Integration of green practices in supply chain environment
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Integration of green practices in supply chain environment Integration of green practices in supply chain environment Document Transcript

  • Manish Choudhary et al. / International Journal of Engineering Science and Technology (IJEST) Integration of Green Practices in Supply Chain Environment The practices of Inbound, Operational, Outbound and Reverse logistics MANISH CHOUDHARY Malwa Institute of Science and Technology, Indore, Madhya Pradesh (India) mchoudhary1611@gmail.com NITIN SETH Indian Institute of Foreign Trade, New Delhi (India) nitiseth@yahoo.comAbstract:The present decade is fully conscious about the environmental problems and green products for sustainabledevelopment and the recent agenda of Indian Industries facing the environmental problems. The intense pressurefrom government regulatory acts to implement and become the industries Environment Sustainable (ES). GreenSupply Chain Management (GSCM) has emerged as a key approach for automobile manufacturing industriesseeking to become Environmentally Sustainable (ES). There is a growing need to integrate GSCM into Inbound,Operational and Outbound supply chain. This study reviewed various literatures on Supplier (Inbound),Organizational (Operational), Distributional (Outbound) and Reverse logistics (RL) of Green Supply chainmanagement. This paper propose concise framework for forward direction GSCM (FGSCM) and reversedirection GSCM (RGSCM).Keywords: Green Supply Chain Management (GSCM), Environment Sustainable (ES), reverse logistics (RL),Inbound, Operational and Outbound supply chain.1. Introduction: Numerous researchers [26] [28] [22] have pointed for increasing environmental issues and problems ofresource depletion. Due to stricter governmental regulatory acts, some of the Indian automobile manufacturingindustries like TATA motors, EISHER motors, Force motors, MAHLE Engine Components, Mahindra Twowheelers etc. have implemented ISO 14001 certification to reduce the degradation of environment. In globalscenario, the customers and communities are demanding the environmentally friendly products. This pressuresand extremely serious the manufacturing industries for green practices from raw material to finished productsand up to the end user to disposal. In the previous frameworks [23] [14], the researchers and practitioners have elaborated the GSCMneeds, drivers, practices and performances. But these frameworks are not clearly elaborated the integration andoptimization of inbound, operational, outbound and Reverse Logistics. The importance of GSCM is to innovate,implement and widespread the new techniques for sustainable development and deployment to the automobileindustries. At present, the Indian automobile industry has grown and it holds a promising and challenging tenthposition in the entire world with being number 2 in two wheelers and number 4 in commercial vehicles. Agrowth rate withstanding of 18% per annum and production of more than 2 million units per annum, it may notbe an exaggeration to say that this industry in the coming years will soon touch a figure of 10 million units perannum. Market Share of Automobile industry of India can be broadly classified under passenger vehicles,commercial vehicles, three wheelers and two wheelers, with two wheelers having a maximum market share ofmore than 75%. Automobile companies of India, Korea, Europe and Japan have a significant hold on the Indianmarket share. Tata Motors produces maximum numbers of mid and large size commercial vehicles, holdingmore that 60% of the market share. Motorcycles top the charts of two wheelers with Hero Honda being the keyISSN : 0975-5462 Vol. 3 No. 6 June 2011 4985
  • Manish Choudhary et al. / International Journal of Engineering Science and Technology (IJEST)player. Bajaj by far is the number one manufacturer of three wheelers in India. This experiencing increasedpollution and challenges and encourages reducing and recycling. The wide scope of GSCM is ranges from implementing and monitoring of the general environmentmanagement programmes to more creating or controlling practices implemented through various Rs (Reduce,Re-use, Rework, Refurbish, Reclaim, Recycle, Remanufacture, Reverse logistics, etc.) [26] towards attaining aGSCM waste minimization is being considered as an important strategic. The waste, which is non-value addingactivity, carried out in any operation. The most commonly perceived enemy to environmental protection inmanufacturing and production operations. That is, manufacturing and production processes are viewed as theculprits in harming the environment, in the forms of waste generation, ecosystem disruption, and depletion ofnatural resources [9] The objective of this research is to identify the dearth of GSCM integration in the supply chainenvironment, and therefore integrate the potential of GSCM gaps, issues and evolve new opportunities forfurther research. The GSCM classification is categorize in four heads as shown in Fig. 1. This paper begins with brief description of GSCM and automobile industry in general. It precedes withthe GSCM definitions and section 3 provides an overview of research objectives by integration of Inbound,Operational, and Outbound supply chain and reverses logistics, which provides the integrated GSCM andGSCM practices. Section 4 is a conclusion of the paper.2. GSCM Defined:A selected number of definitions of GSCM [20] over the past decades including:2.1 The new concept of green supply chain management has added an environmentally conscious mindset tosupply chain management and has been introduced into many final manufacturing processes [1]2.2 GSCM is defined as: Green Supply Chain Management (GSCM) = Green Purchasing + GreenManufacturing/Materials Management + Green Distribution/Marketing + Reverse Logistics. [1]2.3 Green supply refers to the way in which innovations in supply chain management and industrialpurchasing may be considered in the context of the environment. [13]2.4 Environmental supply chain management consists of the purchasing function’s involvement in activities thatinclude reduction, recycling, reuse and the substitution of materials. [25]2.5 The practice of monitoring and improving environmental performance in the supply chain . . . [24]2.6 The term ‘supply chain’ describes the network of suppliers, distributors and consumers. It also includestransportation between the supplier and the consumer, as well as the final consumer . . . the environmentaleffects of the researching developing, manufacturing, storing, transporting, and using a product, as well asdisposing of the product waste, must be considered. [12] 3. Literature review: A brief literature review on GSCM integration, we introduce some of GSCM integration on Inbound,Operational, Outbound and Reverse logistics. As suggested [30] framework for managers, an effective tool for operations wishing to design environmentalPMSs. Authors presented internal factors such as economic performance, green product development etc. andexternal variables such as green movements or regulators to identify green manufacturing strategy. Suggested,manufacturing strategies on operations policies such as procurement policies, product planning, production andmanufacturing technologies, logistics and human resource management. As described By [31], the differences between the traditional supply chain and the extended supply chain. Intraditional supply chain issues considered as production/distribution scheduling, inventory levels, number ofstages, distribution center, plant-product assignment etc. and in extended supply chain benefits realized asreduced product life cycle costs, reduced environmental and health risks, safer, cleaner factories, recycling andre-use and remanufacturing. Investigated the environmental factors leading to the development of extended ofrecovery operations, such as remanufacturing, recycling, and re-use adds an additional level of complexity tosupply chain design, and forms potential operational and strategic considerations and strategic issues such asISSN : 0975-5462 Vol. 3 No. 6 June 2011 4986
  • Manish Choudhary et al. / International Journal of Engineering Science and Technology (IJEST)inventory control policies, impact of uncontrollable recovery processes on inventory composition, productionplanning, and scheduling, disassembly planning etc. Author [32] examined the linkages between green supply chain practices such as environmentalcollaboration with suppliers, environmental monitoring upon suppliers, environmental collaboration withcustomers, environmental monitoring by customers and the selection of environmental technologies such aspollution prevention, pollution control, management system. As explored by [33], impact of relationshipconditions existing between a customer and its suppliers such as programs to reduce or eliminate materials usedin manufacturing processes or products etc. on the uptake and effectiveness of the customer’s environmentalperformance requirements. [1] Introduced and provided an overview of the various internal issues such as cost and profit driven, legacysystems, data management systems, ISO 9000:2000, total quality management, and other industry-specificstandards and integrate works in supply chain management, environmental management, and performancemanagement into one framework and external issues such as size organizations and specific industries,regulatory pressure, resource productivity, environmental innovation, an integrated technological system,environmental compliance, liability, issues of business continuity, the call for benchmarking to national,international, or industry standards, customer attitudes toward product take-back, and inter-organizationalinformation technology/data management systems related to environmental (green) supply chain managementperformance measurement. Provides metrics of environmental performance from the TRI and the GlobalReporting Initiative of air emissions to energy recovery and recycling such as fugitive non-point air emissions,stack or point air emissions, discharges to receiving streams and water bodies and general measures such asemployee and participative management, publicly available missions and values statement(s) etc. Explored by [34], the green supply chain management (GSCM) initiatives (implementation) and practicessuch as internal environmental management (IEM), green purchasing(GP), customer cooperation (CC),investment recovery(IR), and eco-design (ECO) of various manufacturing industries. Support for GSCM frommid-level managers, cross-functional cooperation, for environmental improvements, total quality environmentalmanagement, environmental compliance and auditing, programs, ISO 14001 certification, environmentalmanagement systems exist, providing design specification to suppliers that include environmental requirementsfor purchased item, cooperation with suppliers for environmental objectives, environmental audit for suppliers’internal management, suppliers’ ISO14000 certification, second-tier supplier, environmentally friendly practiceevaluation, cooperation with customers for eco-design, cooperation with customers for cleaner production,cooperation with customers for green packaging, cooperation with customers for using less energy, duringproduct transportation, investment recovery (sale) of excess inventories/materials, sale of scrap and usedmaterials, sale of excess capital equipment, design of products for reduced consumption of materials/energy,design of products for reuse, recycle, recovery of materials, component parts, design of products to avoid orreduce use of hazardous products and/or their manufacturing process.4.1 Inbound GSCM:This is the early part of supply chain. This takes care of Internal Environment Management (IEM). Theintegration of suppliers functioning begin with Green purchasing (GP) of raw material [26] [21] [22] this GP canbe integrated with green design and leads to Environment friendly raw material, Substitution of environmentallyquestionable raw materials, [17] [1], some programmes like Holding awareness seminars for suppliers/contractors, Guiding suppliers to establish their own environmental programs [19], Suppliers’ ISO14001certification [22] This practice improves reduction of solid/liquid wastes, reduction of emissions, resourcereduction and decrease of consumption for hazardous/harmful/toxic materials [28]ISSN : 0975-5462 Vol. 3 No. 6 June 2011 4987
  • Manish Choudhary et al. / International Journal of Engineering Science and Technology (IJEST) Green Supply Chain Management (GSCM) Inbound Operational Outbound Reverse Logistics Green purchasing Cleaner production Green marketing strategies Waste exchange Environment- environmentally- Integration of Design for friendly suppliers environment friendly packaging transportation Remanufacturing Environment-friendly and lean production distribution Fig. 1 Integration of GSCM4.2 Operational GSCM:This is the middle part of supply chain. This takes care of operations performed on the product. It begins withGreen Design (GD) [4], Eco-design or design for the environment, Design for reduction, Design for reuse,Design for recycling, Design for remanufacturing, Design for resource efficiency [28], Green manufacturing [4],Optimization of processes to reduce solid waste, Optimization of processes to reduce air emission, Optimizationof processes to reduce noise, Use cleaner technology processes to make savings (energy, water, wastes) [17] Thebenefits of integration is to Reduction of solid/liquid waste, Reduction of emission [19], on-site and off-siteenergy recovery [1] [17]can be integrated cleaner production, which leads to Increased efficiency, Productquality improvement, Productivity improvement, Cost saving [17] [19], Quality improvement [19]4.3 Outbound GSCM:This stage is the final delivery of product and contains pick and place of product and delivery. Sometimes Eco-labelling [5], green marketing, environment-friendly packaging, and environment-friendly distribution are allthe functions of an organization for Outbound GSCM and its supply chain [18] [11], Low-density packaging,Bio-degradable packaging [8]4.4 Reverse Logistics:Reverse Logistics is a ‘‘closing the loop’’ of supply Chain. An Automobile company can save raw materials,water, energy, processes etc., through recycling, and by that way, the company can achieve both cost andcompetitive advantage of Recycling, Refurbishing, Re- manufacturing, Uneconomic recycling [1] [29] [19][22], on-site or off-site treatment, Cost for disposal of hazardous materials, Suppliers advances in providingenvironmentally friendly packages, Re-using, Disassembly, Re-engineering [4] The integration of inbound activity with operational activities will ascertain the issues in both part ofthe supply chain. Table 1 shows the functions of Supplier (Inbound), Organizational (Operational), andDistributional (Outbound) and reverse logistics (RL) of green supply chain management and benefits, issuesaddressed and factors for greening the GSCM. The functions such as Green Purchasing (GP), CleanerProduction, Green Design (GD), Re-Manufacturing of rejected products, and lean production. Fig 2 showsintegrated GSCM.ISSN : 0975-5462 Vol. 3 No. 6 June 2011 4988
  • Manish Choudhary et al. / International Journal of Engineering Science and Technology (IJEST) Forward Green Supply Chain Management (FGSCM) of Automobile Industry Manufacturing manufacturing Green Design Distribution Purchasing Packaging Green Green Green Green Re- Reverse Green Supply Chain Management (RGSCM) of Automobile Industry manufacturin Marketing Re- Cycle Re-Claim Re-Work Re- Use Green Re- g Fig. 2 Integrated GSCMISSN : 0975-5462 Vol. 3 No. 6 June 2011 4989
  • Manish Choudhary et al. / International Journal of Engineering Science and Technology (IJEST)Sr. supply chain Functional Broad Area Typical Benefits Issues addressed Typical issues and DriversNo. function for Greening1 Supplier 1. Cost reduction, 1. Reduction of waste produced, 1. Holding awareness seminars (Inbound) Green purchasing strategies, 2. Integrating suppliers in a participative 2. Material substitution through for suppliers and contractors; [19]The integration of decision-making process that environmental sourcing of raw 2. Guiding suppliers to set up suppliers into environmental promotes environmental innovation. materials, and their own environmental management processes, [27] [7] [10] [17]Source reduction of 3. Waste minimization of hazardous programs; pollution in terms of recycling, materials. 3. Bringing together suppliers 3. Re-use and Low-density packaging, 4. Lack of management in the same industry to share and Towards waste elimination in commitment, lack of buyer their know-how and terms of scrapping or dumping, awareness, problems recycling and 5. Lack of supplier awareness, 4. Informing suppliers about 4. Sorting for non-toxic incineration and deficient company-wide the benefits of cleaner bio-degradable packaging. [8] environmental standards or production and technologies; 5. The high cost of environmental auditing programs and 5. Urging/pressuring suppliers programs, uneconomical recycling 6. Lack of state and federal to take environmental and uneconomical re-use regulations actions; and 6. Choice of suppliers by environmental criteria.2 Organizational 1. Cleaner production, 1. Reducing lead times, material and 1. Reducing waste and pollution, 1. Environmentally-friendly (Operational) 2. Design for staff costs, 2. Reducing the environmental raw materials; environment, 2. Increasing production activity and impact of the production phase, 2. Substitution of 3. Remanufacturing and enhancing quality, [16] 3. General waste reduction and environmentally lean production 3. Reduces the marginal cost of minimizing hazardous wastes, [3] questionable materials; environmental management 4. Reduces the marginal cost of 3. Taking environmental 4. Products/services produced are environmental management and, criteria into consideration; environmentally-friendly in nature; enhanced environmental 4. Environmental design 5. Prevention of pollution at source, performance. [2] considerations; 6. Cleaner production practices are 5. Optimization of process to adopted; reduce solid waste and 7. Closed loop manufacturing (reverse emissions; logistics), 6. Use of cleaner technology 8. Wastes generated are processed and processes to make savings in recycled; energy, water, and waste; 9. Re-use and recycling of materials is 7. Internal recycling of maximized; materials within the 10. Material usage is reduced; production phase; and 11. The recyclable content of a product is 8. Incorporating environmental increased; total quality management ISSN : 0975-5462 Vol. 3 No. 6 June 2011 4990
  • Manish Choudhary et al. / International Journal of Engineering Science and Technology (IJEST) 12. The production processes are principles such as worker optimized, and empowerment. 13. Products are redesigned (design for the environment) Distributional 1. Green marketing, 1. Cost savings and 1. Dispose of the waste, 1. Environment-friendly waste3 (Outbound) 2. Environment-friendly 2. Enhanced competitiveness 2. Recycling and management; packaging, and 3. Utilization of all waste,[15] 3. Re-use of packaging, [6] 2. Environmental improvement 3. Environment-friendly of packaging; distribution, [18][11] 3. Taking back packaging; 4. Eco-labelling; 5. Recovery of company’s end- of-life products; 6. Providing consumers with information on environmental friendly products and/or production methods Reverse logistics 1. Reverse logistics 1. Cost savings 1. Dispose of the waste, 1. Use of environmentally-4 (RL) and Waste friendly transportation. exchange, 2. Taking back packaging 2. environmentally- friendly transportation Table: 1 GSCM Practices (Environmental Initiative) ISSN : 0975-5462 Vol. 3 No. 6 June 2011 4991
  • Manish Choudhary et al. / International Journal of Engineering Science and Technology (IJEST)4. Conclusion: To achieve environmental and sustainable development, the developing country like India will have tofocus on GSCM practices. The integration of supply chain functions like Supplier (Inbound), Organizational(Operational), Distributional (Outbound) and Reverse logistics (RL), the automobile companies can systematizethere supply chain from Green Purchasing to Green Distribution and take back the product for re-use, re-manufacturing, refurbishing or dis-assembly. The integration of GSCM will provide conceptual broader framework to researchers. The GSCM canreduce the degradation of environment due to improper utilisation of resources and manufacturing processes.Proper integration of GSCM facilities and resources, Manufacturing Industries can reduce general waste andminimizing hazardous and toxic wastes, reducing waste and pollution, reducing the environmental impact of theproduction phase. At the supplier’s and organisational end, the issues like reduction of solid waste, reduction of airpollution, substitution of environmentally friendly material and minimize the waste of hazardous materials, lackof buyer awareness, Lack of management commitment, Lack of supplier awareness, Lack of state and federalregulations are resolved. At distributional and reverse logistics end, the issue like re-cycling, re-use ofpackaging and dispose of the waste. Concluding, Automobile Manufacturing Industries can implement GSCM in firm and earn profits bysaving cost of products and processes, reduce lead times, material and staff costs, increasing production activityand enhancing quality, reduces the marginal cost of environmental management, products/services produced areenvironmentally-friendly in nature, prevention of pollution at source, cleaner production practices are adoptedand closed loop manufacturing (reverse logistics). The paper presented a select summary of the contributions inthe less explored GSCM area highlighting the rich agenda for researchers.References: [1] A. Hervani, M. M. Helms, and J. Sarkis, Performance measurement for green supply chain management, benchmarking: An international Journal, 2005. [2] A.A. King and M.J. Lenox, Lean and green? an empirical examination of the relationship between lean production and environmental performance, Production and Operations Management, 2001. [3] A.M. Sanches, and M.P. 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  • Manish Choudhary et al. / International Journal of Engineering Science and Technology (IJEST) [25] R. Narasimhan and J.R. Carter, Environmental Supply Chain Management, The Center for Advanced Purchasing Studies, Arizona State University, Tempe, AZ, USA, 1998. [26] S. K. Srivastava, Green supply-chain management: A state-of the- art literature review, International Journal of Management Reviews, 2007. [27] S.V. Walton, R.B. Handfield and S.T. Melnyk, The green supply chain: integrating suppliers into environmental management process, International Journal of Purchasing and Materials Management, 1998. [28] T. K. Eltayeb, S. Zailani, and T. Ramayah, Green supply chain initiatives among certified companies in Malaysia and environmental sustainability: Investigating the outcomes, Resource Conservation and Recycling, 2010. [29] W.-H. Tsaia and S. -J. Hung, A fuzzy goal programming approach for green supply chain optimisation under activity-based costing and performance evaluation with a value-chain structure, International Journal of Production Research, 2009. [30] A. Azzone and G. Noci, Identifying effective PMSs for the deployment of ‘green’ manufacturing strategies, International Journal of Operations & Production Management, 1998. [31] B. M. Beamon, Measuring supply chain performance, International Journal of Operations and Production Management, 1999. [32] S. Vachon, Green supply chain practices and the selection of environmental technologies, International Journal of Production Research, 2007. [33] D. Simpson, D. Power, and D. Samson, Greening the automotive supply chain: a relationship perspective, International Journal of Operations and Production Management, 2007. [34] Q. Zhu, J. Sarkis and K.-h. Laic, Initiatives and outcomes of green supply chain management implementation by Chinese manufacturers, Journal of Environmental Management, 2007.ISSN : 0975-5462 Vol. 3 No. 6 June 2011 4993
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