Applying Green Principles to Supply Chain Management

Green Supply Chain Management has been rising in consciousness with the environment within the last couple of decades. Governments have released campaigns to market this issue to individuals. A number of organizations responded to this by applying green principles to their organization, for instance using environmental friendly raw material, decreasing the usage of petroleum power, and recycling papers for packaging. The green principles have been broadened to numerous departments within organizations, such as the supply chain. Green Supply Chain Management (GSCM) has been emerging within the last few years. This concept covers every single stage in manufacturing from the first to the final stage of the product life cycle.

A definition of Green Supply Chain Management is integrating environmental reasoning directly into logistics or supply chain management, which includes merchandise design, material sourcing as well as selection, production techniques, delivery of the final merchandise to the consumers, and end-of-life management with the merchandise after its beneficial life. GSCM helps reduced environmental load for the atmosphere, lower price prices for the supplier, reduce price for the producer, reduce expense of ownership for consumer, and a smaller amount consumption of resources for modern society. Supply Chain Consultants

Factors of why businesses should adopt the green thinking: target marketing, sustainability of resources, reduced costs/increased performance, merchandise differentiation and competitive advantage, aggressive and deliver chain pressures, adapting to regulation and reducing risk, brand reputation, return on investment, employee morale, and the ethical imperative.

In today’s business world, the competitive among business is quite high. To make a consumer impression, the firm needs to generate themselves standing out from others. Being environmental friendly is one method to differentiate them from the rivals. Furthermore, when rivals already adopted GSCM, the organization gets pressure instead. Therefore, it’s a excellent thought to implement GSCM no matter if the competitors have adopted it or not. Not only competition, but buyers affect for the company’s choice to adopt the GSCM. In numerous cases, buyers were the one who need specific treatment or unique products.

Not merely manufacturers have taken part; other supply chain organizations got engaged in GSCM too. The largest retailer in the U.S., Wal-Mart has an interesting story of adopting GSCM to their organization. In October 2005, Wal-Mart CEO committed the company to 3 goals: to be provided 100% by renewable power; to generate zero waste; and to sell solutions that sustain Wal-Mart’s means plus the atmosphere, and Wal-Mart was launching a company sustainability strategy to dramatically minimize the company’s impact on the global environment and turn out to be “the most competitive and innovative organization inside the planet.

Home Depot switched from suppliers shipping on pallets to slip sheets and have been able to avoided disposal expenses of $760,000, reduction in pallet purchases: $660,000 and decrease freight shipping expenses of $2.4 million. Environment savings was about 36,000 tons of waste wood prevented. The expense of leasing the push-pull attachments is expected to be at $2.0 million per year.



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