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Green Supply Chain

Supply Chain Management Page 1


The subject of supply chain management has additional in recent times towards its
attentiveness to the role of the supply chain in each (a) Effects to the environmental
surroundings and (b) the generation of environmental functioning amendment. This change in
our assumptions for the supply chain has arisen from growing social burden, legislative
fluctuations about packaging and end-of-life product, known supply chain risks possibilities,
and going up usage of environmental needs being flowed from customers to suppliers.

A going up sort of organizations have launched greening necessities to each upstream and
downstream supply chain interestpurchasing sections, objects, preparations, and skills.

The word greening the supply chain define a large kind of movements that corporations
square measure presently guiding to scale back unhealthy impact on the surroundings.
Greening the supply chain leads square measure geared toward gaining better-quality
surroundings, health and safety implementation. Greening supply chain help out expansion
efficiencies within the consumption of energy, water or alternative natural assets or raw
materials: declining the environmental and social influence of business operations upon folks
round and also the part. By adopting environment-friendly practices, firms will become
competitive and get better the money performance by declining value of wastages.
The product style selections, price management, producing, coming up with and
management, and distribution have a serious impact on the environmental implementation of
a corporation. In shortly, Green Supply chain impressions a significant demand
environmental influence by the supply chain procedures and preparations of business

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Supply Chain Management:
A Supply is that the size of inventory/products available (in required capacity) for usage of
the important substitute of a product or part.
A supply Chain is to compile regarding a group of, companies, accommodations, demand and
provide points, and repair links. This process associated with the upstream suppliers and
downstream customers additionally to the outflows of products, services, finances and
knowledge starting a supply to a shopper.
Supply Chain management is that the organized and planned coordination of all business
gathering among an organization and throughout enterprise among supply chain to enhance
the semi-permanent functioning of distinct firms and therefore the supply chain, as an

Green supply chain management:
Green supply Chain Management put together environmental and supply chain management.
Green SCM acknowledges the unbalanced environmental influence of supply chain activities
in a company.

Green Supply Chain enhances campaigns by employing an environmental explanation.
Enhance responsivenessGreen supply chain management help out minimize risks
and speedup improvements.

Increases flexibilityGreen supply chain consideration frequently principals to
advanced procedures and nonstop improvements.
Green Supply Chain Management (GSCM) = Green purchasing + Green Manufacturing/Material
Management + Green Distribution/Marketing + Reverse Logistics

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Advance SupportGreen supply chain management includes negotiating statements
along with suppliers and customers, which results in better advance support of
enterprise processes and statements
Green supply chain management (GSCM) has occurred as a key move toward for companies
adventurous to be a part of environmentally property. The idea of GSCM implies the in part
of environmental choices with within the ancient construct of supply chain management.
Greening supply chain suggests that group action surroundings thinking into supply chain
method, as well as product style, inventory sourcing and choice, producing procedures,
distribution of the ultimate merchandise to the customers, and end-of-life management of the
merchandise once its helpful life.
In green supply chain style, the green process advance method is normally elected.

Green Process Improvement Approach

The following five basic regions of the supply chain: upstream. Downstream, within the
organization and logistics.
Purchasing Activities of the organization involved assessment standards of
suppliers environmental functioning.

Distribution activities, normally comprises those activities related to the disposal and
sale of excess stock, including recovery and recycling opportunities.

Design activities include involvement with design for the environment with
Waste Stream
Measure Opportunity
cost of waste
Create innovation
towards waste reduction
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Manufacturing activities include green production causing no pollution and

Logistics activities such as just-in-time or quality management intertwine with
environmental criteria.

Benefits to the Organization:
Green Supply Chain accrues the following benefits to the organization:
Judicious Utilization of resources: GSCM helps in efficient and cost-effective utilization of
available resources of the organizations. Organizations will purchase green input resources
for environment-friendly production process to produce desires outputs.

Cost Reduction: Green practices reduce transaction cost and promote recycling and
reuse of raw materials. The generation of water and hazardous by-products is reduced
or eliminated, helping the firms complying with the regulations. Consequently, the
relevant handling and operational cost involved can be further reduced and, in the
meantime, the efficiency of using resources can be enhanced.

Gaining competitive Advantage: As the issue of environmental concerns is
addressed successfully, differential positioning of its product in market is possible.
Besides attracting new profitable customers for organization, it will competitive edge
in the marketplace. It will strengthen the brand image and reputation in the market

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Risk mitigation: Organization adopting GSCM practices can reduce the chances of
being prosecuted for anti-environmental and unethical practices.

Ease in product adoption: Environment-friendly products are adopted without any
hesitations by the consumers. This will enhance the brand image and brand reputation
in customers mind.

Green Purchasing
Green purchasing involves identifying, selecting and purchasing products (i.e. goods and
services) with significantly less adverse environmental impacts than competing products.
Further, it involves considering the costs and environmental characteristics and performance
of a product in all stages of its life-cycle, from product design, development and
production/provision, through product use, to the ultimate handling (i.e. recovery, recycling,
re-use and/or waste disposal) of whatever remains of the product at the end of its useful

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It is important to recognize and appreciate that proper and effective green purchasing doesn't
simply lead to environmental benefits, but also helps purchasers reduce full life-cycle costs
and thus save money. For practitioners, another significant benefit of green purchasing is the
major contribution its adoption and application can make to the establishment and
demonstration of a broader overall Corporate Social Responsibility (CSR) strategy and

Green Manufacturing
It is a system that integrates product and process design issues with issues of manufacturing,
planning and control in such a manner as to identify, quantify, assess, and manage the flow of
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environmental waste with the goal of reducing and ultimately minimizing environmental
impact while also trying to maximize resource efficiency.
Basically Green Manufacturing is designing and delivering products that minimize negative
effects on the environment through their production, use, and disposal.

The life cycle of the product typically include the following:
Stage 1: Process of product development which includes design, acquisition of raw
materials, components and consumable materials from the suppliers including green
practices etc.

Stage 2: Product manufacturing with reduced wastage, minimum environmental
pollutions, safety to workers with reduced health hazards, minimum consumption of
energy during manufacturing, etc.

Stage 3: Consumption stage includes minimum packaging, recyclables packaging and
minimum energy consumption during product usage and maintenance friendly.

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Stage 4: This is the last stage which covers ease in disposable, recycling, reuse or re-
The fundamentals of green manufacturing are very simple and relate to minimizing the use of
resources and the environmental impact of a product. This philosophy is extended to all the
elements of its life cycle - from its design to its end of life.

The drivers for green:
Competitiveness: The natural desire of manufacturing firms to improve its processes and
capabilities for competitive advantage. This can manifest in terms of technology, new product
and process development as well as opportunities for business.
Corporate Social Responsibility: The growing pressure on manufacturing firms to become
more responsible to the social and environmental impact it creates. Companies would like to
brand themselves with a "green" image.
Legislation: Manufacturing firms have to constantly strive to meet current and upcoming
stricter environmental regulations.

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Green Distribution:
GL is the management activities to pursue customer satisfaction and social development goals,
connecting the main body of green supply and demand, overcoming space and time obstacles to
achieve efficient and rapid movement of goods and services. It inhibited the damage to environment
to achieve the purification of the logistics environment and the best use of logistics resources. GL is a
multilevel concept which includes both the green logistics business activities and social activities for
green logistics management, standardization, and control
Logistic is the integrated management of all the activities required to move products through
the supply chain. For a typical product, this supply chain extends from a raw material source
through the production and distribution to the point of consumption. The logistic is also used
for reverse flow of material from customer to manufacturers. While moving the inventory
across the supply chain, logistical activities comprise freight transport, storage, inventory
management, materials handling and all the related information processing. The main
objective of logistics is to coordinate these activities in a way that meets customer
requirements at minimum cost. In the past, this cost has been defined in purely monetary
terms. As concern for the environment rises, companies must take more account of the
external costs of logistical associated mainly with climate change, air pollution, noise,
vibration, fuel/energy consumptions and accidents.
In logistics, shippers need to seek out carbon-efficient carriers. Two of the biggest sources of
emissions can be found during the manufacturing and transporting process. If companies
can openly share information, the logistic service provider can analyse existing practices and
make proposal to optimize the supply chain and reduce both CO2 emissions and costs. The
green practice includes better stuffing practices to sea from air, and to rail from road, and
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shipping with a more CO2 efficient ocean carrier. Hence, for greening, supply chain
logistics should achieve a more sustainable balance between economic, environmental and
social objectives. The green supply chain best practices can be best summarized as follows:
Align supply chain goals with business goals.
Evaluate supply chain as single life stream.
Use green supply chain analysis as catalyst for innovation.
Focus on source reduction to minimize waste.
Thus, green supply chain management takes into account all suppliers in various stages of the
manufacturing process, transportation of finished goods and services, and the integration of
reverse logistics. A green supply chain utilizes recyclable material, streamlines distribution
processes, reduces redundancies, and minimizes waste to provide cost benefit to society,
people, nature, business and economy ensuring pollution reduction, environmental
stewardship, reduced operational costs, streamlined processes and better supplier

Towards the greening of supply chain, DHL, has extended the carbon-natural Go Green
logistics service in Asia. Under this system, a shipper can choose to ship the cargo/shipments
under go green by paying a percent premium charge over the usual charge: in return DHL,
undertakes carbon reduction projects in its system: better trucks, hybrid trucks, route mapping
and so on, DHL offered to ferry all materials and equipments using its go green service. In
India DHL is using CNG vehicles, which come under this go green initiative as well.
On the distribution side, there are many marketing activities of a firm that are intended to
create a positive impact or to lessen the negative impact of a product on the environment.
These activities will answer consumers concerns about environmental issues. The activities
cover everything from design to using recycled material in making a product to claim in
advertising or on package labels. Environment-friendly distribution attempts to respond to the
criticisms about pollution and waste. To counter to the environmental regulatory and
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consumer pressures, the firms have started the cradle-to-grave, that is, life cycle approach to
its products.

Green Marketing
Green marketing is the marketing of products that are presumed to be environmentally safe.
Green marketing incorporates product modification, changes to the production process,
packaging changes, modifying advertising, hoodwinking consumers, and compliance
An important challenge facing green marketers is to identify which consumers are willing to
pay more for green products. An enhanced knowledge of the profile of this segment of
consumers would be very profitable.
Bubble or blister plastic packaging is standard in health-and-beauty aids, hardware,
electronics components and cosmetics. However, as that accounted for nearly 1 percent of all
solid waste, blister packs have been targeted by environmentalists as unnecessary and
wasteful. An advantage of blister packs is that they are strong enough to protect a product
while still allowing the customer to see it.
Many companies for confirming to environmental regulation adapt products and/or packages
to make them more environmentally sound. This green marketing strategy requires more
substantive effort. A firm might replace an offensive ingredient with a more acceptable one,
change production or distribution methods to reduce pollutants and waste, or design a product
for easier recycling, closable, zip-lock bag that consumers can reuse when the popcorn is
For example: Johnson and Johnson packages shampoo in a pouch that is made from 80
percent less plastic than a conventional shampoo bottle.
Green marketing as a strategy will work only if enough consumers find it appealing. The
factors which are responsible for making green marketing so important are as follows:
Government pressure to product better society and consumers.
Pressure from consumer groups.
Competitive pressure for differentiation leading to competitive edge.
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Sense of social responsibility amongst the corporate.
Opportunities to reduce cost.
Consumers can affect the environment at two points, by either buying or rejecting
environmentally unsound products, and by recycling products or discarding them in the
garbage. Right now, recycling is the more common pro-environmental behaviour.


Product: A producer should offer ecological products which not only must not
contaminate the environment but should protect it and even liquidate existing
environmental damages.

Price: Prices for such products may be a little higher than conventional alternatives.
But target groups are willing to pay extra for green products.

Place: A distribution logistics is of crucial importance; main focus is on ecological
packaging. Marketing local and seasonal products, e.g. vegetables from regional
farms, is easier to be marketed green than products imported.

Promotion: A communication with the market should put stress on environmental
aspects. This may be publicized to improve a firms image. Furthermore, the fact that
a company spends expenditures on environmental protection should be advertised.
Sponsoring the natural environment is also very important. Ecological products will
probably require special sales promotions.

Publics: Effective Social Marketing knows its audience, and can appeal to multiple
groups of people. Public is the external and internal groups involved in the program.
External publics include the target audience, secondary audiences, policymakers, and
gatekeepers, while the internal publics are those who are involved in some way with
either approval or implementation of the program.

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Partnership: Most social change issues, including green initiatives, are too complex
for one person or group to handle. Associating with other groups and initiatives to
team up strengthens the chance of efficacy.

Policy: Social marketing programs can do well in motivating individual behaviour
change, but that is difficult to sustain unless the environment they're in supports that
change for the long run. Often, policy change is needed, and media advocacy
programs can be an effective complement to a social marketing program.
4. Reverse Logistics:
Reverse Logistics is playing an increasingly important role in the global supply chain as firms
seek environmentally responsible solutions for their warranty, end of life, spare parts, and
product returns requirements.
Reverse logistics includes processing returned merchandise due to damage, seasonal
inventory, restock, salvage, recalls, and excess inventory. It also includes recycling
programs, hazardous material programs, obsolete equipment disposition, and asset recovery.
While product take-back programs have been a part of many companies operational
playbook for some time, more sophisticated approaches are emerging which involve greater
degrees of coordination and planning among multiple suppliers.
For a logistics practitioner, the best value choice for disposition is still often determined by
the most profitable alternative:
1. Reconditioning when a product is cleaned and repaired to return it to a like new
2. Refurbishing similar to reconditioning, except with perhaps more work involved in
repairing the product.
3. Remanufacturing similar to refurbishing, but requiring more extensive work; often
requires completely disassembling the product
4. Resell when a returned product may be sold again as new
5. Recycle when a product is reduced to its basic elements, which are reused also
referred to as asset recovery.
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Product take-back programs are particularly popular in the retail sector, as manufacturers reap the
benefits for material recovery while customers find convenient ways to jettison used products for
recycling (printer cartridges, used computers, aluminium cans, tires, batteries, etc).

Competitive Sustainability:
In green supply chain initiative the firm would use environment-friendly inputs to
transforming input products which can be recycled to conserve scarce resources and reduce
the environmental pollution. The output of process used would be reclaimed and reused at the
end of life cycle of the product. The sustainable supply chain aims at reducing the cost of
operation and keeps the environment pollution free.
There are many facts of the sustainable supply chain. The starting point is product design and
process of manufacturing which needs to be focused and addressed properly for making the
product and process environment-friendly with reduction in cost. On the other hand, many
companies are also focusing on packaging and transportation to reduce environmental issues.
For Example: by proper designing of packaging, the amount of cardboard or filler material
used can be reduced for it and will help to reduce the loading (volume) on the truck.
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Organizations are adopting a variety of tools, both tactical and strategic in nature, with short-
and long-term perspectives. With these tools in mind, corporations plan and deploy various
programmes to gain competitive advantage.
The United States environmental protection Agency (EPA) published a guideline called the
The Lean and Green Supply Chain. It is a four-step decision-making process for greening
supply chain:
The first step is to identify environmental costs within a companys process.
The second step is to find opportunities for reducing environmental impact.
The third step to calculate the benefits of proposed alternatives.
The fourth step is to decide, implement and monitor solutions.
The benefit of implementing a green sustainable supply chain is that profitability of a
company can be improved and it helps to keep the environment green. Thus, towards a
environment-friendly supply chain practice, the following are identified as potential areas:
Product design, packaging and labelling
Transportation of hazardous raw material
Manufacturing processes for waste reduction/elimination
Supplier selection
Waste/scrap disposal.

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Environmental protection is becoming more and more important for enterprises because of stronger
public awareness, competitors and communities, and government regulations. For this purpose, some
programs become more popular for environmentally aware performing including total quality
environmental management, ISO 14000 standards, and green supply chain management. Reducing the
environmental pollution from upstream to downstream during procuring raw materials, producing,
distribution, selling products, and products depreciation is the most important goal of green supply
chain management (GSCM).
Supply c managers must consider the complete environmental impact of a product during its entire
life cycle, including raw material, manufacturing/assembly processes, distribution, use, and disposal.
The environmental effects include material, energy, air, water, and solid waste pollution
The main and basic challenges in the green supply chain are modelling a strategy to manage the
resources and meet the demands. Select the green suppliers that will deliver the goods and services
that are required to manufacture the product, deliver the product to the customers environmentally,
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and arrange for return of the product for servicing through customers, if there is any fault in the