Lean and Green Supply Chain

Companies are changing how they manage their supply chains. Arms-length customer-supplier relationships are giving way to alliances with upstream and downstream trading partners. For example, many companies have suppliers automatically ship and replenish their inventory. Other companies outsource product design and development to key suppliers. Direct interaction with supply chain partners can enable a company to reduce total inventory levels, decrease product obsolescence, lower transaction costs, react more quickly to changes in the market, and respond more promptly to customer requests.

Companies are also further enhancing these fundamental supply chain changes by considering the environmental impact and related bottom-line effects of their decisions and actions. They increase their competitiveness and enhance their public image by engaging in such environmental performance enhancing activities as:

• Reducing the obsolescence and waste of maintenance, repair, and operating materials through enhanced sourcing and inventory management.
• Decreasing the costs associated with scrap and material losses.
• Reducing training, material handling, and other extra expenses associated with the use of hazardous materials.
• Increasing revenues by converting waste to saleable byproducts.
• Reducing the use of hazardous materials through more timely and accurate materials tracking and reporting systems.
• Recovering valuable material and assets through efficient product take back programs.
• Allocating costs associated with environmental impact for improved accounting practices and visibility.

Success stories can be drawn from several industries, however, the common thread is a proactive, rigorous effort that incorporates environmental considerations into the company's decision making processes in the areas of:

• Purchasing - Companies have achieved substantial savings and reduced waste by providing incentives for suppliers to reduce inventory quantities and by leveraging the suppliers' expertise.
• Materials Handling - Companies have successfully switched to reusable packaging systems and reduced costs by working closely with suppliers.
• Storage - Companies have significantly decreased the disposal of obsolete materials and lowered carrying costs by streamlining purchasing and storage processes.
• Material Recovery - Companies have developed saleable material from wastes generated during the manufacturing processes.
• Transportation - Engaging companies that have taken a pro-active role in reducing their carbon emissions

There are many demonstrated success stories that extol the benefits of reducing pollution at the source and designing products and process to enhance environmental quality. These will generally result in higher productivity and reduced operating costs, and may also increase market share.

Visit ASIL, Inc. to test drive a greener future today!

Contributed by Michael Singleton