You are on page 1of 12

Origin of GSCM

75% of a
Title
companys
carbon .
footprint
comes from
transportation
and logistics

Environment SCM
Extended Supply Chain
Extends the one-way chain to construct a semi-closed loop that includes
product and packaging recycling, re-use, and/or remanufacturing
operations

Collecting used materials,


products, or components and
processing into recycled
products

Collecting a used product ,


assessing its condition, and
replacing broken, or obsolete
parts with refurbished parts
Global GSCM Survey
Global green supply chain survey 2008 Supply Chain Standards

Transportation & logistics- areas of focus

Reasons- Brand Image, Differentiation, Customer Satisfaction

Initiated By companies revenue over $1 billion (54%)

Go-Green Supply chain the next big thing

Asia Pacific the leaders

Indian Cos. Perspective


FE-EVI Green Business Survey 2008

213 companies from the FE 500 list

61% agreed - use of fuel efficient vehicles

7% - Plan to measure emissions


Steps Towards GSCM
Best possible path
1 gallon diesel -22.2 pounds CO2 emission
Optimize Routing & Incorporate flexibility offered by 3PL
Consolidation

GPS tracking and monitoring


Timely vehicle maintenance
Improve Fleet Driver training
Management

Delays due to port clearance


Poor duty payment coordination
Increase Global Reduced through efficient coordination and tracking(EASN)
Transport Efficiency
Steps Towards GSCM
Reduce paper- RFID, ASN etc.
System-generated
Improved collaboration
Tasks and
Communication
Improved forecasts Reduce
PET bottle
weigh by
20%
Materials variations & cube optimization
Light weighting and reduction PepsiCo.
Packaging Wal-Mart- Packaging Scorecard for suppliers

Energy-saving motion sensors for lights


Energy
Switch to Reusable pallets
Conservation in
Warehouses
Efficient shelving or forklift routing
Renewable Innovation, 5
Energy, 5
Recovery
value, 10 GHG/CO2,
15

Material
Recycled
Value, 15
Content, 10

Prod/Pck
Cube Ratio, 15
Transportation Utilization,
, 10 15
Role of IT Towards GSCM

Optimizing Streamlining
Hardware Business
resources Processes

Streamlining
Right-sizing IT
Business
infrastructure
processes
Lack of Information abt.
GSCM practices
Re-architecture
of data Green supply Lack of IT tools to
processing and chain execution optimize the chain
storage
Global sourcing- Tracing
carbon footprint difficult
Leveraging Enabling supply
shared chain
infrastructure collaboration
Challenges
Performance parameters
Classification Performance measure
(measured over product and process life cycle, except where indicated)

Resource use Total energy consumed


Total material consumed (e.g. water, timber, steel, etc.)
Product recovery Time required for product recovery
Remanufacturing Percent recyclable/re-useable materials (volume or weight) available at end of product life
Re-use Percent product volume or weight recovered and re-used
Recycling Purity of recyclable materials recovered
Percent recycled materials (weight or volume) used as input to manufacturing
Percent product disposed or incinerated
Fraction of packaging or containers recycled
Material recovery rate (MMR)
Ratio of virgin to recycled resources
Ratio of materials recycled to materials potentially recyclable
Materials productivity: economic output per unit of material input
Product characteristics Useful product operating life
Total mass of products produced
Waste emissions Total toxic or hazardous materials used
Total toxic or hazardous waste generated
Solid waste emissions
Percent product (weight or volume) disposed in landfills
Concentrations of hazardous materials in products and by-products
Estimated annual risk of adverse effects in humans and biota
Waste ratio: the ratio of wastes to all outputs
Economic Average life-cycle cost incurred by the manufacturer
Purchase and operating cost incurred by the consumer
Average total life-cycle cost savings associated with design improvements
Economic/emissions Eco-efficiency: adding the most value with least use of resources and the
Examples

McDonald's reduced the weight,


Dell saves over $20mn annually as volume, and environmental impact
a result of supply chain and of its packaging materials and
packaging improvements explores new packaging
alternatives

Texas Instruments: Saves $8


million each year by reducing its Dow Corning: Saved $2.3 million
transit packaging budget for its by using reconditioned steel
semiconductor business through drums in 1995. Also conserved 7.8
source reduction, recycling, and million pounds of steel.
use of reusable packaging systems

Companies that have


Pepsi-Cola saved $44mn by
made a proactive move
Greener switching from corrugated to
to a green supply chain
companies
reusable plastic shipping
now, have discovered
boost image and
containers for one litre and 20-
that the benefits go
customer
ounce bottles
beyond a competitive
satisfaction advantage
Roadmap to GSCM
follow the
basic Identify processes
principles
established
by ISO 14000
Develop a performance measurement system

Measure the supply chain system & prioritize steps

Develop alternatives and select approach

Establish auditing and improvement procedures


Profits from GSCM
Environmental Benefits
Business benefits (Cost Reduction and Customer preferences)

Asset
Profitability
Utilization

Tangible
Outcome

Service
Green Supply Technology
Level
Chain Supply Chain
Initiatives Value
Customer Reputation

Intangible
Value Drivers

Greener
Continuity Alliances companies
boost image
and customer
Stakeholder
satisfaction
Interests
The Future to come
Slowgistics
use of a countrys canal and rail networks and coastal shipping routes

Reversal of the supply chain


Designed from the customer backwards

Shared distribution networks


Collaborate - Reduce the surplus capacity

Virtual bazaars
companies with niche offerings come together to sell their wares

Return of local factories


Globally distributed factories- may not make commercial sense in future

Implementation of GSCM
strategies will require
fundamental changes in core
business processes such as
product development,
marketing and sales,
manufacturing, supply chain
management, and customer
service