Manufacturers are under increasing pressure to document their impact on the environment. This pressure is coming—for North American manufacturers—primarily from the private sector. Major manufacturers are asking their upstream supply chain partners to document its environmental impact as part of green supply chain initiatives. Green supply chain programs may be initiated in order to help manufacturers position themselves to its own customers or investors, or to facilitate environmental compliance.

This focus on green extends well beyond the simple carbon footprint, which in and of itself can be a challenge to track given that almost any business activity, from turning on the lights to running a metal press, results in consumption of at least some fossil fuels. In coming to grips with an environmental footprint, a number of other impacts including discharges to waterways, landfills, and other gas emissions must be monitored. The life cycle impact of a product—ranging from shipability, energy consumption, offgassing, service requirements, and end-of-life disposal or recycling, must be taken into consideration.

In this article, I will address the various drivers for this green supply chain trend, share important considerations for satisfying a customer’s green supply chain initiative or initiating your own green supply chain initiative, and discuss the role of enterprise software like enterprise resource planning (ERP) in keeping pace with this industry trend.

Why Green Your Supply Chain?
From a practical standpoint, green supply chains are smart moves for manufacturers because they can present a marketing advantage. Here are more pressing and immediate reasons for green supply chain management (SCM):

Investor demand for sustainability data is increasing. This should be a serious consideration for public companies and their suppliers. In February of 2010, the Securities and Exchange Commission (SEC) issued guidance requiring publicly-held companies to disclose their environmental liabilities that could become problematic if cap and trade regulation came into effect.

The concern for sustainability of public companies from an investor perspective is not driven by altruism, but rather by a need to increase the degree of transparency and visibility of potential risks and liabilities that could harm long-term returns. While manufacturers can expect more rather than less in the way of environmental reporting requirements, substantial rules are already in force, including several statements of position (SOP) from the Accounting Standards Executive Committee (AcSEC) of The American Institute of Certified Public Accountants (ACPAs):

• Guidance on "Accounting for Contingencies" requires that liabilities be recognized in the financial statements if a loss is probable and the amount is estimable. At the very least, even if the loss is not estimable, the likely loss must be accounted for in footnotes to financial reporting.
• These position statements also require that environmental contamination costs be expensed as incurred unless they extend the life or increase capacity of the property, mitigate or prevent future environmental contamination, or are realized while preparing the asset for sale.
• The standard operating procedure (SOP) for Environmental Remediation Liabilities details the responsibilities of corporations involved in mandated environmental cleanup, and responsibilities of corporations to avoid environmental destruction.

SOURCE:http://www.technologyevaluation.com/research/articles/erp-for-green-supply-chain-management-in-manufacturing-20770/

Manufacturers are under increasing pressure to document their impact on the environment. This pressure is coming—for North American manufacturers—primarily from the private sector. Major manufacturers are asking their upstream supply chain partners to document its environmental impact as part of green supply chain initiatives. Green supply chain programs may be initiated in order to help manufacturers position themselves to its own customers or investors, or to facilitate environmental compliance.

This focus on green extends well beyond the simple carbon footprint, which in and of itself can be a challenge to track given that almost any business activity, from turning on the lights to running a metal press, results in consumption of at least some fossil fuels. In coming to grips with an environmental footprint, a number of other impacts including discharges to waterways, landfills, and other gas emissions must be monitored. The life cycle impact of a product—ranging from shipability, energy consumption, offgassing, service requirements, and end-of-life disposal or recycling, must be taken into consideration.

In this article, I will address the various drivers for this green supply chain trend, share important considerations for satisfying a customer’s green supply chain initiative or initiating your own green supply chain initiative, and discuss the role of enterprise software like enterprise resource planning (ERP) in keeping pace with this industry trend.

Why Green Your Supply Chain?
From a practical standpoint, green supply chains are smart moves for manufacturers because they can present a marketing advantage. Here are more pressing and immediate reasons for green supply chain management (SCM):

Investor demand for sustainability data is increasing. This should be a serious consideration for public companies and their suppliers. In February of 2010, the Securities and Exchange Commission (SEC) issued guidance requiring publicly-held companies to disclose their environmental liabilities that could become problematic if cap and trade regulation came into effect.

The concern for sustainability of public companies from an investor perspective is not driven by altruism, but rather by a need to increase the degree of transparency and visibility of potential risks and liabilities that could harm long-term returns. While manufacturers can expect more rather than less in the way of environmental reporting requirements, substantial rules are already in force, including several statements of position (SOP) from the Accounting Standards Executive Committee (AcSEC) of The American Institute of Certified Public Accountants (ACPAs):

• Guidance on "Accounting for Contingencies" requires that liabilities be recognized in the financial statements if a loss is probable and the amount is estimable. At the very least, even if the loss is not estimable, the likely loss must be accounted for in footnotes to financial reporting.
• These position statements also require that environmental contamination costs be expensed as incurred unless they extend the life or increase capacity of the property, mitigate or prevent future environmental contamination, or are realized while preparing the asset for sale.
• The standard operating procedure (SOP) for Environmental Remediation Liabilities details the responsibilities of corporations involved in mandated environmental cleanup, and responsibilities of corporations to avoid environmental destruction.

SOURCE:http://www.technologyevaluation.com/research/articles/erp-for-green-supply-chain-management-in-manufacturing-20770/