GREEN
SUPPLY CHAIN
GREEN SUPPLY CHAINS
MOVING FROM GSCM TO “G”SCM…
• Global Supply Chain Management
• (GSCM)
• “Green” Supply Chain Management
• (“G”SCM)
… WITH A “SUSTAINABILITY” ANGLE TO
GSCM
“Green Supply Management is integrating
environment thinking into supply chain management,
including product design, material sourcing and
selection, manufacturing process, delivery of the
final product to the consumers, and end-of-life
management of the product after its useful life.”
(Srivastara, 2007)
OBJECTIVES OF “G”SCM
• “G”SCM mainly focuses on making the business orientation eco-
friendly
• To achieve competitive advantage and high performance through
“G”SCM practices
• To integrate the green supply chain into the corporate policies
and strategies for smooth operation
• To make difference in its approach
• To show how important it is to conserve environment and sustain
our natural resources and show to what extent is our business
activities dependant on environment
ADVANTAGES OF BEING “GREEN”
• Wal-Mart anticipates its goal of a 5 percent reduction in
packaging by 2013 will produce $3.4 billion in direct
savings and roughly $11 billion in savings across
supply chain. the
• Johnson & Johnson’s energy efficiency program resulted
in an estimated $30 million in annualized savings over
the 10 years prior to the company’s 2006 sustainability
report.
• Nestlé, through a combination of packaging
source
reduction, re-use, recycling, and energy recovery, saved
$510 million, worldwide, between 1991 and 2006.
MATHEMATICS OF “G”SCM
Green Procurement
+
Green
Manufacturing/Materials
Management
+
Green Distribution/Marketing
+
Reverse Logistics
-----------------------------------------
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Green Supply Chain
Management
SCOPE AND RELEVANCY OF “G”SCM
• Scope:
• Companies effort to incorporate GSCM leads to reduction of wastage.
• Reduction of pollution
• Sustainability of natural resources.
• Better environment and world to live in.
• Opportunity to slowly orient to “Green” SCM should be the focus of
the companies to world class standards.
• Relevancy:
• Eliminate wastes.
• Optimum utilization of resources.
• Sustaining environment.
• Competitive advantage.
• Impress customers.
• To make difference.
• Reverse logistics.
• Create social responsibility.
APPROACHES TO “G”SCM
• Reactive approach by complying with
domestic legislation
• Proactive approach by pre-empting new
legislation
• Value-seeking approach
“GREEN” SUPPLY CHAINS
PRACTICES
CONCEPTS: “G”SCM IN
DISTRIBUTION ACTIVITIES
“G”SCM practices involve integrating environmental
thinking into distribution practices
• “G”SCM practices include:
• Energy efficiency
• Reduction of GHG air emissions
• Water conservation or processing
• Waste reduction
• Reduced packaging/increased use of bio-
degradable packaging
• Product and packaging recycling/re-use
• Green procurement practices
“G”SCM DRIVERS ACROSS
SUPPLY CHAINS
Costs coupled with the need for competitiveness advantages
are the main “G”SCM drivers across supply chains
• Energy costs can
amount to 55% of air
transportation costs and
29% of truck
transportation costs
• Logistics and
transportation firms
value GSCM as a
service differentiator in a
highly commoditized
market
LEADING SECTORS ON THE USE
OF “G”SCM
PRACTICES
Logistics and transportation (L&T) companies are leading the use of GSCM
practices compared with manufacturing and retail firms
• Logistics and
transportation service
providers own more
transportation assets
than manufacturing and
retail firms
• Retail chains GSCM
opportunities are more
complex due to multiple
store locations and
franchise business
models
SOME FACTS ABOUT THE
USE OF “G”SCM PRACTICES
• Firm size may no longer impact whether “G”SCM activities are pursued
• Retail chains “G”SCM mandates encourage suppliers to become greener
• Initial retail chains “G”SCM practices are within organizations
• Second generation “G”SCM practices include “G”SCM mandates with suppliers at
both services (transportation and logistics) and manufacturers
• “G”SCM practices translate into reduced energy consumption and waste in distribution,
decreased GHG emissions, and less packaging
• Retail chains have an opportunity to have access to carbon credits and decrease
harmful air emissions and waste
• Transportation services have an opportunity to reduce their global industry carbon emission
footprint.
• Emissions differ widely by transportation mode
