Supply Chain Management for Environmental Improvement
Why Green Your Supply Chain?
General Motors (GM) sums it up well: "Working together with our suppliers, we can accomplish much more to improve the environment than GM can alone".
"Greening the supply chain" refers to buyer companies requiring a certain level of environmental responsibility in core business practices of their suppliers and vendors. Many businesses have internal standards, policies, and/or environmental management systems that govern their own environmental performance and efficiency. If suppliers do not abide by these same standards, the buyer company may be buying and using products that do not meet their own standards.
A supply chain can be complex, with environmental issues occuring at the second and third-tier supplier levels. Some companies may also attempt to work the opposite spectrum of the supply chain, by educating their customers on the environmental benefits of their products.
According to an enlightening study conducted by Business for Social Responsibility (BSR), Suppliers' Perspectives on Greening the Supply Chain, many companies have received requests from their corporate customers to address environmental issues. The study also discusses some benefits and challenges from the suppliers' perspective. Several suppliers noted that their efforts toward meeting the customers' requirements have resulted in advantages such as cost reductions, greater operational efficiency, enhanced value to customers, increased sales, positive media attention, and positive ratings from socially responsible investment groups.
As the customer seeking environmental improvement, time invested in greening suppliers can result in just that.