This Month in Modern: Being green is simply being smart
April 01, 2012 - MMH Editorial
The general interest level and media attention given to the concept of “sustainability” has traditionally ebbed and flowed with the price of fuel.
Fuel prices go up, and all of a sudden we’re bombarded with images of consumers flocking to buy hybrid vehicles. Fuel prices stabilize, as we saw over the course of the past two years, and it’s right back to the V8 sport utility vehicle while the hybrids are dropped from the national conversation.
But today, even with the specter of $5 diesel looming, the sheer number of green messages appears to be dwindling while coverage of green corporate initiatives has cooled. According to Modern’s recent State of the Industry Survey, conducted by Peerless Research Group (PRG), this shift in “messaging” shouldn’t come as a surprise since the ROI of the green marketing message is still yet to be measured in terms of sales or market position for many manufacturers and retailers.
In fact, Modern’s research found that only 38% of respondents said that the adoption of green initiatives inside their warehouse and distribution centers is being pushed down the line from top management—that’s down from 53% in our 2011 findings. Only 25% of respondents said that their customers are demanding green initiative adoption, while only 16% report that they’re implementing green efforts to keep up with their competitors.
“But don’t be alarmed,” PRG’s research director Judd Ashenbrand told me after he wrapped up the survey. “Efforts to recycle, energy-saving implementations, and green packaging are certainly undergoing continued acceptance.”
What’s changed, he said, is the pressure from the top. “It’s interesting to note that our findings clearly tell us that while many businesses consider the observance of environmental efforts to be a socially responsible act, management in fewer organizations are now upholding the movement to green as a corporate directive.”
What’s lost in the findings, however, is the fact that many savvy supply chain professionals are proving that the benefits of their green initiatives—also defined as “smart” supply chain best practices—are certainly measurable and are actively trimming costs.
One company in particular that’s been “smart” for four decades is this month’s cover subject Federated Co-operatives, an organization that provides distribution to 257 retail co-ops in Western Canada. Federated started their energy conversation program during the oil crisis in the 1970s, and most recently installed five 24-foot, low-speed fans to regulate the air in the 80,000-square-foot loading dock station of its Saskatoon warehouse.
The project delivered a 10% reduction in natural gas consumption and nearly $20,000 in savings during its first year. But that’s just scratching the surface of what this smart, green organization has achieved.
For the supply chain team at Federated, green will never loose steam. To them, green is simply executing sound best practices and being smart. “The root of our program is one of economics,” says Philip Thiemann, Federated’s warehouse operations director. “Back then, we thought $40-a-barrel oil was high, and we have been looking at ways to decrease our operational expenses ever since.”