FocuS Green
Barriers to Adopting Green SCM Practices (Figure 2) Incentives for Implementing Green practices (Figure 3)
Cost is prohibitive Brand building as a "green company"
Too complicated to implement/lack of expertise Compliance with company sustainability goals
No financial incentives to apply Green SCM Increase supply chain efficiency/reduce waste
Balancing buy side demands with market A competitive advantage for doing business
reality Complying with customer requirements
Not a priority Save cost through implementing efficiency
No government incentives to apply Green SCM Motivating suppliers to perform better
Existing technology does not support green No motivation for applying Green SCM
initiatives Other
Lack of Executive support
No barriers
Other
per in contracts and auditing suppliers were create efficiency. Adoption of more sophis- of the price and complications involved with
the least commonly implemented initiatives ticated green transportation measures which turning green, being perceived as a such in
(both cited by less than a third of respon- have less direct relation to efficiency and the eyes of society is still very important to
dents). cost savings are not in wide practice. More over half of the respondents. Brand build-
There was also a lot of interest recorded advanced green transportation measure such ing was listed as one of the top incentives
on the execution of green warehousing and as using alternative power sources for refrig- (Figure 3) for implementing green practices,
distribution actions, most likely because erated trailers, more aerodynamic trucks and along with compliance with company goals
these initiatives also often mean added effi- more alternative fuel powered trucks, were on sustainability (53%) and increasing sup-
ciency. Companies appear to be most ahead adopted by 11% or less of ply chain efficiency/waste
in green practices when dealing with inven- companies. reduction (52%). Other in-
tory reduction and product handling (61% centives for implementing
have already implemented initiatives), their Money Counts green practices include cost
ability to consolidate orders (51% have al- As seen by these results, savings, efficiency and a
ready implemented these initiatives) and us- costs are ultimately a big perception that being green
age of reusable containers and storage equip- factor that companies weigh will bring a competitive ad-
ment (60% have already implemented these when creating strategies vantage. There are very few
initiatives.) When it comes to reducing en- and practices in green sup- companies in China that
ergy consumption through the use of solar ply chain management. This feel there is no motivation
panels or green roofing options, surprisingly perception is echoed in the for applying green practic-
25% of companies say they have already ad- voices of the survey par- es. (Figure 3)
opted such initiatives. Similarly around 29% ticipants, who cite that costs While perhaps not al-
of companies report that they have already prove the biggest perceived truistic, this is among the
optimized the location of their distribution barrier (36% of respondents) to adopting many encouraging signs in the Green Sup-
hubs. Many of these initiatives show direct Green SCM practices. Many also shrug some ply Chain in China survey results. While
cost and efficiency benefits, but up-front methods off as too complicated to be prac- wide adoption of Green SCM practices has
cost associated with them may be why they tically implemented (35% of respondents). not yet happened, there are positive indica-
are not more widely adopted. Almost a third of the companies surveyed tors in terms of the way that companies are
Surveyed companies in China also say they (32%) felt that there were no financial incen- maintaining their supply chain, including the
are fairly well advanced in adopting green tives to justify adopting Green SCM. Lack intention of many companies to adopt green
transportation focused initiatives. Similar of executive support was not felt to be a sig- SCM practices in the near future.
to production and warehousing proposals, nificant barrier. The message seems clear that
there is a crossover between these implemen- if green SCM makes financial sense and is
tations and levels of efficiency. Almost half easy to implement, chances for adoption are To read the full results of this survey and learn more
of companies surveyed are already reducing much higher. (Figure 2) about how other companies are viewing a green supply
expedited shipping and therefore air freight. chain, please go to:
This along with optimizing routing reduces The Price of Going Green http://tinyurl.com/SupplyChainGreenSurvey
empty miles and increases cube utilization to Despite the fact that companies seem wary or call us for a hard copy.
www.supplychains.com MARCH/APRIL 2010 53
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