GREEN

SUPPLY CHAIN
MANAGEMENT
Presented to – Presented by –
Dr. Mona Verma Manisha Kumari 13159
Pooja Goyal 13189
Pooja Sharma 13190
Priyanka Meena 13210
WHAT IS SUPPLY CHAIN
MANAGEMENT?

 Supply chain management (SCM) is the oversight of

materials, information, and finances as they move in a
process from supplier to manufacturer to wholesaler to
retailer to consumer.
WHAT IS GREEN SUPPLY
CHAIN MANAGEMENT

“Integrating environment thinking into supply chain

management, including product design, material sourcing
and selection, manufacturing processes, delivery of the
final product to the consumers, and end-of-life
management of the product after its useful life".
BENEFITS OF GREEN SCM
IMPROVEMENTS BY GREEN SCM
 Improves operations by employing an environmental solution

 Improves Agility: Green supply chain management help mitigate

risks and speed innovations

 Increases Adaptability: Green supply chain analysis often leads to

innovative processes and continuous improvements

 Promotes Alignment: involves negotiating policies with suppliers and

customers, which results in better alignment of business processes
and principles.
SUCCESS STORIES
POLLUTION PREVENTION
HIERARCHY
WHY THERE IS NEED FOR
GREEN SCM?
 Increasing Environmental Constraints due to Global Warming
 Corporate Social Responsibility
 Beneficial for Organization
 Eco-friendly
 Increasing Environmental awareness in stakeholders
 Evolving Consumer and Client Demand
 Response to increasing fuel prices
WHAT IS GREEN SUPPLY CHAIN
MANAGEMENT?

 GSCM can be defined as “integrating environmental thinking into

supply chain management, including product design, material
sourcing and selection, manufacturing process, delivery of the final
product to the consumer as well as end-of-life management of the
product after its useful life”.
Question really is what is supply chain management? Green =
natural environment (may = money too).
GSCM = green purchasing + green manufacturing/materials
management + green distribution/marketing + reverse logistics
 MAJOR CHALLENGES
Practicing green marketing initially is a costly affair. Green SCM
encourages green products/services, green technology, green
power/energy; a lot of money has to be spent on R&D programs
The customers may not believe in the effectiveness of firm’s
green strategies. The firm therefore should ensure that they
convince the customer about their green initiatives, this can be
done by implementing Eco-labelling schemes offer its “approval” to
“environmentally less harmless” products and have been very
popular in Japan and Europe.
Initially the profits will be very low since renewable and
recyclable products and green technologies and more expensive.
Green SCM will be successful only in long run.
Many customers may not be willing to pay a higher price for
green products which may affect the profitability of the company.
The firms practicing Green SCM have to strive head in
convincing the stakeholders and many a times there may be some
who will simply may not believe and co-operate.
 By considering above barriers it can be concluded
that the path towards green supply chain has not
yet been determined by the companies.
 Furthermore, in many cases the methods are
partially known, are not mature enough or just
not available.
So, it is lack of motivation or lack of
awareness from the side of the corporate leaders
towards going green or choosing and
implementing the appropriate green strategies
for their supply chain, so that they make their
business competitive in this globalised era of
business.
AREAS TO GREEN THE
SUPPLY CHAIN
 Designing Of Products
 Production
 Material Purchase
 Packaging
 Warehousing
 Logistics & Reverse Logistics
OTHER INITIATIVES
 Eco labeling:
Labeling that identifies products that meet certain
environmental criteria
 LEED (Leadership in Energy and Environmental Design):
Design and Construction practices that significantly
reduces or eliminate negative impact of building on
environment
 Green sourcing:
Sustainable procurement
AN OVERVIEW OF
GREEN SUPPLY CHAIN
MANAGEMENT IN
INDIA
By Nimawat Dheeraj and Namdev Vishal (2012)
Presented by Pooja Goyal
ABSTRACT
 The green supply chain management (GSCM) is a powerful
way to differentiate a company from its competitors and it can
greatly influence the plan success. With increased awareness
to corporate responsibility and the requirement to meet the
terms with environmental policy, green supply chain
management (GSCM) is becoming increasingly important for
Indian manufacturers. Companies that have adopted GSCM
practices with a focus on distribution activities have
successfully improved their business and environmental
performance on many levels. Today’s also some of remaining
companies have not adopted green supply chain management,
due to this environmental performance index (EPI) ranking of
India is not good. Today’s environmental performance index
(EPI) of India and the major four activities of the green supply
chain management; namely green purchasing, green
manufacturing, green marketing and reverse logistics are
being covered throughout the paper.
RESEARCH BACKGROUND
 A researcher studied green supply chain management, it includes pressure
practice and performance within the Chinese automobile industry in which
they observed that on increasing pressure from a variety of directions have
caused the Chinese automobile supply chain manages to initiate carrying out
of green supply chain management (GSCM) practices to improve both their
economic and environment performance.
 After that another researcher studied the green supply chain management in
electronic industry. According to that, there are various approaches for
implementing GSCM practices has been proposed and recognized in previous
literatures according to the author, but there is yet no investigation that
identified the reliability and validity of such approaches particularly in
electronic industry.
 After this, study on the implementation of green supply chain management in
textile enterprises is also done in which the author considered the
environmental influence and resource utilization efficiency in the whole supply
chain and here also one problem was arise that how to execute the GSCM.
 Further works on the Implementation of green supply chain management
practices in electronics industry in which they aims to survey existing green
activities in computer parts manufactures in Thailand to evaluate GSCM.
GREEN PURCHASING
 Environmentally preferable purchasing (EPP) or green
purchasing is process of selection and acquisition of
product and services which minimise negative impact over
the life cycle of manufacturing, transportation, use and
recycling.
Environmentally Preferable Purchasing
Materials Matter:
•Mercury-free
•Non-toxic (or minimize toxicity)
•PVC or DEHP free
•Recyclability
•Recycled Content (post-consumer)
•Hazardous Waste Considerations
•Minimal Packaging
•Take-Back Programs
•Durable or Reusable
•Energy Efficient
•Can Be Reprocessed
•Product labeling
GREEN PURCHASING NETWORK
INDIA
 GPNI is an evolving network of professionals
interested and active in the general area of
sustainable consumption and production- more
specifically: green purchasing and public
procurement. It is currently a loose informal
network of professionals primarily operating as
an internet based electronic forum.
 The objectives of the GPNI are:
 To create awareness amongst Indian industry and other
stakeholders about green purchasing and procurement
(GPP).
 To encourage and facilitate implementation of GPP and
greening supply chains (GSC) projects to enhance the
competitiveness of the Indian industries.
GREEN MANUFACTURING
 In Green manufacturing, manufacturing equipment is
made to be fast, reliable, and energy efficient.
 Green manufacturing can benefit your manufacturing
company in many ways. Not only it will benefit the
environment, but it will impact your consumer, the
shareholders, and the company perception in the market.
LEAN MANUFACTURING
 Lean manufacturing, which is simply known as Lean,
because it is a competitive practice that reduces costs,
improves environment and quality, and improves the
bottom line. Lean manufacturing is aimed at the
elimination of waste in every area of manufacturing.
 Lean manufacturing is closely associated with green
manufacturing as there is an overlap between the goals
and drivers for both processes.
JIT
 A key component of Lean principles is just-in-time (JIT)
inventory strategy. It focuses on reducing inventory and
provides material, energy, and space savings.
 Purpose of JIT is reduction of cost and quality
improvement.
 ISO 9000 AND ISO 14000: Purpose of ISO 9000 and 14000 are
to recognize quality standards are followed by the companies
and changes the motivation
 Zero Emission Strategy: Purpose of zero emission strategy is
to environmentally damaging production products are
eliminated.16% of companies are actively following zero
emission. 85% of companies are following reduced emission
strategies.
 Six Sigma: Six Sigma is another management methodology
which became very popular. It supports green production by
primarily eliminating defects from manufacturing processes
and, hence, cutting waste. Through exercising greater care
and management control minor investment defects are caught
as early as possible through the process. As a result,
significant savings can be made by reducing the number of
defects, rework, and spending time on defective pieces.
COMPARISON OF LEAN
MANUFACTURING WITH GREEN
MANUFACTURING
GREEN MARKETING
 Green marketing involves a commitment from the
organization to deal with environmentally friendly
products (i.e., products that do not harm society and the
environment) and to conduct marketing activities in a way
that reflects the organization’s commitment to
environmental responsibility through adherence to specific
controls to ensure the preservation of the natural
environment.
 Owners’ satisfaction
 Achieving security in the introduction of products and in
operations management
 Organization social acceptance
 Sustainability of activities
ENVIRONMENTAL PERFORMANCE
INDEX (EPI)
 It measures the effectiveness of national environmental
protection efforts .
 EPI indicators focus on measurable outcomes such as
emissions or deforestation rates rather than policy inputs,
such as program budget expenditures.
 India Ranks at 125 of 2012 Environmental Performance
Index, which is worst rank.
 CURRENT RANK – 144 (out of 178 countries)
CONCLUSION
 Recycling of raw materials and component parts are the
top green manufacturing and production focused initiatives
Adoption of green practices is highest in those areas of the
supply chain where there is a direct relation to cost savings
and efficiency, for example in inventory reduction,
recycling of raw materials.
 EPI-2012 rank of India is worse, this also shows that
awareness of green supply chain management and
greening in India is poor, so there will be need to spread
the knowledge of green supply chain management, with
the help of this green supply chain management, Indian
manufacturing enterprises get their cost and efficiency
benefits.
CURRENT RANK - 2016
CASE STUDY
WALMART “GOING GREEN”
• Initial strategy of walmart was to target low-income
families in rural areas by offering significantly lower costs.

• Walton’s mission was truly realized through the use of

technology in distribution and supply chain logistics,
which allowed Wal-Mart the opportunity to cut costs and
lower prices for end users.

• Scott’s business model to strengthen supply chain

management processes by “going green” was a strategic
decision that positively impacted Wal-Mart’s growth,
distribution techniques, and corporate identity.
 Lee Scott took control of Wal-Mart in 2000 with a newly
adopted strategy of making logistical processes more
economically friendly. “Green” logistics, at its core, means
implementing a system that can independently monitor
overseas suppliers to make sure they meet social and
environmental standards.
 Lee Scott saw the two goals as intertwined: “being a good
steward of the environment and being profitable are not
mutually exclusive.
 The company did earn some goodwill among
environmentalists as the first major retailer to speak out
in favour of the environment. When vendors claimed they
had made environmental improvements to products, Wal-
Mart began promoting the products with green-coloured
shelf tags.
 The company sold as many as 300 products with green tags
at one point. By the early 1990s, the green tag program
disappeared altogether, and environmental issues slipped
off of the Wal-Mart’s list of strategic priorities.
The three goals were just an introduction to Mr. Scott’s
speech. He also discussed the following goals:
 Increase fuel efficiency in Wal-Mart’s truck fleet by 25 percent over
three years and
doubling it within 10 years
2. Reduce greenhouse gases by 20 percent in 7 years
3. Reduce energy use at stores by 30 percent in 7 years
4. Cut solid waste from U.S. stores and Sam’s Clubs by 25 percent in
three years.
5.Buying diesel-electric and refrigerated trucks with a power unit
that could keep cargo
cold without the engine running, saving nearly $75 million in fuel
costs and eliminating
an estimated 400,000 tons of CO2 pollution in one year alone
6.Making a five-year verbal commitment to buy only organically
grown cotton from
farmers, and to buy alternate crops those farmers need to grow
between cotton harvests.
Last year, the company became the world's largest buyer of organic
cotton.
 As Wal-Mart attempts to scale up networks and improve
upon “green” initiatives, the company faces three possible
obstacles:
1. Increased Costs
2. A Sub-Optimal Product Assortment
3. Criticism of Factory Labour Conditions.
CONCLUSION
 In this case study we have outlined the requirements
needed to become a sustainable business, the reason why
this initiative is different than others previously attempted
by Wal-Mart, goals presented by management, the new
value networks, and risks Wal-Mart needs to address.
 Wal-Mart critics argue that the steady dose of these
initiatives is an effort to deflect attention from its work-
place policies and its financial performance. They need to
continue to invest in its environmental policies as well as
address the issues facing their workforce in order to prove
these initiatives are not just a public relations stunt.
 If Wal-Mart proves that it is serious about reducing
environmental impact and devoted to investing in green
initiatives, critics will have to unclench their fists for a
round of applause.
CASE STUDY 2
 A green SCM story
 “The Greening of Wal-Mart : by Erica L.
Plambeck and Lyn Denend”. Stanford Case
study
 Analysis of the case on SCM Review
THE STORY

October 2005, Wal-Mart CEO Lee Scott committed the

company to three ambitious goals:

•To be supplied 100 percent by renewable energy

•To create zero waste and to sell products that sustain

Wal-Mart's resources and the environment.

•To meet those goals, Wal-Mart would seek to

transform its supply chain, in cooperation with suppliers
and environmental non-profit organizations.
 SIGNIFICANT
INITIATIVES
Hired Blu Skye Sustainability Consulting
to help identify the categories of Wal-
Mart's products and processes that had
the greatest environmental impact.

Wal-Mart/Blu Skye team multiplied sales

data with environmental impact factors
from the Union of Concerned Scientists,
and identified 14 focal areas, bundled
into three broad categories:

•renewable energy
•zero waste and
•sustainable products.
For each focal area, an executive sponsor
and a network captain took charge of
building a sustainable value network of Wal-
Mart employees and representatives from
government, academia, environmental
nonprofits, suppliers, and other
stakeholders.

The goal was to reduce environmental

impacts and derive profit from that positive
change.

Network captains were typically senior

managers from Sam's Club or Wal-Mart who
were considered to be among the company's
top performers.
Engaged external organizations into the loop,
to create a “sustainable value network”
CONCRETE STEPS
Based on “The Greening of Walmart's Supply Chain” - SCMR 2007, Dr.
Erica Plambeck, Stanford University

1. Identify Goals, Metrics and New technologies

-- Beginning in 2008, Wal-Mart formally planned to use a system to "measure

and recognize its entire supply chain based upon each company's ability to
use less packaging, utilize more effective materials in packaging, and source
these materials more efficiently relative to other suppliers."

--The scorecard is an important enabler for Wal-Mart to achieve its public goal
of reducing the packaging used by all of its suppliers by 5 percent between
2008 and 2013.

-- If achieved, this five-year program is expected to generate $3.4 billion in

savings. In the first month, 2,268 vendors have logged onto the packaging
scorecard site and 117 products have been entered into the system.
2. Certify Environmentally Sustainable products

-- According to an international study released in 2006, all species of wild seafood

are greatly depleted and predicted to collapse within 50 years.

-- Within this ominous business environment, Wal-Mart sourced approximately

$750 million in seafood in 2006, and the company's volume of seafood business
is growing at roughly 25 percent a year.

-- The Marine Stewardship Council (MSC), established by Unilever and the World
Wildlife Fund (WWF) in 1997, has defined standards for certification as a
sustainable fishery, based on the United Nations' Code of Conduct for
Responsible Fishing and on input from fishermen, retailers, government,
nonprofits, and other stakeholders.

-- The MSC certifies third parties to audit and certify fishery and processor
compliance throughout the supply chain, from "boat to plate."

-- Walmart sources only MSC certified fish, lately!

3.Providing Network partner assistance to suppliers

Wal-Mart is able to provide suppliers with valuable knowledge and process

assistance through its strong relationships with the environmental nonprofits in
its networks.

Eg: when the Chinese government threatened to shut down a number of textile
dye houses, including one of Wal-Mart's suppliers, in order to reduce pollution in
Beijing ahead of the 2008 Olympics, Wal-Mart immediately took action

- put the dye house in touch with one of the NGOs in their network, which
helped it formulate a more environmentally friendly process that reduced its
toxic output very quickly.
-- However, to meet organic standards, a farm needed to remain free of non-
organic pesticides or similar materials for a period of three years prior to the
harvest of any organic crop. To increase and secure its supply of organic cotton,

-- Wal-Mart made a five-year verbal commitment to buy organic cotton from

farmers. "It gives them confidence and stability

-- Wal-Mart (which became the world's largest purchaser of organic

cotton in 2006) also agreed to purchase the organic cotton farmers'
alternate crops.
4. Committing to larger volumes of environmentally sustainable products
-- By making a commitment to buy a specified quantity of each product certified as
environmentally friendly, Wal-Mart gives its suppliers an incentive to develop and produce
that product.
-- In its textiles network, Walmart learned that, along with the cost of certification, farmers
faced a near-term reduction in yields with organic cotton farming, as well as the need to
diversify crops. This forced farmers to alternate the planting of cotton with legumes,
vegetables, or other cover crops to rejuvenate the soil.

5.Cutting out middlemen

An immediate but unanticipated benefit of MSC certification in the seafood network—and
of organic cotton certification in the textile network—was full visibility of the chain of
custody, and hence the opportunity to eliminate intermediaries.

By simplifying its supply chain, Wal-Mart reduced the frequency of seafood stock-outs,
improved the quality of the fish it was receiving, reduced paperwork and transaction costs,
and reduced the costs and environmental impacts of transportation.
6. Consolidating direct suppliers

Over the short term, Wal-Mart has had many diverse relationships with
many factories, often working with a supplier one purchase order at a time or
one season at a time.
Says sustainability vice president Ruben: "Right now we account for two
percent of a lot of people's business, especially overseas. We know that needs
to be a lot larger—maybe 50 or 60 percent."

7. Restructuring the buyer role

To better manage relationships with suppliers, the textiles network

implemented a major organizational change: It redesigned the role of its
buyers.
In the past, textiles buyers had been generalists, handling a wide variety of
responsibilities (as buyers did in other product categories).
  Licensing environmental innovations
If one factory is significantly more energy-efficient than others,
it's got an advantage. If it shares that information, the
competition might gain a much better understanding of its
production costs and therefore its profit margins."
"Information about how much energy a product consumes is
not particularly sensitive."