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Supply chain management: why it pays to go green

Find out about the critical role the supply chain plays in reducing companies' carbon footprint.

Supply chains are integral to the success of modern businesses. The vital link between a company’s suppliers, distributors, service providers and customers, they deliver goods and services around the world.


Managed well, they can reduce costs, enhance profitability and increase shareholder value. If not, the impact on profit, people and the environment can be both substantial and severe. 


In recent decades, the negative impact of climate change on our planet and the very real risk to people’s health and safety, has highlighted the importance of sustainability and the need to improve the quality of people’s lives more equally around the world, protect our ecosystem and preserve natural resources for future generations.  


This growing global concern has sparked initiatives like the United Nations’ Sustainable Development Goals (UN SDGs) which recognise, for example, that the environment is an exhaustible resource, so we must use and manage its natural resources more sensibly and prevent pollution (air, land, water and waste). 


The supply chain plays a critical role in supporting the SDGs, not least by reducing the carbon footprint a product makes throughout its life cycle, from manufacturing to delivery, consumption by the end user and finally as waste.


Transportation alone is significant because transport is a major user of energy, a source of noise and air pollution, and can also damage and degrade the landscape and its ecology. 


Why do supply chain issues happen more frequently these days? MSc Logistics and Supply Chain Management Programme Director Dr Richard Farr investigates:


What is green supply chain management? 


Green supply chain management proactively considers the environment in all aspects of a company’s supply chain management and operations as they relate to the movement of materials, goods, information and finances, from supplier to manufacturer to wholesaler to retailer to consumer.


This includes product design, material sourcing and selection, manufacturing processes, delivery and distribution of the final product, and end-of-life product management. It can also cover social sustainability performance issues, such as human rights, fair labour practices, living conditions, health, safety, wellness, diversity, equity, work-life balance, community engagement, philanthropy, volunteerism, and more.  

Why is green supply chain management important? 


By their very nature, supply chains often involve energy-intensive production and transportation, as goods are made and moved around the globe. According to a report by McKinsey, the typical consumer company’s supply chain creates far greater social and environmental costs than its own operations, accounting for more than 80% of greenhouse-gas emissions and 90% of the impact on air, land, water, biodiversity, and geological resources.


Adopting a more environmentally and socially-friendly supply chain can therefore protect the planet and improve the lives of the population.   

What kind of changes can make the supply chain greener? 


Depending on the nature of your business, there are potentially lots of things you can do to go greener, for example, by redesigning a product or its packaging (to reduce weight, energy consumption or waste) or streamlining production (to limit energy use or use of pollutants).  


When it comes to transportation, you can consolidate shipments, coordinate with partners and try to shorten distances involved in sourcing, assembly and distribution (reducing fuel consumption and pollution). A shift to green suppliers throughout the supply chain can also improve your overall performance, adding carbon to measurements of cost, quality and service when evaluating service level agreements and quotes).  


To help companies improve their supply chain practices, the UN has produced various guidance, including the Decent Work Toolkit for Sustainable Procurement, the Guide to Traceability (A Practical Approach to Advance Sustainability in Global Supply Chain)and the Supply Chain Sustainability (A Practical Guide for Continuous Improvement. 

What benefits can green supply chain management bring to the company? 


Whether you work for the supply chain of local, regional or multinational companies, you can still enjoy substantial benefits from adopting a more environmentally-friendly supply chain. It can often reduce costs and increase revenue, reduce waste/emissions and increase energy efficiency, reduce community impact (noise, traffic etc.) and increase community satisfaction, health and safety.


Furthermore, as more suppliers and customers recognise the importance of sustainability and opt for environment-friendly products, adopting greener business processes can enhance your corporate reputation. 

What is triple bottom line? 


You may come across the term ‘triple bottom line’ (TBL) or ‘3BL’, which is a framework for companies to assess the performance of their business in terms of various financial, social and ecological or environmental factors – people, planet and profit.  


Companies can measure and demonstrate their level of commitment to corporate social responsibility (CSR) and its impact on the environment over time.


This is important because more and more legislation and/or regulation requires companies to monitor and report on their activities, covering anything from use and transportation of hazardous substances, to the volume of emissions and waste.  

Take the next step 


On our online MSc in Logistics and Supply Chain Management, you’ll learn to manage logistics and supply chains to increase competitiveness on a global scale and we’ll introduce you to best practices in green supply chain management.


Our dedicated module on Strategies for Sustainable Business Logistics provides key insights on how to achieve more sustainable business operations and improve profitability through the elimination of waste. 


This master’s degree is part of the Hull University Business School, a leading UK business school with internationally recognised accreditations from the Association of MBAs (AMBA) and the Association to Advance Collegiate Schools of Business (AACSB).


As a part-time, tutor-led course, you’ll have the flexibility and support needed to learn an array of new skills while honouring your ongoing commitments:


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