The benefits of supply chain collaboration
October 1st 2006 by Roger Papworth, Envirowise Supply Chain Delivery Leader
In today's increasingly competitive climate, companies can often react to rising costs by squeezing suppliers often shopping around for cheaper prices or pushing suppliers to accept more flexible terms.
However, businesses that take this approach may actually be risking long-term relationships and competitiveness. Instead of pressurising suppliers to reduce costs, companies adopting a more creative view of supply chain management can experience efficiencies and create better, leaner and more competitive supply chains, resulting in improved profitability.
One area where this can be best demonstrated is through environmental best practice.
Efficient use of resources helps secure significant cost savings for both suppliers and their clients allowing both parties to maintain their competitive edge.
For instance, during the last year alone, the Envirowise supply chain programme has identified cost savings worth more than £4.5 million - and around £10 million since the project began in 2002, with many companies already benefiting from the £6.6 million savings achieved in previous years.
Larger companies - described as the 'hosts' are given support and advice to work in partnership with their suppliers to reduce environmental impact throughout the supply chain.
The initiative involves introductory workshops, on-site resource efficiency reviews, targeted training and impact assessment. It also offers free support and practical assistance under the Envirowise programme.
Efficiency savings are typically made through identifying costsavings solutions such as re-usable transport packaging, better delivery logistics and smarter product design.
Home Retail Group which includes Argos and Homebase - is currently working with 30 of its suppliers to explore opportunities to minimise waste along the supply chain and reduce the amount of packaging associated with the products it sells.The retailers' involvement is part of a wider waste management strategy that aims to send zero waste to landfill by 2010.
One of the Group's suppliers,Glen Dimplex UK, is aiming to identify specific actions to cut excess waste from transit and internal packaging, without compromising product protection or significantly increasing costs.The company is currently benchmarking water and energy costs to set water and energy saving targets, including reducing flushing volumes and energy measuring procedures, with little or no financial outlay.
Also working with Envirowise for the first time this year is one of the UK's leading Business Process Outsourcing (BPO) companies.
A specialist in print management, Williams Lea has made a wholehearted commitment to reducing environmental impact throughout its supplier network by taking part in the programme.
It is part of a long-term plan to drive up environmental standards throughout the company's supply chain which also involves encouraging its suppliers to work towards ISO 14001 the international standard for environmental performance by September 2007.
Williams Lea's suppliers are taking full advantage of the opportunity to make a positive change.Many are looking into more effective ways to handle key environmental issues such as reducing paper and packaging waste and are expected to save money in the process.
Whilst it is clear that these businesses recognise the value of building close relationships with their suppliers, research undertaken by Envirowise last year demonstrated that this is not always the case.
Indeed, in a survey of 250 retail and wholesale companies across the UK, most of those that took part pointed to a cost cutting response to economic pressure, with 56 per cent shopping around for cheaper suppliers and 53 per cent pushing to cut prices.
However, Envirowise's experience has shown that investing time in supply chain management and engaging with suppliers can help secure stronger commercial relationships for future success. More articles from Water Technology List: | 
