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GSCM

GSCM

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Published by Abraham Joseph

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Published by: Abraham Joseph on Sep 04, 2012
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Supply chain management has traditionally been viewed as a process where in rawmaterials are converted into final products, and then delivered to the end-consumer.[4] This process involves extraction and exploitation of the natural resources. It isimportant to note however that we live in a decade where environmentalsustainability has been an important issue to business practice. The waste andemissions caused by the supply chain have become one of the main sources of serious environmental problems including global warming and acid rain.In terms of sustainability and the international green initiatives, focus is given to thethree major issues—dematerialization, detoxification, and decarbonization—whichlead to the 4R’s (reduction, redesign, reuse, and remanufacture) in practice. Mostindustries strive for dematerialization to reduce theamountof materials or timeneeded to produce and deliver products and services required by the customers. Theproduction of poisonous materials can be the best example of people who suffer fromtheir own actions because they ignore the potentially global effects of such systemssuch as oil spill or some other poisonous material spill.Green supply chain policies are desirable since reactive regulatory, to proactivestrategic and competitive advantages. Greening supply chains aims to balancemarketing performance with environmental issues. To meet with challenges such asenergy conservation and pollution abatement, enterprises have tried to green theirsupply chains, that is, to create networks of suppliers to purchase environmentallysuperior products or to build common approaches to waste reduction and operationalefficiencies. Greening the supply chain is increasingly a concern for many businessenterprises and a challenge for logistics management in the 21st century. Of particular concern is how to arouse organizational environmental awareness and putenvironmental activities into practice in the logistics activities of their supply chains.Confronted with global resource exhaustion and increasing environmentaldeterioration, enterprises cannot ignore environmental issues in today’s business.Economic globalization and pressure from the public, laws, and environmentalstandards are forcing and driving enterprises to improve their environmentalperformance as well. Green SCM is getting more attention as a sustainabledevelopment mode for modern enterprises and is increasingly a part of CorporateSocial Responsibility (CSR) initiatives.In recent times, Green Supply Chain Management (Green SCM) is gaining significanceamong manufacturers due to the following reasons:a) Diminishing raw materialsb) Deterioration of environmentc) Overflowing waste landsd) Increasing levels of pollutionOne of the key aspects to green supply chains is to improve both economic andenvironmental performance simultaneously throughout the chains by establishinglong-term buyer–supplier relationships. Enterprises have developed a diverse set of 
 
initiatives for greening SCM, including screening suppliers for environmentalperformance, providing training to build supplier environmental managementcapacity, and developing reverse logistics systems to recover products and packagingfor re-use and remanufacture. Green SCM can not only generate environmentalbenefits, but also business benefits.
Green Supply chain management
Patrick Penfield of the Whiteman School of Management defines Green Supply ChainManagement GSCM) as "the process of using environmentally friendly inputs andtransforming these inputs into outputs that can be reclaimed and re-used at the endof their lifecycle thus, 1 creating a sustainable supply chain .”Why a Green Supply Chain Matters?Government regulations and customer demands are making environmentalresponsibility an increasingly important factor in everything from materialsprocurement to distribution. Many companies share the current widespread concernsfor the health of the planet. Hardly few of them, unfortunately, have successfullytranslated those concerns into action by adopting environmentally sustainable, greensupply chain practices. Businesses worldwide continue to use toxic chemicals,wasteful packaging, and transportation practices that produce clouds of gases thatmay contribute to global warming.However, from materials acquisition and manufacturing to packaging, logistics, anddistribution, every stage of the supply chain offers opportunities to reduce waste andpollution.
 The explosion of GSCM activity in the practical realm has led to an increasing body of empiricalwork regardingboth external infl uences leading to the uptake of green supply chain management practices, andtheir impact on fi rm performance. Investigation in this area has generally fallen into four maincategories:
Use of compliance-based strategies that support the cascading of basic environmentalrequirements generically across all suppliers
Aligning supply chain goals for both efficiency and pollution-reduction
 Transfer of environmentally specific innovations or technologies from customers tosuppliers
Collaboration or competition between firms to develop re-manufacturing or closed-looprecycling systems
 
In this framework the key to extracting business value lies in establishing a long-termgreen supply chain strategy that is aligned with corporate strategy and approachedtop-down – with strong sponsorship. It also requires a strong business case for thegreen supply chain that highlights a prioritised list of targeted opportunities and aphased adoption roadmap. Finally, the initiatives need to be integrated with othercompanywide projects to ensure that one does not compromise another.GSCM integrates ecological factors with supply chain management principles toaddress how an organization's supply chain processes impact the environment.
With Increasing customer awareness and regulatory norms, organizations with greener supply chainmanagement practices will have a competitive advantage over companies that are reluctant toembrace GSCM.
a)Dell saves over $20mn annually as a result of supply 12 chain and packagingimprovements . In fact, this market leader achieved its goal of becomingcarbon 4 neutral by 2008 .b)Texas Instruments saves $8mn each year by reducing its transit packagingbudget for its semiconductor business through source reduction, recycling, anduse of reusable packaging systems 4 (20% annual savings) .c)Pepsi-Cola saved $44mn by switching from corrugated to reusable plasticshipping containers for one liter and 20-ounce bottles, conserving 4 196mnpounds of corrugated material .

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