Green Supply Chain

Green Supply Chain

Abstract:

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 organizations.

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 aggregate.

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 Management (GSCM) = Green purchasing + Green Manufacturing/Material Management + Green Distribution/Marketing + Reverse Logistics

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.

Advance SupportGreen supply chain management includes negotiating statements along with suppliers and customers, which results in better advance support of enterprise processes and statementsGreen 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.

Create innovation towards waste reductionMeasure Opportunity cost of wasteIdentifyWaste Stream

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 suppliers.

Manufacturing activities include green production causing no pollution and wastages.

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 place.

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 PurchasingGreen 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 lifespan.

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 image.

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 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.

Stage 4: This is the last stage which covers ease in disposable, recycling, reuse or re-manufacturing. 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.

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 controlLogistic 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 CO2 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 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 relationships.

Example: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 consumer pressures, the firms have started the cradle-to-grave, that is, life cycle approach to its products.

Green MarketingGreen 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 constraints.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 gone. 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. 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.

EIGHT PS OF GREEN MARKETING MIX

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.

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 rolein the global supply chain asfirms 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 state2. 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 product4. Resell when a returned product may be sold again as new5. Recycle when a product is reduced to its basic elements, which are reused also referred to as asset recovery.

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. 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.

Conclusion: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 pollutionThe 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, and arrange for return of the product for servicing through customers, if there is any fault in the product.

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