The reality is that most large manufacturers do not have the time and money to help all of their smaller suppliers remain lean and green.

As global stakeholders continue to push for cleaner production from the manufacturing supply chain, companies of all sizes are now considering environmental issues in their corporate strategies. Most large manufacturers are adopting sustainability strategies in advance of impending regulations.

Global manufacturing leaders continue to put more pressure on suppliers. Last fall, several of the world’s leading multinationals announced they were banding together to form the Supply Chain Leadership Coalition to promote better environmental standards among their supply chains. The group includes Procter & Gamble, Unilever, Tesco, Nestlé, Imperial Tobacco Group and Cadbury Schweppes. The launch of the new group is part of a wider trend that has seen numerous multinationals increase pressure on suppliers to cut emissions and disclose environmental information.

The reality is that most large manufacturers do not have the time and money to help all of their smaller suppliers remain lean and green. Many smaller firms are still struggling with where they should begin greening their operations and do not have the resources for environmental and operational improvements. The Green Suppliers Network, a voluntary program sponsored by industry, the EPA and the Manufacturing Extension Partnership of the U.S. Department of Commerce, works with these companies to get them the on-site technical assistance they needed to remain profitable, environmentally sound and competitive.   

The Green Suppliers Network works with large manufacturers to engage their suppliers in reviews. “When GM helped launch this initiative a few years ago, we wanted to reach deeper into the supply chain to continue improving the environmental performance of the industry as a whole,” says Beth Lowry, vice president of environment, energy and safety policy at GM. We have been very pleased with the progress that has been made on all levels.”    

As a global firm with suppliers all over the world, GM is also developing green supply chain programs overseas. The firm realizes its future growth will be coming from overseas markets and that China will be a big part of that growth as it becomes the world’s largest auto market in next decade. “We worked with GM to implement a pilot green supply chain program initiative with its suppliers in Shanghai,” says Gwen Davidow, director of global corporate programs with the World Environment Center (WEC).   

The China Greening Supply Chain Pilot Project was implemented by GM, Shanghai GM (SGM) and the WEC. GM invited eight top suppliers to participate. After a short training course, the suppliers evaluated opportunities to improve quality, reduce environmental impacts and lower costs. Through the evaluation, suppliers identified actions and investments that ultimately resulted in a combination of net financial savings and improved environmental performance.   

According to the Green Car Congress, the original eight participating suppliers have reduced their displacement of CO2 by more than 2,500 tons and saved about 28 million gallons of water annually. They also have lowered their operating costs by a collective $254,500. Now SGM is reported to be working on another supply chain initiative and believes the number of participating suppliers will reach 40 by the end of 2008; it could grow to 150 by 2010.    

“The momentum overseas is definitely building on the greening of the supply chain initiative,” Davidow says. In addition to its success in working with GM in China, WEC also recently worked with Alcoa on a green supply chain project in Mexico and a follow-up project in Romania. “Getting repeat business is a great indicator of success,” Davidow says. WEC hopes that once manufacturers go through this greening process, they will engage their Tier II and Tier III suppliers and enact it with them.

As this initiative gains traction globally, obviously the smaller manufacturing suppliers will have to make the necessary investments to adopt cleaner practices. In the United States, many smaller firms are already squeezed on price and global competition, but they need to adapt to the winds of change. The reality is that the train has gone out of the station and companies that embrace sustainable manufacturing will be well-positioned to be responsive to client supply chain demands and impending regulations, while also positioning themselves for future global competition.

The Green Suppliers Network is a resource that should be tapped by small- to medium-sized firms. Once suppliers commit to a review, it usually takes two to three days to conduct an on-site visit. During this time, the Green Suppliers’ review team trains employees to create a value stream map and process map of current and future process flows. At the end, suppliers are given a cost/benefit analysis that identifies lean and environmental opportunities in their facility and evaluates which opportunities have the greatest return on investment. The final report remains confidential.

These reviews are assisting suppliers across the United States to save significant sums. The program’s first 19 reviews have helped suppliers identify $9 million in annual potential cost savings and more than $3 million in cost savings from one-time lean opportunities.

“The lean and green principles have become our way of doing business for everything we do at H&L Advantage, and it’s now in our DNA,” says Steve Beurkens, sales marketing manager. The firm is a small injection molding manufacturer located in Grandville, Mich. With 60 employees and 40 years in the business, H&L Advantage knows what it takes to compete. When its largest customer nominated it to participate in Green Suppliers, it viewed participation as an opportunity to rise above the rest.

Manufacturers are encouraged to contact Kristin Pierre at pierre.kristin@ epa.gov for more information about the Green Suppliers Network. These experts in lean and clean manufacturing techniques helped H&L Advantage identify more than a dozen improvement opportunities in August 2004. “I would encourage anyone who has an opportunity to become involved in the Green Suppliers Network to take that opportunity. It is extremely valuable,” Beurkens says.

Because OEMs and suppliers alike benefit from the program, many companies are signing up to participate. There are 23 OEMs from the automotive, aerospace, healthcare, pharmaceuticals and office furniture sectors. Forty suppliers are currently involved and another 103 have been identified by their OEMs.    

Global companies understand both global and local stakeholders will not differentiate between a multinational company and its suppliers if they do not demonstrate sustainable leadership as part of their preeminent business success. In an age where reputation is everything, manufacturers with a global footprint need to ensure their suppliers are in line with the principles of their sustainability strategy. Accordingly, small-to-medium manufacturers need to pay attention to this green supply chain movement and adapt accordingly to ensure their future survival.

Peter R. Gourlay is the president of the Maryland-Asia Environmental Partnership and chairman of the Business Growth Committee of the World Trade Center Institute. He can be reached at This e-mail address is being protected from spam bots, you need JavaScript enabled to view it .