Green Supply Chain Management

Green Supply Chain Management (GSCM) refers to embedding environmental care through assimilating sustainable environmental methods into the inter-business uses of supply chain management (SCM). It aims to decrease negative environmental impact due to the supply chain in combination with elements like global warming, pollutants, ozone depletion, and deforestation.

Its practices help various sectors decrease their carbon footprints and maximize growth through decreased waste. It has the four main principles of reduce, reuse, recycle, reclaim, and degradable 4R1D ingrained in it. Manufacturers emphasize the need for suppliers to adhere to green practices implemented in their systems and offices.

Green supply chain management (GSCM) is a systematic approach to handling the environmental effects related to the supply chain's process from raw material sourcing to production, distribution, and delivery. Sometimes, it is also termed green logistics or sustainable supply chain management. The impact of sustainability on the environment of every process and product throughout the supply chain gets evaluated to find ways to enhance efficiency and sustainability.

The evaluation includes practices like recycling materials and energy efficient improvement through green logistic options and collaborating with green vendors. It has always been about having more efficient operations and enhanced sustainability. Companies achieve these goals by adopting different practices like eco-friendly transportation, lean manufacturing, reverse logistics, and sustainable procurement. Hence, these practices fulfill the aspirations of customers and different stakeholders seeking to support and use greener logistics.

Various industries apply it because it can be customized to suit the particular capabilities and needs of different companies. Such a process comprises collaboration with suppliers, customers, and other stakeholders to accomplish the objectives of green supply chain management and sustainability. Moreover, small businesses can initiate the process by making simple modifications like energy-efficient lighting and sustainable packaging. It makes a firm more competitive and admirable to customers, as customers like buying products with lesser environmental impact.

It also pushes firms towards compliance with reducing their carbon footprint and environmental goals. As a result, it facilitates companies' achieving corporate social responsibility initiatives, improving their image, and increasing their proximity to vendors. Moreover, it aids companies in cost savings through recycling and green transportation. Further, companies can derive other benefits like decreased fuel consumption, improved brand image, and minimized waste disposal expenses.

There are eight principles and practices of GSCM, as listed below;

• Sourcing Green materials includes purchasing eco-friendly traits inbuilt components like recyclability and reusability, as well as not using detrimental chemicals that support waste reduction, enhance recycling, and reduce environmental impact.
• Green marketing promotes environmentally friendly real estate by reducing the harmful impacts of products, leading to improved competitiveness, corporate reputation, and financial performance.
• Green Management provides supplementary information sources to companies to increase their business and enhance environmental objectives, opening the path to efficiency, cost savings, carbon emission mitigation, and environmental compliance.
• Warehousing and Green Distribution aims to reduce waste while reducing energy and enhancing organizational performance overall with a better corporate reputation.
• Green Manufacturing aids in executing environmentally and socially accountable production practices, decreases harmful effects, and enhances efficiency and financial, environmental, and operational performance.
• Ecological Design helps businesses manage a large portion of environmental effects on processes and products by supporting recycling, reusing, and re-manufacturing to cut expenditures and improve environmental costs.
• Reverse Logistics and Green Transportation usage are directed at better quality, cost-cutting, and decreased environmental impacts.
• Biofuels and Renewable Energy adoption in SCM and operations improves economic performance, enhances sustainability, and results in fewer carbon emissions.

Let us examine a few examples to understand the topic.

Example #1

A report published online discusses the implantation of GSCM in Amazon's structure. Amazon successfully reduced CO2 emissions to a level 16% lower than in 2019. It has expertly improved transport efficiency coupled with sustainable packaging, leading to a 32% carbon footprint reduction. Moreover, they have also expanded their electric delivery fleet, which now has 20,000 electric vehicles in the eurozone.

As a result of such a novel initiative, last-mile delivery emissions were effectively decreased. As part of its GSCM practices, amazon has also invested heavily in renewable energy resources, resulting in two-thirds of its energy being derived from renewable sources by 2025. All these steps would help Amazon's commitment to achieving net zero by 2040 and toward business sustainability.

Example #2

A car manufacturer based in Old York City has developed a novel design for its engine to comply with SGCM. It has done this to comply with Old York's regulatory body and attract courier companies and the general public to contribute to environmental causes. Atomic Car has developed a system in the engine that automatically switches to battery operations above 40 km/hour speed. Therefore, its cars reduce their carbon emissions by 50% and contribute to its SGCM policy.

It has collaborated with green vendors to procure all its parts and batteries. Moreover, it has also made an agreement with a steel manufacturer of recyclable steel for its body parts and chassis. Hence, companies and individuals using their cars for logistics contribute to greater environmental conservation and cost-cutting.