Developing a green supply chain can have benefits

Companies across the world are looking into adding more sustainable technology and practices to their vast supply chains in order to enjoy greater cost savings, become energy independent  and protect the environment. With large organizations such as UPS, IKEA and Wal-Mart committing to adding sustainable initiatives to their supply chains, the issue is receiving more attention and more companies are beginning to add green policies to their strategic sourcing, logistics and manufacturing policies.

The financial benefits
Many businesses are discovering that by switching out older practices with new, sustainable techniques, they can reduce spending within the supply chain and cut back on expenses. Businesses that want to use less natural gas, whether in their production and manufacturing processes or their logistics operations, can implement green energy technology, such as wind and solar power, to power their facilities or vehicles. This insulates businesses from the ever-changing cost of natural gas and cuts down on the direct material cost of alternative fueling option. Companies that aren't ready to go completely green can reduce their fuel use by simply streamlining transportation routes and making them more efficient.

Other companies are cutting costs by strategically sourcing closer to their manufacturing operations to avoid spending more on logistical costs, while more are limiting the amount spend on paper and plastic packaging.

Energy independence a reality for some
Some companies, such as IKEA, have plans to be completely energy independent in the future. While a plan of this magnitude may not be the path every company is able to take, small steps can help companies become less reliant upon energy sources and better able to focus on their operations. Businesses using even a small amount of sustainable energy may be able to cut energy suppliers, and additional costs out of their supply chain.

Environmentally friendly
Some companies have announced their plans to go green in an effort to preserve the natural environment, while others are doing to in an effort to prevent problems in the future. Some environmental activists are claiming the devastating Hurricane Sandy, which disrupted supply chains across the East Coast, was caused by global warming. This has led some businesses to reconsider green policies in hopes to prevent future disasters that could wreak havoc on their operations once again. According to Environmental Leader, this strategy could help mitigate supply chain risk in the future and keep an organization running smoothly and trying to prevent costly disasters that result in business disruptions.