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How Sustainability Practices Can Differentiate Your Business

In addition to the pressure on electronics manufacturers to maximize margins, remain agile, and improve lean inventory management, there are simultaneous demands to improve sustainability through green initiatives that couple environmental awareness and responsibility with market and financial success.

The opportunity for new, creative solutions to maximize traditional business goals, increase profitability, and improve environmental sustainability has been promising. Understanding that green initiatives are an essential component in today's market evaluation of companies is critical to understanding the importance of green as a meaningful differentiator that can improve profitability when embraced at a corporate level and adopted throughout the organization. Requiring sustainability management of suppliers can save logistics costs, ease increasingly complex regulatory compliance, and increase market share when purchasers positively evaluate the adoption of comprehensive and meaningful sustainability goals.

Sustainability management refers to the strategies, technologies, and risk management procedures to improve business and customer relations while reducing costs, improving profitability, and implementing environmental stewardship goals. It is a win-win approach requiring visibility and collaboration along the supply chain. Many companies have green initiatives, but for these to succeed and ring true, it is imperative that suppliers also meet and embody these corporate green strategies. Today, green stewardship, corporate reputation, and positive network relationships are increasingly combined as market differentiators.

One outcome of sustainability management is increased visibility along the supply chain to ensure adherence to green initiatives while collaborating more closely on unique needs and ever-shifting market positions. This relationship change resulted from both the increase in outsourcing as companies maximize resources and control costs and the need to leverage the special positions and insights that supply chain partners have.

A new type of accountability is on the rise: environmental awareness and responsibility in both the production and end of life (EOL) handling of electronics. In response, major OEMs continue to improve their green initiatives, including Dell, Samsung, Panasonic, and Apple, to name a few. In turn, OEMs have required of partners increasing adherence to environmentally responsible practices, which trickles down to include more of the electronics supply chain. Many suppliers and distributors have chosen to lead their sectors in sustainability management.

Among the revenue opportunities from thorough supply chain sustainability governance is disposition of excess and EOL product. Both law makers and consumers demand safe EOL product handling, resulting in greater demand for environmentally sound reverse logistics practices, e.g., asset disposition, repurposing, and zero-landfill waste methods. To ensure safe, proper, and responsible asset disposition — in addition to ROI — due diligence along the supply chain is required.

Profitability and environmental stewardship coexist in successful sustainability management programs. Seen as both risk management and a business ecosystem, today's electronic supply chain is growing in many shades of green, all of which support positive business growth through strong collaboration, visibility, and shared environmentally aware goals and responsibilities.

(I'd recommend the recent whitepaper from CA Technologies for a good discussion of sustainability management.)

8 comments on “How Sustainability Practices Can Differentiate Your Business

  1. Ariella
    April 24, 2012

    I consider such initiatives to be very commendable — so long as they really do improve environmental impact and not just “greenwashing.” 

  2. Barbara Jorgensen
    April 25, 2012

    @Ariella: I agree. I believe that the more recent developments in sustainability are more tangible than the feel-good efforts of the past. My first-hand experience is with Avnet that has developed a significant after-market repair, reuse and disposal business. Rather than counting carbon credits, compnaies are actually taking old products and equipment and disposing of them responsibly. I also find such efforts to be more easily understood than the carbon credit system. Not that the credit system is bad, it's just hard to follow for a casual observer (such as myself.)

  3. FLYINGSCOT
    April 25, 2012

    I wonder what motivates companies to do this:  profit, altruism, fear of punitive measures?  Can companies really turn unnilateral “green-ness” in to bottom line dollars?

  4. prabhakar_deosthali
    April 25, 2012

    It is a welcome move that the companies are now treating – the taking back their old products and recycling them – not as a liability pushed onto them by regulations but  as a part of their social responsibility.

     

    Can some of this responsibility be transferred to the end customers by making them obligatory to return their old products to the original company and not dump them alongwith other waste.

  5. syedzunair
    April 25, 2012

    @flyingscot:

    I don't think it is because of the stick. It is probably because firms realize that the consumers are getting more educated these days. They will stand up for issues like pollution, conflict minerals being used in production etc. Therefore, it seems to me as a logical option to adopt greener business practices. It will ensure that the consumers will be satisfied with the ethical responsibilities of the company. Plus, with effective CSR and marketing they can also charge a bit more claiming that the green process does not come in cheap. 

  6. Ariella
    April 25, 2012

    @prabhakar_deosthali I think it is possible to get the cooperation of the end customer, though they may need an incentive — like a credit toward the next purchase when returning the piece for recycling.

  7. stochastic excursion
    April 26, 2012

    Hopefully consumers take their cue from industry leaders when products are made that leave the minimum carbon footprint and consume a maximum of reusable materials.  The LA Times reported about a month ago about the whirling mass of plastic in the Pacific ocean estimated to be about the size of Texas, and there are a few others like it around the world.  We all can do more to transform our disposable society.

    Anyway, sustainability is a virtue that can only benefit companies in the long run.  Companies that are in for the long haul–most likely companies angling for blue chip status–seem to embrace greener methodologies more.

  8. elctrnx_lyf
    April 27, 2012

    COmpanies with long term vision should embed the initiative of enviromental friendly products. As more customers should be made aware of these practices and I believe educated customers and those who has sound understanding of nature could definitely buy only these products in the future. Please pass on the safe earth to our next generations.

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