Kevin Hirsh
3/4/08
Scullery Article: The Future Is Green
There is no doubt that the future is “green.” We hear it all the time in the business
world. Corporations are constantly being scrutinized because of their large carbon
footprints. Many corporations are attempting to reduce their greenhouse gas (GHG)
emissions and are implementing innovated strategies to do so. Throughout my paper I
will discuss how a few “cutting-edge” companies ‘greened’ their supply chains and
improved customer perception while enhancing shareholder value in the process.
The benefits of moving goods “green” are overwhelming. Those shippers who
aren’t “green” are not only undermining the environment but they will be hurting
themselves and companies in the long run. With this in mind, the most competitive and
innovated company in the world, Wal-Mart, is a big player in the green supply chain
movement. “[Wal-Mart] keeps a scorecard on how every logistics partner manages its
fleet and what size carbon footprint they leave. Those with the leanest and most efficient
vehicles win” (Burnson, 2008). Furthermore, Wal-Mart made a three year commitment
with the Environmental Protection Agency (EPA) to upgrade its private fleet of trucks.
Wal-Mart will equip their trucks with auxiliary power units, energy efficient tires, and
enhanced trailer aerodynamics. In addition, Wal-Mart has joined the EPA’s “SmartWay”
F.L.E.E.T. to partner with other corporations to reduce emissions. Wal-Mart and its
partners are on track to reduce 36 million metric tons of carbon dioxide emissions and
200,000 tons of nitrogen oxide emissions annually. When these goals are reached, it will
result in fuel savings of up to 150 million barrels of oil a year (Plambeck, 2007). Being a
“good steward of the environment and being profitable are not mutually exclusive, they
are one and the same (Plambeck, 2007).”
Another corporation ‘greening’ their supply chain is the worlds leading organic
yogurt maker, Stonyfield Farm. Stonyfield Farm is dedicated to “green” logistics, as it is
the core of their mission statement. The company has employed numerous innovated
distribution practices by using more efficient engines and fuels. Stonyfield Farm leases
their tractors and trailers from Ryder, Because Ryder works with EPA’s “SmartWay” to
design newer fuel efficient equipment. Stonyfield Farm acknowledges that more efficient
equipment has lead to a smaller carbon footprint, but the single most important aspect is
“people.” The corporation holds all employees to high standards. In fact, “warehouse
workers must pick orders correctly with 100 percent accuracy to avoid redelivery.
Customer service works with sales and clients to increase order minimums and review
delivery frequencies.”(Burnson, 2008) With these implementations, Stonyfield Farm
decreased their emissions by 40 percent from 2006 to 2007.
There is no question that the ‘greening’ of supply chains was embraced early on
by the high-tech community. With much competition, Dell seams to be the leader it its
industry. “They realize that it was not only a way to strip cost out of its pipeline but also a
key differentiator in branding and value creation.” Brittain Ladd, manager of logistics and
transportation strategy for Dell, assembled a “relationship team.” The team’s job is to put
into practice a number of cultural shifts in transportation and distribution. The first
change made by the team was to pay more attention to “geographic manufacturing.” The
idea of what dell calls “GeoMan” is to build products closer to the customer, thereby
reducing miles and transit time. “Cost savings were immediately realized as reliance on
air travel was reduced and less carbon was being emitted (Burnson, 2008).” Dell uses
only two transportation companies, Saia and Old Dominion Freight Inc. The reason they
use these two companies is because they are “SmartWay” certified and able to utilize
enhanced service networks. “This increases velocity, thus cutting hours of time trucks
were running their engines (Burnson, 2008).” Dell has dramatically reduced their
emissions but their not done. They expect to be completing a project referred as
“Transportation Rendezvous Zones” which will use electric-powered tractors to deliver
products with in the city limits.
If I where head of the logistics and transportation of these three corporations I
would apply a few more strategies to further “green” the supply chain. In the case of
Wal-Mart I would create environmental progress by leveraging corporate purchasing
power. Wal-Mart has uses 60,000 vendors and needs to hold these vendors to high
standards when it comes to GHG emissions. Wal-Mart already controls its vendors by
forcing them to produce products at a lower cost to carry on the savings to the customers.
Furthermore, Wal-Mart should force its vendors to show decreased emissions every
quarter. If a vender fails to show legitimate reduction of GHG emissions, Wal-Mart
should cut ties with that vendor.
Stonyfield Farm has a solid “green” supply chain. However they can still reduce
the size of their carbon footprint. I suggest that they switch to tractors and trailers that run
merely on Liquefied Natural Gas, or LNG. It would be more cost efficient and
environmental friendly.
When it comes to Dell, I would show less emphasis on rates and more on the best
practices and performance. In addition, I would turn talk into actuality. For example, I
would put into action the “driver and trailer share” program. The program would make
drivers and independent contractors free to operate any company’s vehicle. This program
would reduce transportation because it optimizes all available drivers and equipment
from a single pool.
It is evident that going “green” is one of the smartest decisions a corporation can
make. It enhances a corporation’s marketability and will enlist new customers. Along
with cutting long term cost, a “green” supply chain will enhance a corporal image.
Works Cited
Plambeck, Erica (2007, July 7). The Greening of Wal-Mart's Supply Chain. Retrieved March 4,
2008, from Supply Chain Management Review Web site: http://www.scmr.com/article/CA6457969.html
Burnson, P. (2008 March). Are You Green Yet?. Logistics Management, 46-48.