Your clients will like you green

Is green dead? Our economy was this beautiful party balloon, expanding and floating ever higher. Suddenly, it’s deflating alarmingly, racing around the room, squealing and slobbering in the most horrible way and defying anyone to catch it. Who cares about rubbery, plastic items wrecking the place when there does not seem to be much hope of another party? Without revenue for research and development, or confidence in the long-term market, it will be difficult to raise capital for green innovation and clean energy. Surely that means green gets pushed down the list of priorities. Even if you hate the debate on global warming, you may like Thomas Friedman’s latest book, Hot, Flat, and Crowded: Why We Need a Green Revolution--And How It Can Renew America, where he creates the phrase “global weirding,” to describe those strangely unpredictable weather events where “the hots will be hotter, the dries drier, the rains longer, the snows thicker.” To those who question going green, he says: “You can jump out of an 80-storey building and for 79 floors you think you’re flying.” Putting aside the arguments about the degree of man-made impact on the world: There is no doubt that in these economic times, we will all want to be reducing costs in our lives, whether it’s heating our homes, dealing with our garbage, or reducing the price of transportation. Green may be just the ticket to shift us out of this downward slide in our economy. I asked my friend Melissa Gracey who runs DTA, a company in the transportation industry, and she said that green is plain, good business sense. I was relieved when Melissa pointed out the many ways for even the smallest company to build a green program without, she assures me, taking on the look of the dishevelled Ms. Elizabeth May, our very own Green Party leader. (Why is it that green always seems to bring to mind marijuana T-shirts, rumpled hippy skirts, and Birkenstocks?) Green is already mainstream in the business world. “Top companies are creating scorecards for going green and stewarding the environment,” says Edmund Rucels, a specialist in supply chains and packaging. “Today, green awareness means winning and keeping clients — it is no longer just about saving money. If you can demonstrate how your operations are helping reduce your customers’ carbon footprint, you will have loyal and grateful clients.” For example, Wal-Mart started a “reduce packaging” program with their suppliers and achieved a $3.4 billion savings in the first year that they introduced the concept. Sounds good. To get an idea of how green could work, let’s go through an industry example. In the transportation industry, the key measure to watch is “case level optimization,” meaning how many boxes you pack in your truck or container. Currently, many companies are shipping a great deal of air. Here are a few quick checks to see how to reduce your carbon imprint with your packaging and shipping: Know your fill rate When asked in surveys, managers will say they are shipping with 80 percent of their container space filled; often it is more like a 60 percent fill rate. Shipping 40 percent air translates to a great deal of wasted money. Check your packaging To mitigate damage, a thick corrugated box is used to save the product, but do you really need one? You can rework your SKUs (stockkeeping unit used to identify a product and track it for inventory purposes). By using packing and stacking methods where the edges of boxes are aligned to avoid that Leaning Tower of Pisa effect, you will avoid damages and improve your fill rate. There are experts who can help with this process. Reduce pallets in play When there are more pallets (the platforms for packing multiple boxes) out in the system than required, it allows extra room for wasted space. Rather, force a smarter approach to reducing costs by bringing down the number of pallets used in your system. Consider spacing on each pallet There are underutilized spaces on the pallets, usually along the edges. This is valuable real estate with every centimetre worth money. By watching for underutilized pallet space, employees can reduce the shipping costs of that “empty air.” By starting with these transportation programs, you will ratchet up the density of shipping, reduce damages, and find savings for yourself and clients. As a result of a focus on case level optimization, Edmund Rucels says his clients have achieved up to 40 percent savings on transport, storage, and handling. This adds up to a great deal of carbon reduction and a greener, happier customer and planet. Your customer will like a greener you and it does not mean you have to watch Al Gore’s movie — I promise. Jacoline Loewen raises capital for growing companies and is the author of Money Magnet: How to Attract Investors to Your Business (Wiley). www.moneymagnetbook.ca

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