannot happen independently of all the advancements accomplished in building and managing optimised supply chains. Greening is actually a daunting, long-term commitment; a goal which will at times align with and at times conflict with the more traditional supply chain goals of building efficiency, continuous improvement, and profitability," Thomson concludes.