Supply Chain Management

While I agree with the above views, here is my take on the way I see this green movement unfolding. The increase in oil, energy and commodity prices coupled with tight regulations paved the way for companies to adopt the “first wave” of green supply chain initiatives. The first wave that saw companies acting on the “low-hanging fruit” – reducing packaging and transportation cost. This wave is certainly questionable. Was green thinking driving these benefits or was it clever marketing? But the “second wave”, which incorporates green thinking into each and every supply chain function, will be propelled predominantly by heightened customer awareness and buying patterns. And once that rolls-in, companies will have no choice but to integrate environment thinking in their supply chains.

I saw a preview of this scene in my apartment complex. A recent awareness campaign on global warming and environment sustainability measures led to several apartment folks touting their green strides. This small awareness campaign catapulted to such a crescendo that a person today would rather be caught speeding in the apartment campus than with a plastic bag in his hand. As a result, majority of the mom-and-pop retailers in the vicinity have switched over to paper bags or at-least provide that as an option. How long would it be before the consumer starts demanding green products? While I may be over-imagining here, a recent McKinsey report talks about the need for businesses to make consumers walk the green talk. To quote “businesses should play a leading role in the green movement in order to shape their market opportunities and manage potential regulation of their industries”. If this were to happen, we could see companies doing a lot more (and more devoutly) in making their supply chains green and customers responding in tandem to buy more green products. The result - not a vicious cycle but instead a sustainable cycle!!

I do acknowledge though that a recessionary economy, which causes priorities to change overnight, can lengthen the time it will take for this sustainable cycle to pick up momentum. But considering that the green seeds are sown and are germinating well, the cycle has indeed started. As the economy trudges along and the impact of global warming increases, I foresee the cycle picking up speed. To wrap-up, I do see that Green supply chains are here to stay and that companies will be compelled, sooner than later, to invest in greening their supply chains