How can greening a supply chain can help Canadian retailers gain competitive advantage? With the green movement gaining momentum, it is time for retailers to redesign their supply chain with the environment in mind.
Steps can be taken at any link the supply chain, from choosing suppliers who utilize water conservation methods to switching to hybrid distribution vehicles. By making a supply chain more eco-friendly retailers can improve their public image and reduce their carbon footprint.
By greening your company’s supply chains you can experience lower transportation and energy costs, as well as increasing your competitive advantage in the market. In a time when cost minimization and customer retention are of utmost importance, these drivers can simply not be ignored.
The fact that there are more benefits for a retailer than just reducing their carbon footprint should be a strong indicator of the importance of Green Supply Chains. These new chains can lead to more loyal customers that equal higher profits. Consumers are integrating sustainable practices into every aspect of their lives, from where they shop to what they eat. With rising disposable income consumers are more willing to pay a premium for brands that align with their environmental values.
Retailers and consumers must band together to help the planet. The demand for environmentally conscious products is on the rise and retailers can gain competitive advantage by being the ones to supply them. A retailer’s public image can be damaged if they are known to negatively affect the planet. Just think of how the 2010 BP Oil Spill led to world-wide boycotts of the brand and the loss of profits this must have caused.
This is where the concept of green supply chains fit in. Captain Emad Samwel, an undergraduate and graduate professor at Ted Rogers School of Management, is an expert in logistics who feels strongly about green supply chains. He says that “Retailers can no longer afford to ignore their customers’ values about the environment. Customers vote with their dollars and will only support retailers who successfully align business operations with their values. By going green, retailers will be able to attract new, environmentally conscious, customers and retain existing ones.”
Companies have fewer excuses than ever before.
Enterprise Resource Planning giant SAP has introduced software that makes it even easier for companies to incorporate friendly practices into their core processes. In 2009, they began offering “Environment, Health, and Safety Management” packages to their clients.
Best in Class firms have significant competitive advantage in the market as the classification demonstrates their efforts to the public. Canadian retailers seeking Best in Class standing can do so by greening two of their main practices in the chain. By reducing energy consumption and decreasing waste along the supply chain, retailers will be recognized as Best in Class firms who have achieved environmental improvements.
Think retail giants can’t be bothered with this entire greening process? Think again. Many Canadian retailers, have LEED certified facilities recognizing them as environmental ambassadors. LEED helps companies to improve their environmental image and “provides benchmarks for the design, construction and operation of a property and covers site makeup, building materials, water and energy efficiency as well as indoor environmental quality.”
With the emphasis consumers place on doing what is right for the planet retailers must step up to respond. As Captain Emad Samwel pointed out, consumers vote with their dollars and if a retailer does nothing to help the planet by way of their supply chain, they are going to miss out on those votes.
What do you think about company’s making a switch to sustainable supply chains? Comment below or share your thoughts via Facebook or Twitter (@TRSMRyersonU).
Find more information about TRSM’s School of Retail Management!