Article

Green Supply Chain Management: Asia-Pacific Journal of Management

Research and Innovation

A Potent Tool for Sustainable 8(4) 491–507

© 2012 Asia-Pacific
Institute of Management
Green Marketing SAGE Publications
Los Angeles, London,
New Delhi, Singapore,
Washington DC
DOI: 10.1177/2319510X13481911
http://apjmri.sagepub.com
A.N. Sarkar

Abstract
The concept of ‘Greening’ is intrinsically linked to offsetting and abatement of greenhouse gas (GHG) emissions, resulting largely
from fossil fuel–based and energy-intensive industrial operations and various anthropogenic actions. ‘Kyoto Protocol’ pioneered the
concept of mandatory reduction and compliance of GHG reduction norms applicable for major polluting nations in the world by 2012
and beyond. This prompted the corporate world to go in for introduction and commercialisation of ‘clean’ and ‘green technologies’
to mass produce and market wide-ranging green products. This had in turn led to the concept of Green Marketing. The concept of
Green Supply Chain Management (GSCM) has been a parallel development to push the green products in an ever-expanding market
with huge future potential—given growing customer consciousness towards eco-friendly green products and changing lifestyles. The
article reviews and analyses different dimensions and facets of GSCM, including the evolution of the concept, approaches of building
the constructs of GSCM, implementation strategy, linkage with transport systems, ‘Lean’ concept in supply chain management (SCM),
green innovations and sustainability issues of GSCM and Green Logistics strategies for evolving integrated GSCM system.

Keywords
Green supply chain management, green marketing, sustainable development

Green Supply Chain Management
(GSCM): The Concept
The increasing pace of globalisation and industrialisation
has revolutionarised the way the corporate world is
responding to the changed lifestyle with time. Some of the
major casualties of the energy-intensive mode of industri-
alisation are enhanced rate of greenhouse (GHG) emis-
sions, global warming and ecological degradation. As the
public becomes more aware of environmental issues and
global warming, consumers are asking more questions
about the eco-friendliness of products they are purchasing.
Companies are confronted with embarrassing questions
like how green their manufacturing processes and supply
chain are, the state of their carbon footprints and how
they recycle and dispose wastes, etc. Consumers increas-
ingly prefer to purchase products that are free of toxins,
produced with minimum level of pollution-linked contami-
nants and with minimal environmental impact. Increasing
evidences are accumulating that a gulf of difference exists
between consumers’ green claims and the certified quality
of green products. Companies that successfully adopt a
green policy can generate profits, provide positive social
impact and reduce environmental impact as there is an
apparent link between improved environmental perform-
ance and financial gains. Realising this perspective, com-
panies have looked into their supply chain and explored
areas where they can expect more profits (Murray, n.d.).
Prominent features of leading green supply chains include
an emphasis on life cycle costing, asset efficiency and
waste reduction and service innovation and recycling.
Executed effectively, GSCM stimulates product and
service innovation, improves asset utilisation and deepens
customer relationships and service levels through a shared
focus on reducing waste and cost (van den Broek, 2010).
Several companies have gone one step further by GSCM
as a competitive advantage (Murphy, Poist & Braunschweig,
1995; Sarkis, 1998; Vachon & Klassen, 2008; Wu & Dunn,
1995; Yang & Sheu, 2007). The premise of GSCM is that
sharing and integrating environmental ideas and concerns
across organisational boundaries will greatly enhance
green manufacturing. More manufacturing firms have rec-
ognised the importance of GSCM practices and have begun
to foster long-term partnerships with their suppliers to
increase environmental performance (Handfield & Bechtel,
2002; Johnson & Sohi, 2003; Rao & Holt, 2005).

A.N. Sarkar, Senior Professor (International Business) & Dean (Research), Asia-Pacific Institute of Management, 3&4 Institutional
Area, Jasola (Sarita Vihar), New Delhi 110025, India. E-mail: ansarkar1@gmail.com
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492 A.N. Sarkar
GSCM improves Green Marketing operations by
employing an environmental solution in the following
ways:
• improves agility—GSCM helps to mitigate risk and
speeds up innovations;
• increases adaptability—green supply chain analysis
often leads to innovative processes and continuous
improvements;
• promotes alignment—GSCM involves negotiating
policies with suppliers and customers, which results in
better alignment of business processes and principles.
Core focus of the lectureship will be on the necessity
of green and on-green operations (network design and
reverse logistics, transportation, green manufacturing
and remanufacturing and waste management).
One of the biggest challenges for companies in the
twenty-first century is the growing need for integrating
environmentally sound choices into supply chain and
logistics practices. While the past three decades have seen
businesses come under increasing scrutiny from stakehold-
ers on numerous environmental issues, these factors are
becoming secondary, as GSCM initiatives are being
perceived as sound practices that can improve competitive-
ness, environmental performances and robust partners’
relations. GSCM is closely related to the broader concept
of sustainability and involves adopting an environmentally
conscious mindset in conducting numerous company-level
(strategic, tactical and operational) processes and the
development of sound strategies around environmental
impact issues. Approaches like green purchasing and man-
ufacturing, eco-labelling and retro-logistics (or reverse-
logistics) are only a small sample of terms frequently
used by environmental conscious stakeholders (Walton,
Handfield & Melnyk, 1998; Zhu & Sarkis, 2004).
Green supply chain is conceived by different research
workers from four different perspectives, namely,
(a) ‘Green supply chain refers to the way in which innova-
tions in SCM and industrial purchasing may be considered
in the context of the environment’ (Chen, Shih, Wu &
Spyur, 2008); (b) Environmental SCM consists of the
purchasing function’s involvement in activities which
include reduction, recycling, reuse and the substitution of
materials (Harris & Naim, 2006); (c) ‘The practice of mon-
itoring and improving environmental performance in
the supply chain…’ (Nones, Morques & Evgenio, 2004);
(d) ‘Integrating environmental thinking into a SCM,
including product design, material resourcing and selec-
tion, manufacturing processes, delivery of the final product
to the consumer as well as end-of-life management of the
product after its useful life’ (de Brito & Vander Laan,
Asia-Pacific Journal of Management Research and Innovation, 8, 4 (2012): 491–507
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2010). From these four definitions, we see that there is a
range of author focus and purpose on green supply chains
and their management, that is, purchasing, operations, mar-
keting or logistics, etc., also influences the definition.
Greening the industry is increasingly gaining importance
in all sectors, especially in high-tech electronics, fast-
moving consumer goods (FMCG), followed by automotive
original equipment manufacturer (OEM), sustainable solu-
tions, etc. (Rodrique, Slack & Comtois, 2001). According
to Sarkis (2007), the supply chain system should include
purchasing and inbound logistics, production, distribution
and reverse logistics. He also shows how firms focus on
total quality management (TQM), with its emphasis on
improving product quality, zero defects, customer satisfac-
tion, training and employee empowerment, etc., and inte-
grate it with environmental management resulting in total
quality environmental management (TQEM).
Different researchers have defined GSCM from differ­
ent perspectives, driving forces and purposes for which the
concept is used. Sarkis (1999) refers to the supply chain
as a system which includes purchasing, production,
distribution and reverse logistics. Handfield, Walton,
Sroufe and Melnyk (2002) defined that supply chain
encompasses all activities associated with the flow and
transformation of goods from raw materials (extraction)
through the end-user, as well as associated information
flows. In 1996, the Manufacture Research Consortium
(MRC) in Michigan State University first put forward the
definition of GSCM. The definition comprehensively
considers the environmental influence to optimise resource
utilisation in the supply chain in manufacture industry.
This principle is similar to life cycle of a product.
Product life cycle is an idea that products pass through a
cycle of life—similar to humans—of birth, maturity and
death. The product life cycle provides a degree of structure
to the life of products, and thereby provides direction for
the diverse functional efforts required to produce and
deliver product/service offerings (Birou, Fawcett &
Magnon, 1998). Many studies addressed product life cycle
along with supply chain or GSCM. Since GSCM normally
involved the inverse of the product flow, reverse logistics
are automatically included in the GSCM conceptual
framework. Sheu, Chou and Hu (2005) proposed a linear
multi-objective programming model optimising the
operations of both integrated logistics and used product
reverse logistics in green supply chain.
According to Gilbert (2000), greening the supply chain
is the process of incarnating environment criteria or
concerns into organisation purchasing decisions and long-
term relationship with suppliers. GSCM is integrating
environmental thinking into SCM. GSCM has emerged in
the last few years and covers all phases of product life
Green Supply Chain Management 493

cycle, from the production of raw material through design, Interfacing GSCM with
production, distribution phases to use of products by the Environment
customers and its disposal at the end of product’s life cycle.
According to Nones et al. (2004), GSCM encompasses an The idea of GSCM is based on two related fields, namely,
integration of logistics with the business strategy with the environment management and SCM. Hervani, Helms and
business environment in a synergetic manner to maximise Sarkis (2005) characterised GSCM as a composite whole of
the operational effectiveness and the desired impact. green purchasing, green manufacturing/green materials
GSCM integrates traditional SCM practices and envi- management, green distribution/marketing and reverse
ronmental criteria into organisational purchasing decision logistics in an integrated and systemic gestalt. Accordingly,
and long-term relationship with the supplier (Ho, Shalishali, a comprehensive definition of GSCM would be ‘a manage-
Tseng & Ang, 2009; Nones et al., 2004). GSCM focuses on ment approach to link environmental concerns with all
reduction of wastes of all industrial operations in order to stages of the supply chain comprising purchasing material,
conserve energy and prevent the dissipation of dangerous managing material, product and process design, inbound
materials into the environment (Ho et al., 2009; Paksoy & logistics, production, outbound logistics and reverse logis-
Lam, 2009; Solvang, Deng & Solvang, 2007). GSCM is a tics’ (Aragon-Correa, 1998). Controversial issues linked to
kind of modern management model in the whole SCM, this concept include the question as to whether value can be
which considers the environmental influence and efficiency. created through a green supply chain and whether in that
It should keep in touch with suppliers, manufacturers, case GSCM can demonstrate a better economic return.
sellers and consumers. The detailed contents include Green All the same, it still remains an open-ended question about
Designing, Green Production, Green Package, Green the most suitable performance criteria to measure an excel-
Marketing and Green Recycling (Fengwen & Yuhua, 2003). lent environment-friendly supply chain. Another relevant
question is: To what degree companies should take a proac-
tive approach towards a green strategy in order to gain a
Difference between Conventional competitive advantage (ibid.)?
SCM and Green SCM
Conventional SCM is usually concentrated on economy Approaches of Building the
and control of the final products, but seldom considers its Constructs of GSCM
ecological effects/impacts. In comparison, GSCM is green,
integrated, ecologically optimised and takes into consider- GSCM construct should essentially encompass the
ation the human and Phyto-toxicological effects as well. following key elements for effective operationalisation and
Companies put ecological congeniality requirements as system integration with Green Marketing channels:
one of the predominant criteria for products. At the same
time, the company must assure its economic sustainability 1. Product Life Cycle Analysis (PLCA)
by staying competitive and profitable (Ho et al., 2009). 2. Waste Management
Differences between conventional SCM and GSCM are 3. Vendor Assessment
summarised in Table 1. Product Life Cycle Analysis (PLCA)
Table 1. Difference between Conventional SCM and Life cycle assessment (LCA) is a technique for assessing
Green SCM the environment aspects and potential impacts associated
with a product, process or service over its life cycle. The
S. No. Characteristics Conventional SCM Green SCM
Society of Environmental Toxicology and Chemistry
1. Objectives Economic Ecological defines the LCA as follows:
value
2. Ecological Integrated approach High ecological The life cycle assessment is an objective process to evaluate the
optimisation impacts environment burdens associated with product, process, or activ-
3. Supplier Price switching Ecological ity by identifying energy usage and environment releases, to
selection supplier short-term aspects long- assess the impact of those energy and material and material uses
criteria relations term relations and releases on the environment, and to evaluate and implement
opportunity to effect environment improvements. The assess-
4. Cost prices Low High
ment includes the entire life cycle of the product, process or
5. Speed and High Low activity, encompassing extracting and process of raw materi-
flexibility als; manufacturing; transportation and distribution; use/reuse/
Sources: Ho et al. (2009); Sarkis (2003). maintenance; recycling and final disposal. (Chu & Wei, 2010)

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494 A.N. Sarkar
Waste Management
Wastes can be defined as anything that add adverse effects
to the environment without adding value. Waste manage-
ment is an effect-directed approach that is reactive in nature
and tries to reduce landfill. The reactive pressures
are usually attributed to the government as well as regula-
tors for preservation of a status quo among the corporate
competitors. Europe leads the path by making the manu-
facturers responsible for the waste generated throughout
and at the end of the product life cycle. On the other hand,
waste prevention or reduction is a ‘catch it at the source’
approach that is proactive in nature and helps to build
among the customers and communities at large a harmoni-
ous linkage for gaining competitive advantage in the
market (Ho et al., 2009).
Vendor Assessment
Vendor assessment is the rating of vendors according to
environment auditing of vendors. A rating is given to all
the vendors according to how much they affect the envi-
ronment in terms of the following:
• Vendor management is done following vendor envi-
ronmental questionnaire
• Asking for product test reports
• Demanding bill of material (BOM)
• Environmental auditing of vendors
Implementation of a Green
Supply Chain
There are four basic steps to implement a green supply
chain. The four steps are as follows: (a) identify costs,
(b) determine opportunities, (c) calculate benefits and
(d) decide, implement and monitor (Ho et al., 2009; Nones
et al., 2004; Sarkis, 2003). Ideally, companies engaged in
promotion of Green Marketing should customise this
approach to best suit their own organisational needs
and culture (Nones et al., 2004). The following model is a
decision-making framework suggested by EPA (2000), and
it is based upon the best practices of several companies that
have successfully initiated and implemented environmen-
tal accounting to best suit their own organisational needs
and culture (Nones et al., 2004).
Green Purchasing and Inbound Logistics
Greening the supply chain has numerous benefits to an
organisation, ranging from cost reduction, to integrating
suppliers in a participative decision-making process that
promotes environmental innovation (Rao, 2002). Green pur-
chasing strategies are adopted by organisations in response
Asia-Pacific Journal of Management Research and Innovation, 8, 4 (2012): 491–507
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to the increasing global concerns of environmental sustain-
ability. Green purchasing emphasises on reduction of waste
produced, material substitution through environmental
sourcing of raw materials, waste minimisation of hazardous
materials, and so on. The involvement and support of suppli-
ers is crucial to achieving such goals. Therefore, companies
are increasingly managing their suppliers’ environmental
performance to ensure that the materials and equipments
supplied by them are environmentally friendly in nature and
are produced using environmentally friendly processes. Min
and Galle (1997) studied ‘green purchasing’ to determine the
key factors affecting an enterprise’s choice of suppliers, the
key barriers and the obstacles to green purchasing initia-
tives. They also investigated the influence of green purchas-
ing on a corporation’s environmental goals. Sroufe (2003)
presents a framework involving performance indicators and
supplier assessment metrics. It is found that environmental
initiatives such as strategic environmental sourcing and eco-
friendly green project development initiatives improve an
organisation’s competitive position and reduce market risks.
The green purchasing function involves the acquisition
of materials from suppliers to meet the needs of producing
the organisational product or service. Purchasing includes
duties such as vendor selection, material selection, out-
sourcing, negotiation, buying, delivery scheduling, inven-
tory and materials management, and to some extent,
involvement in design. Green purchasing has a number
of environmentally based initiatives that may be incorpo-
rated into the purchasing function as follows (Lamming &
Hampson, 1996; Lloyd, 1994): Supplier Environmental
Questionnaires; Supplier Environmental Audits and
Assessments; Environmental Criteria on Approved
Supplier List; Require Suppliers to undertake independent
Environmental Certification; Jointly Develop Cleaner
Technology/Processes with Supplier(s); Engage Suppliers
in Design for Environment product/process innovation;
Reduce packaging waste at the customer/supplier
interface; Reuse/Recycling of materials requiring co-
operation with supplier; Reuse initiatives (including
buy-backs and leasing); Conduct LCA with cooperation
from suppliers; Seek to influence legislation in cooperation
with suppliers; Create supply ‘club’ to collaborate on envi-
ronmental issues; Coordinate minimisation of environmen-
tal impact over full supply chain; Build environmental
criteria into supplier contract conditions; Audit Supplier
Environmental Performance.
Green Distribution and Outbound Logistics
Whereas purchasing and inbound logistics focus on
managing the vendor-organisation relationships of the
supply chain, the distribution and outbound logistics
Green Supply Chain Management 495
function is meant to address the organisation–customer
relationship issues. Customer relationships are greatly
influenced by Green Marketing policies. Some studies
have found that ultimate individual consumer interest in
the environment and environmentally sound products is
quite substantial, even though there has been a slight
decline. This interest along with government regulations,
are two external pressures that flow throughout the supply
chain. Studies have shown that many companies are putting
pressure on their suppliers and suppliers are listening to
corporate customers, as well as the end-user (Lamming &
Hampson, 1996). One of the controversies in Green
Marketing and customer relationships is whether custo­
mers continue to show interest in environmentally sound
products which translates into actual purchase. Various
studies have shown that the interest is usually higher than
actual purchase. This argument can be made for either indi-
vidual consumers or corporate and industrial buyers. Even
though this issue has been shown to be an individual con-
sumer phenomena (Mandese, 1991; Schlossberg, 1990),
the extension to corporate buyers needs a more complete
evaluation using product life cycle approach.
One of the reviews of the literature found a number of
areas within standard practice of outbound logistics that
have implications for greening the logistics function (Wu
& Dunn, 1995). The design of a logistics network and its
planning are two of the more strategic issues facing logis-
tics managers in this function. Many trade-off decisions
need to be made with regard to the firm’s market, customer,
product and logistical resources. Some of the design and
management criteria that support environmental planning
in this area include fewer shipments, less handling, shorter
movements, more direct routes, and better space utilisa-
tion. But each of these issues includes trade-offs among
delivery time, responsiveness, quality and cost, as well as
environmental performance. Warehousing and delivery
packaging design are two important issues in outbound
(and inbound) logistics and distribution. Wu and Dunn
(1995) argued that warehousing, other than land use
requirements, also generates much of the packaging waste
in the supply chain. Freight consolidation functions and
‘break-bulk’ operations carried out in warehouses also
have the potential of utilising transport capacity more effi-
ciently, thus minimising the environmental impact of the
outbound transport system.
Reverse Logistics
Reverse logistics incorporates the return of materials,
components and products back into the ‘forward logistics’
chain. Carter and Ellram (1998) have defined reverse
logistics as an environmentally conscious approach by
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incorporating reverse distribution and resource reduction.
Their complete definition for reverse logistics is the return,
upstream movement or goods or materials resulting from
reuse, recycling, or disposal with the minimisation of waste
which results in more efficient forward and reverse distri-
bution processes. Reverse logistics operations generally
include the following major steps: collection, separation,
densification or disassembly, transitional processing, deliv-
ery and integration. The operational emphasis is dependent
on the type of material or component that flows in the
reverse logistics channel. Practical examples of issues that
have been addressed in the reverse logistics function are as
follows:
Siemens Nixdorf Information system AG has a recovery
plant located in Paderborn, Germany. The recovery plant
reconditions and recycles used computers. The customer
bears the burden of some of the disposal costs. It charges
customers on a sliding scale based on the product type and
disassembly and recycling costs (Ayres, Ferrer & Van
Lyenseele, 1997). Rank Xerox, with a history of leasing
copier equipment, has implemented programmes to
increase the leasing option to help in recovery of parts and
equipment. These programmes have increased the rate of
return for purposes of asset recovery and in turn decreased
the costs of fully warranted equipment at reduced prices.
Marketing programmes have been developed strictly for
promoting these green products (ibid.). As a new pattern of
enterprise strategy management, GSCM pursues coordinate
optimisation of economic efficiency and social efficiency;
reverse logistics is not only the foundation of circulation
economy but also has synergism with the construction of
green supply chain.
Green Suppliers and Importance of
Green Purchasing
Suppliers play an important role in the supply chain and
have a direct impact on production quality, cost and reputa-
tion. Sarkar and Mohapatra (2006) observed that providers
will affect the supply chain performance of the major factors,
and poor suppliers will affect the overall supply chain per-
formance. Today, many companies are giving their suppliers
pressure, asking them to follow the suppliers’ Executive
Environmental Management System, as well as go through
the ISO 14001 certification (Zutshi & Sohal, 2004). The
level of suppliers’ market-orientation will affect manufac-
turers’ trust level (Zhao & Cavusgil, 2006). Providers in a
number of qualities for manufacturers of products have sig-
nificant influence (Forza & Filippini, 1998). Cannon and
Homburg (2001) opined that suppliers and manufacturers in
the relationship between manufacturers developing sustain-
able competitive advantage are very important. Winn and
496 A.N. Sarkar
Roome (1993), through environmental principles into sup-
plier management mechanism, administrate the greening
movement. Zhu and Sarkis (2004) observed in the manufac-
turing industry in China in their study, discussed in the
GSCM, that the external GSCM primarily concerned with
suppliers’ and customers’ interaction.
Environmentally Preferable Purchasing (EPP), often
referred to as green purchasing, is the affirmative selection
and acquisition of products and services that most effec-
tively minimise negative environmental impacts over their
life cycle of manufacturing, transportation, use and recy-
cling or disposal. Examples of environmentally preferable
characteristics include products and services that conserve
energy and water, minimise generation of waste and
releases of pollutants; products made from recycled
materials that can be reused or recycled; energy from
renewable resources such as bio-based fuels, solar and
wind power; alternate fuel vehicles; and products
using alternatives to hazardous or toxic chemicals, radioac-
tive materials and bio hazardous agents. In simple words,
green purchasing is adding environmental aspects to price
and performance criteria when making purchasing deci-
sions. Ultimate goal is to reduce environmental impacts of
sourcing and to increase resource efficiency. Green pur-
chasing is the practice of applying environmental criteria
to the selection of products or services. Green purchasing
is now relatively common among larger companies and
appears to be increasingly used as a corporate practice. For
example, a 1995 survey of 1,000 buyers of office equip-
ment and supplies showed that 80 per cent of respondents
were taking part in environmental initiatives within their
organisations. In 1993, just 40 per cent of respondents
responded this way. Internationally, Germany undertook
structured green public procurement activity in the 1980s
followed by other European countries like Denmark
(1994), France (1995), UK, Austria (1997) and Sweden
(1998). The US EPA developed Guidance for Environ-
mentally Preferable Purchasing, while Japan enacted the
Green Purchasing Law in May 2000 to promote green
purchasing as national policy. The law requires all govern-
mental bodies including local governments to practice
green purchasing and report the summarised purchasing
records to the public.
Interfacing with Green Marketing
Green Marketing includes environment-friendly packag-
ing, environment-friendly distribution, and so on. They are
all initiatives that might improve the environmental
performance of an organisation and its supply chain
(Rao, 2002). Management of wastes in Green Marketing
such as reverse logistics and waste exchange can lead to
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cost savings and enhanced competitiveness (Rao, 2002).
Many of these initiatives involve compromises between
various logistics functions and environmental considera-
tion in order to improve the environmental performance of
an organisation (Wu & Dunn, 1995). Currently, it is quite
common to use packaging that prevents the product from
damage and makes it easy to handle. The use of packag-
ing—whether it is made of glass, metal, paper or plastic—
mainly leads to the solid waste stream. In order to emphasise
these environmental impacts of packaging, many nations
now develop programmes and laws that aim to minimise
the amount of packaging that enters the waste stream, such
as the Packaging Directive in the EU. In China, many
Small and Medium Enterprises (SMEs) are facing the
problem of how to dispose of the waste from their produc-
tion process. Lack of strict waste management law may
lead to unregulated and indiscriminate disposal of wastes,
causing environmental pollution. However, more environ-
mentally engaged SMEs are adopting on-site waste man-
agement treatment facilities and waste exchange networks.
To address the problem of industrial waste management in
China, many government agencies are trying to promote
the concept of industrial ecology for corporations, espe-
cially for SMEs where a ‘closed loop’ approach (Frios,
1999) utilises all waste through the recycling and reuse of
energy and materials.
The impact of Green Marketing on customer relation-
ships, and the impact of corporate customers on suppliers,
had also been widely investigated (Kärnä & Heiskanen,
1998). Encouraging suppliers to take back packaging is a
form of reverse logistics that can be an important consid-
eration in Green Marketing, with a study by Dorn (1996)
identifying an increase in market share amongst companies
that implemented an environment-friendly packaging
scheme. Wu and Dunn (1995) identify warehousing and
packaging design as the two most important issues in out-
bound logistics and distribution. They argue that standard-
ised reusable containers, good warehousing layouts and
easy information access reduce storage and retrieval
delays, which leads to savings in operating costs. In an
environment-friendly transportation system, essential ele-
ments of a transportation system such as type of transport,
fuel sources, infrastructure, operational practices and
organisation can be considered. These elements and the
dynamics that connect them determine the environmental
impact generated in the transportation logistics phase of
the supply chain (Kam, Smyrnios & Walker, 2003).
Strategies of Green Supply Chain
The simplest strategy of GSCM with regard to inter-
organisational investment resource development is one
Green Supply Chain Management 497
of risk minimisation. Firms adopting this strategy are
proposed to do so in response ostensibly to stakeholder
requirements. Such a strategy is ideal for the organisation
that retains minimal internal environmental management
resources or has only recently begun to consider the intro-
duction of a supply chain greening programmme. It is
based on minimal inter-organisational engagement.
Such efforts might involve the inclusion of basic clauses in
purchasing contracts for suppliers to meet all relevant reg-
ulatory requirements. Most frequently used with this
approach is the cascading of an established international
standard such as ISO 14001 (King, Lenox & Terlaak,
2005). The use of an existing performance standard, an
approach used initially by the Ford Motor Company
with its suppliers and now more frequently by other organi-
sations for their supply chains, offers: (a) established
environmental performance benefits, (b) third party or
arms-length management of performance and a system rec-
ognised globally by other organisations. This third aspect
improves the efficacy of uptake by suppliers because the
system is recognised by the market and other industry
members, reducing the ambiguity of desired performance
levels and minimising the need for customer involvement.
A more complex and developing strategy in recent years
has been the ‘eco-efficiency’ or ‘lean-and-green’ approach
to GSCM. This type of strategy derives environmental
performance benefits for the supply chain beyond mere
regulatory compliance through the requirement for suppli-
ers to meet operations-based efficiency targets. Much of
the environmental performance benefit arises from specific
manufacturing practices that have been found to provide
secondary environmental performance benefits. The effi-
ciency-based strategy ties environmental performance to
operational processes in the supply chain, and this strategy
allows the extension of performance requirements into the
supply chain that maximises economic performance and
provides secondary environmental performance benefits
through waste and resource use reductions. It requires
more comprehensive and supply chain–specific perform-
ance specifications than the simpler risk-based strategy. It
also requires a higher level of involvement between supply
chain partners arising from the use of more complex inter-
firm performance requirements. Using this strategy to
facilitate greater efficiency in the supply chain does not
require the development of co-specialised resources
specific to environmental performance. The necessity for
collaboration on efficiency, however, provides a facilitat-
ing role for context-specific, complex problems such as
waste reduction and recycling (Geffen & Rothenberg,
2000). The strategy can provide a cost-reduction advantage
to the supply chain and readily fits with pre-existing
organisational goals of optimisation.
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Innovation-based Greening Strategies
The innovation-based GSCM strategy is distinct from the
efficiency-based approach because of its use of a supply
chain environmental performance strategy that is more envi-
ronment-specific. Organisations are increasingly aware of
the potential for narrow purchasing policies to in-source
components or services from suppliers that may be legally
non-compliant with environmental regulations or who
themselves procure goods in an environmentally irresponsi-
ble way (Bowen et al., 2001). Some organisations have
begun to guarantee more comprehensive product life cycle
considerations for consumers of their products. Once a
supply chain begins to consider specialised processes, tech-
nologies or complex performance standards for suppliers
such as chemical avoidance, the level of knowledge
exchange and relational investment begins to change.
Moving from an efficiency-based GSCM strategy to a
greater level of innovation or integration of environmental
performance in supply chain and product design requires
specialised environmental resources (Lenox & King, 2004).
Keeping up-to-date with environmental legislation changes
and training suppliers in environmentally relevant process
changes requires more dedicated environmental resources,
specialised personnel and design. The development of such
resources provides the conditions for an organisation to shift
from an efficiency-based to an innovation-based GSCM
strategy. For products, the resources developed could be
used to incorporate innovative environmental planning into
specific product designs, characteristics, functionality or life
cycle-related activities (for example, service, repair and
recycling). At the process level, they could be deployed to
develop environmentally robust methods and systems for
the production, distribution and use of products.
Closed-loop Strategies
Closed-loop strategies are a more recent type of GSCM
strategy and represent the most complex and collaborative
form of this type of activity. Often referred to in its simplest
form as ‘reverse logistics’, closing the loop involves the
capture and recovery of materials for either remanufacture
(high value) or recycling (low value) (Kocabasoglu,
Prahinski & Klassen, 2007). These materials can arise during
production, as returned goods, post use and at the end of life.
The closed-loop strategy ties or integrates environmental
performance to the whole supply chain. Very few examples
of coordinated recycling or closed-loop activity in the supply
chain currently exist however. Prominent examples include
Kodak’s return and remanufacture of its disposable cameras,
Hewlett-Packard’s retrieval of used printer cartridges and
BMW’s end-of-life vehicle requirements for suppliers
498 A.N. Sarkar
(Guide, Kraus & Srivastava, 1997). The motivation for a
closed-loop strategy remains low for basic reasons of poor
and distributed control over the reverse supply chain, lack of
available infrastructure and the inability of supply chains to
believe that such activity is economically viable. Designing
and successfully using a closed-loop strategy present one of
the most complex endeavours for a single organisation to
undertake within its supply chain (Richey et al., 2005). In its
simplest form, ‘closing the loop’ may involve product take-
back and reverse logistics implemented only in the retail
portion of the supply chain. In more complex ‘closed-loop’
systems, used or obsolete products and waste are taken back
by the producer and remanufactured or recycled rather than
being disposed of to landfill. The closed-loop strategy
represents an approach that seamlessly integrates issues of
economic, operational and environmental performance.
Organisations considering implementation of a closed-loop
supply chain require high levels of control over the capture
and return of used materials.
Supply Chain Key Performance
Indicators (KPIs)
It is essential to assess the supply chain in a numerical
manner, since the individual companies involved and the
supply chain as a whole can benchmark themselves against
their competitors, so that they can continuously improve,
and dynamically adjust their KPIs. According to Inger
et al. (1995), the most strategic supply chain KPIs are
delivery performance, schedule adherence, lead time and
product logistics costs. Meanwhile, Moore (1998) used the
concept of ‘SCOR model KPIs’ to assess the performance
of a significant number of organisations. They categorised
three external and one internal attributes and they selected
specific KPIs to measure the performance of the organisa-
tion. These attributes were supply chain delivery reliabil-
ity, supply chain responsiveness, supply chain flexibility
and supply chain asset management efficiency. The KPIs
that they used to measure organisations were delivery per-
formance to commit date, fill rate, perfect order fulfilment,
order fulfillment lead time, supply chain response time,
production flexibility, cash-to-cash cycle time, inventory
days of supply, net asset turns. However, it is important to
align these KPIs to Green Logistics; it is vital to determine
whether or not these KPIs can be aligned to sustainable
distribution, and if not, it will be necessary to develop a
new set of KPIs to assess the performance of transport
from a holistic green supply chain perspective.
Supply Chain Management Practices
Organisation’s implementation of GSCM practices and the
organisation’s environmental performance and economic
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performance have positive relations (Zhu & Sarkis, 2004).
SCM practices of organisations can conduct sales perform-
ance; financial performance and competitive edge have a
positive impact (Li et al., 2006). GSCM practices are rather
of wide range, from internal and external. GSCM practices
include internal environmental management, external
GSCM, investment and restore the ecological design or
environment practical design (Zhu & Sarkis, 2004). Several
authors have researched about SCM practices, but most
recently, Li et al. (2006) developed a list of sub-constructs
for SCM practices to link them to performance. These con-
structs are Strategic Supplier Partnership, Customer
Relationship, Information Sharing, Information Quality,
Internal Lean Practices and Postponement.
Towill (1999) developed other frameworks to guide
supply chains to reach an effective operation. He stated a
number of pre-conditions that companies need to apply in
order to simplify material flow. These rules are ‘unbiased
and noise-free information flows; time compression of all
work processes; achievement of consistent lead times;
choice of smallest possible planning period; adherence to
the schedule i.e. elimination of pockets of “Just-in-Case”
materials, selection by simulation of the “best” supply chain
controls; and finally, matching the simulation model to the
real work process via process flow and information analy-
ses’. However, there has been little research on the impact
of supply chain practices on Green Logistics performance;
this gap in the Green Logistics literature needs to be filled.
Some examples to show the impact on supply chains
(van den Broek, 2010) are as follows:
• Wal-Mart, which in 2005 launched a sweeping busi-
ness sustainability strategy, recently set the goal of a
5 per cent reduction in packaging by 2013. The retail
giant expects the cut in packaging will save 667,000
metric tonnes of carbon dioxide from entering the
atmosphere. Moreover, the company anticipates
$3.4 billion in direct savings and roughly $11 billion
in savings across the supply chain;
• Nestlé employs an ongoing, company-wide
sustainability programme that has generated
significant environmental and financial benefits. The
company has applied the strategy to its use of product
packaging by initiating an integrated approach that
favours source reduction, re-use, recycling and
energy recovery. In particular, the company’s
packaging material savings between 1991 and 2006
led to $510 million in savings, worldwide, according
to Nestlé’s corporate website;
• Heineken committed to reduce fuel and electricity
use through its ‘Aware of Energy’ programme.
The company said in its 2006 sustainability report
Green Supply Chain Management 499
that it aimed to reduce fuel and electricity costs by
15 per cent between 2002 and 2010. At the time of
the Diamond report, Heineken had achieved savings
of 6 per cent—even after the acquisition of new
breweries.
Supply Chain Management and Transport
SCM is a field that is usually been studied more from
a market and product perspective rather than from a
transport point of view. However, some authors have
recently worked in the development of the supply chain
and transport relationship. Firstly, Stank and Goldsby
(2000) developed a decision-making framework that posi-
tions transport in an integrated supply chain. Regarding
transport decision-making, decisions are made from strate-
gic to operational level and from macro to micro level; they
categorised these decisions as total network and lane deci-
sions, lane decisions, mode/carrier assignment decisions,
service negotiation and dock level decisions. However,
they do not determine the impact of each of these decisions
on Green Logistics performance, and most importantly, the
decisions made at macro and strategic levels possibly
have a more significant impact on Green Logistics
performance, so it is vital to fill this gap in the literature.
Meanwhile, Potter, Lalwani, Disney and Velho (2003),
stated that there has been little degree of change of trans-
port management techniques, although there is evidence of
demand variability, and subsequently, demand amplifica-
tion on transport operations. In terms of demand amplifica-
tion and transport, there has qualitatively been suggested a
negative relationship between these two variables.
However, according to Potter and Lalwani (2005), nega-
tive relationship has not been proven. In addition, they
developed a framework that integrate five main strategic
themes, namely coordinated distribution network manage-
ment, transport cost visibility, exploitation of ICT, collabo-
rative relationships and information feedback. However,
these authors left an unfilled gap in the body of knowledge
of supply chain and transport, since there has not been
determined the impact of transport demand amplification
on Green Logistics performance, and also the impact of
their five main strategic themes on Green Logistics perfor­
mance. SCM and transport are areas that should be
discussed more in-depth; in order to do so it is necessary to
develop a framework that allows a holistic analysis from a
system perspective. Therefore, before discussing about
supply chain strategies and practices, it is important to
discuss more deeply about sources of uncertainty between
supply chain companies and third logistics providers.
Supply chain uncertainty is a concept that is making
inroads into GSCM operations. According to van der Vorst
and Beulens (2002), ‘SC uncertainty’ refers to
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decision making situations in the SC in which the decision
maker does not know definitely what to decide as he is indis-
tinct about the objectives; lacks information about his envi-
ronment or the supply chain; lacks information processing
capacity; is unable to accurately predict the impact of possible
control actions on SC behaviour; or, lacks effective control
actions.
Therefore, uncertainty is produced mainly because of
insufficient information within the supply chain and lack
of effective control decision tools. On the other hand, at a
strategic level, uncertainty can be divided into two main
categories, external vulnerability and supply chain agility
(Prater et al., 2001). External Vulnerability is related to
demand and forecasting uncertainty, and complexity.
Supply chain agility is related to sourcing flexibility and
speed, manufacturing flexibility and speed, and delivery
flexibility and speed. Therefore, it is important to deter-
mine the impact of external vulnerability and supply chain
agility on Green Logistics performance.
Lean Supply Chain Management
The theory of Lean Thinking has evolved with time. The
term ‘lean production’ was first used to describe the process
of minimisation of waste in the automotive industry
(Womack et al., 1990). According to Jones, Hines and Rich
(1997), Lean Thinking has a natural starting point with
value for the customer looking at the whole rather than the
individual processes. However, ‘leanness’ means develop-
ing a value stream to eliminate all waste, including time,
and to ensure a level schedule (Naylor et al., 1999). More
recently, Hines, Holweg and Rich (2004) stated that Lean
Thinking exists at two levels: strategic and operational.
The customer value-creation strategic thinking applies
everywhere, the shop-floor techniques do not, but value
creation is only equal to quality, cost and delivery. However,
Lean Thinking is not a supply chain strategy that can be
adapted to all sorts of products. Developing a supply chain
strategy consists of matching market characteristics (prod-
ucts, attributes and demand variability) with supply, and
there are two sorts of products, fashionable and commodi-
ties (Fisher, 1997). Therefore, the commodities can be
adapted to the ‘lean’ environment since there is high pre-
dictability of demand, and in consequence, the process can
be controlled by the Lean Thinking level schedule require-
ments (Suzaki, 1987). However, all this discussion leaves
questions unanswered about the characteristics and
attributes of this supply chain strategy and it is also neces-
sary to deduce the potential implication of Lean Thinking
for Green Logistics performance.
From the Toyota’s tool box, Jones et al. (1997) stated
the characteristics of truly Lean Thinking strategy, value
500 A.N. Sarkar
creation, value stream, level schedule (level demand and
supply), organisation of work (preventive maintenance),
pull system through Kanban inventory control system
(minimisation of safety stock), standardisation of work
(TQM), visual control devices and production errors detec-
tion. From these characteristics, it can be noticed that waste
minimisation and level schedule play a strategic role in any
Lean Thinking programme. However, it is important to
think about the feasibility of this strategy—how this strat-
egy can be adapted to a volatile market. Also, it is neces-
sary to determine the impact of a typical Lean Thinking
supply chain, where minimisation of inventory is achieved
through level schedule and pull systems, on Green Logistics
and transport performance. Elimination of waste and pull
system is also a vital component of ‘lean’ SCM, as Naylor
et al. (1999) stated, ‘in a “pure” lean supply chain there
would be no slack and zero inventory’. Several authors
include elimination of waste and pull system as a strategic
Lean Thinking characteristic (Ohno, 1988; Jones et al.,
1997; Abernathy, 2000; Mason-Jones, Naylor & Towil,
2000). This represents a similar issue as time compression
presents, since there can be multi-goal problems between
inventory reduction and transport optimisation. Therefore,
it is important to establish how an inventory reduction
strategy under a pull system can achieve its main goal, and
at the same time, mitigate its negative effect on Green
Logistics and transport performance.
Potential of Lean Supply Chain to Green
Logistics Performance
It can be argued that ‘lean’ manufacturing has a positive
impact on the environment, since its primary focus is on
waste minimisation. However, there are certain constraints
that need to be taken into account to determine whether or
not Lean Thinking has a positive impact on the overall
green supply chain performance. ‘Design, modelling, and
analysis of the traditional supply chain has primarily
focused on optimising the procurement of raw materials
from suppliers to the distribution of products to customers’
(Beamon, 1999). This has included production/distribution
scheduling, inventory control and locations, number
of echelons, distribution centres (DCs), plant–product
assignment, buyer–supplier relationships—determining
and developing critical aspects of the buyer–supplier rela-
tionship and product differentiation step specification.
However, this does not consider the total product life cycle,
including reverse supply chain processes.
No longer is it acceptable or cost-effective to consider only
the local and immediate effects of products and processes; it
is now imperative to analyze the entire life cycle effects of all
products and processes. Therefore, the traditional structure of
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the supply chain must be extended to include mechanisms for
product recovery. (Beamon, 1999)
Hence, in order to mitigate the negative impact of trans-
port on the environment, the integration of forward and
reverse flows in the ‘lean’ supply chain should be consid-
ered, so it should be determined how supply chain compa-
nies and transport providers can integrate those flows to
holistically optimise transport movements. Lean supply
chains based their strategy on pull systems that aim to min-
imise the inventory within the chain. In order to achieve
waste minimisation, these sorts of systems require Just-
in-time (JIT) delivery. McKinnon (1996) has suggested
that ‘JIT delivery cannot be considered a green solution;
despite that it has not greatly increased road volume’. ‘The
more JIT strategies are applied, the further the negative
environmental consequences of the traffic it creates’
(Rodrigue, Slack & Comtois, 2001).
JIT is one of the main strategic features of Lean Thinking
and is by far the one that represents the greatest challenge
for Green Logistics. Therefore, in order to achieve a high
level of Green Logistics performance, under JIT system,
supply chain companies and their third logistics providers
need to look for alternative means of achieving both at
the same time. According to Minanham (1997), ‘Toyota
is under a continuous improvement process of its JIT
system, “location of the suppliers’ base helps to achieve a
close-loop distribution network”, known as “milkrun” that
can deliver parts from its suppliers to assembly base in a
JIT principles’. Therefore, from a transport and supply
chain perspective, sourcing and location of suppliers are
critical factors to achieve an effective JIT system, since
optimisation of transport flow can be achieved in conjunc-
tion with minimisation of inventory. In Japan, ‘Nissan with
its factories more dispersed than Toyota, soon found the
addition of buffer stock, well above that of those levels
maintained by Toyota, to be a useful tool to offset traffic
congestions in urban areas’ (Polito & Watson, 2006).
Therefore, from a transport and supply chain perspective, it
is important to determine the main strategic factors that
allow high level of Green Logistics performance under a
JIT system.
Green Innovations and
Sustainability Issues of GSCM
Hurley and Hult (1998) noted that on the question of
market dynamics, one is almost unable to find industries
which do not engage in innovative activities. Porter and
van der Linde (1995) also view that in a dynamic and
competitive business environment, we must constantly
innovate to be able to effectively respond to competitors,
Green Supply Chain Management 501
legislators and other areas of businesses that are critical for
survival. Schumpeter (1934) pointed out that invention and
innovation is a different concept; innovation has become
the industry and academia to the subject. Rogers (1962)
pointed out that many scholars research subject of innova-
tion from many views, but innovation can be regarded as a
separate, integrated concept. However, researchers with
the interest and views of different organisations of the
innovation will define the difference; basically the defini-
tion of innovation can be divided into four perspectives:
product perspective (Burgess, 1989), the process perspec-
tive (Johannessen & David, 1994; Kimberly, 1986; Scott &
Bruce, 1994), product and process perspective (Dougherty
& Bowman, 1995; Lumpkin & Dess, 1996; Tushman &
Nadler, 1986) and multiple perspective (Robbins, 1996;
Russell, 1995). The most recent study is about multi-
perspective. Multiple perspectives of scholars believe that
regardless of the product or process perspective, the indus-
try should focus more on ‘technological innovation’ level,
while not ignoring the ‘management of innovation’ level.
Thus, it will be ‘technological innovation’ (including prod-
ucts, processes and equipment, etc.) and ‘innovation
management’ (including systems, policies, programmers
and services, etc.) at the same time added into the defini-
tion of innovation.
In the 1990s, Green Century Council session, restarting
the business community, compared to the traditional treat-
ment at the end-of-pipe, through process and product
innovation, production of environment-friendly products
in an attempt to produce a green image (Ramus & Steger,
2001; Porter & van der Linde, 1995; Peattie, 1992). More
and more enterprises are from the obedience of laws and
regulations to transfer a positive strategy for innovation
strategy (Aragon-Correa, 1998; Berry & Rondinelli, 1998).
It continued to improve performance, in order to improve
corporate body and enhance competitiveness (Nehrt,
1998). Porter (1991) suggested that enterprises through
environmental regulations to the business environment
innovative technologies, in addition to regulatory compli-
ance requirements, can further reduce production costs and
increase economic efficiency. Chen et al. (2008) pointed
out that green innovation has a related impact on the
enterprise’s competitive edge.
The most well-known definition of sustainability is that
of the Brundtland Commission. It defines sustainable devel-
opment as ‘a development that meets the needs of the
present without compromising the ability of future genera-
tions to meet their own needs’ (WCED, 1987). Elkington
(1997) suggests the integration of the economic, ecological
and social aspect of sustainability in a ‘triple bottom line’
concept, emphasising their intense interrelatedness. Dyllick
and Hockerts (2002) conceive corporate sustainability as
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the business case (economic), the natural case (environ-
mental) and the societal case (social). Thus, the following
six criteria for achieving corporate sustainability are
derived: eco-efficiency, socio-efficiency, eco-effectiveness,
socio-effectiveness, sufficiency and ecological equity.
Combining definitions of SCM and sustainability, Seuring
and Müller (2007, 2008) define SSCM as ‘the management
of material, information and capital flows as well as coop-
eration among companies along the supply chain while
taking goals from all three dimensions of sustainable devel-
opment, i.e., economic, environmental and social, into
account which are derived from customer and stakeholder
requirements’ (ibid.). As such, members in a sustainable
supply chain have to fulfil environmental and social crite-
ria, but equally have to remain competitive by meeting cus-
tomer demands and related economic criteria.
Sustainability has become an increasingly important
issue in today’s business world. All firms operating in
domestic and global business must be cognizant of all the
myriad aspects of sustainability. All areas of marketing,
including SCM, have to operate in this new environment.
Philip Kotler and Gary Armstrong (2010) look at sustaina-
bility as a marketing management practice that looks at the
present needs of consumers and businesses and then devel-
oping practices that satisfy these current needs while
making sure that the needs of future generations will be
satisfied. Chad Holliday, a DuPont CEO, opines that no
executive can afford to ignore this wave (Esty & Winston,
2006). Smart companies use environmental strategy to
innovate, create value and build competitive advantage. A
critical part of this environmental strategy involves
the creative, effective use of Integrated Marketing
Communications, as well as all other aspects of those criti-
cal four Ps of marketing strategy—Product, Promotion,
Price and Place (Perreault & McCarthy, 1979).
Sustainability, as defined by Kleindorfer et al. (2005),
includes the topics of environmental management, closed-
loop supply chains and a broad perspective on triple bottom
line thinking, integrating profit, people and the planet into
the culture, strategy and operations of companies. In other
words, sustainability is a comprehensive approach to make
a company more green, in a way that aligns an organisation’s
profit and environmental goals. Kleindorfer et al. (2005)
divided the primary drivers of sustainability in the supply
chain into two groups: regulations and public expectations.
The regulatory drivers of sustainability are corporate
image, regulatory compliance, liability and community
relations. The public expectations that drive sustainability
are employee health and safety, customer relations, cost
reduction and quality improvement (ibid.).
According to Starik and Rands (1995), new patterns of
sustainable production and consumption are only achievable
502 A.N. Sarkar
through a high degree of innovation of products and
processes. Innovation refers to innovative technologies,
products and services, innovative processes, innovative
organisational models and innovative business ideas.
Eco-innovation can be defined as actions to create or apply
new goods, processes, systems, services and procedures
designed to provide customer and business value and
help to decrease negative environmental impacts (James,
1997; Rennings, 1998). There is a growing interest among
top managers, stakeholders and academics regarding
Green Marketing strategies and the potential impact on the
triple bottom line. Firms are increasingly adhering to
a triple bottom line performance evaluation, a concept
coined to reflect the growing tendency of stakeholders
to evaluate organisational performance on the basis of
economic prosperity, environmental quality and social
justice (Elkington, 1997).
Carter and Rogers (2008) identified four facets support-
ing the performance on the triple bottom line (Elkington,
1997) by means of a review of sustainability literature:
risk management, transparency, strategy and organisational
culture (Figure 1). On this basis, the authors define
SSCM ‘as the strategic, transparent integration and
achievement of an organization’s social, environmental,
and economic goals in the systemic coordination of key inter-
organizational business processes for improving the long-
term economic performance of the individual company and
its supply chains’ (Carter & Rogers, 2008).
Figure 1. Sustainable Supply Chain Management
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Asia-Pacific Journal of Management Research and Innovation, 8, 4 (2012): 491–507
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Green Logistics Strategies for
Evolving Integrated GSCM System
Area of Green Logistics encompasses many segments that
can be used to manage environmental impact. According to
the fact that pollution is partly the consequence of economic
activities, cooperation with the economy is necessary
because of the need to assess levels of environmental
impacts by each and every business related to transport
logistics and try to minimise these. Minimisation of these
impacts can be provided by using the knowledge and under-
standing the necessity of every company for individual
organisation of Green Logistics programmes. The whole
concept of Green Logistics includes strategies and activities
of logistics operations that are designed in such way as to
have less negative impact on the environment. The benefits
of applying this concept to individual companies can be
numerous: energy savings, lower operating costs and the
possibility of positioning in the markets where the business
is in compliance with environmental standards as an
element of competitiveness (Bajor, Božić & Rožić, 2010).
Green Logistics is a relatively young research area. As
original focus of logistics has developed from the original
movement of finished products to transport, handling
systems, storage and SCM, same happened in the Green
Logistics, which now encompasses greening of the produc-
tion, warehouses, transport, manipulation, packaging, mar-
keting and in the end, the customer. Results of the research
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Green Supply Chain Management 503
have shown that ‘going green’ can bring profit by as much
as 10 per cent when compared to a traditional supply chain
in logistics industries. Designing a Green Logistics cannot
be specified on one of the points in supply chains; it is a
collection of organised set of activities, resulting in sus-
tainable and upgradable green network that consists of
planning the Green Production, Green Transport, waste
reduction, energy savings, space savings, resource savings,
planning a GSCM and having a green consumer.
Although in the past, the environment was not a major
preoccupation or priority in the industry itself, the last two
decades have shown a remarkable change as Green Logistics
became increasingly a part of the SCM discourse and prac-
tices. The standard themes of materials management and
physical distribution can be expanded with an additional
focus on strategies able to mitigate the paradoxical nature of
Green Logistics. Applying Green Logistics to supply chains
must also consider the network and spatial footprint of
freight distribution. Airports, seaports and rail terminals are
among the largest consumers of land in urban areas. For
many airports and seaports, the costs of development are so
large that they require subsidies from local, regional and
national governments (Rodrigue, Slack & Comtois, 2001) .
There is growing evidence that green logistics results in
increased supply chain performance, particularly since
greenness per se favours an integrated perspective about
supply chains. The actors involved in logistical operations
have a strong bias to perceive Green Logistics as a means
to internalise cost savings, while avoiding the issue of
external costs. The top environmental priority is commonly
reducing packaging and waste. The rise in energy prices is
conferring additional incentives for supply chain managers
to improve upon logistics and will correspondingly push
energy and emissions at the forefront. These observations
support the paradoxical relationship between logistics and
the environment that reducing costs does not necessarily
reduce environmental impacts. Overlooking significant
environmental issues, such as pollution, congestion and
resource depletion means that the logistics industry is still
not very green. Green Logistics remains an indirect
outcome of policies and strategies aimed at improving the
cost, efficiency and reliability of supply chains.
Green Integrated Supply Chain Management (GISCM)
brings together various stakeholders in the supply chain
from within and outside the organisation to help the organi-
sation improve its environmental credentials. To benefit
both the business and the environmental bottom line, the
SCM of an organisation needs to be analysed, planned
and optimised for sourcing and deliveries, and in an envi-
ronment-conscious manner. Such analysis includes
suppliers, customers, regulatory authorities and employees
at all levels of an organisation. Undoubtedly, electronic
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(Internet-based) systems deliver enterprises with a
competitive advantage by opening up opportunities to
streamline processes, reduce costs, increase customer
patronage and enable straight thorough processing capa-
bilities. These same characteristics of good SCM can be
converted to handle environmental issues related to supply
chain operation and processing.
GISCM involves the linking of suppliers and customers
with the internal supply processes of an organisation from
an environmental perspective. Internal processes include
both vertically integrated functional areas such as materi-
als, sales and marketing, manufacturing, inventory and
warehousing, distribution and perhaps, other independent
companies, which are involved in the supply chain (that is,
channel integration). Customers at one end of the process
can potentially be a supplier downstream in the next
process, ultimately supplying to the end-user. Whilst large-
scale GISCM systems are yet to happen in some organisa-
tions, the concept of establishing information flows
between points in the supply chain has been around since
the 1980s. Through Electronic Data Interchange (EDI),
customers and suppliers have communicated supply data
through direct dial-up interfaces and other mediums.
However, the ability for the Internet to create a common
communication infrastructure has made integration much
more cost-effective. In sum, GISCM has a future promise
to deliver the right product to the right place at the right
time and at the right price.
Conclusions
Most companies currently engaged in energy-intensive
operations such as manufacturing, infrastructure, mass
rapid transport, etc., are confronted with embarrassing
questions like how green their manufacturing processes
and supply chains are, the state of their carbon footprints
and how they recycle and dispose wastes. With growing
consciousness towards ‘going green’, consumers increas-
ingly prefer to purchase green products that are free of
toxins, produced with minimum level of pollution-linked
contaminants and minimal environmental or ecological
hazards. The article has discussed at some length about dif-
ferent emerging concepts and operational strategies for
successful implementation of green supply chain that could
be successfully employed as a potent management tool,
aiming at both corporate and product branding of green
products. Linkage with transport systems, ‘lean’ concept in
SCM, green innovations and sustainability issues of GSCM
and Green Logistics strategies for evolving integrated
GSCM system have also been discussed with suitable cor-
porate examples to bring in greater clarity on the evolving
concept.
504 A.N. Sarkar
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