Shanghai GM Green Supply Chain Program Saved $19M in 2009

GreenBiz - A major initiative to help Chinese auto industry suppliers reduce their environmental impacts successfully improved productivity and generated annual savings worth millions of dollars. Shanghai General Motors (SGM) partnered with the World Environment Center (WEC) for a "Greening the Supply Chain Initiative" targeting 125 suppliers. The 50/50 joint venture between General Motors and Shanghai Automotive Industry Corp. is one of China's largest vehicle producers; it also imports and sells Buick, Cadillac, Chevrolet and Saab products.

The program focused on reducing water, waste and energy use, while also boosting competitive advantage. It demonstrated a strong business case for efficiency: The 125 suppliers invested about US$21 million in 498 projects, generating annual cost savings of roughly US$19 million. Many projects had ROIs of less than a year. In a report (PDF) releasing the findings, the partners said the program had the benefit of strengthening the supplier relationships and making the participants more adaptive to evolving government requirements. The participation by the majority of suppliers was described as "excellent."