Differentiate your product through socially responsible practices.
Competing in 2009 is a profound challenge because of fewer customers, smaller pocketbooks, and a poor overall outlook for the U.S. economy. That is a gloomy perspective, but unnecessarily so. Your opportunity in this environment is to differentiate your product and business by ensuring that they meet green standards and to lower the cost of sourcing goods through socially responsible practices. In a constrained world, lower cost and CSR (corporate social responsibility) could be at odds. In reality, however, few constraints actually exist.
Consider Your Supplier Base
You may have cultivated your suppliers over time and eliminated those unworthy of your standards. You're left with a preferred list of vendors, and you are confident that you are getting the most from each. This is precisely the time to share your desire for lower costs and simultaneous improvement in CSR initiatives. Suppliers can alter their approach to product development, manufacturing, and production operations to improve performance. Materials can be selected so that they are renewable, sustainable, and recyclable. They can be sourced more closely to the point of manufacture so that the carbon footprint of raw material delivery is reduced. Production can be timed to ensure full utilization of equipment and personnel so that there is less waste of both, and you can reap the benefits.
Scrutinize Packaging To Diminish Shipments
By synchronizing buys and subsequent production and consolidating items prior to shipment so that full containers move instead of partially filled ones, the energy expended per item delivered is lower. Ultimately, employing the concept of 'near-sourcing' lets you economically source from nearby factories (e.g. Massachusetts, Canada, Mexico, Honduras, etc.) instead of geographically remote locations (e.g. China, Vietnam, India). The proximity of near sources means that less greenhouse gasses are emitted as goods are delivered. Given the high cost of oil, it also means that the cost to deliver these items is commensurately lowered as well. Duties and free trade agreements color these decisions, but are decidedly 'pro-near-sourcing' today.
The simple act of overtly expressing your corporate desire to simultaneously improve sourcing costs, environmental sensitivity, and corporate social responsibility is the catalyst for success. Many processes and procedures employed by manufacturers and retailers have not been reexamined in years, if not decades. There are redundant steps, absurd paper trails, and a host of wasteful practices that basic review can expose to your enduring advantage. A recent discussion with one of our customers revealed that a single supplier interaction produced approximately 125 pages of paper daily, implying an annual paper load of 46,000 pages. With hundreds of suppliers, this could drive unreasonable consumption of paper, ink, and labor (not to mention hundreds of thousands of dollars) to fulfill what can be accomplished electronically today.
Individual and corporate behavior is greatly influenced by the signals sent by leaders. It is time to move beyond signals and explicitly demand that CSR, environmental sensitivity, and lower cost coexist in today's supply chains, providing companies with a competitive advantage ignored by laggards and competitors. We all benefit — suppliers, manufacturers, retailers, and consumers — from the fruits of such green initiatives. Amen.