In an April post, (Implementing the Green Supply Chain- Highlights from the MIT Forum) I provided my observations from a dedicated session held by the MIT Forum for Supply Chain Innovation which focused on the subject of implementing the green supply chain. In that post, I noted speaker observations that green supply chain strategy makes sense from an overall business perspective, but the vast majority of companies are in early stages of strategy development. Europe has more momentum right now because companies in that region are reacting to the financial and legislative environmental policies directed at carbon and waste reduction. While customer and the end consumer are increasingly expecting companies to be green, they may not necessarily be willing to pay the extra costs, especially given the current economy.
The latest further evidence related to views on this topic comes from a quantitative survey titled Green Transportation & Logistics (registration required). While this survey, sponsored by conference firm Eye for Transport, is being distributed as a marketing tool to motivate attendance at an upcoming conference, it does provide some interesting data related to the topic. This particular survey has been conducted over two subsequent years (2007/2008), targeted specifically to transportation and logistics professionals, providing over 500 cumulative responses across the two years. Thus this particular survey gives the reader some benchmarks on how views have changed among executives in the transportation and logistics area. The majority of respondents represented companies from two distinct spectrums, either below $50 million or above $1 billion in revenues, leaving a bit of a gap in mid-market representation. Readers can perform their own interpretation of the survey data, but I would like to call your attention to a couple of interesting data points.
First, the report indicates that the perceptions of the relative importance of green initiatives within the company’s overall business strategy are garnering increased importance. Over half (54%) of respondents reported that green issues were either important or very important in their companies in 2007, and in 2008 the responses increased 10 points to 64%. The key business drivers, to no surprise, are government compliance, improved customer relations, and a decreased fuel bill. Improving customer relations and decreasing the fuel bill showed the most dramatic positive movement in 2008. In 2007, only 36% of respondents disclosed that they expect to see both financial and public relations payback in three years, but when polled again in 2008, that number climbed to 50% Cutting costs and enhancing reputation are identified as the top reasons why companies are investing in the measurement of their carbon footprint.
But I found a more interesting data point, one that I believe holds the key to continued momentum. Respondents were specifically asked to identify who was responsible for green transportation and logistics initiatives in their company. The summation of responses points to a wide variety of titles from logistics, supply chain, operations, compliance, and oh yes, that category called other. The range of write-in responses was also broad. The identified barriers to initiative adoption are widespread, focused on either too high an adoption cost or too long to implement. In my view, all of this would indicate initiatives for the most part are being driven from different organizational functions with a lack of solid senior management sponsorship as a cohesive driver
Implementing green supply chain programs and initiatives are becoming more important in many industry settings but the evidence continues to point out that having a well defined cross-functional business case and gaining senior executive sponsorship remain a challenge for supply chain professionals.