The Green Supply Chain: Pharma 5 Steps Forward



Cold Chain IQ
02/17/2013

With the global pharmaceutical industry facing a steady tide of pressure from consumers and regulators to reduce the environmental impact of its activities, the supply chain is under scrutiny like never before.

Although some attempts to make the pharma sector's manufacturing processes more environmentally friendly have been successful, there is still a significant way to go in terms of supply chain operations. A particular challenge lies in the area of cold chain shipping, due to its energy-intensive nature.

However, the growing awareness of sustainability issues among consumers, combined with stricter legislation and the increased prevalence of corporate social responsibility reporting, means there is plenty to motivate pharma companies who have yet to make major inroads with their supply chains.

Furthermore, the potential business benefits of greener supply chains are numerous. Companies that succeed in making their operations more environmentally friendly can expect operational cost savings as a result of less waste, reduced fuel, energy and transport costs, and a lack of compliance penalties. In addition, studies have shown that supply chain improvements of this nature invariably enhance an organisation's brand and reputation considerably.

Here are five key steps that can help organisations to lessen the environmental impact of their supply chains.

Adopt a lifecycle approach

Lifecycle may have become a buzzword among supply chain experts in recent years, but it does hold the key to making operations greener. By understanding the lifecycle of a product from raw materials to disposal, companies can identify areas where there is real scope for improvements and redesign aspects of the process to minimise their environmental footprint.

With carbon accounting methods requiring companies to include all costs from raw material extraction to the final disposal of materials, there has never been a stronger case for carrying out product lifecycle analysis.

Embrace Cold Chain Technology

Research has shown that automating supply chain transactions can have a significant impact on a firm's carbon footprint, as well as the well-publicised cost benefits. Automation can be used to drive efficiencies throughout the supply chain, although reduced paper usage is likely to be one of the most immediate and visible benefits. To this end, technology can be a powerful tool for companies planning a green overhaul of their supply chains.

Target green efforts

The 'lifecycle' school of thought may promote a holistic approach to greening a supply chain, but it is also important to think strategically and target efforts in places that are likely to yield the best outcomes. Significantly decreasing the environmental impact of a company's entire supply chain should be the long-term objective; identifying priority areas and delivering tangible results should appear on the day-to-day business agenda.

Remember the bottom line

Organisations must be careful not to view their sustainability targets as existing in an entirely separate sphere to their overall business goals. Any supply chain project is likely to be more successful if it closely reflects the strategic direction of the organisation. For this reason, identifying the financial benefits of any green supply initiatives and clearly demonstrating them to the relevant decision-makers of the company is essential.

Seek expert assistance

Businesses without the internal expertise to carry out a full review of their supply chain operations and establish a plan for change should seek support from outside the organisation. Working in partnership with a consultancy or independent adviser can give firms access to a wealth of skills and experience that will help them to trim waste and embed efficiency into the supply chain.

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