The next step in green supply chain – introducing the closed loop environmental supply chain

Green Supply ChainGreen issues have never been more topical that they are today. With the promised reduction in greenhouse gasses failing to get anywhere near its appointed targets, and the rate at which we are stripping the Earth of its limited resources, not to mention rising sea levels, scientists and environmentalists are pulling their hair out.

Global supply chain is once again coming under the microscope. Supply chain professionals, driven on by public concern and the need to find greater economies, are beginning to refocus their attention of the so-called green supply chain.

The white paper commissioned by DHL

In a new white paper (commissioned by DHL) and entitled “Closing the loop – building the environmental supply chain” the author of the report, Lisa Harrington, who is president of Iharrington group, and also an associate director of the Supply Chain Management Center, said that an environmentally sustainable supply chain will not just achieve significant cost savings and efficiency, it will also generate new avenues of earnings by recovering the residual value from products at the end of their life. Companies that possess the foresight to alter their take on environmental sustainability – from just meeting obligations, to grabbing hold of new opportunities – can really steal a march by capitalizing on this strategic approach

A full copy of the white paper can be downloaded from: http://supplychain.dhl.com/Enviro-Resilience

In pursuit of the gold chalice

Once-upon-a-time the supply chain was one of the weakest links in the commercial business world. Now, green supply chain practices, labeled as “the closed loop environmental supply chain,” are the gold chalice that is being pursued by green-minded businesses, in an effort to reduce carbon footprints, bring about significant economies, and appease the growing green conscience of the consumer public.

The 3 key drivers for the closed loop environmental supply chain

The white paper lays out the case, and identifies 3 key drivers in terms of the incentives for businesses to don their green hats and rethink their green supply chain; to go beyond balking at the potential cost of going green, and look further ahead at the prospect of the billions of dollars that could be saved. These 3 key drivers are:

  • Pressure from conservation aware consumer
  • The need to become more efficient and to further reduce costs
  • The pressure to achieve compliance

The white paper illustrates the point by citing Proctor & Gamble, who through the pursuit of best supply chain practice shaved almost $1 billion off its environmental supply chain costs.

Looking beyond the cost of implementation

Referring back to Ms Lisa Harrington, she went on to say that a big change in attitudes is currently moving across all industries. No more of the old-fashioned outdated misconceptions that ‘green’ equates to higher costs. In circumstances when the environmental supply chain model is put in place and managed correctly, businesses capitalize on increased revenue and bask in the social kudos from customers, while also making sure that their business is operating in accordance with appropriate compliance measures.

The 4Rs – Reduce, reuse, recycle and recapture

The way to get success is to correctly apply the four basic principles; reduce, reuse, recycle and recapture. Reduction means eliminating waste through injecting efficiency. Reusing comes down to product refurbishment, and recycling is all about ensuring that any waste becomes potential opportunity. Finally, recapturing means breaking down end-of-life products in order to make best use of any residual value, from short supply items such as precious metals.

The importance of LEPs

The white paper points the way towards solutions that will help businesses to achieve the 4 principles referred to earlier. It talks about LEPs (Lead Environmental Partners) who can steer the process by identifying opportunities in the supply chain that provide environmental and economic sense. The next step in the process is to implement a closed loop supply chain incorporating the 4 principles through an elected LEP, whose job it is to steer the supply chain to meet the goals. Progress towards achieving the targets is monitored through a comprehensive carbon report produced by the LEP.

An opportunity and a necessity

According to Chris Jackson, the Vice President of DHL Supply Chain’s Enviro-solutions, an environmental supply chain structure is not only an opportunity, it’s a necessity that can drive down costs significantly and contribute towards global green issues, including reducing greenhouse gas emissions, and maximizing conservation.

Getting the best out of your LEP

An effective LEP who becomes an integrated partner can save a business thousands and millions of dollars through measures such as collecting recyclable waste in the same vehicle that is tasked with delivering in-bound shipments. The fact that an LEP majors in these areas as a specialty, makes a significant difference towards maximizing the integrity of the supply chain.


What differences and benefits could an appointed specialist LEP bring to your business operation and performance? Have your say at the feedback section below

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