supply chain involves suppliers, manufacturer, warehouse, retailers and finally
customers. Due to existence of superior alternatives, today customers are more
demanding, looking for wide variety of products at shortest possible delivery
time, even willing to configure the product to their specifications. This has
brought the shift from passive acceptance of customer to active involvement in
the design and delivery of products and services. The exceptions of earlier
supply chain like desired product delivered in right quantity to the right
location in time, damaged free and correctly invoiced are reality of today.
Traditionally the focus of supply chain network is economic benefit i.e. cost
minimization or profit maximization.
concept is changing from economic value to market value to Relevance. Increased
pressure on cost and globalization of supply chain have further complicated the
supply chain. These have brought tremendous changes in the traditional supply
chain. The supply chain has become an integral part of strategic management
with most of the companies and even considered as competing strategy.
today’s environment, the concept of integrated supply chain is widely used by
large enterprises. Still in classic supply chain, the concept of environment or
TBL (Triple bottom line) is not considered. It will be pertinent to mention
here that organizations are also looking at CSR initiatives as part of their
larger responsibility towards society. CSR activities focuses more on business
ethics, local employment and local concerns whereas green supply chain
management focus on environmental issues. Shell Puget was fined in US for non-compliance
of environmental regulations1. This indicates that legal framework
is tightening noose around the companies for violations in regard to environment.
There are many mo1re
manufacturing industries are seen as culprits for damaging the environment. The
current state and trend of environmental degradation (from regulatory,
consumer, and moral standpoints) indicate a need for a change in manufacturing
philosophy. There must be a fundamental shift in the way production systems
operate. There must be a move towards sustainability, achieved through vast
reductions in resource use and waste generation, and a move away from one-time
use and product disposal (Beamon, 1999).The greening of supply chain involves
the consideration of environment. The increasing customer awareness about
environment, legal framework and pressures from stakeholders (consumers,
government regulatory bodies, competitors, non-profit or non-government
organizations, investors, employees, shareholders, etc.) have forced the
organizations to think of Green supply chain. Thinking Green has become buzz
word in today’s corporate world. In 1997, Kyoto protocol was adopted by both
developed and developing countries to reduce the CO2 emission (Greenhouse gas).
concept of green supply chain applies to product or services through entire
product life cycle. All products manufactured within the supply chain, and the
applied materials and substances used in the process are expected to meet
environmental standards for design, development, distribution, use, disposal or
recycling. The comprehensive approach
includes reducing energy, water consumption and greenhouse gas emissions,
increasing use of renewable energies, Enhancing appropriate waste management
and training of employees. The growing awareness about the conservation of
environment is partly attributed to media also. The consumers in the developed
countries are more concerned about the environmental friendly products. The
biggest challenge of the green supply is to integrate the suppliers and
customers in a collaborative way.
Green or Sustainable Supply Chain can be defined as “the process of using
environmentally friendly inputs and transforming these inputs through change
agents – whose byproducts can improve or be recycled within the existing
environment. Green supply chain management can be defined as integrating
environmental thinking into supply-chain management, including product design,
material sourcing and selection, manufacturing processes, delivery of the final
product as well as end-of-life management of the product after its useful life.
We can define green supply chain management (GSCM) as management practice which
considers the impact of environment in its existing supply chain, use of
resources efficiently, elimination or minimization of waste ( energy, water,
air, hazardous materials) and reverse logistics. Sustainable supply chain
includes forward supply chain and closed loop supply chain including reverse
logistics, remanufacturing, and product recovery.
supply chain management is now-a-days a part of strategic management at board
level of many companies. European automotive companies like BMW Group,
Volkswagen, PSA Peugeot, Ford, Volvo, Land Rover, Jaguar, Scania, Daimler and
Toyota have already formed the automotive working group on supply chain
sustainability. They are working on common guiding principles for
sustainability. There is no conclusive evidence available which states that
GSCM practices have positively impact the profitability of the organization.
companies need to develop the capabilities to measure the performance of their
environmental criteria’s in SCM are increasingly becoming important for
competitive advantage and for business performance. The main questions for
researchers and organizations are 1) which criteria’s to be measured, 2) do the
organizations have capabilities to measure, 3) to establish linkages between
environmental criteria’s and business performance. Many authors have said that these environment
criteria’s either non-existing in organizations (Hervani e al. (2005) or they are not considered in performance
measurement (Cuthbertson and Piotrowicz (2008))
Shell Puget Sound
Refinery, Anacortes, Washington, was fined $291,000 from 2006 to 2010 for violations
of the Clean Air Act making it the second most-fined violator in the Pacific Northwest. As of 2011, it
was listed as “high priority violator” since 2008(https://en.wikipedia.org/wiki/Shell_Oil_Company).