Green supply chain pays off

Cooperation with sustainable suppliers and the rigorous optimization of supply chain management under CO2 aspects provides companies with important leverage to save costs.

This results from the "2011 Supply Chain Report" by the non-profit organization Carbon Disclosure Project (CDP) and A.T. Kearney who, to this end, collected and analyzed climate-relevant data from worldwide leading corporate groups and from more than 1,000 supplier companies. More than half of all corporate groups and one-fourth of all suppliers generate cost savings due to sustainable supply chains.

A total of 86 percent of the CDP supply chain companies see far-reaching competitive advantages through their close collaboration with suppliers – above all a better return on investment. That figure had only been 46 percent in the year 2009. The increase would confirm that a thoroughly sustained orientation in supply chain management and in purchasing will not only help the environment but also keep down costs.

More than 79 percent of the CDP supply chain member companies meanwhile have a comprehensive sustainability strategy. Last year, the figure was only 63 percent. The importance of sustainability is also accordingly high in the area of supply chain management. Last year, the increasing strategic importance of the sustainability issue triggered a veritable domino effect within the supply chains of global corporate groups. Thus, already 41 percent of the companies offer training sessions for their employees if they submit suggestions for CO2 reductions in the supply chain. Such suggestions are specially rewarded in 25 percent of the companies.

There is also great interest in precisely determining the CO2 percentage in products. Altogether 69 of 100 queried executives are certain: Changed customer needs result in companies having to put more weight on green products in the future. One fourth of those interviewed indicated that saving resources is the top priority. That was the result of a study by the Kerkhoff Competence Center of Supply Chain Management at the University of St. Gallen and the Institut für Demoskopie (Institute for Public Opinion Polls and Research) in Allensbach on the subject of "green procurement". Currently, it's especially CO2 reduction which has many companies preoccupied.

"Today, CO2 is practically in every product", says Frank Weinert, General Manager of the Düsseldorf-based costdata Cost Engineering, a consultancy specialized in cost calculation. CO2 not only accumulates already in mining the required raw materials such as oil and ores, but also during transportation and refining of raw materials, and finally in installations or assemblies as well. Weinert: "Here, the question is only: Exactly how much CO2 is in my product? Just as in the determination of costs, specialists today are also able to determine the CO2 share in products. Instead of examining cost parameters, we are screening the CO2 percentage resulting in the production of products in every manufacturing step and in all details."

In the future, this will enable companies to specifically optimize products to reduce the CO2 percentage.