Greening the Supply Chain: Trends and Challenges in the Current Landscape

Greening the Supply Chain: Trends and Challenges in the Current Landscape

Greening the Supply Chain: Trends and Challenges in the Current Landscape

Modern business owners inherited an economic landscape that focused on profitability at the expense of the environment (Vachon, 2008). Effective supply chain management demands a keen eye for profitability and flexibility, as the modern business landscape is as competitive as it is dynamic (Zugang, Anderson, & Cruz, 2012). There are several forces pushing businesses to adopt more sustainable practices, including increased government regulation and public pressure (United Nations, 2016). Regardless of the reasoning behind these transformations, socially responsible corporations that focus on a sustainable supply chain may be able to embody both characteristics. After a brief overview of the elements of a supply chain, the tenets of sustainability, and current challenges for commerce, this paper will provide examples of corporations that demonstrate strategies for greening the supply chain. When major companies take the initiative to put environmental concerns at the forefront of their planning and strategy, the benefits extend beyond their profit margins.

Background

        A brief discussion of the elements of a supply chain and the definition of sustainability are necessary before specific corporate strategies are discussed. It is also important to describe the contemporary context in which businesses are operating.

Elements of a Supply Chain

        Understanding the elements of a supply chain is the starting point to see how it can be made more sustainable. These elements include procuring raw materials, manufacturing goods, and transporting the finished product to retail locations (Mentzer et al., 2001). Essentially, a product must be made, moved, and sold. The goal of an effective supply chain is to maximize profits by overseeing all of the processes and participants connected to the business cycle of a particular good or service (Mentzer et al., 2001). Traditional manufacturing is not the only place to look for greener supply chains. The service industry, with its production of various experiences and retail opportunities, is also seeking ways to insert sustainable endeavors into their logistics (McPherson, 2018). Innovative supply chain professionals should be investigating each element of their supply chain in order to maximize profit. Contrary to popular belief, one way to do this is to consider sustainable options.

Sustainability

        Sustainability refers to the level to which a good, process, or entity can lessen or negate environmental impact (Sneddon, Howarth, & Norgaard, 2006). The process by which an organization adopts policies and practices that promote sustainability is known as “going green” or “greening” (Griskevicius, Tybur, & Van den Bergh, 2010). While there are some entities that have been practicing it for much longer, sustainability has been a hot button issue for the past ten to twenty years (Griskevicius et al., 2010). One major concern of sustainability-minded people is the carbon footprint of a process, company, or individual. Environmentalists aim to reduce carbon emissions and thereby reduce the thinning of the ozone layer (Sneddon et al., 2006). A primary method to reduce carbon emissions is to utilize energy sources that do not come from fossil fuels (Sneddon et al., 2006). Proponents refer to this as “clean” energy. The supply chain requires energy for each of its steps and parts, so it is a good place to look when considering greener business practices.

Current Challenges for Commerce

        Companies are increasingly seeking sustainable solutions to their supply chain challenges. The United Nations (2016) listed several reasons that companies make efforts to green their supply chain, including avoiding legal repercussions and the associated fiscal penalties, meeting consumer expectations, and increasing profit. One driving force to seek sustainable solutions comes from the response to recent environmental catastrophes like storms, floods, and wildfires (McClimon, 2019). McPherson (2018) used the term “climate resiliency” to describe the goals of the proactive solutions on trend companies are delivering to their consumers. Acting in this way extends organizational resiliency to the consumers and their communities. Another factor influencing the drive to green the supply chain is the new generation of workers entering the labor pool (McClimon, 2019). These younger people, who overall tend to be more environmentally conscious, may influence corporations to seek sustainability as a pillar of their operations and corporate philosophy.