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by Stephanie Neil, MA Editorial Staff   | Abstract: | Sure, most manufacturers want to be environmentally sensitive. But there must be more to becoming green than that. Now, manufacturers are looking for more — competitively and on the bottom line. |
| Keywords: | the business of going green, going green, environmentally conscious |
It's not unusual to drive by a smokestack these days and see a clear sky, devoid of the thick black plumes it may have expelled into the atmosphere in the not-too-distant past. But, today, those smokeless stacks, a direct result of efforts to lower carbon emissions, are just the tip of the iceberg when it comes to the industrial green movement.
Manufacturers may have always been conscious of the need to be environmentally friendly corporate citizens, but recently — due to pressures from supply chain partners, local governments, and watchdog organizations — they are being forced to evaluate every aspect of their business to figure out how to lower energy usage, cut waste, reduce the size of packaging, conserve water, and, of course, decrease toxic emissions to keep the air clean.
But as any savvy organization knows, even altruistic behavior — including saving the world — should be done in a manner that directly helps the financial bottom line. Investing in technology for the future is as much about the green — money, that is — as it is about the environment. For many companies, the green movement is just a small slice of a more encompassing sustainability effort that can be leveraged for competitive advantage.
Sustainability, defined as the ability of a process or a state to be maintained at a certain level indefinitely, includes manufacturing, the supply chain, innovation, cultural shifts, and a commitment to best practices. These activities must incorporate lean philosophies throughout and also require that a company take responsibility for not only its internal efforts, but also those of its business partners.
Being big brother to your business partners is a major undertaking and not something that happens overnight. But, industry onlookers say, it will be an essential part of doing business in the very near future. Therefore, if you haven't started thinking about sustainability, you'd better start now — because it's not optional.
"There's a growing awareness that the carbon agenda is here to stay, the high price of oil is here to stay, and if you or your suppliers are not addressing it, there is a risk to competitiveness," says Andrew Armstrong, vice president at WSP Environmental Strategies, an international consulting business addressing energy management and corporate responsibility. "We are very much in the discovery stage at the moment, with leading retailers starting to make noises and leading manufacturers starting to quantify the impact of operations on their products. It will be some time before the thumb screws get tightened and people make decisions based on this, but it's an excellent time to start."
Wal-Mart, one of the retailers Armstrong is referring to, is a prime example of a company making sustainability a priority — and requiring its suppliers to comply with its internal mandate.
In 2005, Wal-Mart laid out three goals: to be supplied 100% by renewable energy, to have zero waste, and to sell products that sustain resources and the environment. Wal-Mart's "Sustainability 360" initiative takes into account the entire company, the customer base, the suppliers, and even the products on its shelves.
For example, Wal-Mart wants its 50,000-plus suppliers to reduce packaging by 5% by 2013. That effort alone is equal to removing 213,000 trucks from the road, saving about 324,000 tons of coal and 67 million gallons of diesel fuel per year, and stopping 667,000 metric tons of carbon dioxide from entering the atmosphere, according to information on the Wal-Mart Web site.
It is, indeed, a virtuous effort, some people proclaim.
"Wal-Mart is saying they want to be the steward of the economy, but it is not like RFID, when we ended up with malicious obedience," says Phil Friedman, vice president of consumer products at QAD, an ERP vendor. "This is really Wal-Mart's recognition that retailers and manufacturers need to collaborate and cooperate on improving our environment."
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