The green tsunami

Cliff Lynch, a longtime friend, col- league, and senior statesman among supply chain experts, has said that in his opinion, the top three developments affecting supply chain management over the past decade are globalization, technology, and Wal-Mart. Cliff would no doubt agree on a fourth: Green.

Last April, "The color of money," a column in our sister publication, DC VELOCITY, suggested that 2007 was shaping up as a watershed year for the "green" movement. Based on the current, almost obsessive emphasis on environmental concerns, it appears that the so-called "green wave" is hitting the business world with full force.

The supply chain profession has seen its share of trends and concepts that emerged rapidly and forced companies to adopt an almost myopic focus on them. Some have been short-lived. Others have taken root.

Twenty years ago, for instance, some people challenged the viability of logistics outsourcing. Critics insisted that turning over vital logistics functions to outside vendors was an absurd idea that would never last. Likewise, in the mid-1990s, some derided the term "supply chain" as a buzzword created by consultants. Those who failed to take those concepts seriously are probably out of a job by now.

Some may try to dismiss the green movement as little more than a temporary fad, but it is not. Like outsourcing and supply chain management, the movement toward environmentally friendly business practices is here to stay.

Critics also say the "greening" of the supply chain is based on the views of environmentalists. Green practices do, of course, produce the tangible environmental benefits that activists want to see. But that's not what's giving the green wave its momentum.

What's driving business to embrace environmentally friendly approaches to supply chain operations is another kind of green: money. Companies are now realizing that going green makes very good business sense.

In his book Green to Gold, author Andrew Winston provides rock-solid evidence that companies are reducing their impact on the environment in ways that also are improving their profitability. Just two examples: First, going green cuts costs in areas like energy consumption. And second, it often boosts revenue by building brand loyalty among consumers.

For those who are neither convinced nor motivated by those examples, Winston issues a warning. "The bottom line," he says, "is that there is no alternative any more. A green approach to business is where we are headed, and companies can embrace that reality or they can choose not to, and then risk becoming irrelevant. The risk of not embracing this trend is high. The benefits of participating, conversely, are enormous, and the value to be created is very large."

Winston is right. It is important that companies in general, and supply chain professionals in particular, recognize both the benefits of embracing the green wave and the perils of ignoring it, lest it build into a tsunami that washes them away to obscurity—or worse, failure.