If asked what green meant to your business several years ago, you probably would have thought of cash, revenue and profitability. Today green is synonymous with ecology. We can't open a publication without seeing titles such as Brown Has Gone Green interlaced with terms such as Carbon Footprint and Global Warming throughout the article.
Whether you view it as the latest politically correct statement or scientific fact, the reality of the concept is affecting your business in ways you may not have considered. Most companies view going green as a cost, but there is no reason why the green of today can't generate the green of yesterday. In fact, Going Green can quite possibly help you maximize your profitability from a marketing, public relations and financial perspective.
Your Carbon Footprint
A carbon footprint is the measurement your activities have on the environment in terms of the amount of green house gases produced. Measured in units of carbon dioxide, it helps conceptualize the impact you have in contributing to global warming. The larger the footprint, the worse it is for the environment.
While we know of no evaluations for the average carbon footprint for the business community as a whole, conceptual data does exist for individuals. The average American creates a carbon footprint of 32,607 lbs of carbon dioxide per year. That's the equivalent of burning 1680 gallons of gasoline. Put another way, if your car or truck averages 20 miles per gallon, it's the equivalent of driving 1.3 times around the world at the equator.
Needless to say, industry, any type of industry, leaves a considerably larger footprint than an individual. At $3.2 Trillion in revenue worldwide, the logistics industry, which encompasses the entire supply chain from shippers, receivers, carriers and warehousing, creates a significant part of the global carbon footprint.
However, logistics has a footprint which is magnified when compared to other industries of equal size because of the nature of the transport business. Footprint sizes from lowest to highest are pipeline, water, rail, truck and air.
The best way to determine the carbon footprint of your organization is to talk to your local utility for specific geographic information and the International Organization for Standardization (ISO) to determine worldwide standards. ISO 14001 outlines the standards adopted worldwide for environmental issues and it issues certifications to companies which become ISO 14001 certified. ISO does not specify levels of environmental performance, but provides guidelines that can be used for all industries. Thousands of US firms have already been certified under ISO 14001.
Once you have the facts and your measurement base levels in hand, you can set and achieve carbon footprint reduction goals in tandem with profitability goals.
Just as the space race of the 1960s resulted in the direct creation of products which we view as essential today, the global warming concept is creating products, ideas and services which will be molded into the essential business practices of the future. Implementing those concepts and technologies now will not only reduce your footprint, but will generate public relations and marketing opportunities as well as financial rewards.
In logistics, the first thing that probably comes to mind is hybrid vehicles. Utilizing hybrid technology is a valid method to reduce current footprint size, but you want to develop long term strategies and business practices that will continue long after hybrids become buggy whips. Think of concepts that will improve the manner in which you conduct business and which will allow you to reap financial benefits for years to come. Focus on strategies that incorporate new business sensible technologies that have been created by the global warming challenge. Creating that strategy will not only provide a solid foundation and point you in the right direction, but will evolve into a golden opportunity for public relations, marketing and financial success. Think of how that strategy can be linked to other companies in your geographic area that have the same ecological mindset.
The only good news about gas prices today is if you can use less of it, the cost savings can be very significant.
If you're a carrier, you're probably doing as much as you can to lower your fuel costs. You need to focus on business sensible technologies and strategies that affect your company as a whole while offsetting your fuel costs and reducing your carbon footprint.
Think of the macro opportunities that Going Green presents. Don't think only in terms of what you can do to save money, but what can help you earn more money while reducing your carbon footprint. In taking this atypical approach you'll be surprised at the cost savings concepts that develop. And by implementing macro changes now, you position yourself for improved profitability regardless of the direction of fuel costs in the future.
Concentrate on business sensible technologies that have been created through cost reduction and green initiatives. Technologies that go beyond vehicle maintenance to one of reducing driver miles between pickups or deliveries. Technologies that are not departmental focused, but those that affect your entire organization and link you to customers. Those that reduce your costs while producing positive results from a marketing and public relations perspective.
A good example of marketing through the green initiative is Green Express (www.greendelivers.com) of
If you're a shipper, you've probably negotiated rates with your carriers, but continue to look for other cost savings opportunities. Like carriers, you want to migrate to business sensible technologies and strategies that affect your company as a whole. While the following is not all-inclusive, it's a good starting point:
- If you use your own fleet, consider dispatching software to improve efficiency and reduce miles between stops. As a rule of thumb, good dispatching software should reduce the need for personnel by at least 50% while lowering your overall day to day fleet operational costs.
- Consider an additional distribution center located closer to customers to provide superior service at lower cost. If building a new DC is not feasible, consider warehousing and having regional carriers make deliveries. You'll save considerable transportation costs and improve service to your customers while reducing your footprint.
- Reduce your shipping costs to select regional markets by consolidating Thursday and Friday shipments to those markets. You'll achieve the same Monday delivery as you do now but save on logistics costs and fuel.
Viewed as energy savers in the past, fluorescent light bulbs are now passe when you want to be greener. CFL (Compact Fluorescent Light) bulbs are the new standard. Not only do they provide good quality light and last 10 times longer than standard light bulbs, they use 75% less energy than standard bulbs. Evaluate how many light bulbs your business is using and you'll see the cost savings can quickly add up.
CFLs cost considerably more than standard light bulbs. But if your utility company has jumped on the green bandwagon, you may be able to get them at a reduced rate. PG&E in
Computer servers are without a doubt a necessary cost of doing business, but they are also a huge energy drain. Companies typically use a variety of servers with each server doing specific tasks. However by installing multi-tasking software you can have a single server do the work of several servers, reducing not only your hardware costs, but the hidden utility costs also. To further reduce the energy drain and reduce hardware costs, consider subscription services for the server tasks.
Virtually all computers and appliances today come with standby mode, allowing them to come alive faster when you want to use them. But there is a hidden cost for that fast feature. It is estimated that eliminating all standby modes in the
Some of us turn off our computer daily rather than leaving them in standby mode and that's a good first step in lowering your electric usage. But that's only part of the savings. Virtually all PC users use a surge protector to which they connect their computer. Turning off your computer and not the surge protector allows all other hardware accessories (speakers, modems, etc) connected to the surge protector to continue running. Rather than putting your computers in standby mode, turn them off via the power strip or surge protector.
Go Green and become a more profitable EcoLogistics organization.