Green supply chain is no more a generous initiative for some of the top corporate houses. More than just being a motto of corporate social responsibility of reducing harmful impacts of industrial activities it has become a means of boosting up business performance for sustaining the environment as well as the companies.
One of the most important positive changes that have come into being in the collective consciousness of people in the 21st century is the re-awakening of environmental concerns. Riding atop this surge, comes awareness into the ecological hazards and the ramifications of it. While conservation of environment is the onus of every single individual on the surface on the planet, it is the industrial sector and especially the supply chain industry that must rise to the occasion. For a very long period of time, manufacturing industry has been indicted of leaving maximum carbon footprints. It is now their responsibility to bring it down and at the same time strike a balance between burgeoning demand and consequent, seamless supply.
These are the days of cutting-edge competitiveness when supply chain models have become multi-tier with the multinational giants depending on layers of suppliers in order to get their work done. While these MNCs themselves try to comply with the conservational norms, it becomes extremely difficult for them to keep a tab on their lower-rung suppliers and stakeholders and monitor how they are adhering themselves to the conservational protocols as the network is far too complex and far too spread out. Ironically, the stakeholders are most of the times small entities who do not harbor proper knowledge and guidance pertaining to this grave concern and they breach the environmental protocols in order to meet the deadlines set by their partners in the higher rungs. Thus it is not only the need of the hour to set up a green supply chain but also to give it a form of green supply chain network where the lower-rung stakeholders are given proper guidance by the bigger companies and are monitored and taken care by them and are given incentives for bringing about change.
The Idea Behind
Green supply chain refers to all the techniques, methods, ideas that can be harnessed in order to embed sustainability goals into the entire gamut off supply chain. While the end goal of this venture is to reduce pollution and waste, to encourage usage of eco-friendly products and services and better operational and end-of-life product management, this can prove to be extremely beneficial in terms of profitability. Not only does the environmental metrics of companies give a positive thrust to their images but also with the help of low-cost, reusable, recyclable materials and end-products, the overhead expenses can also be brought down that can result in a staunch customer loyalty and higher profit margins. Thus by integrating sustainable models in supply chain and by judicious selection of design, operation, distribution, suppliers, raw materials and reverse logistics modes, tremendous amount of value is entrusted upon supply chain industry and the whole idea behind it can fizzle out if the processes are not streamlined or supported by each and every player in the game. Environmental principles are applied across the entire order cycle including assemblage, procurement of raw materials, re-engineering tools to suit the requisites etcetera. Moreover, in sync with the idea of reducing fossil fuel depletion, transportation systems are re-modeled to accommodate bio-fuels.
Green supply chain models have come into existence especially due to the intervention and regulations imposed by the governments. Numerous trade laws have been passed and there are nations where stringent vigilance is kept so as to keep environmental degradation in check. The restrictive measures can go to the extent of banning the production of products that pose threat to the environment in the very manufacturing level. Not only is it the government, but also the customers have also woken up to the fact that harmful impacts on ecology can result in extinction. With the barrage of media coverage, institutional stewardship and mass campaigning, environmental concerns have been indoctrinated into the gentry in such a way that any company that does not follow the norms can face severe brickbats in terms of reputation. It is exactly this pressure from the regulatory bodies and end-users that propelled the supply chain leaders mull over the possibility of revamping the domain end-to-end. Resultantly, they have encouraged their employees to adapt themselves to green practices for not only environmental but their own sustainable business model. This awareness percolates to the chain of suppliers constituting the green supply chain network. It must also be noted here that competitiveness in upholding an organizational image as an envoy of change is also a key factor in implementing the radical change in the system. With the society’s increasing awareness of the impacts of industrial activities, green supply chain and resource planning have come to see the light of the day.
Green Purchasing, Green Management
One of the most important factors embedded deeply in the environmental principles of supply chain is green purchasing. With the noble objective of reducing waste and sensibly utilizing the existing resources to their hilt, green purchasing delves into procurement of raw materials which are reusable and recyclable. Consequently, at the end of the products’ life cycle, with an astute application of end-of-life management the components of the defunct products are leveraged as raw materials. Not only does it help operation performance getting skyrocketed but also curtails the procurement and manufacturing cost and thereby giving impetus to the profitability and productivity.
Coupled with the objectives of green purchasing, green management of manufacturing and marketing also boost efficiency, improve environmental compliance and help in carrying out greater social responsibilities. This can be achieved through a careful process of planning, packaging, producing and promoting products in the most eco-friendly ways and properties possible.
Sensibility in Transportation
The distribution phase of the supply chain is a major adjunct in the whole process. Once the manufacturing is done using green resources, quality is ensured and cost is mitigated, lean logistical models in transportation and warehousing become decisive aspects of cost-controlling and in the goal of strictly complying with the environmental principles. Usage of bio-fuels render tremendous amount of help in preserving biomass and in bringing down carbon emission. Transportation management systems are extremely helpful tools that stop conveyances running extra-mile and regulating the last-mile delivery so that maximum efficacy is extracted with minimum errors and cost.
When it comes to warehousing, it is an oft-neglected cog in the wheel of green logistics. Most often do we get to see how the errors and delays in the warehouses driven by hazardous documentation can result in wastage and non-compliance to ecological norms. The solution lies in implementing a robust warehouse management system that automates the distribution centres and gets rid of the piles of paperwork. With the help of an efficient pick-path management, inventory management and RFID/barcode scanning systems, warehouses can eliminate the extra cost that gets entailed and do their own bit by contributing to the sustainability goals.
Reverse logistics and after-sale services are those functions that can be tapped in very intelligently in order to promote customer association and to procure raw materials at the end of the products’ life cycles. Instead of simply doing away with the products, they can be brought back, can be re-used and value can be added to scraps if reverse logistics is a strong contention of the logistical chain.
Green supply chain is not only a generous initiative undertaken by companies that are sensibly awake or are willing to undergo an image overhaul as a part of marketing tactics. The respect that the companies earn and the cost efficiency that they strike have become so imperative in this modern competence-driven market that it is a mission to be undertaken by all and sundry. The question is of sustenance, of nature, of economy, of the industry and eventually and inevitably of the companies themselves. They must yoke the green initiatives with their operational models, do whatsoever is needed to attain that and redo whichever silo they are lagging in because unless there is sustainability within and without, what purpose does ideas serve?