Costs Down, Productivity Up: Making the supply chain sustainable

Holden is one of a handful of companies working with the World Environment Center to achieve more sustainable supply chains.

GM HOLDEN has embarked on a program to make its supply chain more sustainable, the company announced earlier this year.

The company is working with the World Environment Center's "Greening the Supply Chain" program, which GM China completed last year.

Holden said 17 suppliers in Victoria and South Australia had agreed to participate.

World Environment Center corporate programs director Gwen Davidow said the not-for-profit, "non-advocacy" organisation usually recommended companies begin with only a portion of their supply chain.

"Since we customise the project to each member who participates, it is good to begin with a portion of the supply chain to both verify what works best as well as seeing what we can improve upon."

Ms Davidow said participating suppliers could benefit from reduced energy and raw material costs, greater productivity, better environmental performance and reduced risk to human health.

She said the WEC recommended allowing a minimum of 12 or 13 months for the process. The amount of effort and money involved depended on factors including the scope and location of the project.

Multinational enterprises that are members of the World Environment Center are known as the 'anchor companies' in the process, and they commit to promoting cleaner production and energy efficiency amongst suppliers.

Ms Davidow said in most cases the anchor company covered the costs of the project, and their other primary involvement was showing support at the highest levels of the company.

"This is pivotal for success so that the suppliers can understand how important their participation is," she said.

Anchor company employees are selected as points of contact and supplier selection criteria are established, along with program objectives, training agendas and policy requirements.

Suppliers sign non-binding agreements to provide necessary resources and a representative attends a two-day training course. An action plan is developed and then implemented over nine to 12 months.

The World Environment Center conducted pilot projects with Johnson and Johnson in Brazil and Alcoa in Mexico, and has also implemented "Greening the Supply Chain" with Alcoa Romania, GM China and Shanghai General Motors.

This article first appeared in Business Community Intelligence, August 2008