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12/18/2015

GREEN SUPPLY
CHAIN MANAGEMENT
- Presented By-

Dr. Rudra Rameshwar
L.M. Thapar School of Management
Thapar University, Patiala (Punjab) India
e-mail: rrameshwar@gmail.com

PRESENTATION OVERVIEW
What is a Supply Chain Management?

SCOR Model

Why think Green SCM?

What is Greening the Supply Chain?
Green Supply Chain Principles
GSC as a strategic tool

Trends in Green SCM
Examples of cleaner technology
LEED
Global Eco-labelling Network
Environmentally Preferable Purchasing (EPP)
Carbon Footprint

Green Sourcing

Stanford Case study – “The Greening of Wal-Mart

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suppliers and equipment Understanding demands and supplying goods 6 3 . and (4) with the entire supply chain. Source. (2) with immediate suppliers.and second-tier suppliers and customers along the supply chain. 5 Management processes in SCOR Plan. Make. SCM has two dimensions: • Coordinating the various business activities within a supply chain agent • Coordinating the business activities between various supply chain agents SCOR – PROCESS MODELING Helps break down complex business processes & its functionalities to better understanding of business. Deliver & Return SCOR deals with important factors of a business such as Customer interaction from order entry to invoicing All products & transactions from end to end supplies. drilling Material Component Product Sale and and harvesting production manufacture assembly delivery Planning Sourcing Production Inventory Logistics Supply Chain Management is about managing business activities and relationships (1) internally within an organization. (3) with first. 12/18/2015 DEFINITION OF SUPPLY CHAIN MANAGEMENT (SCM) Mining.

green collar jobs.Recruiting and retaining talent .etc Why now ? .Can save cash immediately .Customer demands . the world) .many firms have slack capacity .Green economy . 12/18/2015 SCOR DRIVES AN END-TO-END VIEW OF SUPPLY CHAIN PERFORMANCE WHY THINK GREEN ? Why think Green ? . green infrastructure 4 .Eco-efficiency saves money . Europe .Corporate citizen .Regulation ( US .

12/18/2015 NEED FOR GREEN…. Source : Going green .Sustainable growth strategies . PWC 2008 ASSESSING VALUE OF GREEN INITIATIVE 5 .

12/18/2015 ASSESSING VALUE OF GREEN INITIATIVE Source: ATKearney Report 6 .

7 . 12/18/2015 KEY FINDINGS (A T KEARNEY) WHAT IS A “GREEN” SUPPLY CHAIN? Integrating environment thinking into supply chain management. including •Product design •Material sourcing and selection •Manufacturing processes •Delivery of the final product to the consumers •End-of-life management of the product after its useful life.

creating a sustainable supply chain”. •The GreenSCOR model enables organizations to more effectively integrate environmental management with supply chain management. 12/18/2015 Green Supply Chain Management (GSCM) is defined as "the process of using environmentally friendly inputs and transforming these inputs into outputs that can be reclaimed and re-used at the end of their lifecycle thus. From cost compliance to value creation GREEN SCM INTEGRATES ENVIRONMENTAL AND SUPPLY CHAIN MANAGEMENT. 8 . Environmental Green SCOR SCOR Management Model Model •GreenSCOR modifies the existing SCOR structure to include environmental processes. and best practices. •GreenSCOR maintains the integrity of the current SCOR model by adding to the existing elements. metrics.

energy costs as a percent of production costs. and minimizing and reusing packaging materials. and returned products disposed of versus remanufactured. LESSENING ENVIRONMENTAL IMPACT Through GreenSCOR. reducing fuel and energy consumption. such as how to collect and manage waste produced during production and testing (including scrap metal and nonconforming product). Processes to address waste management. it can: Improve supply chain management in the areas of: Procurement Transportation Management of inventory Production 9 . such as collaborating with partners on environmental issues. waste produced as a percent of production. Metrics to measure the effects of greening. Industry can: Reduce its environmental footprint Reduce emissions Ensure compliance with regional/governmental standards Manage remediation At the same time. 12/18/2015 CAPABILITIES OF GREENSCOR GreenSCOR incorporates industry best practices for making the supply chain more environment friendly. including carbon and the environmental footprint. emission costs per unit.

….. 10 .to opportunities for efficiency and growth…from short term to long term… Sources of Profitability Cost reductions Improved asset utilization• Higher levels of customer service Increased revenues Focus of sustainability is to find the balance between sound ecological decisions and profitable operations GREEN SUPPLY CHAIN PRINCIPLES The product life cycle is the basis of green supply chain management.. 12/18/2015 LEARNING TO THINK DIFFERENTLY From “problems” and “risk factors”….

Historically. GSC management focused on the upstream supply chain. 12/18/2015 THE ENVIRONMENTAL IMPACTS OF EACH LC STAGE ARE EXAMINED FOR REDUCTION. 11 .

12/18/2015 Now. Companies are starting to view GSC as a strategic analysis tool. GSC programs are moving from compliance to value creation. 12 .

conserving 196 1995.8 million pounds of steel. million pounds of corrugated material. Also conserved 7. 12/18/2015 GREEN SCM LEVERAGES THE ROLE OF THE ENVIRONMENT IN SC VALUE CREATION. systems (20% annual savings). 2004 COMMERCIAL FIRMS HAVE HAD EARLY SUCCESS USING GREEN SCM PRINCIPLES Texas Instruments: Saves $8 million each year by reducing its transit Commonwealth Edison: Produced $50 packaging budget for its semiconductor million in financial benefits from business through source reduction. Tangible Outcomes Green Supply Profitability Chain Programs Asset Utilization Supply Chain Service Level Value Employee Satisfaction Customer Environmental Sustainability Reputation Continuity Community of Quality of Life Alliance Technology Stakeholders Interest Intangible Value Drivers Source: Forging New Links..3 million by plastic shipping containers for one liter using reconditioned steel drums in and 20-ounce bottles. Pepsi-Cola: Saved $44 million by switching from corrugated to reusable Dow Corning: Saved $2. 13 . managing materials and equipment recycling. and use of reusable packaging with a life-cycle management approach. GEMI.

SMART) •. Despite high profile initiatives from firms such as Wal-Mart and HP to limit the environmental impact of their supply chains.Protection from imitators Managing the competition (e.g. Survey of over 600 directors at companies with turnovers in excess of $100m found that just 35 per cent had an explicit green supply chain strategy. Mobility. Xerox. Exxon. HEVs) •.Saving energy •. ARM.Reducing waste •. WRAP.g. FSC. A lack of information about green supply chain best practices and regulations was identified as the main reason for the relatively low adoption of green supply chain policies.Environmental lawsuit Product differentiation (e. 14 .Customer willing to pay more for environmental benefits •.Product take-back Environmental risk management (Union Carbide. StattAuto) •. DuPont) •..Consumer boycott •. organic produce. Conclusion of a major new survey from management consultancy Bearing Point found that almost two thirds of firms had taken no action to cut the environmental impact of their supply chain.Private regulatory programs •.. although 83 per cent claimed to factor environmental factors into decisions.Government regulation Redefining markets (e. Interface. 12/18/2015 MORE WIN-WIN SCENARIOS Cost savings (e.Products into services •.Environmental benefits are credible •. Shell) •.Product innovations NOT EVERYONE'S AS ENTHUSIASTIC THOUGH. 3P.g.Industrial accident •. the majority of large firms still have no green supply chain policy in place.g.

Promotes Alignment—Green supply chain management involves negotiating policies with suppliers and customers. 12/18/2015 GSCM & ‘AAA’ Improves Agility—Green supply chain management help mitigate risks and speed innovations. Three Competitive Edges of Firms Reducing carbon footprints Operational Implementing cleaner technology Excellence Green logistics Supplier Audits Working with suppliers Product Customer Supplier Engagement Green building Standards Leadership Defining and implementing Environmentally Intimacy Standards & Eco labels Preferable Purchasing 15 . Increases Adaptability—Green supply chain analysis often lead to innovative processes and continuous improvements. which results in better alignment of business processes and principles.

) 16 . hybrid delivery vehicles. etc. 12/18/2015 How do firms stack up… PI CI OE Industry High M H Low Software Industry Microsoft High L M High Electronics/ High Technology Medium Low High Manufacturing Chemical Pharma TRENDS IN GREEN SUPPLY CHAIN Start at the Beginning Product Design – Use more environmentally friendly materials – Design more efficient product – Plan in recycling of product at end of life – Consider environmental impact of product Choice of Suppliers – Review supplier environmental data – Consider supplier source of raw materials/components – Partner with suppliers to improve environmental performance – Consider energy‐efficient practices (“green” manufacturing facilites.

12/18/2015 GREENING THE PROCESS Manufacturing – Use more efficient processes – Institute pollution/emission controls – Plan waste management – Implement quality control Packaging/Shipping – Use environmentally friendly/recyclable packaging – Plan for reuse of packaging materials – Ship in hybrid/efficient vehicles – Ship directly to customers END PRODUCT End Product – Deliver efficiently to end user • Use recyclable/reusable packaging • Deliver in hybrid/efficient delivery vehicles • Consolidate shipments – Plan for recycling/reuse of product/components at end of life – Educate customer on recycle/reuse policy Cost savings – Efficient design saves waste – Environmentally friendly sourcing saves disposal costs – Pollution/emissions control saves cleanup costs – Compliance with environmental regulations 17 .

12/18/2015 Now…IT’S ALL ABOUT.... GREEN SUPPLY CHAIN & SUSTAINABILITY !! THANK YOU! 18 ..