Green Supply Chain Management practices

1. Presentation
Abhijeet Ghadge
Department of Industrial Engineering &
Management
IIT Kharagpur

2. Contents
What is Green Supply Chain Management?
Green Supply Chain Management Principles
Green Supply Chain Management Best Practices
Implementing Best Practices
Some successful cases
Emerging trends
Discussion

3. Introduction
Green supply-chain management (GSCM) is gaining
interest among researchers and practitioners of SCM;
Driven mainly by the escalating deterioration of the
environment;
The applications are beneficial to the organization’s
environmental and financial performance;
The GSCM initiatives ranging from reactive to
proactive practices implemented through various Re’s
!!!!
(Reduce, Re-use, Rework, Refurbish, Reclaim, Recycle,
Remanufacture, Reverse logistics,etc.)

4. Green Supply Chain management
An integrating environment thinking into supply chain management,
including product design, material sourcing and selection, manufacturing
processes, delivery of the final product to the consumers,
and end-of-life management of the product after its useful life.
(Srivastava, 2007)

5. Wastes in Lifecycle of Product

6. The product life cycle is the basis
of GSCM.

7. The environmental impacts of each LC
stage are examined for reduction.

8. GSCM
from compliance to value creation

9. GSCM a strategic analysis tool.

10. The Drivers of GSCM
External drivers: pressures from outsiders to the
company to implement GSCM (government, NGOs,
or consumers);
Internal drivers: company’s motives to implement
GSCM, (need to have efficient SCM or attract green
consumers);

11. Green supply chain practices
 Two practices of GSCM:
1. Green design: systematic environmental
consideration in the product design;
2. Green operations: relate to all aspects related to
the SCM operations

13. The Practices of GSCM – Green
Design
Environmentally conscious design (ECD) is aim to
develop an understanding of how design decisions
affect a product’s environmental compatibility;
Life-cycle assessment/analysis (LCA) is a process for
assessing and evaluating the environmental,
occupational health and resource-related
consequences of a product through all phases of its
life;

14. The Practices of GSCM – Green
Operations
Three types of green operations:
 1. Manufacturing and re-manufacturing;
 2. Reverse logistics and network design;
 3. Waste management

15. Green Operations – Green
Manufacturing, Remanufacturing
 Green manufacturing is about reducing the
ecological burden by using appropriate material
and technologies;
 Remanufacturing is recycling-integrated
manufacturing;
 Recycling is performed to retrieve the material
content of used and non-functioning products;

16. Green Operations – Reverse
Logistics and Network Design
 Reverse logistics (RL) as the process of planning,
implementing, and controlling the efficient, cost-effective
flow of raw materials, in-process inventory, finished goods
and related information from the point of consumption to
the point of origin for the purpose of recapturing value or
proper disposal.
 Collection is the first stage in the recovery process,
followed by sorting of used products;
 Redesigning logistics networks to accommodate product
returns and remanufacturing and re-use is important to
minimize the operations cost

17. Green Operations – Waste
Management
 Waste management is the reduction of hazardous
waste which is generated (during production and
operations) or subsequently treated, stored or
disposed;
 The source-reduction/pollution-prevention
concept
 aims to prevent the creation of waste rather than
managing it after it is generated

18. Indentify “good” and “bad”

19. Focusing on source reduction
programs

20. Strategies of Green Supply Chain
Management
 Risk-based Strategies
Involve the inclusion of basic clauses like in purchasing contracts for
suppliers to meet all relevant Environment regulatory requirements.
 Efficiency-based Strategies
Involves meeting operations-based efficiency targets like Quality
standards
 Innovation-based Strategies
Involves guarantying more comprehensive product life-cycle
Management considerations for consumers of their products during
Design stages.
 Closed-loop Strategies
Involves product take-back and reverse logistics implemented in Supply
chain for waste reduction.

21. 12 steps to a ‘greener’ Supply Chain
 Step 1: Redesign the product
 Step 2: Reconfigure manufacturing
 Step 3: Shift to green suppliers
 Step 4: Shorten distances
 Step 5: Alter service level agreements
 Step 6: Shrink packaging

22.  Step 7: Plan for reverse supply chain activity
 Step 8: Consolidate shipments
 Step 9: Plan shorter routes
 Step 10: Coordinate with partners
 Step 11: Take a lifecycle view
 Step 12: Start now

23. GSCM benefits
 Economic benefits from increased efficiency. By reducing wastes,
companies decrease handling expenses, fines, and even costly
inputs. Supplier's savings may be passed along to buyer companies.
 Competitive advantage through innovation. Efficient production is
enhanced through the use of cleaner technologies, process
innovation, and waste reduction. Reduction in wastes equals dollars
earned.
 Improved product quality. Supply chain partnerships help maintain
relationships between buyers and suppliers leading to increased
control over product quality.
 Consistent corporate environmental goals. In an era of multi-
faceted, non-vertical manufacturing, companies include supplier
outreach to address corporate environmental goals.
 Improved public image. Consumers, investors, and employees
respond positively to companies with a reputation for good
environmental performance

24. SOME SUCCESSFUL CASES
•In early 1990s Xerox launched a new
initiative to take back used copiers
as a source of material for new
machines.
• Customers like the program
because they no longer worry about
machine disposal.
• Xerox estimates “several hundred
million” dollar savings annually.
144 million pounds
diverted from landfills (2003)
70-90% (by weight)
of machines reused

25. THE DUTCH FLOWER INDUSTRY
 Netherlands produces 65% of the worlds
cut flowers, yet has limited land
 Mass cultivation in a confined area
resulted in fertilizer, herbicide, and
pesticide contamination
 To correct the problem, growing was
shifted to rock wool and water instead of
soil
– Fertilizer in the water is recycled through the
system to reduce waste.
– Water based growth also reduces the risk of
infestation by weeds and pests, reducing the
need for chemical treatments.
– The new system also greatly reduced variations
in growth conditions, greatly improving the
predictability of output.
 Producers were able to increase output
per space and further innovate to reduce
costs

26. TEXAS INSTRUMENTS
 Saves $8 million each
year by reducing its
transit packaging
budget for its
semiconductor
business through:-
 source reduction
 recycling
 use of reusable packaging
systems (20% annual savings)

27. PEPSI-COLA
Saved $44 million by switching from corrugated to
reusable plastic shipping containers for one liter and
20- ounce bottles, conserving 196 million pounds of
corrugated material.

28. Growing areas from GSCM
Carbon footprint Management
Reverse Logistics
Product Lifecycle Management

29. carbon footprint
carbon footprint is a measure of the impact our
activities have on the environment, and in particular
climate change.
It relates to the amount of greenhouse gases produced
in our day-to-day lives through burning fossil fuels for
electricity, heating and transportation etc.
The average carbon footprint for people in India is 1.20
tonnes of Co2.

30. carbon footprint Management
Objective of the IBM SCM Carbon Distribution Modeler is to lower the carbon footprint
across the total product lifecycle.

31. Reverse Logistics
Reverse Logistics comprises of all activities involved in
managing, processing, reducing and disposing of
hazardous or non-hazardous waste from production,
packaging and use of productions, through processes
of reverse distribution.

32. Forward and Reverse
Logistics
Forward Logistics
Manufa-
Supplier Retailer Customer
cturer
Waste Reverse Logistics
Landfill Collector
Processor

33. Product Lifecycle Management
Product lifecycle management (PLM) is the process
of managing the entire lifecycle of a Product from its
conception, through design and manufacture, to
service and disposal.
PLM has four primary areas-
Product and Portfolio Management (PPM)
1.
2. Product Design (CAx)
3. Manufacturing Process Management (MPM)
4. Product Data Management (PDM)