June 27, 2008 – Supply chain executives striving to green their operations are finding themselves most hamstrung by difficulties in justifying the cost of implementation, according to a new survey.
The survey of 250 supply chain executives finds that of the 78% who are either currently implementing or evaluating green initiatives, close to two-thirds consider “cost justification” the greatest barrier to implementation. Of those currently implementing a green program, 40% say they have not established a method to measure return on investment.
“Companies clearly need an effective method to identify and quantify high-impact areas throughout their supply chain and ensure their investments are green – especially in cases where these efforts also drive improved profitability,” says Brad Barton of IT services firm CSC, which co-produced the study.
(The lack of useful green metrics isn’t limited to sourcing functions; a survey released in March found that many companies are hesitant to incorporate sustainability into financial strategy without concrete metrics for evaluating the prospective benefits.)
Despite the lack of clear metrics, however, most companies appear to recognize the importance of reducing environmental impact by optimizing supply-chain efficiency, the supply chain survey notes. More than of respondents say they have a documented sustainability strategy at the corporate level, and about the same number say their company has a senior executive dedicated to this effort.
Nearly two-thirds say waste disposal and recycling are the most important environmental issues to address. More than a third are involved in the U.S. EPA’s SmartWay Transport program, and 25% report that their organization is actively involved in other sustainability-related groups, such as the Green Suppliers Network and the Carbon Disclosure Project.
Sustainable Life Media