Applying Green Supply Chain Management on Firms
One of the most important business discoveries in the twenty-first century is green supply chain management. This involves green business, the greening of the environment, and a reshuffle of the entire manufacturing of products in order to protect the environment and the important ecosystem.
Producing a product is exploitation of the environment. This is a harsh reality that we have to accept. And it’s time we give credit to businesses and conscience-stricken businessmen for making the step of caring for the environment.
Raw material for a product comes from the environment. The process of extracting raw materials requires a complicated process using technological means, and sometimes with the use of chemical and hazardous substances.
Production involves processing the extracted raw material to create a product. This stage alone produces dioxin, the most poisonous substance, released to the atmosphere that will be inhaled by workers and their families, and the community population where the factory is located.
Green supply chain was introduce, taking into consideration the initial stages – the planning and design, production and manufacturing, transport and delivery, until the disposal of the product. Recycling can be one of the methods of disposal, but Annie Leonard (The Story of Stuff Project) says recycling is not enough: it does not address the core element of the problem.
Recycling addresses only one percent of the waste products; while 99 percent of the products become trash and are fed to incinerators and landfills. This is again one of the most dangerous parts.
The problem of supply chain and environmental abuse has become complicated that a simple solution is not enough.
The environment must be a primary concern of businesses and organizations. Green supply chain and green supply chain management are significant in reducing environmental abuse.
Literature on green environment and green engineering tells us that global warming and climate change are two environmental phenomena that threaten the Earth’s existence.
Pollutants are everywhere – dioxins, hydrocarbons, photochemical oxidants, and many other gas toxins are found in manufacturing plants and industries, power plants, and vehicles. The world’s atmosphere is a ticking time bomb. (Health and Safety Executive)
Firms of the twenty-first century have realized that the environment has to be considered while the process of production is still in the planning stage. The environment is top priority. Green supply chain will make the business prosper and succeed.
There were various triggers of change that required action from organizations, e.g. the industrial revolution, the rise of retailers and multinationals, consumerism, and globalization. All these focused on production of a multitude of products threatening the environment.
Globalization has many effects in the daily activities of people and organizations. Standardization and adaptation are two outcomes wherein customers can have the choice of countless products. Markets are integrated and widened. The result is a unified spectrum of consumerism, multiple products invading supermarkets and retailers that are competing for the best.
The world needs to be informed that the time to create a green environment to prevent environmental catastrophe is becoming short. The deterioration of our planet’s ecosystem and atmosphere cannot be ignored. Climate change and global warming are becoming worse.
Our children deserve a clean atmosphere and fresh air to breath. But what do they get?
Industries are expanding while new ones are born. Nation states are working hard in the name of development, ignoring sustainability, while demand for fossil fuel and construction materials continues to threaten the environment. This excessive demand will deteriorate the ecology.
The world’s program of action has not improved these past decades because we still depend on fossil fuel; specifically, eighty percent of energy comes from fossil fuels. There will come a time that supply of oil will come to its peak. There must be a way to substitute fossil fuels and coal, an energy source that is not harmful to the ozone layer and the environment as a whole.
Difference between Traditional and Green Supply Chain
The concept of green supply chain is a novel idea. First, it was used to deal with the coming in of products manufactured without careful planning. Extracting raw material requires green engineering and skillful management. This was the beginning of green supply chain management.
Supply chain is a primary source of products. Core materials cannot become real products without proper implementation of supply chain management. But supply chain must be handled in a systematic way.
In the traditional sense, quality means product durability, but green business means quality that should not threaten the environment. Quality also means good business. It means simple products that will return to manufacturer for recycle to avoid waste. But as stated in the introduction, recycling is not enough.
The term supply chain first referred to electricity. It connotes purchasing, manufacturing, sales and distribution. Supply chain management is about integrated business functions that focus on transfer of materials from manufacturer to end-users. (Fortes 2)
The entire supply chain refers to exploitation of the natural resources because it involves extracting raw material from the natural environment in order to create a product.
In the strictest sense, supply chain involves destroying the natural environment. The aim of green supply chain is to eliminate this destruction. Supply chain management is the vehicle for this elimination.
This is the reason why green engineering should be applied. And green engineering involves adopting measures to restore the environment to its near-original state.
The Need to Apply Green Supply Chain Management
The deterioration of the environment has become severe and alarming that the world must unite to act. The ecosystem – the forests, fisheries, wetland and fresh water resources, are about to lose significance to human existence. (Health and Safety Executive)
In business circles, global warming and climate change have been of much concern. It should be from this sector – business and industries – that the environment must take its prime importance. Businesses and organizations should focus on sustainable and green environment. (Environmental Protection UK)
Green supply chain emphasizes sustainable development which means meeting the needs of the present and future generations (Arlbjorn et al. 328).
The Wipro website defines green supply chain in relation to corporate social responsibility, adding terms such as brand image and government regulations to clearly define green supply chain. (Wipro website)
Green supply chain emphasizes that the product is produced with less material and will not create waste (Wang and Gupta xv). The 3Rs (recycle-reuse-reduce) is an important feature of green supply chain.
Green supply chain management starts from planning, then to extracting of raw material, manufacturing and transport of the product. Disposing of the product after constant use is covered in the planning stage.
Value Added Supply Chains
In the 1980s, a group of professional consultants concerned with the deteriorating condition of the environment discussed issues on supply chain management and how it can be tapped to help in protecting the environment.
Green supply chain management (GrSCM) became a popular phrase for corporate governance and corporate social responsibility (CSR). Its importance to business and the environment was formulated and laid open (Oliver and Webber, 1982 qtd. in Wang and Gupta 4).
Adding value to supply chain is one of its benefits. Historically, Porter (1985) was the first to introduce the significance of adding value to supply chain, or better known as value chain. This refers to adding value to products through altering some processes and adding primary and support activities in production and processing of products.
Green SCM motivates supply chain actors to produce valuable products with less material to make and minimize surplus inventory.
Supply chain management refers to businesses and people who are part in the making of a product. SCM is management of the process of extracting raw materials to produce a product and putting the activities in proper perspectives so as to minimize environmental abuse.
In 1999, the Global Supply Chain Forum, a group of environmentally-concerned businessmen and leaders, who wanted to put more weight and meaning to the concept of SCM, provided a definition to supply chain management.
The Global Supply Chain Forum defined supply chain management as the ‘integration of procedures from suppliers to consumers to provide products, services and information in order to add the values of the customers and the related roles’. Supply chain management is concerned with products, suppliers, and raw materials. (Wang and Gupta 4)
Businesses focus on environmentally friendly methods and processes in supply chains. Measures are addressed to sound environmental protection and care. Value added chains are added with technological methods emphasizing environmental protection. Green Supply Chain Management is born.
Green SCM promotes green logistics and also handles other seemingly unrelated topics like health and safety of workers in the workplace, benefits of workers, green engineering, and much more.
Closer relationship between companies and suppliers is encouraged through coordinated efforts and effective communication. The importance of planning the strategies with suppliers is an important stage. Value added chain is a significant milestone in this process involving all partners and stakeholders in the making of product. (Wisner and Stanley 598)
Applying Green Business
Green business is a part of GrSCM. Firms should implement this be a part of management processes. There are various benefits that organizations can derive in applying green business.
It discourages discrimination or exclusion because of gender, race and age, and promotes social justice. The Green Business Plan Guide provides positive steps for environment preservation and enhancement of workers’ welfare in an organization. (The Green Business Plan Guide)
Implementation of GrSCM in an organization can lead to the following:
All processes in the supply chain are geared for environmental improvement;
Partners in the supply chain take an active role in assuming the different functions and activities to design and produce environmentally friendly products.
The enhancement of information technology as an active tool for the storing of data and information about processes of environment preservation and protection.
The removal of traditional methods supply chain that can lead to environmental degradation;
Promoting CSR as part of the process of GrSCM. (Emmett and Sood 10)
The philosophy and principle behind Green Supply Chain Management is that partners work hard to protect the environment in order to make every step of business successful. If green supply chain is effective, business becomes effective and successful. A green environment provides a backdrop for a successful business. And the world becomes a better place for people and organizations.
There are processes and steps in GrSCM that put the environment into its right place. There is an integration of environmental programs and practices with those of the traditional supply chain management.
It meant that product planning and design, material procurement and sourcing, including manufacturing and transporting, are integrated with environmental planning and applications. Another important aspect is the emphasis on the end-of-life management of the product. Over-supply of products is controlled because this can lead to waste.
Waste disposal is one of the carefully planned steps in green SCM. According to Annie Leonard in The Story of Stuff video, waste disposal through incineration aggravates the meteorological condition because it produces dioxins. Dioxins harm everything and everyone on planet Earth.
The product life cycle is the basis of green supply chain management. Designing the supply chain concurrently with the product is a supply chain management best practice.
In applying new methods to the product life cycle, emphasis is on important aspects of design, production process and the organizational management. Sustainable supply chain management can add features to green productivity. Green productivity promotes quality management.
The targets of green supply chain are waste materials, wasted energy and resources. Source reduction includes the 3Rs – recycle, reduce, reuse. This can drive business value.
Recycling is good business but Annie Leonard said that recycling is not enough. Recycling does not address the core of the problem. Only one percent can be recycled while 99 percent of the products become trash within six months. (The Story of Stuff Project)
Green supply chain best practices include: green supply chain goals and business goals are aligned; supply chain corresponds to a single life cycle system; green supply chain used as a catalyst for change; and reduce material components of a product to reduce waste.
We have discussed in this essay the environmental situation in businesses and organizations and the reality that we should apply Green Supply Chain Management. GrSCM is a necessity in this age of intense globalization.
Arlbjorn, Jan Stentoft et al. Supply Chain Management: Sources for Competitive Advantages. UK: Academica, 2010. Print.
Emmett, Stuart and Sood, Vivek. Green Supply Chains: An Action Manifesto. United Kingdom: John Wiley & Sons Ltd., 2010. Print.
Environmental Protection UK. Publications. 2010. 6 November 2011. Web.
Fortes, Jamal. Green Supply Chain Management: A Literature Review. Otago Management Graduate Review, vol. 7, 2009. Web.
Health and Safety Executive. The Dangerous Substances and Explosive Atmospheres Regulations 2002. Web.
The Green Business Guide Plan. Green for all CAP Green Business Content. 7 November 2011. Web.
The Story of Stuff Project. Video Presentation by Annie Leonard. 7 October 2011. Web.
Wang, Hsiao-Fan and Gupta, Surendra. Green Supply Chain Management: Product Life Cycle Approach. United States of America: The McGraw-Hill Companies, Inc., 2011. Print.
Wipro. Greening a Supply Chain. 2009. 7 November 2011. Web.
Wisner, Joel and Stanley, Linda. Process Management: Creating Value along the Supply Chain. United States of America and Canada: Thomson South-Western, 2008. Print.