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 Green Supply Chain Management – Global
Opportunities and Challenges
A Case Study
Rai Waqas Azfar Khan, Nawar Khan
Dept. of Engineering Management, College of E&ME
National University of Science & Technology
Rawalpindi, Pakistan
waqasazfar@yahoo.com, nwr_khan@yahoo.com
Abstract — In the recent past, China’s emergence as an economic
giant has not only affected regional supply chains; but has even
challenged the existing global logistics practices. Most of the
destinations of Chinese shipping vessels are Middle East, Europe
or North America. These vessels customarily follow the longer
route from China to Singapore, Sri Lanka, Middle East and
onwards to Europe or North America. Agility, leanness, Just-In-
Time (JIT) and postponement are a few of the challenging
concepts for competitiveness and Supply Chain Management
(SCM). Globalization has put an added enormous pressure on
techniques and practices of SCM. This study focuses on
identification of all potential route options from central China to
Middle East, Europe and North America as well as finding best
possible shortest route. Optimization in terms of distances, lead
time and fuel consumption will lead to economic-soundness,
enhanced financial gains as well as improvement in SCM
practices. This optimally identified shorter route will also offer
strategic advantage to the global-village; especially to South East
Asia, Middle East, Europe and North America. This study will
contribute towards the UN-Global initiative for the reduction in
greenhouse gases and global warming.
Keywords - Green Supply Chain Management, Optimized Logistics,
Agile, , Just-in-Time, Globalization.
I. INTRODUCTION
Twenty first century is the era of globalization, expedited
by the developments made in the fields of telecommunication
and associated technologies. Fastest means of
telecommunication made today’s world a truly global-village
[35]. Competitiveness and value proposition in SCM practices
of any enterprise can only be achieved through business
intelligence (BI) [23][24]. Overwhelming pressure of
globalization and enhanced utilization of BI has enabled even
self-employed entrepreneur to remain competitive: The global
revolution in manufacturing industry demands that product-
process-business should have thorough integration and should
have vertical structure [38] [39]. This phenomenon of
globalization also improved means of transportation and
logistics [36]. Early recognition of latest innovations,
awareness about use of cutting edge technologies, best location
of merchandise’s availability; its cheapest price and minimum
transit time required for delivery are few factors which logistics
manager has learn in global-competitive environment [26][28].
Every customer desires that latest innovative merchandise
should reach to him as early as possible, but in cheapest price.
___________________________________
978-1-4244-9653-2/11/$26.00 ©2011 IEEE
5
Muhammad Abbas Chaudhary
University of Engineering & Technology
Taxila, Pakistan.
mabbas@ceme.edu.pk
This phenomenon of globalization compelled transportation
and logistics business to improve their standards to earn hyper-
efficiency as well as earn optimum financial gains [27,29,30].
Recent advancements in transportation and logistics sector,
assisted integration of SCM at global scale; which made it
possible that electronic gadgets of a US branded company with
Chinese made major components - assembled in Singapore (or
Malaysia), distributed through Dubai logistics transit hub can
be sold in Africa or Europe. The shipping container, initially
designed for maritime transportation only, is now being used
extensively in the inland freight distribution systems due to the
pressures put on by global logistics [1]. The question arises
why the previous century’s old mechanism has changed in
which all merchandises were manufactured, assembled, packed,
stored and distributed from one location? The answer is quite
simple, because globalization has put immense pressure on
competing rivalries brand, where these organizations has to
compete not only in cost but also in agile and more customized
supply chains. Customization is great hindrance in mass
production and thus new trends of postponement have emerged.
Hence, making globally integrated supply chain management
the need of the hour; this can offer cheaper, agile, green and
customized logistics. [30,31,32,33,37] Green SCM not only
offers great opportunities but pose numerous challenges as well;
such as optimization in distances, lead time, fuel consumption,
low GHG emission and cost.[34] These challenges faced by
global logistics and SCM are tried to address in this case study.
II. RESEARCH PROBLEM STATEMENT
In the last decade and half China has emerged as an
economic and technological giant. Its transition from world’s
sluggish economy to a rapidly developing one was made
possible due to two factors: a) vast resource of cheap labour,
and b) its ability of mass customized production. Much of
China’s financial growth, that ensued, was due to the
expansion of its exports and off-shore engineering. May be due
to the need for cheap goods the US which was one of the
biggest exporter became the biggest importer of Chinese goods.
Globalization has affected regional supply chain along with
challenging the global logistics, Agility, leanness, just-In-Time.
China has recently developed its western and central region as
duty free zone, which has converted central China into light
engineering cluster. However, the east coast of China is more
than 2,500 kilometers away from central China which is a great
impediment to good SCM practices. A number of studies have
been carried out to check the feasibility to connect directly
central China with Europe through land route and then North
America through sea route to minimize distance, lead time and
total logistics cost. In the past studies have been carried out to
evaluate the feasibility of land route options between China and
Europe or the Northern Arctic Ocean route [3, 4, 5], but these
were not found to be cost effective.
Most of the Chinese shipping vessels destinations are
Middle East, Europe or North America. Historically, U.S.-
Asian trade had occurred by the straightest route, i.e. through
the Pacific Ocean to seaports on the west coast of the United
States, resulting in west coast ports experiencing congestion [2].
Alternative to this route, two options are available but both of
these comparatively follow the longer route. First alternative
route passes through Pacific Ocean, Panama Canal, Caribbean
Sea and finally passing through Atlantic Ocean, this route
terminate at North American seaports. Second alternative to
this route originates from China passes through straits of
Malacca, Arabian Sea, Gulf of Aden, Red Sea Suez Canal,
Mediterranean Sea, Atlantic Ocean and onwards Europe or
North America. One third of world’s trade follows this route
and commonly known as Royal Road (fig-2 Route option-3)
[5]. Merchandises from Eastern Asia to Europe follow the
same Royal Road route till Mediterranean Sea and after that it
bifurcates into two prongs one strait to northern America and
second towards right to Europe. Royal Road route is the most
commonly followed route by the ships moving between Asia
and Europe. Constantly following lounger route lead to extend
distances and lead time; resultantly extra TLC as well as
generation of extra GHG emissions, which ultimately promotes
global warming. All these problems impose great challenges to
reinvigorate the existing logistics routes of the world; as well
as provide corridor of opportunity in which we can revitalize
the Silk Route (one of the world oldest trade route) by
enhancing this route into Royal Silk Road (fig-2 Route option
- 4). The capacity building of Royal Silk Road infrastructure
will provide us numerous great opportunities to optimize
logistics system; as well as offer long term, green and
sustainable prosperity for global-village and especially for the
Asia, Europe or even for Northern America [43 – 45].
III. LITERATURE REVIEW
The globalization of manufacturing and the geographic
scattering of economic movement have elevated the
prominence of the transportation and logistics segments of the
economy. One sector in specific that has experienced
noteworthy expansion is oceanic transport and container
shipping [6]. Supply chain disruption has adverse effects on
both revenue and costs [7]. In 1990s transportation and
communication accelerated slowly to be on their way. In
twenty first century it has been renovated into the much
broader idea of logistics; which has become an overbearing
element in the business as well as restructuring of the
globalizing bargain. The fast track redeployment of the global
transport structure has a direct influence on progressions of
globalization [8] [16]. The relationship has been determined
between cargo and economic growth, in which the main
leading factor is the merchandise transports demand. It has
been well established that the cargo present obvious rectilinear
relationship to the variables the population, GDP, total retail
transactions of consumer merchandises as well as the fixed
6
resources invested on transportation and telecommunication [9].
Product proliferation is a conjoint challenge for corporations
providing customized products. To cope with this test,
corporations usually integrate strategies such as component
cohesion, postponement, and delayed discrepancy in their
supply chains [10][17].
One of the apprehension about the usage of Eurasia as a
land bridge for container traffic; is revealed that the lead time
benefit of land bridges (with respect to its costs) would be
appropriate for a manufacturer; but the challenges of ports and
railway transportations makes it less attractive as a possible
alternative [11]. The inventories stored in ideally located
logistics hub’s warehouses can be anticipated to play an
important role in global logistics [12]. Transportations are
modal maneuvers incorporated in logistics while logistics itself
is the core process of the supply chain management
[13][14][25]. The effects of product-market feature on logistics
strategy formulation have been established at business division
or corporation level [15]. There is a deficiency of empirical
studies concentrating on South Asia and Middle East region
with respect to formulation of logistics strategy; which forms
strong basis for conducting this case study[18][19]. In today's
extremely competitive global market, there is great stress on
rivalries to find new customs to create value proposition.
Distribute of goods to the customers is facing strongest
competition. There has been an enlightening recognition that
proficient logistics management in SCM can principally assists
in cost saving and service enrichment [20]. An in-depth
examination of the relationship among green, lean, agile,
responsive, sustainable, postponement, and global supply
chain strategies as found in the literature revealed that; the
three supply chain strategies have many barriers, as well as
many converging but contradictory drivers [23]. Optimization
of regional supply chains by utilizing renewable energy sources
is getting much attention [46]. Sustainable, green SCM and
logistics is the top most concerned of not academia only rather
it has got due awareness in leading industry as well.
Researchers are developing frameworks which are promptly
being adapted by leading industry leadership. [40-42]
IV. RESEARCH QUESTION
Consistently following longer route is great impediment for
good SCM practices, moreover extended lead time is the
greatest hindrance in cost effective, responsive, agile, green
and sustainable logistics. All these motives provide great
challenge to reinvigorate the existing logistics system of the
world. In this research we set out to find that:
(1). How in most cost-effective manner, we can integrate
sustainability in greening the logistics, reducing the supply
chain distances; thus ultimately resulting in reduction of lead
time, fuel consumption, greenhouse gases emissions, global
warming as well as total logistics cost?
V. RESEARCH DESIGN / METHODOLOGY
This study focuses on identification of all potential route
options from central China to Middle East, Europe and North
America as well as finding best possible shortest route. It will
surely be a value proposition which will have direct positive
impact on global business, however all these opportunities are
linked with challenges. Before formulating a mega strategy and
suggesting structural changes, all existing practices of SCM Fig.1 Route - 2 passes through Pacific Ocean, Panama Canal,
will be evaluated. As matter of fact a sustainable logistics Caribbean sea, Atlantic Ocean ultimately terminating along
transit hub is identified to reap economic, political and with Route-1.
geographical advantages as well as managing global supply
chains efficiently. Various scenarios have been created in TABLE I. DISTANCES OF VARIOUS ROUTES FROM CENTRAL CHINA TO
which numerous route options are evaluated. This optimally SEA PORTS OF THE WORLD
identified logistics transit hub and shorter route will also offer Point A Point B Distance ( Kms)
strategic advantage to the global-village; especially to South Shanghai Central China Xining 2208 / 2500*
East Asia, China, Pakistan, Middle East, Europe and North Shanghai San Francisco 9901
America. This study will contribute to reap the benefits of UN- Shanghai San Diageo 10632
Global initiative for the reduction in greenhouse gases and Shanghai Karachi (Land Route) 5345 / 7314*
global warming. However, many futuristic situations can Shanghai Karachi (Sea Route) 8926
develop which are enormously difficult to envisage with Central China Karachi (Land Route) 3578 / 4814*
Xining
accuracy and conviction, due to the geo-political fluctuating Karachi Aden 2670
dynamics of the world we live in today. Aden Cairo 2369
Cairo Casablanca 3684
VI. RESULTS AND DISCUSSIONS Casablanca New York 5802
New York San Francisco 4148 / 4680*
Different scenarios of route options were created, the route New York Karachi 11702 / 14525*
distance between two locations was calculated in two different (by Sea)
manners:- New York Panama 3564
Panama San Francisco 4996
1). Shortest possible aerial distance between two
Shanghai New York (Direct Via 11881
locations (bird’s path) was calculated. In order to calculate the Air)
aerial distance between two locations, Zipoid software was Central China New York via San 17081
used. The distances calculated with the help of software were Xining Francisco (Land Route)
also validate from the database available on the website: Central China New York via San 20461
Xining Francisco & Panama
http://www.timeanddate.com [21]. (Pacific Route)
2). Secondly using ArcGIS network analyst, distance Central China New York via Karachi 19339
between two locations was calculated as per actual Xining land + Sea (Atlantic
road/rail/sea network length (on earth path). On any particular Route)
Shanghai Singapore 3795
route, if sea distance was involved, then for the calculation of
Singapore Colombo 2721
total distance and lead time, APL shipping company database Colombo Karachi 2410
regarding port rotation time and transit time was utilized [22]. Colombo Aden 3876
Table-1 shows the distances calculated after creating Casablanca London 2979
different scenarios. If the distances calculated by both methods Shanghai London via Sea route 13371
were same, only one distance is mentioned in the table. Central China Karachi via (Sea route) 11426
Xining Shanghai +Singapore +
However, if the distances of same route were different, then Colombo = Karachi
both the aerial as well as the actual earth route distance are Central China London via land route 7698/11204*
mentioned. In all subsequent calculations this actual earth Xining
route distance (road, rail or sea) was used instead of the aerial Central China London via (Sea route) 21924
Xining Shanghai +Colombo+
route. After calculating the distances of different routes, total Aden + Casablanca
lead time was also calculated by using actual road, rail or sea Central China London via (Land + Sea 16516
route transit time data. The results shows that merchandise Xining route) + Karachi + Aden
produced in china has to move long distances before reaching + Casablanca
Middle East, northern countries of Africa, Europe and even Table footnotes 1. * Distance calculated as per actual road/rail/sea route.

eastern coastal cities of North America. Fig.-1 shows two 2. in all subsequent calculations this actual land route (*) is used instead of aerial route

scenarios, marked on map as route 1 and 2. Both routes,
originating from central China, pass through one of the east
coastal cities of China (which, for this study, is commonly
taken as Shanghai) and then through Pacific Ocean to the
North America. In Fig.1 Route -1, after passing through
Pacific Ocean, passes through one of the west coastal city of
the North America (which, for this study, is commonly taken
as San Francisco) and then it follows a land route to reach one
of eastern coastal cities of North America (which, for this
study, is commonly taken as New York City); whereas in
central China, follows a land route over Pakistan (through silk
route or nowadays this route is known as K.K.H.), then this
route passes through Arabian Sea and finally it join
Two more scenarios are shown in Fig. 2 and marked on map
as route 3 and 4. Scenario created in route option – 3 up till
Shanghai follows the same route as scenarios 1 and 2, but after
Shanghai, route - 3 follows alternative path of straits of
Malacca, Indian Ocean, Gulf of Aden, Red Sea, through Suez
Canal, Mediterranean Sea, and Atlantic Ocean reaches New
York City. But for Middle East and Europe Route - 3 is the
only route customarily followed known as Royal Road.
Whereas Route - 4 (Royal Silk Road) is revival of one of the
oldest trade route of the world. This route originates from

7
Route - 3 at Gulf of Aden. In these scenarios four different
route options were measured to identify shortest possible route
from central China to New York City. Likewise shortest
possible route option for cities of London, Aden, Cairo, and
Casablanca were also calculated.
Fig. 1 Route scenarios - 1 and 2 from central China to New York City
Fig. 2 Route scenarios - 1 and 2 from central China to New York City
VII. CONCLUSIONS
(1) Our analyses suggest that Route - 4 compared with
the Route - 3, is the much economical route for Middle East,
northern costal countries of Africa, Europe or even eastern
coastal cities of North America; as this route reduces distance
by 5124 Km. Route - 4 compared with the Route – 3, also
reduces lead time by almost 7 days for Middle East, northern
costal countries of Africa, Europe or even eastern coast cities
of North America.
(2) Route - 4 is even economical route for eastern coastal
cities of North America as compared to Route - 2 (Panama
8
Canal route). Route - 4 reduces lead time by 3-4 days and
distance by 1338 km from central China to New York as
compared to Route - 2 (Panama Canal route).
(3) In case of electing direct road or rail option from
central China to Europe, it is not simply a question of transit
time and reliability; it is also a question of cost, which is
higher than Route - 4 option.
(4) Following the Royal Silk Road (which is a shortest
route for Middle East, Northern Coastal cities of Africa,
almost complete Europe as well as for northern America ) will
reduce consumption of oil; so we can in most cost-effective
manner meet our objectives; e.g. integrate sustainability in
greening the global logistics and SCM; reducing the supply
chain distances; thus ultimately resulting in reduction of lead
time, fuel consumption, greenhouse gases emissions, global
warming as well as TLC.
(5) Results show that if we follow new Route – 4 Royal
Silk Road, it also provides us the best optimal location of
logistics transit hub. To reap the benefits of agile, optimized,
lean, coast effective logistics and SCM in the region; two
Pakistan’s coastal cities of Karachi and Gwadar can ideally be
converted as logistics transit hub.
(6) One problem associated with following the Royal
Silk Road is that although it reduces the total distance; but on
other hand it increase the distance travelled by road portion; so
the chances of road traffic accidents comparatively increases.
However this problem can efficiently be managed by better
road traffic management as well as by capacity enhancement
of the existing infrastructure. The cost expended on capacity
building will have very little amount as compared to the
financial benefits gained; in optimized, Sustainable, green
logistics and SCM.
ACKNOWLEDGMENT
Authors acknowledge extremely valuable improvements by
the Dr. Nauman Jawad Maqbool in the manuscript.
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