16 April 2008 | Paul Snell
A long-term strategy, linked to overall business goals is the key to making a "green" supply chain commercially effective.
A report by US-based Diamond Management and Technology Consultants said becoming environmentally friendly was often a result of creating a more effective supply chain, rather than an end in itself.
"Ultimately, each green opportunity should positively contribute to the value of the firm and the environment," it said.
The study said there were two aspects to consider when implementing green supply chain ideas: what will be the return on investment and how serious is the requirement? It said companies should strike a balance between investing in items that will pay back in the future, such as alternative energy, and the so-called "quick wins".
Darin Yug, partner at Diamond and co-author of the report, said: "The idea of a green supply chain isn't exclusively about green issues. It's also about generating efficiencies and cost containment."
It added strong governance was needed to keep programmes on track, and advised firms to create a group with representatives from across functions to manage the scheme and increase collaboration.
But it warned that implementing a long-term strategy in one go could damage a company's bottom-line in the short-term, because of the extra investment needed. Instead firms should take smaller steps, beginning with those that make the biggest impact on business and the environment.