Green supply chain management (GSCM) has emerged as an essential strategy for minimising firms’ environmental effects and encouraging sustainable business practices in today’s complex global business environment.
Over the years, businesses and organisations are embracing sustainable activities and outputs as clients become more aware of environmental dilemmas.
This article explores what green supply management is, why it is important, and the green initiatives firms can undertake to go green.
“Green supply chain management could therefore be defined as the process of incorporating environmental factors into the broad supply chain management, which involves product design, acquisition of raw material, manufacturing, and transportation.”
It includes implementing strategies and measures that decrease the negative effects on the environment and may increase supply chain performance. While the traditional supply chain management focuses mostly on minimising the cost, green SCM prioritises on minimising waste generation, recycling, and using resources efficiently throughout the supply chain network.
The importance of green supply management goes beyond strict adherence to environmental legal requirements; it is a strategic enabler of organisational improvement in aspects like reputation, efficiency, and sustainable performance.
Green supply management enables organisations to cut down on pollution of the environment, wastage of resources and generally enabling the firms to tread lightly on earth.
Besides, green SCM can bring long-term economic returns for the companies since they only need to utilise minimum resources of raw materials and energy and also enjoy customers’ preference due to their focus on the company’s environmentally friendly activities.
With an aim of implementing green supply chain management practices, companies use strategies that enhance the call for sustainability at every step of the supply chain system. Here are some of the most common practices:
Sustainable sourcing requires collaborating with suppliers who use renewable resources for instance. By selecting these suppliers, businesses guarantee that material inputs are procured with the lowest environmental effect. Such an approach throws much light on green supply management to minimise wastage and costs.
Organisation and integrated supply chain management of reusable and recyclable products plays a focal role for green SCM, where preference is given to certain products which can be recycled or reused. Perhaps, accomplishing this process plays a role in learning how to minimise wastage along the supply chain considerably. The implementation of this practice enhances total sustainability performance among the firms adopting this practice.
One of the most important components of green supply chains entails using high energy efficiency equipment and methods. Companies minimise operational expenses and output carbon emissions by minimising energy consumption. This commitment to efficiency of energy is in synergy with the environmental collaboration agenda.
Efficient waste management is useful for the greening of the supply chain, by minimising waste and recycling products. Firms with effective waste management policies have low effects on the environment. This practice serves the overall mesh of green supply management goals and objectives.
Reverse logistics has a great strategic importance in green SCM since it enables companies to retrieve product returns from consumers for appropriate disposal or reuse. This also ensures that at the end of the lifecycle of products more of it can be handled in a sustainable manner. Reverse logistics is part of the green supply management at the organisational level.
IKEA: IKEA has a good reputation for being environmentally conscious as the company uses material from environmentally friendly suppliers and generates energy through renewable means. In its relationship with suppliers, IKEA is trying to develop eco-friendly furniture and reduce its impact on the environment.
Walmart: Walmart is also a good example of a company who has adopted numerous green supply chain strategies, where it has focused on energy efficiency and waste minimisation as well as sustainable sourcing. Its work among its suppliers sets out to cut emissions and make all its operations more sustainable as an essential aspect of its plan.
Patagonia: Patagonia works with environmentally friendly fabrics to make their clothing, and they also support recycling programmes. Some of the firm’s green SCM activities are an open partnership with suppliers to reduce emission and make the value chain sustainable.
Apple: Seeing that green supply management involves sustainable procurement and green supply chain operations, Apple has embraced green supply chain by going green in production. Apple is interested in making its supply chain carbon-neutral by 2030 by engaging its manufacturing partners in environmental collaboration.
For organisations to have a green supply chain, there is a need to have a long-term vision and commitment to improve in sustainable activities. Here are some steps companies can take to achieve a green supply chain:
Assess Environmental Impact: The first step involves undertaking an evaluation of the existing environmental impact of the supply chain management so as to establish improvement areas.
Set Sustainability Goals: These goals should be tangible and used by companies to better understand their supply chain sustainability performance.
Engage Stakeholders: Supplier management and stakeholder engagement is a key component in creating mutual and shared vision of sustainability development.
Invest in Technology: Green SCM can also use technology in its implementation such as the use of Artificial Intelligence in logistics or use of blockchain in providing transparency.
Monitor and Measure Performance: Sustainability review and audit must be consistent, and its performance needs to be measured constantly to identify changes to be made.
Understanding green supply chain management is facilitating a vital change towards sustainability, since it enables organisations to reduce their environmental footprint and improve their sustainability performance. Ways such as reduction of waste, material sourcing and environmental collaboration make it possible to transform a business into a green future. More organisations are implementing green SCM today, therefore sustainable practices are becoming inevitable. For more information on these fundamental skills and to advance your career, check out the Logistics and Supply Change Management Courses offered by the British Academy of Training and Development.
What is the aim of green supply chain management?
Green supply chain management is the management of the supply chain to integrate and minimise the environmental impact of its activities in the products life cycle.
What are the benefits of green supply chain management?
There are several advantages of green supply management, which includes environmental improvement, cost advantages, improved organisational image, compliance to the law and mitigation of risks.
What are the green initiatives in supply chain?
Typical contemporary green supply chain initiatives consist of sustainable procurement, energy utilisation, waste management, recycling, and environmental collaboration among suppliers and other key chain members.
What is green supply chain theory?
The green supply chain theory is the theoretical tool that underlies and enables the integration of sustainable supply chain management practices, with an end view to minimise resource usage, waste and emissions.