The environmental supply chain is an untapped opportunity to capture value and drive top line revenue, according to a white paper commissioned by DHL.
It argues that where the supply chain was formerly the weakest link from a sustainability perspective, the new, closed loop environmental supply chain is a business imperative that can reduce carbon, deliver significant cost savings and improve favourability with consumers.
“Closing The Loop: Building the Environmental Supply Chain” by Lisa Harrington, president of the lharrington group makes the case for businesses to think differently about their supply chains and the ‘costs’ attached to going green.
It points out that best-practice businesses, such as P&G which recently reported nearly $1billion in cost savings from its environmental supply chain, no longer perceive sustainability as a cost, but recognise it as an opportunity to create value.
Lisa Harrington said: “A great shift in attitudes is currently underway across industries. Gone are the old and dated misconceptions that ‘green’ means higher costs. Where the environmental supply chain model is executed correctly, companies are capitalizing on increased revenue and social kudos from customers, while also ensuring their business is operating in line with necessary compliance measures.
“The recipe for success is to get the four principles right. These are reduce, reuse, recycle and recapture. Reduction is all about eliminating waste by injecting efficiency, reusing involves product refurbishment, while recycling is ensuring that your waste becomes opportunity. Recapturing is the process of breaking down end-of-life products to harvest residual value such as precious metals.”
The white paper identifies solutions that will enable companies to realise the four principles of the environmental supply chain.
A Lead Environmental Partner (LEP) fulfils a control tower role by monitoring the forward and reverse flows of the supply chain to identify opportunities that make environmental and economic sense.
The next solution is the closed loop supply chain management approach which integrates waste recycling, value recovery and environmental protection compliance through an LEP that manages collection, sortation and recycling streams.
Finally, the LEP provides visibility through its detailed carbon reporting that allows progress tracking better management.