The document discusses the importance and benefits of green supply chain management. It provides examples of companies like Marks & Spencer and Nike that have implemented green practices in their supply chains. The summary is: Green supply chain management aims to integrate environmental considerations from material sourcing through production and distribution to end-of-life management. It can help reduce costs and waste while conserving resources. Companies are adopting green practices like using renewable energy, sustainable packaging and logistics to improve efficiency and ethics within their supply chains. Adopting a cradle-to-cradle approach supports a more circular economy that minimizes byproducts.

1. 58 59Business LK Sept-Oct 2015 Business LK Sept-Oct 2015
Consumers warm up to ‘green’ goods
GREEN SUPPLY CHAIN FOR
A SUSTAINABLE TOMORROW
GAYANI DE ALWIS
shares her views on the importance of integrating environment
thinking into supply chain management from material
sourcing to the end of life management of the
product after its useful life.
I
n 2008, the British-based retailer Marks and Spencer worked
with its Sri Lankan supplier, MAS, to open one of its first
four ‘eco-factories’ in Sri Lanka. Designed to be carbon neu-
tral, the MAS lingerie factory in Thulhiriya combines energy
saving devices, renewable energy, waste reduction process-
es and a healthy working environment. It is reported to be
using 40 percent less electricity than similar factories and enabled
Marks and Spencer to launch the first ever carbon neutral bra.
Today they are known as one of the top 10 green supply chains in
the world.
The American sportswear brand ‘Nike’ has also taken steps to
‘green’ its supply chain. According to Nike Company’s concepts,
“Every product and partner, every decision, every gateway, every
stage from concept to reclamation adds to a near infinite ecosystem
of cause and effect. To offer as much clarity into this ecosystem as
possible, we’ve distilled it down to seven fundamental stages – Plan,
Design, Make, Move, Sell, Use, Reuse.”
Renowned global industries and manu-
factures ranging from baby care products,
freight services, apparels, automobiles,
medical drugs to delivery services are now
taking giant steps towards ‘greening’ their
supply chains.
The green supply chain concept ensures
the integration of environmental thinking
into supply-chain management, including
product design, material sourcing and
selection, manufacturing processes, deliv-
ery of the final product as well as the
end-of-life management of the product
after its useful life. Thus the concept of
green supply chain management is now
widely promoted in Sri Lanka through vari-
ous fora and deliberations.
Gayani de Alwis, Vice President of Insti-
tute of Supply and Materials Management
(ISMM) says, ‘green thinking will bring
about a total mindset change to conserve
resources from origin to point of consump-
tion and beyond.’ She was addressing a
seminar at the OPA recently.
“Mankind must adopt a cradle to cradle
approach and feedback the byproducts.
Greening will make the supply chain more
sustainable and lead to cost savings and
enable resource conservation,” she says.
Green procurement and supply chain meth-
ods are increasingly being adopted by top
global firms and the consumers of those
products are also aware of such products
and demand more.
De Alwis who was the Director –Supply
Chain at Unilever Sri Lanka is now into edu-
cating Sri Lankan professionals as well as
the consumers on benefits they can derive
Supply Chain
COMPANIES NEED TO DEVELOP AND IMPLEMENT GREEN PROCUREMENT
POLICIES, PRACTICE TOTAL COST OF OWNERSHIP (TCO) APPROACH,
ENGAGE AND SUPPORT VENDORS TO REDUCE EMISSIONS AND IMPOSE
GUIDELINES FOR USAGE OF LESS HAZARDOUS MATERIALS.
‘Green thinking will bring about
a total mindset change to conserve
resources from origin to point of
consumption and beyond.’
Benefits of green
supply chain
SUSTAINABILITY
OF NATURAL
RESOURCES
LOWERED COSTS
LESS WASTE
By Chandani Jayatilleke

2. 60 61Business LK Sept-Oct 2015 Business LK Sept-Oct 2015
Bauxite is mined in Australia.
Ships to Norway for processing.
Metal ingot cured in Norway and shipped
to Germany to be rolled.
Sheet metal is shipped to England punched
and formed into cans. Cans are palletized,
stored, and shipped.
Bottler cleans and fills with product.
Cans are packed in promotional boxes palletized
and shipped to retailer.
ence; moreover, consumers now prefer
environmentally friendly products. There-
fore, all these facts should be taken into
consideration when designing the green
‘chain’, added De Alwis.
On the other hand consumers (when
they purchase) should be able to ask ques-
tions such as; Where does it come from?,
How is it disposed of?, Will it last?, Can I fix
it?, and Do I really need it?. If you can get
proper and responsible answers and if you
are convinced that it is a product coming
through a green chain and you become a
part of sustainable green supply chain, she
added.
In conventional supply chains,
• The raw materials that are required to
manufacture the product must be
extracted and sourced
• Manufacturing process entails the con-
version of raw material into a final
product
• Once the raw material has been trans-
formed into a final product it must be
transported to the customer for con-
sumption
• Products that have been consumed are
disposed of either in landfills or through
incineration which have a negative
impact of the environment
Green Supply chain
On the other hand, the green supply chain
modifies conventional supply chains in two
ways.
• The first is an initial focus on ensuring
that each stage of the supply chain
adopts environmentally-friendly pro-
cesses
• Second modification on the convention-
al supply chain involves an entirely new
reverse supply chain --- Recover – Refur-
bish –Remanufacture – Recycle
Sustainable green supply chain
Companies need to develop and imple-
ment green procurement policies, practice
total cost of ownership (TCO) approach,
engage and support vendors to reduce emis-
sions and impose guidelines for usage of
less hazardous materials.
Through green manufacturing process-
es, the manufacturers can reduce overall
costs by utilizing fewer resources (water,
energy and material) and introducing
renewable energy in operation.
In the process of green packaging, com-
panies now use bio-gradable packaging,
packaging with less materials and they also
go green with transport by using rail trans-
port instead of trucks. For instance Unilever
started transporting ice cream from Naples
Italy to the logistics hub in Parma (700km),
by taking 3,500 trucks off the roads, saving
40 million Mega-Joules of energy per year,
De Alwis explains taking an example from
her previous employer- Unilever.
Many people would not know, certain
raw materials and packages travel thou-
sands of miles around the globe, for days
and weeks and months before it gets to the
hand of the consumer. And within seconds
after purchasing the product, the package
produced at a high cost is thrown away. This
is a classic example of the life of a fizzy
drink can.
In Sweden there are examples of trains
being run with biogas derived from organic
solid and liquid waste of the city dwellers.
“But Sri Lanka wants to use expensive fossil
fuel to take care of the city waste by trans-
porting them far away. We need to rethink
of innovation and see how efficiently we
could handle the garbage issue by bringing
the costs down,” says De Alwis.
Green retailing is another area the com-
panies should pay attention to. By 2020
renowned global retailer Zara wants to
make all its stores around the globe to be
eco-friendly. Retailer Walmart is in the pro-
cess of introducing earth friendly product
corners in their outlets. Walmart says, for
them, becoming green is more than just a
marketing slogan.
“There are several barriers for green
supply chain management such as custom-
er preference, supplier’s adaptability to
change, cost of implementing processes
and not having a concrete way to measure
return on investment. But what is impor-
tant to keep in mind is the concept of 3R
– Reduce, Reuse and Recycle.” Quoting the
chairman of Unilever Paul Polman, De
Alwis says – “You can do well in business by
doing good things.” “Polman is a visionary
leader and he is already steering Unilever
towards achieving their goal of doubling the
business while reducing the environmental
impact by 2020,” adds De Alwis.
Understand the
FOOD MILES TRAVELLED
Australia
Norway
German
Sri Lanka
UH
from becoming part of a green supply
chain. She says by 2030 the world demand
for food and energy will be increased by 50
percent; and water by 30 percent. The
resources are already depleting therefore, it
is of paramount importance that the indus-
tries take immediate measures to move
from linear to circular economics.
“Take stuff, make stuff and throw stuff
is not the way we continue with. We need a
sustainable way to continue with; we need
to take stuff we throw away back to the sys-
tem. It has to be a closed loop, if we are
concerned about our planet and the future
resources,” she says referring to the present
supply chain management methods.
It is not only the industries and the links
of the supply chain that should be aware of
the importance of the green supply chain;
but the consumers should also be made
aware of these issues. Around the world
shopping habits of consumers are now
changing.
Although there’s more money to pur-
chase, the consumers demand better
products; although there is a bigger choice
there’s less time to choose; although there’s
more mobility consumers want conveni-
Benefits of green
supply chain
INCREASED
EMPLOYEE
MORALE
ETHICAL
SUPPLY CHAIN
CREDENTIALS
Benefits of green
supply chain
REDUCING THE
CONSUMPTION
OF TOXIC
CHEMICALS
INCREASED
EFFICIENCY OF
PROCESSES
REDUCING RISK
CRADLE
TO CRADLE
APPROACH
AND THEREBY
MINIMIZING BY
PRODUCTS
THROUGH GREEN MANUFACTURING PROCESSES,
THE MANUFACTURERS CAN REDUCE OVERALL COSTS BY UTILIZING
FEWER RESOURCES (WATER, ENERGY AND MATERIAL) AND
INTRODUCING RENEWABLE ENERGY IN OPERATION.