December 2009 | Commentary | Green Landscape

Eco-operation in Action: Collaborating to Achieve Green Goals

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As a company with tens of thousands of suppliers around the globe, Walmart's bold move to promote a sustainability index has planted new seeds across entire industries. It's a significant event for manufacturers, and has caused many businesses to take notice of new customer aspirations and re-think their supply chain designs.

Walmart's efforts to reduce carbon and resource footprints will drive a significant change throughout the industry and ultimately the world. Thanks to its many trade partnerships, the company has the opportunity to not only improve the quality of the products it offers customers, but also eliminate sources of unnecessary cost within its partners' supply chains.

SURVEYING THE FIELD

Consumer awareness and increased regulation are placing added demands on companies to drive green initiatives and efficiencies into their supply chains, according to a recent study among supply chain, finance, and operations professionals. In fact, two-thirds of companies surveyed expect their customers to ask for a product's carbon footprint within the next year.

The study, sponsored by industry group Acceleration of ECO-Operation, also indicates, however, that 60 percent of companies have marginal, very low, or no visibility across their supply chains, making carbon emissions or resource reduction programs seem like an incredibly daunting task.

The report offers insight into how supply chain executives are achieving greater environmental sustainability, and identifies how to help improve visibility, collaboration, and accountability across global value chains.

Survey respondents indicate they are beginning to embrace the benefits of better trading partner relationships by seeking ways to improve supply chain visibility and working with trading partners to reduce resource and greenhouse gas emissions.

The respondents note, however, that the implications for themselves and their partners are significant. For example: How will they collect sustainability data? What should they measure, and what really matters? How good is the quality of this data? How can they use the information to drive down costs and thereby recover their investments? Developing the answers to these questions remains an ongoing challenge.

A BRIGHT HORIZON

The rise of global environmental regulation and Walmart's timely announcement have raised concerns everywhere about the ability of supply chains to gain reliable access to the data customers require.

The technology is available today to help companies navigate multiple tiers of their supply chains to aggregate and manage their environmental footprints. This new way of balancing environmental challenges with core business execution involves using environmental metrics—such as water usage, hazardous materials, or carbon emissions—as drivers to achieve operational excellence resulting in lower costs.

With clear visibility into the whole value chain, companies can identify opportunities to eliminate waste, reduce costs, and orchestrate the network to achieve their customers' sustainability targets while also improving efficiency. Walmart's announcement to drive process transparency is yet another signal that the ultimate measure of sustainability is lasting profitability.

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