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Introduction to the Green Supply Chain

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Listening to Environmentally Aware Consumers

As the public becomes more aware of environmental issues and global warming, consumers will be asking more questions about the products they are purchasing. Companies will have to expect questions about how green their manufacturing processes and supply chain are, their carbon footprint and how they recycle.

Profiting from Being Green

However some companies have seen that this not a bad thing and indeed have been able to convert the public’s interest in all things green into increased profits. A number of companies have shown that there is a proof of the link between improved environmental performance and financial gains. Companies have looked to their supply chain and seen areas where improvements in the way they operate can produce profits.

General Motors reduced disposal costs by $12 million by establishing a reusable container program with their suppliers. Perhaps General Motors may have been less interested in green issues if they were making record profits, but in an attempt to reduce costs in their supply chain, GM found that the cost reductions they identified complemented the company’s commitment to the environment.

Unaware of Potential Benefits

Companies can find cost savings by reducing the environmental impact of their business processes. By re-evaluating the company's supply chain, from purchasing, planning, and managing the use of materials to shipping and distributing final products, savings are often identified as a benefit of implementing green policies.

Despite the public’s focus on the environment, benefits attributed to reducing a company’s environmental impact are not in the forefront of supply chain executive’s minds. It appears that many executives are still unaware that improved environmental performance means lower waste-disposal and training costs, fewer environmental-permitting fees, and, often, reduced materials costs. Hopefully the interest in green issues and environmental concern by the public will not wane as economic issues become more important due to the faltering economy.

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