Sunday, September 5, 2010

Is being Green a luxury?

The CEO of a logistics group related to a major retailing company thundered that "green" was not something they could afford. Right now they want to set the supply chain right and think of being green at a later stage. He further added that being green was a branding exercise which his company did not need at this stage.

The young CEO created two divisions - right supply chain and green supply chain and his speech clearly indicated that these were different. I guess the CEO is not alone in having these views. To a good extent we academicians and a few consultants are responsible for propagating green as a mechanism of adding an extra cost to be more environment friendly.

The article above cites the example of quality movement. Earlier, the basic idea of 'cost' of quality was prevalent. Quality was something that would be checked for after the product was made. It was about inspection and segregating good and bad products. Today, the term is 'cost of poor quality'. Quality is built in at every stage and includes product design, maintenance, and every function in the organisation. The major change was to have quality in every process to have a good quality product.

Has this increased the 'cost' for firms? In certain areas, may be yes. But overall, the yields have gone up, the rejections reduced and the customers more satisfied. This shift was not overnight and it happened over a long span of time. Some companies are in fact discovering this fact in the last few years only.

It is same with green and sustainability issues. Today, being green means installing a good effluent treatment plant or using expensive technology to emit less carbon. This is very similar to the end of the pipe quality concept followed earlier. With time, I am sure the young CEO and his brethren will realise the difference. Every individual has to work in a way to avoid wastage and every process has to be green. Its just a matter of time for sustainability to be a compulsion to do business.