Green supply chi an

1. Green Supply Chain Management

2. Introduction
Background
Product Life Cycle
Supply Chain Management
Industry Practices
The Future
Conclusions

3. Background
 Industrial Ecology: a systematic organizing framework for the many
facets of environmental management..industrial world as a natural
system - a part of the local ecosystems and the global biosphere ...
offers a fundamental understanding of the value of modeling the
industrial system on ecosystems to achieve sustainable environmental
performance (Lowe, 1993).
Industrial EcosystemBoundary
Limited
Resources
Limited
Waste
Energy
and
Materials Extractor
or Grower
Materials Processor
or Manufacturer
Waste Processor Consumer

4. Green Supply Chain Management
What is it? Lots of definitions.
Here’s one -
Management of Materials and Resources from
Suppliers to Manufacturer/Service Provider to
Customer and Back, with the Natural Environment
Explicitly Considered (hopefully in a
conscientious manner).
The Operational Instantiation of Industrial Ecosystems

5. Product/Process
Design
Raw and
Virgin
Material
New
Components
and Parts
Recycled,
Reused
Material and
Parts
Vendors
Selection
External
Transportation
Stora
ge
Inventory
Management
Internal
Transportation
Fabrication
Assembly
Closed-Loop Manufacturing,
Demanufacturing,
Source Reduction
TQEM
Stora
ge
Distribution,
Forward
Logistics
USE
Purchasing,
Materials
Management,
Inbound
Logistics
Production
Outbound
Logistics
Disposal
Reverse Logistics
Waste Waste Waste
Energy Energy Energy
Energy
Reusable,
Remanufacturable,
Recyclable Materials
and Components
Location Analysis,
Inventory Management,
Warehousing
Transportation
Packaging
Marketing
Engineering
Customer Relationships
Green Marketing
Product Stewardship
Waste

6. Supply Chain Management
 Logistics, Procurement have become strategic
 Organizations outsourcing, forming partnerships, alliances
 Product environment becoming more complex
 Time based competition requires time compression
 Managing suppliers and customer relationships necessary
 Competition shifting from company vs. company to
Supply Chain vs. Supply Chain

7. Supply Chain Management
Organizational
Processes
Suppliers
Continuous Improvement Loops
Supplier
Relationships
Customer
Relationships Customers
Supply Chain Elements
Supply Chain => Supply Cycles

8. Some Supply Chain Practices
Prequalification of suppliers
 Require or encourage environmental criteria for approved
suppliers
 Require or encourage suppliers to undertake independent
environmental certification
Environmental requirements at the purchasing phase
 Build environmental criteria into supplier contract conditions
 Incorporate EHS staff on sourcing teams
Supply base environmental performance management
 Supplier environmental questionnaires
 Supplier environmental audits and assessments

9. Supply Chain Practices
Build environmental considerations into product design
 Jointly develop cleaner technology with suppliers
 Conduct life cycle analysis in cooperation with suppliers
 Engage suppliers in design for environment (DFE) product innovation
 Coordinate minimization of environmental impact in the extended supply
chain
 Develop tools that assist in the DFE effort
Cooperate with suppliers to deal with end-of-pipe environmental issues
 Reduce packaging waste at the customer/supplier interface
 Reuse/recycle materials in cooperation with the supplier
 Launch reuse initiatives (including buy backs and leasing)
Reverse logistics
 Give supplier an incentive to reduce the customer’s environmental load

10. Some More Supply Chain
Practices
Influence legislation to facilitate better SCEM policies
 In cooperation with suppliers, lobby to strengthen environmental
regulation
 Lobby on behalf of SCEM initiatives
Work with industry peers to standardize requirements
 Create interfirm procurement group to collaborate on environmental
issues
 Standardize supplier questionnaires
Inform suppliers of corporate environmental concerns
 Issue statements of EHS priorities to suppliers
 Draft and distribute comprehensive SCEM policy
Promote exchange of information and ideas
 Sponsor events to facilitate discussions between customers and suppliers
on environmental issues
 Host training and mentoring programs.

11. Why Do it? (Benefits)
USAEP, 2001, USAEP, (2001), “Greening the Supply Chain”, U.S. – Asia Environmental Program,
http://www.usaep.org/ctem/greening.htm.
 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.