Description
The objective of documentation is about green supply chain management.
Environmental Management
Sustainable Environmental Development
Green Supply Chain Management
A Global Initiative
Green Supply Chain Management
1
Introduction
Green Supply Chain Management (GSCM) is defined as "the process of using environmentally friendly inputs and transforming these inputs into outputs that can be reclaimed and re-used at the end of their lifecycle thus, creating a sustainable supply chain”.
nmental Managemenet
Green Supply Chain Management
Supply Chain Management
Green supply chain management (GSCM) has emerged as a key approach for enterprises seeking to become environmentally sustainable. The notion of Green Supply Chain Management implies the insertion of environmental decisions within the traditional concept of Supply Chain Management. Green Supply Chain Management is integrating environment thinking into supply chain management, including product design, material sourcing and selection, manufacturing processes, delivery of the final product to the consumers, and endof-life management of the product after its useful life.
Green Supply Chain Management
2
GSCM addresses the four interrelated areas of the supply chain: upstream, downstream, within the organization, and logistics.
?
Upstream activities of the organization include evaluation criteria of suppliers' environmental performance.
?
Downstream,
usually comprises those activities related to the disposal and sale of
excess stock, including recovery and recycling opportunities.
?
Within the organization,
supply chain management might include involvement with
"design for the environment" with suppliers.
?
In logistics,
activities such as just in time or quality management intertwine with
environmental criteria. Green Supply Chain improves operations by employing an environmental solution:
?
Improves Agility: Green supply chain management help mitigate risks and speed
innovations.
?
Increases Adaptability: Green supply chain analysis often lead to innovative processes and continuous improvements
?
Promotes Alignment: Green supply chain management involves negotiating policies with suppliers and customers, which results in better alignment of business processes and principles
Green Supply Chain Management
3
Green SCM Principles
The product life cycle is the basis of Green SCM.
Source Reduction Recycle/Reuse Control Technology
Disposal
Green leverages environment in Supply Chain Value Creation. It recognizes the disproportionate environmental impact of supply chain processes in an organization. The environmental impacts of each LC stage are examined for reduction. Companies are starting to use Green SC as a strategic analysis tool. SCM the role of
Long Term
Strategic
Green Supply Chain Management
4
Short Term
Tactical
Pollution Prevention Hierarchy
The Pollution Prevention Hierarchy gauges the value of environmental programs. Organizations have started work in the development of Environmentally conscious practices throughout the supply chain: Green product designs, Green raw materials, Green process designs, use of Environmental Management Systems, environmentally friendly packaging, transportation and sustainable marketing communication. Companies are careful in partnering with suppliers and business partners who have similar concerns for sustainability. Their slogan is “cradle to cradle”.
Green SCM Best Practices
The Green Supply Chain Best Practices are:
? ? ? ?
Align Green SC goals with business goals Evaluate the supply chain as a single life cycle system Use Green SC analysis as a catalyst for innovation Focus on source reduction to reduce waste
Aligning the Green SC improvements with the Business goals creates strategic value. Green SCM is a driver for process improvements. In general, pollution and waste represent incomplete, ineffective, or inefficient use of raw material. Green supply chain analysis provides an opportunity to review processes, materials, and operational concepts. Many businesses have internal hurdles that must be overcome for any improvement:
? ? ?
Inconsistency in supply chain operations (by unit, region, product, etc.) Business viewed through existing operations—resistance to change Focus on short term goals and short term results
Green Supply Chain Management
5
?
Limited partnership experience—especially in the environmental office
Benefits Of Green SCM
Organisations can enjoy several benefits by greening their Supply chain, such as; Sustainability Of Resources - GSCM helps in proper and effective utilisation of available productive resources of organisations. Organisations will purchase 'green' input resources for environmental friendly production process to produce desired outputs. Lowered Costs/Increased Efficiency - Effective management of suppliers can reduce transaction costs and promote recycling and reuse of raw materials. Also, the production of waste and hazardous substances can be cut, preventing corporations from being fined as a result of violating environmental regulations. Consequently, the relevant handling and operational costs involved can be further reduced and the efficiency of resource utilisation can be improved. Product Differentiation And Competitive Advantage - It helps the organisation in positioning its product differently in customer's mind. Besides attracting new profitable customers for organisation, it will give competitive edge over competitors in market place. It will strengthen the brand image and reputation in market place. Adapting to Regulation and Reducing Risk - Organisations adopting GSCM practices can reduce the chances of being prosecuted for anti-environmental and unethical practices. Improved quality and products – Organizations will produce products which are technologically advanced and environment friendly. This will enhance the brand image and brand reputation in customers' mind. Besides above, there are following advantages that can be generated by GSCM:? ?
Positive impact on financial performance Effective management of Suppliers
Green Supply Chain Management
6
?
Dissemination of technology, advanced techniques, capital and knowledge among the chain partners.
? ? ?
Transparency of the supply chain Large investments and risks are shared among partners in the chain. Better control of product safety and quality
Success Stories
Texas Instruments: Saves $8 million each year by reducing its transit packaging budget for its semiconductor business through source reduction, recycling, and use of reusable packaging systems (20% annual savings). Pepsi-Cola: Saved $44 million by switching from corrugated to reusable plastic shipping containers for one liter and 20 ounce bottles, conserving 196 million pounds of corrugated material. Dow Corning: Saved $2.3 million by using reconditioned steel drums in 1995. Also conserved 7.8 million pounds of steel. Commonwealth Edison: Produced $50 million in financial benefits from managing materials and equipment with a life-cycle management approach. Textile, automobile and a host of other industries have benefited by employing Green SCM techniques thereby ensuring sustainable development.
Conclusion
GSCM is a relatively new green issue for the majority of Indian Corporations. Adding the "green" component to supply chain management involves addressing the influence and relationships of supply chain management to the natural environment. Green business practices that maintain and sustain good environmental quality are increasingly becoming a vital component of business organizations. Successful implementation requires raising the profile and perceived value of environmental projects:
Green Supply Chain Management
7
? ? ?
Articulate project value in terms of business value Create the project to work within the organizational culture Use effective tools (e.g., GreenSCOR) to enable project execution
Green initiatives, if properly managed, can enable organizations to act as a responsible corporate/citizens and also develop higher profitability and competitive advantage.
Green Supply Chain Management
8
References
Reports:
? Supply Chain World Conference Report – April 05, 2005 ? Environmental Accounting Project – January, 2007 ? Journal Of Cleaner Production (Science Direct) – 2007 ? Journal Of Sustainable Development (Textile Enterprises) – March, 2009
Web References:
?http://www.indianmba.com/greenscm.html ?http://www.thegreensupplychain.com/news/10-06-22-1.php?cid=3543 ?http://www.pprc.org/pubs/grnchain/casestud.cfm ?http://www.tech.purdue.edu/it/GreenSupplyChainManagement.cfm
Green Supply Chain Management
9
doc_792522935.docx
The objective of documentation is about green supply chain management.
Environmental Management
Sustainable Environmental Development
Green Supply Chain Management
A Global Initiative
Green Supply Chain Management
1
Introduction
Green Supply Chain Management (GSCM) is defined as "the process of using environmentally friendly inputs and transforming these inputs into outputs that can be reclaimed and re-used at the end of their lifecycle thus, creating a sustainable supply chain”.
nmental Managemenet
Green Supply Chain Management
Supply Chain Management
Green supply chain management (GSCM) has emerged as a key approach for enterprises seeking to become environmentally sustainable. The notion of Green Supply Chain Management implies the insertion of environmental decisions within the traditional concept of Supply Chain Management. Green Supply Chain Management is integrating environment thinking into supply chain management, including product design, material sourcing and selection, manufacturing processes, delivery of the final product to the consumers, and endof-life management of the product after its useful life.
Green Supply Chain Management
2
GSCM addresses the four interrelated areas of the supply chain: upstream, downstream, within the organization, and logistics.
?
Upstream activities of the organization include evaluation criteria of suppliers' environmental performance.
?
Downstream,
usually comprises those activities related to the disposal and sale of
excess stock, including recovery and recycling opportunities.
?
Within the organization,
supply chain management might include involvement with
"design for the environment" with suppliers.
?
In logistics,
activities such as just in time or quality management intertwine with
environmental criteria. Green Supply Chain improves operations by employing an environmental solution:
?
Improves Agility: Green supply chain management help mitigate risks and speed
innovations.
?
Increases Adaptability: Green supply chain analysis often lead to innovative processes and continuous improvements
?
Promotes Alignment: Green supply chain management involves negotiating policies with suppliers and customers, which results in better alignment of business processes and principles
Green Supply Chain Management
3
Green SCM Principles
The product life cycle is the basis of Green SCM.
Source Reduction Recycle/Reuse Control Technology
Disposal
Green leverages environment in Supply Chain Value Creation. It recognizes the disproportionate environmental impact of supply chain processes in an organization. The environmental impacts of each LC stage are examined for reduction. Companies are starting to use Green SC as a strategic analysis tool. SCM the role of
Long Term
Strategic
Green Supply Chain Management
4
Short Term
Tactical
Pollution Prevention Hierarchy
The Pollution Prevention Hierarchy gauges the value of environmental programs. Organizations have started work in the development of Environmentally conscious practices throughout the supply chain: Green product designs, Green raw materials, Green process designs, use of Environmental Management Systems, environmentally friendly packaging, transportation and sustainable marketing communication. Companies are careful in partnering with suppliers and business partners who have similar concerns for sustainability. Their slogan is “cradle to cradle”.
Green SCM Best Practices
The Green Supply Chain Best Practices are:
? ? ? ?
Align Green SC goals with business goals Evaluate the supply chain as a single life cycle system Use Green SC analysis as a catalyst for innovation Focus on source reduction to reduce waste
Aligning the Green SC improvements with the Business goals creates strategic value. Green SCM is a driver for process improvements. In general, pollution and waste represent incomplete, ineffective, or inefficient use of raw material. Green supply chain analysis provides an opportunity to review processes, materials, and operational concepts. Many businesses have internal hurdles that must be overcome for any improvement:
? ? ?
Inconsistency in supply chain operations (by unit, region, product, etc.) Business viewed through existing operations—resistance to change Focus on short term goals and short term results
Green Supply Chain Management
5
?
Limited partnership experience—especially in the environmental office
Benefits Of Green SCM
Organisations can enjoy several benefits by greening their Supply chain, such as; Sustainability Of Resources - GSCM helps in proper and effective utilisation of available productive resources of organisations. Organisations will purchase 'green' input resources for environmental friendly production process to produce desired outputs. Lowered Costs/Increased Efficiency - Effective management of suppliers can reduce transaction costs and promote recycling and reuse of raw materials. Also, the production of waste and hazardous substances can be cut, preventing corporations from being fined as a result of violating environmental regulations. Consequently, the relevant handling and operational costs involved can be further reduced and the efficiency of resource utilisation can be improved. Product Differentiation And Competitive Advantage - It helps the organisation in positioning its product differently in customer's mind. Besides attracting new profitable customers for organisation, it will give competitive edge over competitors in market place. It will strengthen the brand image and reputation in market place. Adapting to Regulation and Reducing Risk - Organisations adopting GSCM practices can reduce the chances of being prosecuted for anti-environmental and unethical practices. Improved quality and products – Organizations will produce products which are technologically advanced and environment friendly. This will enhance the brand image and brand reputation in customers' mind. Besides above, there are following advantages that can be generated by GSCM:? ?
Positive impact on financial performance Effective management of Suppliers
Green Supply Chain Management
6
?
Dissemination of technology, advanced techniques, capital and knowledge among the chain partners.
? ? ?
Transparency of the supply chain Large investments and risks are shared among partners in the chain. Better control of product safety and quality
Success Stories
Texas Instruments: Saves $8 million each year by reducing its transit packaging budget for its semiconductor business through source reduction, recycling, and use of reusable packaging systems (20% annual savings). Pepsi-Cola: Saved $44 million by switching from corrugated to reusable plastic shipping containers for one liter and 20 ounce bottles, conserving 196 million pounds of corrugated material. Dow Corning: Saved $2.3 million by using reconditioned steel drums in 1995. Also conserved 7.8 million pounds of steel. Commonwealth Edison: Produced $50 million in financial benefits from managing materials and equipment with a life-cycle management approach. Textile, automobile and a host of other industries have benefited by employing Green SCM techniques thereby ensuring sustainable development.
Conclusion
GSCM is a relatively new green issue for the majority of Indian Corporations. Adding the "green" component to supply chain management involves addressing the influence and relationships of supply chain management to the natural environment. Green business practices that maintain and sustain good environmental quality are increasingly becoming a vital component of business organizations. Successful implementation requires raising the profile and perceived value of environmental projects:
Green Supply Chain Management
7
? ? ?
Articulate project value in terms of business value Create the project to work within the organizational culture Use effective tools (e.g., GreenSCOR) to enable project execution
Green initiatives, if properly managed, can enable organizations to act as a responsible corporate/citizens and also develop higher profitability and competitive advantage.
Green Supply Chain Management
8
References
Reports:
? Supply Chain World Conference Report – April 05, 2005 ? Environmental Accounting Project – January, 2007 ? Journal Of Cleaner Production (Science Direct) – 2007 ? Journal Of Sustainable Development (Textile Enterprises) – March, 2009
Web References:
?http://www.indianmba.com/greenscm.html ?http://www.thegreensupplychain.com/news/10-06-22-1.php?cid=3543 ?http://www.pprc.org/pubs/grnchain/casestud.cfm ?http://www.tech.purdue.edu/it/GreenSupplyChainManagement.cfm
Green Supply Chain Management
9
doc_792522935.docx