Greening Your Supply Chain

How to reduce your environmental impact

Saving money by saving resources is now more than a fad for small businesses, it’s a necessity. But beyond the basics of switching to LED light bulbs and printing on both sides of the paper, there’s a world of more efficient ways to improve the bottom line by greening your supply chain.

Almost every business can reduce its carbon footprint during each phase of the supply chain:

- The materials used to make products
- The processes to manufacture and market products
- How products are delivered and supplied to consumers

Buy local

While the “buy local” campaign is typically heard loudest in the food industry, the benefits of purchasing local materials extends to most any industry. Buying local shortens the supply chain and lowers your procurement costs. Local vendors travel a shorter distance, which means fuel and storage savings are often passed down to you.

Eco-friendly packaging

You’ve likely heard of the “four Ps” of marketing: product, price, promotion and placement. But green innovations are perhaps used most effectively in what some call the “fifth P,” packaging. Regardless of how you package your goods — using cardboard, plastic, metal or otherwise — there are newer, greener packaging materials that can minimize your environmental impact.

Britain’s largest retailer, Tesco, made news with its decision to modernize the plastic and glass used to package its spirits and wines. According to Tesco, the plastic bottles yield an 86 percent reduction in liquor packaging. And its new glass wine bottles are 30 percent lighter than the previous packaging, conserving 560 tons of glass each year.

An even greener packaging strategy comes from Frito-Lay, which is using polyactic acid, a plant-based substance, to package Sun Chips. This bag of chips is fully compostable, so Frito-Lay is appealing to a growing, eco-conscious consumer base. Another cost-saving packaging technique is to reuse shipping containers.

Energy management systems

According to the U.S. Department of Energy, energy represents the largest controllable expense in a commercial building, accounting for 30 percent of total operating costs. But to control these costs, you have to monitor your energy use. That’s where energy management systems (EMS) come in. These devices, many of which are designed for small businesses, monitor and automate your major energy guzzlers — thermostats and HVAC systems, refrigerators and other appliances, lights and more.

Light commercial energy management systems have an installation cost of less than $2,000, plus a monthly fee of about $50. But these up-front costs are relatively low when you consider that these systems can cut energy bills by more than 20 percent. That means many small businesses could recoup their initial investment in the first year.

When shopping for a small-business energy management system, look for one that offers both on-site and Web-based monitoring. And for the best return on investment, look for a system that targets the HVAC system, the chief energy culprit.

Another smart energy management tactic is to use a closed-loop, zero-discharge water recycling system if your business spends a lot on water.
 
Smart scheduling

You can shorten your supply chain on the distribution side, too. Delivery routes and schedules can have a major effect on energy use and fuel costs. Less time in the car means less fuel wasted. Many software companies offer route optimization programs that claim to reduce fuel costs by 15 to 20 percent. For a less-involved solution, outfit your business vehicles (or drivers’ cell phones) with GPS systems that tell drivers the best directions and alert them to traffic jams.

In the U.S. alone, billions of gallons of fuel are burned up due to traffic congestion each year. Schedule your deliveries during off-peak hours so that your employees aren’t sitting in traffic.

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