Energy efficiency needs to be evaluated across the supply chain

Across sectors, companies have become increasingly aware that reducing their energy expenditures is not an option but a necessity. And while cost reduction is a driving factor behind improving energy efficiency, the benefits of such initiatives don't end there. 

A recent study by the University of Minnesota's Institute on the Environment tackled the problems that arise from companies' attempts to create more energy-efficient and environmentally sensitive supply chains. The guiding premise behind the research was that sustainability has now become a center stage issue in the contemporary business landscape.

"Rising energy prices, new governmental regulations and incentives, increases in corporate environmental responsibility and customers' increasing ecological awareness have pushed energy-efficient manufacturing and production into the spotlight," the research team wrote.

The web of energy usage

While it's true that energy efficiency has become a mainstream issue and receives a generous amount of attention from companies and thought leaders, that doesn't mean that it's become any less complex a proposition. Quite the opposite, in fact: The Institute on the Environment found that as supply chains have grown more multifaceted and complicated, so have the efforts necessary to implement sustainable energy usage.

One of the key issues that arose during the research was that energy consumption and environmental impact go far beyond companies' in-house operations and extend well into their supply chains. The institute cited statistics that showed merely 14 percent of greenhouse gas emissions across businesses' entire operations could be accounted for by the company's own manufacturing processes. This means that the vast majority of emissions come from suppliers.

It's imperative, therefore, that companies committed to sustainability implement green logistics to the furthest extent possible by calling upon their suppliers to adopt similar practices.

Who's responsible for sustainability?

Nevertheless, it remains difficult to judge where the responsibility for energy efficiency lies. While major companies have the resources to insist on accountability throughout their entire operations and practice sustainable supplier management, firms in the small business manufacturing space may find this endeavor much more difficult.

In a recent post for engineering and architecture firm Gray's official blog, supply chain veteran Karen Wilhelm discussed the problem of energy efficiency across supply chains. She noted that many experts have pointed to business-supplier relationships as potential sources for solutions.

"Some say that industry collaborations should do more to attack the supply chain problem," Wilhelm wrote.

That effort will need to be undertaken bit by bit - Wilhelm suggested agreeing on a shared set of best practices, which seems a good start. Total energy efficiency is, and will continue to be, a moving target, and it will require real-time data and analytics if it is to be achieved.