1) Many companies have realized that implementing green supply chain initiatives can help reduce costs through decreased overhead expenses and optimized transportation while also increasing customer satisfaction. 2) Starbucks and Apple are examples of companies that have seen increased profitability by introducing sustainable practices like using recycled materials and reusing parts. 3) While traceability and sustainability are important trends, there are still hurdles that prevent many companies from implementing green supply chains, such as the intensive manpower and data collection needed and lack of strong government incentives.

1. Harris 1
Matt G. Harris
Todd Taylor
SCM 479: Supply Chain Strategy
23 November 2016
The Green Supply Chain Movement
In the last 10 years, supply chain leaders have become increasingly concerned about
creating a sustainable supply chain. Corporations have realized that their role and leadership in
creating sustainable organizations encourages other businesses and people to do the same.
However, this environmental responsibility was not embarked upon with the sole purpose to help
the earth. Although preserving the planet is a positive byproduct of the incentive to make more
profit, businesses are realizing that by implementing green initiatives, they decrease overhead
expenses, increase customer relations, and drive profit.
The way businesses try to achieve a greener supply chain is through understanding their
carbon footprint and analyzing the weak points. From here, they try will usually try to optimize
transportation to minimize waste and make sure they are taking max loads on every carry (shared
loading). This greatly reduces emissions. Another area that most companies will try to cut costs
is by reducing packaging material. Packaging costs are surprisingly large for companies and can
cut deeply into the overall profit margins of a company if they are not careful. The best way to
prevent this is through utilizing the green supply chain and introducing sustainable measures into
a company. As culture of a company becomes more sustainable, companies have noticed their
profits have also risen.
One example of a company introducing green tactics and seeing profitability because of
the initiatives is Starbucks. Starbucks sources their coffee beans from organic farms and has been
changing their customer experience. They have been doing this by using cups that are almost
completely recycled material, encouraging customers to bring reusable cups back to the store,
raising the temperature from their standard 72 degrees to 75 degrees, purchasing 90% post-
industrial material cabinetry and investing in low-flow water systems so less water is wasted.
Their overhead expenses have dramatically decreased.
Another company that has been a leader in supply chain sustainability is Apple. Apple
has committed itself to reducing its carbon footprint through new technologies. One of which
that I find fascinating is creating robots that deconstruct over 1.2 million iPhones a year. These
parts are then used to create refurbished iPhones and are sold to customers. There are many
limited resources in iPhones and if they are able to reuse the good parts, it is extremely cost
effective for the company and helps in Apple’s sustainability efforts. Another point worth noting
in regards to the deconstruction robots is that they save the company a lot of money in labor
hours because they run on a fully automated system. Apple uses 99% recycled or sustainable
paper for all their product’s packaging. None of the waste from the iPhone or iWatch final
assembly is wasted. Apple is a leader in making sure toxins are not used in their products. For
example, Mercury is not utilized in their products, which saves money for Apple because it is an
expensive material and they in turn must find alternative solutions.

2. Harris 2
Within corporate sustainability, traceability is a big trend because it involves
understanding where raw materials are derived and beyond. Traceability is important to
sustainability because it is the process of identifying the entire sourcing process of a finished
good. If a company can understand the traceability on their products, they can understand areas
to cut costs through the many suppliers that it takes to create a final product. It also acts as a
check to various claims that suppliers will make about their products and commodities. This is
important to the end user because they deserve to know that the product they’re using is sourced
responsibly and meets all the promises of the manufacturer. Corporations are often uninvolved
with the deeper layers of production that goes into a product (the original sourcing). And many
times, there are unethical, unreliable processes that occur to obtain a material without the next
level of procurement happening. I also believe that implementing traceability is important for
companies who are incorporating sustainability because it requires collaboration between
suppliers (at each level of production) and assembly corporation. This can help to create a
stronger relationship between each company because they are pushing each other to achieve
better sustainable results. It mitigates a lot of risk for companies as well. For example, Disney
was just accused of using polluting suppliers in China. The claim was that they were using
licensing to reduce their environmental responsibility. This has cause a lot of money in lawsuits
and also a weakened brand reputation. Other companies have looked to this example and deemed
they need to monitor their supplier’s performance so that they are not pegged with bad press.
Incorporating traceability provides responsibility for companies and that is why it is becoming a
bigger trend in recent years and will continue to be very important.
With all this being said about sustainability and the reasons companies are embracing a
greener supply chain, it must be noted that many are not implementing these processes. There are
hurdles to introducing a sustainable supply chain. One of which is that it requires a lot of metrics
to analyze and that requires intensive manpower. Some companies do not understand how these
green tactics will affect their bottom line. Another big issue that needs to be addressed is there is
not enough incentive from the government for green practices. This is beginning to change
slowly but it is a debated topic amongst a few interest groups which have prevented major
legislation from being passed. The government needs to incentive companies to be greener in
their processes by looking at various tax cuts. The government can drive companies to look at
their systems and understand where they can cut more costs. Overall, companies do not need to
be a leader in sustainability to hold an effective supply chain. They instead need to look
internally at their systems and understand where they can reduce costs while being more
sustainable. Sometimes this will require investment in new machinery, research and manpower,
but the long-term benefits will often outweigh these costs.