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Creating Customer Value with Supply Chain Sustainability

Sustainable supply chain programs appeal to customers, boost efficiency and provide crucial, far-reaching bottom-line benefits.

* By Tom Gresham *

Toshiba America Business Solutions imports a range of products from Asia. In a recent product cycle, the company determined that its product packaging didn’t allow for the double stacking of the packages in shipping containers because the top stack would be two inches too tall to fit in a container. As a result, containers would have to be shipped nearly half empty. The company subsequently reduced the height of the casters and pallets the packages were placed on, allowing for double stacking in the containers, said Steve Tungate, vice president and general manager, service, supply chain and innovation for MHI member Toshiba America Business Solutions.

Tungate said the adjustment demonstrates the dividends that companies can realize on multiple fronts when they integrate sustainable thinking into their supply chain.

“So what did that do?” Tungate said. “It allowed us to not ship empty space, and that lowered costs and in the process lowered the carbon going into the atmosphere from the ocean container ships because you’re doubling what’s going onto these ships. You’re saving money and it’s also better for the environment.”

Due to its far-reaching, globe-spanning nature, a sustainable supply chain has “a significant impact in promoting human rights, fair labor practices, environmental progress and anti-corruption policies,” according to the United Nations Global Compact. However, companies do not have to treat the pursuit of a sustainable supply chain as a sacrifice for the common good. In fact, a sustainable supply chain can help companies operate more efficiently, cutting costs and improving profit margins. Tara Norton, managing director at BSR, a global nonprofit that works with companies on sustainability issues, said firms with supply chain sustainability programs own a competitive advantage to mitigate risk, identify cost savings, spur innovation by collaborating with suppliers and improve working capital.

Consequently, many companies are embracing efforts to make their supply chains more sustainable. Jason Adlam, vice president of new business development for MHI member CHEP USA, a global provider of supply chain solutions, said some companies are more mature than others in the journey, but it is clear that companies are understanding that a sustainable approach does not equal higher costs.

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This issue of MHI Solutions focuses on sustainability and its progression in the supply chain. Consumers are becoming more interested in making environmentally friendly decisions when it comes to their buying habits and the brands to which they are loyal. Studies have found anywhere from 80-85% of consumers are more likely to buy from a company with a reputation for sustainability than from a neutral company, if their prices are equal.

Leading firms are tapping into this mindset by building more sustainability, and transparency, into their supply chains. They know that more sustainable operations will drive long-term brand loyalty and competitive advantage while having bottom line impacts on efficiency and profitability.

This issue of MHI Solutions will help provide you with the information and resources you need to address sustainability across your supply chain to improve your overall business performance.

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