What is GSCM? Green Supply Chain Management?
What is Green Supply Chain Management?
Green supply chain management is defined as "the process of using environmentally friendly inputs and transforming these inputs into outputs that can be reclaimed and re-used at the end of their life cycle thus, creating a sustainable supply chain. Green supply chain practices incorporate sustainability concepts into traditional supply chain management. A fundamental principle of green supply chains is reducing waste and overall energy use. It was claimed that the GSCM is also known as the environmental supply chain management (ESCM) or sustainable supply chain management (SSCM). All of these concepts are defined as the integration of green purchasing, green manufacturing/materials management, green distribution/marketing, and reverse logistics into the organizational operations.
Why Green Supply Chain gain importance?
The concept of GSCM is to integrate the environment into supply chain management (SCM) including product design, material sourcing and selection, manufacturing process and delivery of final product to the consumers, and end-of-life management of the product after its useful life. GSCM aims to reduce or eliminate wastage including hazardous chemicals, emissions, energy and solid waste along supply chain.?As such, GSCM plays a vital role in promoting the total environmental impact of any firm involved in supply chain activities and thus contributing to sustainability performance enhancement. The very first green supply chain came into context in 1989. Kelle and Silver’s (1989) article was the first of this literature that developed a best forecasting system for organizations to use to forecast products that can be potentially be reused. Some other benefits of Green Supply Chain Management are:
Reduced waste
Lower Transportation cost
Competitive advantages can be seen in GSCM
GSCM helps noise reduction.
Traffic congestion avoidance can be achieved through GSCM.
Health, safety and security measures achieved.
How to achieve Green Supply Chain?
Ethical Sourcing
Ethical or Sustainable Sourcing is defined as: “Sourcing the materials, products and services an organization needs from its suppliers in a sustainable manner, thereby taking into account the environmental and social impact of its supply chain strategies and activities”.
Green Materials
Green sourcing means sourcing or purchasing materials and components which have eco-friendly characteristics such as reusability, recyclability and non-use of hazardous/dangerous chemicals. The role of eco friendly purchasing is the involvement of recycling and remanufacturing.
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Reverse Logistics
Reverse logistics systems address how companies handle products once they fulfill their purpose. GSCM encourages recycling and reusing, though products might undergo other disposal methods if recycling isn't possible.
Just-in-Time
JIT supply-chain management involves placing materials in the right place at the right time. Manufacturers only bring in as many supplies as they need to avoid excessive inventory. JIT lets companies avoid overspending on materials and overfilling their warehouses.
Efficient Transportation
Transporting goods over long distances contributes to greenhouse gas emissions by burning fossil fuels. GSCM calls for the use of alternative fuels and the establishment of localized supplier and manufacturer relationships. To employ the strategy, some companies will need to downsize and procure materials from fewer sources.
Green Certification
Certification from LEED, Green Globes, Energy Star and similar initiatives guarantees a company's commitment to sustainability. They require organizations to meet extensive criteria in measuring adherence to green practices. Supply-chain certification ensures that businesses employ eco-conscious methods by gauging and improving their current production methods.
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