Green Supply Chain Management: here to stay, but how to

get there?
Lessons to be learned from the beverage industry.

By Kurt Jacobs, November 2008

Nowadays, its impossible to pick up a business or supply chain magazine without at
least one article about the importance of environmental or green initiatives. It is clear that in
order to keep our planet healthy both individuals and businesses have to change their
behavior. Everybody is aware of the need to reduce Green House Gasses (GHGs) and the
concept of ones carbon footprint is becoming common knowledge. We can safely assume that
these issues will continue to determine political, business and personal agendas for decades to
come, so the question no longer is whether to go green or not, but how to get there. Since it
isnt easy to determine the best suited green initiatives, corporations need to study each
potential green initiative carefully on its own merits before implementing one of them. This is
even more important when one considers the gap some surveys show between managements
awareness of green topics and the actual initiatives already being implemented.

To demonstrate the difficulties in determining the best green path for a business or
even industry, let us look at one of the first industries confronted with environmental pressure by
legislators and consumers: the beverage industry. Over a decade ago, one of the first real green
topics to make it to the political agenda was the choice of beverage container and without much
discussion it was determined that re-usable glass bottles were the best option for the
environment. People who dared to question this position were often treated as outcasts and
ignored although there were some obvious disadvantages to re-usable glass bottles: extra miles
to be transported (automatic round trips at all times often underutilized), more energy needed
for the initial production of a glass bottle, less liters per pallet/truck, etc.

Being professionally active in supply chain management myself, I tried to bring these
issues up in our discussion at home about whether or not we should switch to glass bottles for
our beverages. As might be expected, my arguments were quickly dismissed and it was decided
that we would contribute to the environment and make the switch to glass. This was also the
position our (Belgian) government decided to take and additional taxes were imposed on one-
way containers (plastic bottles and cans) to stimulate people to switch over to glass bottles.

Stubborn as I am, since that time I have followed green logistics trends related to this
topic ranging from closed loop supply chains, to reverse logistics, to carbon foot-printing and
carbon offsetting while quietly carrying the weekly burden of hauling the (heavy) crates to and
from our local store. And over the years, Ive noticed an evolution in the approach towards
beverage packaging: as it became more and more clear that only a price penalty on one-way
packaging could convince even a limited number of people to let go of their plastic bottles, the
focus started to switch to the environmental impact of these flows.

Two areas have seen significant developments over recent years: technology improvements in Polyethylene
Terephthalate (PET) packaging and recycling programs for one-way packaging. The development of
lightweight PET bottles reduced both the energy needed for production of a bottle, as well as the weight per
liter to be transported. Simultaneously, several (European) countries developed and implemented recovery
and recycling programs for plastic bottles that are very successful (e.g., up to 75% of plastic bottles are
recycled in Switzerland). Several recently published figures show that the environmental burden of using
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plastic bottles is no longer significantly different compared to glass bottles: information supporting this
general statement can be found online (for statements about recycling in Switzerland:
http://www.bafu.admin.ch/abfall/01472/01489/index.html?lang=en ; related information can be found
on http://www.naturalstyles.com/Articles.asp?ID=143 , on-line blogs like
http://www.triplepundit.com/pages/askpablo-glass.phpor or in specific case studies (e.g. about plastic wine
bottling: http://www.wrap.org.uk/retail/case_studies_research/carbon_audit.html or
www.boissetfamilyestates.com/press/Boisset%20-%20forbes_R2.pdf ). It is always easy to judge in
hindsight, but this evolution leads me to ask the following question: shouldnt we have studied the different
possibilities to go green more in depth at the outset?

When discussing this with my family, it turned out that they were inclined to believe me
this time around, but that they were still very hesitant to switch back to plastic bottles. But the
reason was no longer an environmental one - nor even an economical one: it was a psychological
one: by buying plastic bottles, they feared to loose their ecological image with the neighbors! As
for myself, I had no such problem and I went back to buying my soft drinks in plastic bottles: my
green conscience was no longer burdened and my back was very relieved when the heavy lifting
disappeared!

I think we can safely assume that this discussion hasnt ended yet, but at least the
discussion is taking place, and this time its based on facts and figures and its no longer merely
about believers and non-believers. I sincerely hope that this type of discussion will become an
integral part of the roadmap towards a green and sustainable business environment and supply
chains.