Supply Chain Expert Sees Profits in Sustainability

Transportation and warehousing firms that view the green movement with trepidation may be missing out on an opportunity to remove cost and add profit to their operations.

“Sustainability shouldn’t be about Washington jamming green stuff down your throat,” said Dale Rogers, professor of supply chain management at the University of Nevada Center for Logistics Management.

“This is something you may be able to make money on,” Rogers told the annual conference of the International Warehouse Logistics Association in Coronado, Calif.

A mandate from a state such as California to map an importer’s carbon footprint, or a possible requirement from Washington to reduce greenhouse gases through a carbon cap and trade regime can push companies into the wrong mindset, Rogers said.

Warehouse and trucking firms that look at carbon footprint only by measuring what comes out of a tailpipe would be better off looking at the exercise as a way to reduce fuel consumption.

Companies that make optimal use of trailer space, schedule parts deliveries so as to reduce miles traveled or purchase more fuel-efficient trucks fulfill regulatory mandates to reduce carbon emissions. At the same time, more efficient operations reduce fuel consumption and therefore cut a company’s overall fuel costs.

Wal-Mart is going into sustainability in a huge way and requiring its vendors to do the same, Rogers said. “Wal-Mart gets it. This is a lot about money, about reducing cost,” he said.

Companies that engage in reverse logistics – managing the return of products that do not sell or are defective – are engaging in a form of sustainability because they capture value from the product rather than discarding it.

Similarly, high-tech companies that have end-of-life programs for their electronic products not only reduce fees for hazmat disposal but they can also salvage some parts and components from the recycling process.

“There can’t be sustainability if it isn’t financially profitable,” Rogers said.

Contact Bill Mongelluzzo at bmongelluzzo@joc.com.