Bob Trebilcock

Getting lean and green

Read the e-mails and press releases that pass through my inbox lately, and you’d think that every day is St. Paddy’s Day and that all the supply chain software vendors are Irish. That’s because everyone wants to talk about the green supply chain.

Having lived through the boom and bust of electronic marketplaces and exchanges and supply chain collaboration, I’m a little skeptical, even if my wife did make me swap out all our light bulbs with compact fluorescents.

But every now and then a press release grabs my attention just because it seems to make sense. That was the case with Going Lean and Green: The Next Focus of Supply Chain Management from David Johnston, a senior vice president of manufacturing and wholesale distribution, with JDA Software Group.

In the release, and a subsequent interview, Johnston made a connection I’d never really thought about, but which made sense: Companies that are serious about getting green might start by getting serious about lean.

“If you look at the evolution of manufacturing over the years, going lean is one of the areas that got people excited,” Johnson told me. “If you think about it, what you’re doing with lean manufacturing and distribution is creating eco-friendly practices that also bring value to a company.”

While most of us may not equate the two, isn’t maximizing the use of resources by eliminating waste the point behind both lean practices and the green revolution? Instead of getting lean and mean to get through the current economic times, maybe companies should focus on getting lean and green.

In fact, Johnson says he’s beginning to see the convergence of the two at some companies. “Admittedly, this trend is in its infancy, but we’re beginning to see some companies take a portion of their budget for lean projects and target that for green initiatives,” says Johnson.

Some of those moves may have more to do with salesmanship than saving the planet: Slapping a new label on a lean initiative allows a company to market its plants and products as eco-friendly. But, Johnson argues, there may be some substance behind the marketing hype.

After all, one of the byproducts of a successful lean initiative is a greener operating environment, even if it’s not called that. “We work with one food producer that has a full-time organization focused on continuous improvements to their supply chain network design,” says Johnson. “They have grown through mergers and acquisitions and are constantly looking at how to rationalize the hodge-podge of plants, distribution centers and transportation networks to become more efficient. As a result, they’re also reducing their inventories, reducing their footprint, and cutting down on the miles traveled to distribute their products. That’s not just lean, that’s green.”

One other unintended consequence? Johnson says some companies are re-evaluating strategies to outsource and off-shore their operations to low cost manufacturing centers in favor of more efficient “right-shoring” models, that eliminate the risks and costs associated with manufacturing overseas. “Longer lead times, increased fuel costs, larger carbon footprints and excess inventory are causing some companies to re-examine where and how much they outsource,” Johnson contends.

While I haven’t seen evidence of that change yet, I’m going to be keeping my eyes open. Is your company looking at ways to go green and lean? Let us know by posting a comment below or send me an e-mail at Robert.Trebilcock@verizon.net.

Posted by Bob Trebilcock on March 10, 2008 | Comments (0)