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Set goals before choosing green SCM software

Selecting the right green SCM software will help ensure that supply chain sustainability initiatives run smoothly. There are a number of factors to look at during the green SCM software selection process.

Green supply chain management (SCM) software selection should follow the same process as choosing other enterprise...

applications. It is essential to understand both what your organization's corporate goals and objectives are around corporate social responsibility (CSR) as well as what are your company's specific program goals to achieve these objectives. 

For example, do you want to reduce an overall carbon footprint by 20% in the next five years? Is ensuring that your supply chain is free of hazardous materials a priority? Companies should begin the green SCM process only after defining these kinds of specific targets. Opting for an installed versus Software as a Service (SaaS) deployment is a secondary consideration.

The next decision point is about what types of green SCM software tools you will need to support your specific program targets. Here is a list of possible scenarios to consider in your deliberations followed by a list of technology types to consider:

 

  • What you buy (product lifecycle management, product information management, e-sourcing, sourcing optimization)
  • Who you buy it from and how you engage them (supplier information management, supplier performance management, supplier directories, e-sourcing)
  • Where you ship it to (logistics, logistics optimization, transportation management systems)
  • How long you hold inventory (APO, demand planning, supply planning, multi-echelon planning: all are core SCM)
  • How customers get it in their hands (see above + fulfillment)
  • What they do with it, for how long and how they dispose of it (customer relationship management, service parts management, warranty / claims systems, etc.)

It becomes clear from this list that green SCM technology, as a category, does not -- and should not -- exist as a stand-alone product. Rather, various technology components can be configured and combined to support CSR programs and objectives.

Beyond this, the most important green SCM technology tips are twofold. First, take a phased approach and start with quick wins (e.g., packaging reduction). Second, don't underestimate the importance of engaging and proactively managing, measuring and communicating with supply chain partners at every stage of a relationship. Your success is their success in green SCM -- this is anything but a zero sum sustainability game.

About the author: Obsessed with how companies manage, spend and save money, Jason Busch writes about procurement, trade and supply chain issues on his blog Spend Matters. He is also Managing Director of Azul Partners, an advisory firm.

This was last published in March 2010

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