June 2013 | Commentary | Checking In

Getting Green, Going Lean

Tags: Green Logistics, Lean

Felecia Stratton is the editor of Inbound Logistics magazine.

Creating a viable and sustainable green strategy can be a challenge for companies that want to be good corporate citizens, but also remain competitive. If customers are focused on price, how conscious is your green conscience when you need to drive out costs—at all costs?

It's a valid question in today's economy as companies deliberate capital investments, sourcing strategies, and even requests for proposals. Do you choose the lowest-cost transportation and logistics provider, or the one that costs more but offers green solutions?

It doesn't have to be an either-or proposition. Countless companies have successfully integrated sustainability objectives with sound business principles. Inbound Logistics' annual Lean and Green issue salutes these best-in-class cases.

Our 75 Green Supply Chain Partners list offers a sampling of logistics leaders that have made sustainability a priority, and continue to push the needle in terms of innovation and execution. They "get green"—and are helping to bring more shippers and suppliers into the fold.

Some shippers have taken their own green lead; Walmart chief among them. Sustainability and supply chain excellence are one and the same for the world's largest retailer. A green project needs to make good business sense to get the green light; in turn, a venture is only worth pursuing if it receives Walmart's green thumbs up. Follow Green Logistics the Walmart Way for an updated view into how the company created an organizational culture where sustainability permeates all aspects of its supply chain, extending to its suppliers and customers as well.

Walmart has built a culture that integrates green into its business processes. In other cases, synergies are less apparent.

Merrill Douglas' article, The Lean Supply Chain, demonstrates how shippers and service providers are incorporating Lean best practices into their operations to better match demand to supply, react faster to market change, reduce inventory carrying costs, and eliminate waste. In principle, Lean doesn't always correlate with green. Carrying less inventory requires more frequent shipments of smaller quantities, which increases transportation costs and carbon emissions.

Demand-driven logistics practices, however, are a perfect focal point to integrate green with Lean, which helps reduce material and time waste, ensure more accurate fulfillment, and thereby eliminate inventory obsolescence and returns. Moreover, shippers can offset frequent deliveries and higher transportation costs by working more collaboratively upstream in the supply chain, pooling shipments, rationalizing assets, optimizing loads, and achieving greater economies of scale.

Understanding the interplay between supply chain execution excellence and sustainability excellence is critical to developing a long-term strategy that strikes the proper balance; and achieves success at getting green and going lean.