Green Supply Chain panel discussion at Syncron User Summit 2008

Many companies around the globe are actively engaged in environmental discussions, which will fundamentally impact the shape of their businesses. The main drivers for participants are compliance with regulations, winning customers mindshare and promoting positive community relations. The Supply Chain industry is no exception.

The Syncron User Summit 2008 agenda had a clear focus on “Green Supply Chain” with one of the key speakers being Andreas Lundgren, spokesperson for IBM Green IT.  Andreas presented IBM´s three step approach for reducing environmental impact. His key message was that the business value for implementing emission reduction solutions increases with an end-to-end collaboration in the supply chain, but the benefits can be great when implementing point solutions. A panel discussion was then held focussing on the question of whether it is possible to go green and to improve profitability at the same time?

A couple of years ago there was a common view among supply chain managers that “going green” meant increasing costs and decreasing profits. Today many argue that you can increase your competitiveness and make your supply chain greener at the same time.

“The key to managing a green supply chain and lowering costs lies in high product availability and local sourcing. With higher levels of availability you do not have to issue emergency shipments by air from the other side of the world to maintain high levels of customer service. Local sourcing can both shorten your lead times, decreasing inventory further, whilst minimizing your transport emissions”, believes Syncron’s green supply chain champion Håkan Amnäs.

Michael Justesen, Group Director for International Manufacturing at
Logica, also tied this to the idea of the collaborative supply chain.
“As more companies collaborate within a supply chain, the possibilities to find both profitable and greener alternatives are even greater. Companies can benefit from taking a close look at how local sourcing can be used more effectively.”

Johan Marklund from Lund University agreed and added that “The problem for global organisations often is that the supply chain is not planned as a complete entity. Procurement and production are centrally planned, and transportation is often treated separately and used as a quick fix solution to deal with planning mistakes and supply chain uncertainties; this harms both the profits and environment.”

The entire panel agreed that green issues are being tied closer and closer to financial results, and that acting on the environmental impact of your organisation can create financial advantages.