The Wall Street Journal, validated by World Trade magazine Editor Neil Shister, recently proposed that the Wal-Mart model of the supply chain is drawing to a close, due to a gathering "perfect storm": the United States economy lagging behind its trading partners, with the ultimate impact of the credit crisis a looming sink-hole; the slowing of productivity gains, "the magic bullet that has spared the U.S. from inflation"; debts coming due; and the dollar trading at lows not seen in a decade.

Indeed, the supply chain is evolving. For one, increasingly more businesses cite their desire — even need — to decrease energy expenditures within their organizations.

According to Plant Services Editor-in-Chief Paul Studebaker:

The rapid rise of energy costs over the past few years ... support the widespread conclusion that we're entering an era in which energy productivity (energy cost per unit of production delivered to the customer) will loom ever larger as a factor in the bottom line and global competition.

As consumer buying power flattens or declines due to spending more for heating/cooling, health care and commuting, offering less expensive products becomes essential to business prosperity and survival.

The growing awareness of "green" throughout the supply chain, of course, is another major determinant in the remodeled supply chain.

"Far from a fad or feel-good initiative, green sourcing is fast emerging as a strategic business imperative," reports Electronic Supply & Manufacturing.

Companies are now looking at their supply chain as the next frontier for combating environmental upheaval — and giving consumers what they want.

Kris Colby and David Fertal, a senior manager and an engineering project manager in the Spend Management Services group at Ariba, Inc., respectively, recently offered their ideas for greening the supply chain at Electronic Supply & Manufacturing (paraphrased here):

1) Know where you stand by doing a carbon footprint study or by assessing your organization's "green" status.

2) Have a plan, create goals and use metrics to track progress.

3) Have a single point of accountability by ensuring the point of accountability is empowered to effect change.

4) Market your progress internally and externally, communicating to all levels why green efforts are being undertaken, what will be measured and how the company will succeed.

5) Incorporate green into your existing sourcing and procurement processes by specifying approved and preferred materials as well as including green criteria into requests for proposals and create clear metrics.

6) Communicate goals and standards to your supplier community, setting clear expectations and monitoring compliance and progress.

7) Stay up-to-date with global regulations, including Restriction of the Use of Certain Hazardous Substances (RoHS) regulations (Europe's and China's), and stay on top of state and community regulation changes that could become more stringent.

8) Keep up with new materials, technologies and processes by participating in industry groups. Do whatever it takes to maintain your competitive advantage and not be left behind.

9) Do the "easy stuff" first. Find and use ways to use energy more efficiently and negotiate leasing or buy back options when appropriate. (See: Getting Serious about Energy Efficiency)

10) Get everyone involved — including engineering, design, sales and finance — to make an impact on the entire organization.

In addition to cutting energy costs and carbon emissions from your own operations, you can work with supply chain members to improve in these areas, too. Sharing expertise can also yield real measurable savings. In many cases, energy savings lead to a lower carbon footprint.

"Carbon footprint is absolutely new territory," W. Drew Schramm, a senior vice president at Herman Miller and a member of the committee on social responsibility at the Institute for Supply Management, recently told The New York Times. "We're not sure how we'll measure it, we're not sure how we'll deal with it, but we've told our suppliers, 'Get ready, because we're going to ask you a lot of questions.'"

Moreover, increasingly more companies are turning to alternative energy, buying hybrid fleets and otherwise trying to clean up their own acts.

Frito-Lay, for instance, has an ambitious plan to install at one of its plants the following:

• Fifty (50) acres of solar concentrators;
• A membrane bio-reactor;
• An anaerobic digester to produce methane; and
• A biomass generator.

"If the price of ... resources continues to rise, we will be very happy we made these investments," Rich Beck, senior vice president for operations, told The New York Times earlier this month.

Earlier: Getting Serious about Energy Efficiency

Resources

Inside World Trade: The Supply Chain after Wal-Mart
by Neil Shister
World Trade Magazine, Nov. 2, 2007

For Suppliers, the Pressure Is On
by Claudia H. Deutsch
The New York Times, Nov. 7, 2007

In Eco-Friendly Factory, Low-Guilt Potato Chips
by Andrew Martin
The New York Times, Nov. 15, 2007

Ten Steps a Green Supply Chain
by Kris Colby and David Fertal
Electronics Supply & Manufacturing, Oct. 30, 2007