Green Supply Chain Management

Assignment No. No.-6

1. Explain the concept of green supply chain management & differentiate between green supply chain and conventional supply chain.
Green supply refers to the way in which innovations in supply chain management and industrial purchasing may be considered in the context of the environment. Environmental supply chain management consists of the purchasing functions involvement in activities that include reduction, recycling, reuse and the substitution of materials. It is the practice of monitoring and improving environmental performance in the supply he environmental chain and integrating environmental thinking into a supply chain management, including ntegrating product design, material resourcing and selection, manufacturing processes, delivery of the final product to the consumer as well as end-of-life management of the product after its life useful life. Green SCM recognizes the disproportionate environmental impact of supply chain processes in an organization. Improves AgilityGreen supply chain management help mitigate risks and speed Green innovations. Increases AdaptabilityGreen supply chain analyses often lead to innovative processes and Green continuous improvements. Promotes AlignmentGreen supply chain management involves negotiating policies with Green suppliers and customers, which results in better alignment of business processes and principles.

Example Pepsi-Cola: Saved $44 million by switching from corrugated to reusable plastic shipping Cola: containers for one liter and 20 ounce bottles, conserving 196 million pounds of corrugated 20-ounce material. Page | 1

Green Supply Chain Management Characteristics Conventional SCM A conventional supply chain consists of all parties involved, directly or indirectly, in fulfilling a customer request keeping the total cost involved minimum. To minimise the cost and maximise overall value generated and satisfy customer needs.

Assignment No.-6 Green SCM Green supply chain refers to activities involved in fulfilling customer requirements in ecofriendly way. To minimise the cost s well as reduce the impact of supply chain activities on environment Manufacturer encourages suppliers to adopt green practices, environmental management systems, etc. and focus is on the material content and environmental practices of suppliers. High cost pressures and high prices. Low

Concept

Objectives

Supplier selection

Focus is on cost and quality of supply chain (responsiveness, efficiency etc.)

Cost pressure and prices Speed and flexibility

High cost pressures and low prices. High

2. Explain the benefits of green supply chain management?

When eco-friendly techniques are applied in supply chain management, it becomes green supply management. Actually green supply chain management recognizes the disproportionate environmental impact of supply chain processes in an organization. There are innumerable benefits of implementing green supply chain management techniques. Todays business world is full of competition and to create an impression on customers, the wholesalers, and manufacturers need to stand out among others. Being eco-friendly is one method to differentiate ourselves from the rivals. Green supply chain management improves agility and helps mitigate risks and speed innovations. It also reduces adaptability and often leads to innovative processes and continuous improvements in wholesale products offered by different manufacturers. Green supply chain management promotes Alignment and involves negotiating policies with suppliers and customers, which results in better alignment of business processes and principles. Some other benefits of Green SCM are stated as under: Economic benefits from increased efficiency: By reducing wastes, companies decrease handling expenses, fines, and even costly inputs. Supplier's savings may be passed along to buyer companies. Competitive advantage through innovation: Efficient production is enhanced through the use of cleaner technologies, process innovation, and waste reduction. Reduction in wastes equals dollars earned. Improved product quality: Supply chain partnerships help maintain relationships between buyers and suppliers leading to increased control over product quality.

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Green Supply Chain Management

Assignment No.-6

Consistent corporate environmental goals: In an era of multi-faceted, non-vertical manufacturing, companies include supplier outreach to address corporate environmental goals. Improved public image: Consumers, investors, and employees respond positively to companies with a reputation for good environmental performance. In nutshell, we can say that going Green is not just a better way to sell your services or goods, but it is committed to national and world crisis that we all face in the current generation and manufacturers, wholesalers, retailers and customers in a supply chain activities should play their role to make the world a better place for living.

3. Explain the role of green supply chain in manufacturing industry?

To create real environmental change, firms must develop innovations that consume fewer resources, produce less waste, and create less environmental harm. An environmentally beneficial innovation needs new combinations of knowledge about product characteristics, process and material characteristics, and technologies. The key to developing innovations that will be beneficial and profitable is an effective exchange of knowledge between the individual links within the supply chain. The supply chain within the manufacturing industries can be made green by reusing, remanufacturing, repairing and recycling. Green manufacturing aims to reduce the ecological burden by using appropriate material and technologies, while remanufacturing refers to an industrial process in which worn-out products are restored to like-new condition. Industries that apply remanufacturing typically include automobiles, electronics and tyres. Recycling, mainly driven by economic and regulatory factors, is performed to retrieve the material content of used and nonfunctioning products. Logistics represent up to 95% of total costs in recycling. Economically driven recycling finds its application in automobiles and the consumer electronics industry. Product recovery refers to the broad set of activities designed to reclaim value from a product at the end of its useful life. The purpose of repair is to return used products to working order. The quality of repaired products is generally lower than the quality of new products. The purpose of refurbishing is to bring used products up to a specified quality. Many researches have shown significant influence of suppliers on the greening of the manufacturing stage in supply chain. Manufacturers are liable for purchasing products and services that violate environmental activities. Currently there are few incentives for manufacturers to be concerned with the environmental procedure of their suppliers; moreover there is new research pertaining to the connection between suppliers environmental practices and competitive advantages in the supply chain. Manufacturers and suppliers in co-operation can jointly contribute to greening of manufacturing in following ways: Jointly develop cleaner technology with suppliers Conduct life cycle analysis in cooperation with suppliers Engage suppliers in design for environment (DFE) product innovation Coordinate minimization of environmental impact in the extended supply chain Reduce packaging waste at the customer/supplier interface Reuse/recycle materials in cooperation with the supplier Launch reuse initiatives (including buy backs and leasing) Reverse logistics Page | 3

Green Supply Chain Management

Assignment No.-6

Involvement of suppliers in manufacturers plant and manufacturers in suppliers plant helps to communicate better, build trust, plan effectively and concentrate on each individual process and part to achieve a desired environmental rating for the product. Example Xerox implemented a take-back program redefined customers expectations. estimates several hundred million dollar savings annually.

Xerox

70-90% (by weight) of machines reused. 144 million pounds diverted from landfills (2003)

4. What are the best practices for implementation of Green Supply Chain?
The following are the best practices for implementation of the Green Supply Chain:Align your Green Supply Chain goals with Business Goals:Creating a green supply chain that has little to do with your business will not help your company to achieve its business objectives. For example, if a company decides to use biodegradable packaging for its products that costs 25% more than traditional packaging, this goes against the business goals of reducing costs. A company should look at its overall goals and identify how a transition to a green supply chain can help achieve those goals. For example if a business wants to reduce its energy costs it should start by looking at the consumption to see if a reduction can be made by using more energy efficient and greener equipments. Use Green Supply Chain to improve Processes:Companies do not often change their business processes and it is this attitude allows inefficient processes to continue unabated causing unnecessary waste and pollution. Business that want to transition to a green supply chain should take the opportunity to review all their business processes to identify areas where adopting a greener outlook can actually improve their business. Companies should review each process along the supply chain to identify if a more environmentally sound approach will help cure the inefficiencies that occur. Many companies that have been through this exercise have identified processes Page | 4

Green Supply Chain Management

Assignment No.-6

where raw materials were wasted, resources underutilized and unnecessary energy used due to inefficient equipment. Green Suppliers and Material Refurbishment:Companies reviewing their business processes should look beyond their factory walls. When reviewing purchasing processes the aim of any company, looking to transition to a green supply chain, should find suppliers who have minimized their environmental impact without reducing the quality of their product or significantly raising costs, by purchasing products from green suppliers business can then begin their green supply chain before any material reaches their sites. At the opposite end of the supply chain business should look at their return process. Many businesses have not developed a successful refurbishment program for their product that have been returned or exchanged. By offering refurbished items businesses can increase purchasing option to their customers and widen their customer base, whilst improving the environmental impact of their products. There are many ways in which businesses can transition to a green supply chain; however it is important to realize that it is difficult to achieve results without strong focused leadership. Senior management has to lead the effort to move to a green supply chain and provide the resources for the transition. Many businesses have documented a intent or plan o implement a green supply chain, but without the necessary resources, both financial and manpower, nay impact will be minimal.

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