Concepts of Green Supply Chain Management

Subject: Environment
Pages: 36
Words: 10699
Reading time:
39 min
Study level: Undergraduate


It is an established fact that products come from raw materials extracted from the environment. The extraction of the material requires a rigorous technological process, sometimes with the use of chemicals and other complicated methods to separate the core element from the raw material that may finally produce a product.

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The process poses a serious threat to the environment. Traditional supply chain is concerned only of sourcing the material, delivering it for manufacturing, producing the product and transporting it to retailers and finally to end users.

Green supply chain is a different process.

Where before manufacturers were only concerned of making products, sell them to the end users and never thought of what would happen to the environment, industries now have different concept of supply chain management. They have realized that there is a relation between supply chain and the environment. A green supply chain creates good business.

But it simply did not evolve that way. The industrial revolution, the rise of retailers and multinational companies, consumerism in America, they all focused on making products (and profits) of whatever kind and sell them to the world.

Globalization brought in more new perspectives. Standardization and adaptation provided consumers with options on how to choose their kind of products. Globalization widened target markets. Global firms made new products. The result was a mess of many products, voluminous products, some were useful to people and the environment but most were a threat to humanity and Mother Earth.

The world needs to be informed that the time to create a green environment to prevent environmental catastrophe is becoming short. The deterioration of our planet’s ecosystem and atmosphere cannot be ignored.

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Our planet’s ozone layer has been depleted by severe coal gas emissions. Worse is the reality that greenhouse gases have altered meteorological conditions. There are pollutants everywhere, in the atmosphere, in our homes and places of work.

Major air pollutants come from transportation, stationary sources such as factories and power plants, and industries. Air pollutants include carbon monoxide, sulphur oxides, nitrogen oxides, particulates, hydrocarbons, and photochemical oxidants.

All these harm the environment and change the course of human destiny. If we introduce reusable and sustainable energy, pollutants will be controlled and once again we restore the beauty and freshness of mother Earth.

In view of the rapid expansion of the world’s economies, demand for fossil fuel and construction materials will become severe. And the excessive demand for fossil fuel energy, resources will also result in the demise of the ecology of our planet; the effects might be long lasting and cannot be reversed.

Scientists say that environment protection is of immediate concern. The deterioration of our planet’s ecosystem and atmosphere cannot be ignored; if we have to act, the right time is now.

The world’s program of action has not improved these past decades because we still depend on fossil fuel; specifically, eighty percent of energy comes from fossil fuels. There will come a time that supply of oil will come to its peak. There must be a way to substitute fossil fuels and coal, an energy source that is not harmful to the ozone layer and the environment as a whole.

Solar energy and other forms of environmentally friendly energy using the wind, the tidal waves, hydro, and other similar forms, can be used instead of the pollution-producing energy source. Production and manufacturing of every kind must be controlled. The environment must be on top priority of all of the world’s activities.

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With the increase of consumption in energy and water in the years ahead, the world will have a big problem in the supply of basic necessities of which only nature can provide. Agriculture will be adversely affected by lower water supply and there will be extreme heat and drought.

Organizations, no matter how big and how small, are affected by other organizations and businesses around the world. They have to interact, adjust, and have good relationship with each other.

The attitudes, values and behaviours of the people within organizations are affected by different cultures. Products are affected by the multiplicity of cultures since customers also seek products that have the global or international look and appeal.

New ways and New Alternatives are needed

Businesses and organizations have tried new ways of dealing with the influx of countless products that are made haphazardly. Wastes, hazardous chemicals, plastics, and disposing of all the dangerous metals and substances have to be dealt with. It is time the world realizes that all of humanity has a role to play in controlling global warming and climate change.

Various legislations and regulations have been created by governments. Standards have been introduced but few were followed. Businesses now see the relation between supply chain and environmental protection. Industries need to incorporate methods with technologies that preserve and protect the environment.

Processes of extracting, manufacturing, and transporting of products must be carefully planned taking into consideration the environmental threats they can create. The process requires green engineering and management of a product. Thus the concept of green supply chain management is born.

There have been drivers of change for the introduction and implementation of green supply chain management. A driver of change is the continuing demand and attention paid to health issues by consumers. The food industry has been continuously adding innovations due to consumers’ demand for health food and to ‘green’ their supply chain.

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Supply chain is a primary source of products. Core materials cannot become real products without proper implementation of supply chain management. But supply chain must be handled in a systematic way. Supply chain has evolved too, from mere extraction to application of different methods in order to provide quality products.

The term quality has many meanings in the new context of supply chain. While before quality applies to durability and long-lasting, now quality applies to the entire process of extracting the material to become a product. Quality means ‘green’ and must not threaten the environment. Quality also means good business. It means simple products that will return to manufacturer for recycle to avoid waste.

Literature Review

The Traditional Supply Chain Management

The term ‘supply chain’ gained popularity in the 1970s and was first applied to electricity distribution. Supply chain refers to ‘purchasing, manufacturing, sales and distribution’.

Stevens (1989 cited in Fortes, 2009, p. 2) indicated that supply chain management refers to the integration of business functions involving the transfer of materials from manufacturer to retailer and onto end-users.

Supply chain is also the process of converting raw materials into the designed product; it involves steps which start from planning up to delivery of the product to the customer (Beamon, 1999 cited in Fortes, 2009, p. 51).

Supply chain involves exploitation of the natural resources (Srivastava, 2007 cited in Fortes, p. 51), or extracting and exploiting raw materials from the natural environment.

Traditional supply chain focuses on the product, from the manufacturing stage to transport to end user. Identifying and working out to strengthen customer satisfaction, supply chain helps in having good relationship with customers.

Managers understood that supply chain should emphasize the two important attributes – cost and service. Service is itself responsiveness to the customer’s demand, but demand can also increase cost.

As traditional supply chain focused on the product, it did not take for granted the consumer or customer. Traditional SCM aims at the customer. Satisfying customers’ needs was and is an organizational and strategic goal. Supply chain is aligned to this goal.

Organizations keep constant contact with customers, looking for ways to satisfy their needs and wants. Good customer relation is an important aspect of business (McColl-Kennedy & Schneider, 2000, p. S884). Firms work as cohesive organizations, using tools and technology, and focusing on knowledge-based economy, slowly moving away from the industrial economy.

Companies attain competitive edge through constant innovation. Firms make profound shifts in strategies which aim for talents, technologies and customer focus and loyalty (Venkatraman and Henderson, 2008, p. 258).

Firms also keep watch at employees by providing them the necessary benefits or taking care of their needs. Employees are considered the most valuable asset (Storey, 2007, p. 60). Employee satisfaction is somehow related to customer satisfaction since dissatisfied employees cannot deliver quality service to the company’s customers.

Companies endeavor to educate their target customers through promotion using multi-media. More attention is paid to the skills, attitudes and motivations of personnel involved in the marketing channel. Most companies recognized the key role played by their personnel, particularly in their interaction with customers.

The Traditional Supply Chain Strategy without Green Supply Chain Goals
Figure 1 The Traditional Supply Chain Strategy without Green Supply Chain Goals

Traditional supply chain is demonstrated in Figure 1. Operational excellence, strategy capabilities in a supply chain, and customer closeness with demand side capabilities, should go together.

Supply chains are considered competitive weapons and not mere production and distribution mechanisms (Hult, Ketchen, & Nichols, 2002; Hult, Ketchen, & Slater, 2004 cited in Villena et al., 2009, p. 636).

In the traditional sense, supply chain efficiency is measured as ‘a cost of producing and delivering goods and service to the customer’ (Hines, 2004, p 61).

The principle and philosophy followed in the traditional supply chain is that a business organization should provide products that satisfy customers’ needs through a coordinated set of activities in accordance with organizational objectives. This evolved when researchers found that customer satisfaction was a key to customer loyalty. Organizations then aimed for customer satisfaction.

SCM is traditionally focused on least-cost transaction, but later it evolved into long term relationship (Ryals, 2007). One significant strategy in meeting the needs and wants of customers is introducing a “customer-driven approach to supply chain management” (Barsky and Ellinger, 2001, p. 32).

Satisfying the needs and wants of customers has always been a challenge to businesses. Knowing the customers’ needs has become a foundation for which a company was founded (Mohr-Jackson, 1996 cited in Kotri, p. 5), and organizations have to be customer-oriented (Miller and O’Leary, 1994b cited in Cäker, 2007, p. 144).

The practice of customer-oriented approach can be understood as the organization’s openness to the customer, or the organization being “accountable to the customer” (Cäker, 2007, p.144). This practice of being customer-oriented is now incorporated in the organizations’ management accounting (Vaivio, 1999; Guilding and McManus, 2002 cited in Cäker, 2007, p.144).

Meeting the customer’s needs and wants is one of the objectives of a successful supply chain management. It is a business trend in the age of globalization. Organizations aim for customer loyalty while keeping cost of production low.

Products and services must be geared towards customer focus, and customer satisfaction is a goal in a value added supply chain. Authors argue that customer satisfaction must be an important strategic part of marketing.

Understanding customers is critical to their satisfaction and loyalty. In order to address this problem, firms introduced constant innovation. Supply chain learning should be a part of the firms’ strategies to address customer satisfaction and loyalty. This is also the main objective of market orientation – customer satisfaction through superior performance of products. (Singh, 2004, p. 3)

Companies attain competitive edge through constant innovation. The first periods of the new century marked profound shifts in organization’s strategies with aims for talents, technologies and customer’s focus and loyalty (Venkatraman and Henderson, 2008, p. 258). Organizations keep constant contact with customers, looking for ways to satisfy their needs and wants.

Customer focus

Gulati and Oldroyd (2005) suggested the four stages of customer focus, namely:

  • Communal coordination. Create a database of customer information, which records the business interaction of customer and the company.
    Customer can be defined in several ways. For an airline company, a customer can be a travel agent, corporation, or consumer. For a pharmaceutical company, a customer might be a physician or a patient.
    In other words, organizations have to manage and collate their interactions with different kinds of customers. Gathering the information for the company requires a lot of job to include networking with different organizations within the industry.
  • Serial coordination. This involves coordination to manage a continuous communication and exchange of by different units so that these information and data can be analyzed and shared within and throughout the company.
  • Symbiotic coordination. From analyzing the customers’ information, companies can shift focus to analyzing what the future holds for the customer and the company. This may include determining if the customer may still want to deal with the company, or buy products from the company or shift to other competitors.
  • Integral coordination. Companies can shift focus on a ‘sophisticated understanding’ of the customer, and incorporating this understanding into their daily operations. (Gulati and Oldroyd, 2005, p. 99)

Green Supply Chain: Concepts and Practices

Background of Green Supply Chain

The Bible tells us that Noah was instructed to build an arch and prepare for a global catastrophe. But after that, God promised never to repeat what happened. Humans will have the option and can save planet Earth.

Climate change is one of the threats facing planet Earth. The deterioration of the environment has become alarming that we should not ignore it. Drastic actions have to be undertaken especially businesses who produce products that, traditionally, negatively impact on the environment.

Much has been utilized from our important ecosystems: the forests, fisheries, wetland, and fresh water resources. We move fast to destroy our ecosystem and ecological balance.

Global warming is a hot topic in business circles and it is for this reason that green supply chain is an important issue. Businesses and organizations including the general public have to be educated on how to achieve a sustainable, green environment.

Green supply chain has been broadly defined ever since its inception. A broad definition states that green supply chain is for sustainable development, i.e. meeting the needs of the present generation without disregarding the needs of the future generation. (Arlbjorn et al., 2010, p. 328)

Supply chain has no exact and accurate meaning. The present concept of supply chain takes into account the ‘greening’ aspect of supply generation. This does not only refer to the environment but to all aspects of management.

Wipro (2009), in its website, states that green supply chain connotes corporate social responsibility and such other terms as brand image and government regulations.

Wang and Gupta (2011, p. xv) argued that it is not only important to produce a product under a green supply chain process and guideline, but it is also significant that the product be handled properly and goes back to the manufacturer for recycle and reuse.

Green supply chain management covers the time from the planning stage to manufacturing, to delivering it to end users until the product is not anymore in use and to be disposed. Disposing of waste materials has always been a problem. But in green SCM, this is already covered in the planning stage.

Planning includes how the end-product should be recycled and reused. Disposing of it or making it a part of waste products and materials is not a part of green SCM.

Green SCM for food waste is planned carefully. The food industry produces a lot of waste. It has been reported that in Greater London alone, the environmental situation seems like a ticking time bomb. The UN Environmental Program reported wastes from household and industries can reach up to 6,600 tonnes everyday. (UNEP, 1996 cited in Sinha et al., 2008, p. 12)

UK produces waste to around 330 million tonnes annually. A quarter of this is from households and businesses and the rest comes from construction and demolition, sewage sludge, farm waste and spoils from mines and dredging of rivers. Moreover, landfill deposits have been reduced by 18% since 2001, which is an improvement, but there has been an increase in volumes of WEEE and clinical waste. (Environmental Protection, 2010)

Waste materials are discarded because they are considered useless. These wastes are normally solid and the term waste suggests that the material is useless and unwanted. But many of the waste materials can be reused, and thus they can become a resource for industrial production or energy generation, if managed properly. Waste disposal may not be too much of a problem if green supply chain management is applied.

In Europe, laws and standards have been passed to reduce greenhouse gas emissions. The standards include: end-of-life vehicle (ELV); restriction of hazardous substances (RoHS); waste electrical and electronic equipment (WEEE), among others. (Wang and Gupta, 2011, p. 3)

The Green Movement: How it started

In the 1980s, a group of professional consultants concerned with the deteriorating condition of the environment discussed issues on supply chain management and how it can be tapped to help in protecting the environment.

The ensuing discussion and brainstorming led people to think about what SCM really meant and its importance to business and environment (Oliver and Webber, 1982 cited in Wang and Gupta, 2011, p. 4).

Porter (1985) popularized the term value chain which referred to adding value to products by performing primary and support activities in the production and processing of the product. Green SCM is adding value to supply chain by making every product valuable and not only one of the millions of products to flood supermarkets and department stores. Green SCM minimizes inventory.

SCM refers to the interconnection of businesses and people who are linked because of the same interest and need for certain raw material resources, and other activities for the processing of the product/s. In 1999, the desire to put more weight to the meaning and concept of SCM and its significance to businesses motivated the Global Supply Chain Forum to define SCM.

The Forum defined supply chain management as:

“An integration of procedures from suppliers to consumers to provide products, services and information in order to add the values of the customers and the related roles”

This meant that supply chain management revolved around 3 areas important to business: ‘products, suppliers, and raw materials’ (Wang and Gupta, 2011, p. 4).

The original functions of supply chain management, which involved logistics and collaboration among suppliers and the various stakeholders in the manufacture and eventual transport of products to the end-users, are now modified and added with methods of minimizing environmental abuse due to the increased awareness of climate change and global warming.

Industries are now focused on environmentally friendly methods and processes in supply chains, putting measures that are considered sound to environmental protection and care. The different processes on supply chains added with technological methods putting emphasis on environmental protection, for example the incorporation of extended production responsibility (EPR), led the way to the emergence and popularity of green supply chain management (GSCM). (Wang and Gupta, 2011, p. 4)

There is also the concept of green logistics. Green logistics is defined as reducing the environmental impact of logistics or supplies of organizations in the spectrum of supply chain. Customer and supplier partnerships are encouraged.

Green supply chain management is an extension of the concept and practices of green logistics. Closer relationship between business and suppliers is enhanced and companies learn about how suppliers implement the different practices in green supply chain. Partners collaborate and make improvements in producing value added chains. (Wisner and Stanley, 2008, p. 598)

The Green Business

Green business is about the preservation or enhancement of environmental quality. It may not at all for the environment because supporting higher wages and benefits and promoting safety in the workplace is also green business.

Green business does not promote discrimination, like exclusion because of gender, race and age. Green business advocates social justice. The Green Business Plan can do a lot of wonders for the business. It can raise financial business benefits or rewards. (The Green Business Plan Guide)

Theoretical Framework

Green SCM strategies focus on capabilities of organizations to effectively implement it. It concerns with coordination, integrity, info sharing, and flexibility. Then it can lead to responsiveness and efficiency that also concern performance. This spectrum of activities is demonstrated in the following figure.

Shows a theoretical framework for competitiveness in supply chain
Figure shows a theoretical framework for competitiveness in supply chain

Supply chain capabilities

This refers to an organization’s capabilities to use its internal and external resources to maximize supply chain activities. The activities involved in supply chain should have coordination, integrity, sharing of experiences as partners in the environmental endeavor, and adequate flexibility between partners. Each factor is needed in the supply chain activities. (Kersten et al., 2011, p. 129)

Supply Chain Coordination

Coordination is another factor that determines the capability of a supply chain partner. An organization should be able to coordinate interactions with other organizations (Clemons & Row, 1993; Malone, Yates, and Benjamin 1987 cited in Kersten et al., 2011, p. 130).

Coordination is needed in areas involving material supply, finance, human resource and other significant parts of the supply chain. This is an important indicator to the strength of a supply chain.

Information Sharing

This refers to a partner’s ability to share knowledge and information for an effective supply chain. Information should be authentic and is needed in the smooth flow of the supply chain.

Supply Chain Integrity

Integrity refers to technological and activity related. Technological is aimed at a particular direction while activity integrity represents the capability of the organization to coordinate the strategic activities between supply chain partners (Bowersox et al., 1999 cited in Kersten et al., 2011, p. 131).

Supply Chain Flexibility

This refers to an organization’s ability to be flexible in times of uncertainty, for example there are more orders coming from other partners. This is distinct feature in the supply chains because there are always uncertainties in any activity (Slack, 1991 cited in Kersten et al., 2011, p. 131).

Supply Chain Responsiveness

This refers to the supply chain partners’ capability to respond to environmental problems and challenges in a collaborative manner. This enables an organization to develop ‘peculiar competencies’ in answering to challenges like environmental changes that take place as the supply chain operates (Collis, 1994l; Teece et al., 1997 cited in Kersten et al., 2011, p. 131).

Supply Chain Efficiency

Chopra and Meindel (2007 cited in Kersten et al., 2011) defines supply chain efficiency as the ‘costs’ in the supply chain where production and delivery of product to customer is the primary activity.

Supply Chain Performance

Assessment of supply chain performance can be classified into five categories, namely: ‘classical performance, global performance, score cards, score model’, and any particular method applicable to a supply chain (Wisner, Leong & Tan, 2005 cited in Kersten et al., 2011, p. 132).

The theoretical framework stated above can be used as variables in the study and research of a supply chain.

Differences between Traditional Supply Chain and Green Supply Chain

Supply chain and environmental management were opposed to each other (Srivastava, 2007, Fortes, p. 1). Supply chain involves many processes including the making of the product, e.g. planning, manufacturing, packaging, storage, and transport.

The new definition of supply chain recognizes the importance of environmental sustainability to business practice. Supply chain management is traditionally focused on least-cost transaction, but the new trend in business-to-business transaction is long-term relationship (Ryals, 2007).

It is almost similar with customers and consumers. The question that is always in the mind of the manager is: “will the customer come back?”

The organization has to find out what will satisfy customers, and create satisfying products. The organization must continue to alter, adapt and develop products to keep pace with customers’ changing desires and preferences.

Traditional supply chain focused on quality and what quality could speak of pertains to durability, how the product would last long and how was it applicable to the purpose for which it was made, and the price which represented a good value as the customer perceived it to be.

Less collaboration and less visibility characterize traditional supply chain. Materials and information flow through a linear process, meaning it covers from one end of the spectrum to the other end. Supply partners are not well informed and there is limited information regarding environmental issues, or threats and realities.

In the traditional SCM, supply partners are not fed information regarding the existing greenhouse gas emission and carbon footprint. This makes the situation volatile as each partner in the supply chain is concerned only of his own carbon footprint. Costs are not optimized between partners because there is an atmosphere of secrecy in the partnership. (Emmett and Sood, 2010, p. 9)

Green supply chain adds value to the product by putting more emphasis on the environmental factors at the time of manufacturing up to the time of delivery of the product to the end user. Green supply chains take into account the environmental effects that each function and process can provide in the entire supply chain.

For example, effects in the extraction of raw materials from the environment have to be considered; those effects have to be minimized or reduced to the minimum. It will be harmful, so some drastic measures have to be considered like looking for other technological ways that will reduce the effect.

Within the green supply chain, each partner encourages other partners to be part of the green supply chain and provides the necessary information and resources into how the partnership can strengthen the green partnership and how to improve the situation.

Environmental objectives are then made in line with organizational objectives. There will be no competition since each partner motivates and encourages other partners to improve the supply chain and the partnership. The green supply chain will minimize environmental impact of the business.

Shows how green supply chain works
Figure 2 shows how green supply chain works

Distinctiveness of green supply chains

Distinct features of green supply chains can be seen in the following aspects:

  • The top management’s desire for continuous innovation to go ‘green’ and to make the processes of the supply chains all geared toward environmental improvement;
  • Allowing all the partners to take an active role in the different functions and activities of the supply chain, with a focus on the product design, manufacturing, transporting, etc.
  • The use of information technology to store and provide data and information, operate functions, and relay valuable information to and from the different points in the supply chain;
  • The removing of traditional boundaries in the supply chain;
  • Making CSR fully implemented and sustainability an important part of the process. (Emmett and Sood, 2010, p. 10)

Green Supply Chain Management

Green Supply Chain Management involves management of materials and resources used in the manufacture of products, and the processing of these materials from suppliers to manufacturer, delivering these products to customers, and taking into primary consideration the environment.

The philosophy behind green supply chain management is that if the environment is benefited from this kind of management, so does the organization and the stakeholders. A good environment will create a wholesome workplace and business. The world will be a better place to live.

Green SCM has more responsibilities than the traditional SCM. It requires and encourages environmental criteria from suppliers, or encourages suppliers to follow the standards and best practices of green SCM.

Green SCM focuses on the initial stages of product design in order to bring about an environmentally sound supply chain that will also encourage environmental and social awareness across the supply chain spectrum. (Emmett and Sood, 2010, p. 11)

The process will require design re-engineering to make it in line with people’s needs without harming the environment. Sustainability stresses on reduction of the use of non-renewable resources, reduction of waste, and create a healthy environment through:

  • reducing the materials used in production
  • avoiding the use of hazardous materials
  • designing for eventual recycle-reduce-reuse method
  • minimizing pollutants in the air, sea, and atmosphere through the use of renewable energy. (Emmett and Sood, 2010, p. 11)

One aspect of Green SCM is to promote the use of renewable energy in order to minimize carbon emissions.

Renewable energy is gaining popularity in the UK. The government is geared to implement micro-generation or domestic micro-generation. It means electricity generation by users and household owners.

Both the government and the business sector are focusing their resources for its implementation. It is believed that 15% of CO2 emissions will be reduced once micro-generation has been fully implemented by 2050. (Energy Saving Trust, 2005b cited in Watson et al., 2008)

Green supply chain management integrates environmental programs and practices with the practices of the traditional chain management. The functions of the traditional SCM such as product planning and design, procurement and sourcing, manufacturing, transporting and other processes in product making up to delivery to end user, are now applied with environmental planning and applications. (Emmett and Sood, 2010, p. 4)

One of the most important aspects in the new SCM is the focus on the end-of-life management of the product and the avoidance of over-supply. To flood the market with products and create surplus inventory may not be in line with environmental objectives of green SCM.

Green supply chain management recognizes the environmental impact of supply chain processes in an organization. The product life cycle is the basis of green supply chain management. Designing the supply chain concurrently with the product is a supply chain management best practice.

In applying new methods to the product life cycle, emphasis is on important aspects of design, production process and the organizational management. In 1994, the Asian Productivity Organization recommended sustainable SCM, with an added feature of green productivity, to Asian countries. The objective of green productivity was to develop quality management in production processes to protect the end-users and to increase quality in the product. (Wang and Gupta, 2011, p. 5)

The targets of green supply chain are waste materials, wasted energy and resources. Source reduction includes the 3Rs – recycle, reduce, reuse. This can drive business value.

Shows the framework of a green supply chain.. Source: Green supply chain management: product life cycle approach, by H. Wang and S. Gupta (2011, p. 6)
Figure 1 shows the framework of a green supply chain.. Source: Green supply chain management: product life cycle approach, by H. Wang and S. Gupta (2011, p. 6)

Green supply chain best practices focus on the business results first. Best practices include:

  • green supply chain goals and business goals are aligned;
  • supply chain corresponds to a single life cycle system;
  • green supply chain used as a catalyst for change; and
  • reduced material components of a product to reduce waste.

Before proceeding on green supply chain innovations, an organization has to determine the importance of the environment in business. When green supply chain goals and corporate goals are aligned, success in business is not far behind.

Supply Chain Management Practices

Early constructs for supply chain were developed by organizations before the term supply chain management emerged as a management strategy. These were:

  • Strategic Supplier Partnership
  • Customer Relationship
  • Information Sharing (Li et al., 2005 cited in Sanchez-Rodriguez, 2006, p. 6)
Strategic Supplier Partnership

This is a business-to-business transaction involving companies and their suppliers but it also refers to long-term relationship. Suppliers here would mean material suppliers although it could also mean suppliers who manufacture products.

Customer Relationship

This refers to business-customer relationship wherein the emphasis is answering complaints from customers. There is another term called customer relationship marketing (CRM) which has almost similar function. The new practice in CRM has made use of the Internet in providing customer interaction.

Information Sharing

Traditionally, some of the information could be shared, but mostly this refers to strategic information being shared with suppliers. Emphasis is also placed on information regarding green logistics, but as to what extent is information sharing provided by partners cannot be straightly answered. (Sanchez-Rodriguez, 2006, p. 6)

Environmentalism in Business: GrSCM and CSR

Green supply chain management has been regarded by some organizations as strategic management. One example is corporate social responsibility (CSR) which has become a part of legal and ethical framework in most organizations. (Emmett and Sood, 2010, p. 3)

CSR has been considered by organizations as their way of giving back to society and the community where they conduct business and make profits. Green SCM is one way of implementing CSR obligations. CEOs and business owners who have realized what they have done to nature see this opportunity of “paying back” by introducing and practicing green products and services. Major decisions are now focused toward environmentally friendly activities.

One of the many issues organizations are dealing with today is how to effectively implement CSR. Most organizations turn their attention on the communities in which they conduct business with, or the area where they acquire profits.

The aim in CSR is to give back for what corporations have profitably achieved. CSR broadly encompasses many areas that promote interaction between the organization and the society where the organization thrives.

Businesses find a strong link between CSR and green supply chains (Emmett and Sood, 2010, p. 11), or that they find that applying and implementing GrSCM will advance their CSR objectives as well as organizational objectives and improve business. These benefits could not be easily achieved using the traditional supply chains.

But despite the link between the two, GSCM is not a section or under CSR. While CSR is a program under organizational control, GSCM’s coverage is far and wide and it is to promote environmentalism. A business organization should promote it because its products and services have shortened the world’s life span.

Convergence of SCM and Environmentalism

Organizations have been looking for ways to acquire sustainability in terms of environmental programs. Most of them are focusing on minimizing carbon and greenhouse gas emissions, dematerialization, and detoxification.

Recycle-reduce-reuse (3Rs) can be applied here. Dematerialization means reducing raw materials in making the product. Reducing the materials can mean reducing the time and effort in the manufacture and in delivering the product to the customer.

Detoxification is an example. Industrial pollutants can harm natural resources. Manufacturing that involves hazardous materials is closely monitored by government regulators.

The Health and Safety Executive (2007) recommends measures that must be undertaken by businesses and organizations in the workplace. These measures include introducing engineering features and new technology that can control hot or cold temperature; restricting the distance of workers or allowing them to be in safe places; regular medical check-up of workers to determine their fitness for work; use of protective clothing suitable to their kind of work; allowing the workers to acclimatize themselves first before doing any prolonged work; adequate training and development; and expert supervision to ensure that workers are safe in their jobs. (Health and Safety Executive, 2007)

Health of workers means a sound mind and body. During work or while inside the manufacturing plant, workers must not be subjected to situations which may jeopardize their health, for instance inhalation of toxic substances or being exposed to hazardous chemicals.

The Dangerous Substances and Explosive Atmosphere Regulations 2002 (DSEAR) and the Explosives Atmosphere Directives 99/92 EC (ATEX 137) provide for the proper handling and disposal of hazardous and dangerous substances in the workplace. (Health and Safety Executive, 2009)

Antecedents Of Green SCM: What Came First

Firms face a growing pressure from stakeholder groups over environmentally friendly measures they use in manufacturing and processing of products. These stakeholder groups come from the government, the different market segment, workers, and various groups.

Organizations followed measures implemented by government regulators on safeguarding the environment. One of these measures was the program known as environmental management system (EMS) (Vachon and Klassen, 2006, p. 795). Firms concerned with the environment followed suit, and this was the beginning of the ‘green measures. The Green Supply Chain Management emerged later.

Environmental Management Systems

International Standards 14001 certification certifies organizations that follow certain environmental procedures and one of these is the EMS implementation which has a Manual for organizations to follow.

This is an important step in providing environmental protection for the workplace and the organization. One example is the guidance to be carried out in a landfill operation. A landfill provides direct solution for waste minimization and disposal, but this has to be operated under certain stringent measures or waste disposal will not be too effective.

A local government or a private entity who intends to operate a landfill has to apply for EMS certification or license in order to operate. And the EMS procedure stipulates the guidelines to be carried out. The certification will be issued by a standard-writing body, one example is the British Standards Institute.

EMS certification is now one of the accepted requirements that organizations implement to minimize environmental impact. Other EMS objectives include minimizing the use of hazardous substances, CO2 emissions from factories and plants.

EMS is contained in a manual that provides guidelines and procedures for environmental promotion. The manual is also in accordance with legal requirements from the UK government for a more sustained environment. (British Standards Institute, 2004)

Attainment of sustainable development is another objective. Sustainable development takes into consideration development of the present and future generation.

The manual promotes continual improvement, environment protection, and provides step by step procedures in the carrying out of the various programs of the organization. The contents include planning, what the policies are and how the policies are formulated and implemented, the operation and manpower, areas covered, management, monitoring, and other important aspects of the operation. It is the responsibility of the management to review the guidelines and to see to it that the contents of the Manual are being carried out to the letter.

The progress of the environmental work will be provided from time to time. The organization is responsible for hiring a consultant who knows how an EMS works. The consultant should be a qualified management expert, has years of experience in environmental protection and knows the intricacies of environmental planning.

Part of the Manual is a definition of important terms that are related to the operation of a landfill or implementation of an EMS. Some of these terms include ‘aspect’ and ‘impact’. The word aspect refers to activity that the organization carried out is going to carry out in the course of an EMS implementation. Impact refers to the result or outcome of the environment (i.e. environmental impact) out of the aspect that was carried out.

Aspect does not only refer to activity; it may also refer to ‘product’ which the organization produces. This is important in the Manual and in the certification process. Aspect may not necessarily mean input, but it affects and results into something which is regarded as impact.

Output can refer to greenhouse gas emission due to the usage of coal and fuel by factories, cars, plants, and other establishments doing their product processing. When we plant trees, the output is more fresh air and less pollutant because trees absorb carbon dioxide.

Aspects are positive attributes in an EMS manual. Aspects are implemented to provide output. Continuous improvement in an environmental undertaking should be filled with aspect implementation because this will result into impacts that an EMS is trying to achieve. Proper identification of aspects is commendable and should be carried out by managers and personnel involved in the program.

Risk assessment is also part of the environmental process in an EMS implementation. Risk assessment aims to identify risks and the factors that may effect change. Planning cannot be carried out without the necessary risk assessment. But assessment and planning provide positive steps for the management review team to proceed with their work.

An EMS Manual also aims to minimize or eradicate environmental problems in businesses and industries, including households and communities, due to improper or irresponsible disposal of waste materials. Organizations will acquire necessary tools and expertise in waste minimization and eradication; implement reduction of waste through recycling; recover energy; and learn new methods and techniques for environmental sustainability.

Organizations have the option to use or not an EMS program but they will lose the benefits and advantages brought about by this certification. BSI will only accept willing applications but those who become certified will gain much as green organizations. Benefits include economic, technological, social, and much more.

Total Quality Management (TQM)

Early on in addressing environmental concerns in the workplace, firms focused on preventing pollution, recycling waste products, and proper disposal of hazardous materials.

Proponents of SCM look at it as a philosophy and first proponents regarded SCM as synonymous with total quality management (TQM).

Quality management and improvement are enhanced through the application of standards, like the ISO 14000 certification, reduction of the use of energy, and reduction of materials in product manufacturing.

TQM also injected environmental attributes on products and services, but TQM was a management technique known as just-in-time. SCM involves one group known as upstream (suppliers) and another group known as downstream (distributors and consumers or end users). (Cohen, 2011, p. 483)

Other management principles and philosophies that came ahead of Green SCM were not concerned of a management trustful-relationship among the partners in the chain and product distribution. Green SCM has a particular goal and objective that becomes a part of the partnership of suppliers, manufacturers, distributions, and end-users.

The British Standards Institute (BSI) is a private organization which provides assistance to other organizations seeking to improve their environmental performance in this era of intense globalization and in a world in danger of global warming and climate change. BSI is not a government body but its functions encompasses functions that ultimately helps governments and institutions seeking to help save the environment.

One important function is to encourage and motivate organizations to attain environmental best practice. This function is also an objective of green SCM. Green SCM can be called a by-product of BSI certification. But it is even more than that.

BSI has been in existence for decades now. Its objectives are humanitarian and environmental. Both these terms can attain sustainable development now and in the future. BSI has branches in Europe, Middle East and Africa, and in many parts of the world including Asia and the so-called Third World countries.

BSI has contributed much to the growth of the economy. It is estimated that BSI contributes about £2.5 billion annually to the UK economy. This is a reminder to organizations that environmental concern creates business even though the objective is not financial in nature. BSI is for purely environmental promotion but nature knows how to reciprocate. (Christini et al., 2004, p. 331)


Impact of Supply Chain Strategies on Green Logistics Performance

There are a number of effects that can be considered impact of supply chain on green logistics performance. These effects can result into increase in risks. But risks are a part of business, especially in the introduction of change.

Applying change to the processes in the organization increases risks but this is manageable because of the collaborative efforts between partners in the supply chain. The impact of supply chain strategies are:

  • Risk sharing. Organizations involved in the supply chain have to cooperate and work together to minimize risks and gain advantages in their collaboration.
    This can be attained through sharing some of the revenues while working and focusing their efforts on product design. Organizational knowledge and information can be shared, although not to the point of sharing trade secrets. The point is to share for a common goal. (Gillis, 2010, p. 209)
    This is something new in the annals of business since business firms before worked only for their own selfish objectives. ‘To each his own’ was the name of the game. But when supply chains had to be remodeled and refocused with the demands of the changing times, organizations have to work together, unite and gain profits hand in hand.
  • Risk pooling that may result into a reduction of demand by certain customers.
    Some areas where customers are found might reduce their demand and other areas may also increase demand. The stock could be depleted. A technology known as inventory optimization can solve this supply chain problem. Companies will be able to locate areas where stock inventory has to be increased.
    Companies may not be prepared for the introduction of green logistics. Managers and employees could not fully grasp and understand the intricacies of supply chain decisions and in reducing carbon footprint.
    In North America, some have the thinking that high carbon emission is a result of ineffective supply chain, so that companies are demanding from their suppliers to reduce their carbon emissions. Wal-Mart has asked its suppliers to reduce their carbon emissions. (Gillis, 2010, p. 2009)
    This is an impact which some considers negative to good business but has some positive effects for the environment.
    A survey in July 2007 found that in the United States, Asia and Europe, a great percentage of executives believe addressing the problems of the environment is important and that this should be a part of the company’s strategy. (Gillis, 2010, p. 2009)

More of the perceptions on introducing green logistics come from:

  • Employees and members of organizations who are always interested in environmental issues; the segment includes consumers, business partners, and many companies coming from different industries;
  • Countries with their governments providing financial incentives to cut greenhouse gas emissions. Most of these companies are signatories to the Kyoto Protocol which has implemented carbon emission limits and provided benefits to members;
  • Business which have benefited through increased profits and reduced energy costs.

Performance Standards

Performance standards have been increasing due to demand from consumers and the general public and partner organizations that see the good effects and advantages of implementing Green SCM. Some of these standards include Ecolabels, national-level standards, and initiatives coming interested countries, e.g. the Nordic Swan and the Euro-Flore.

There are also initiatives coming from the international scene, like the Forestry Stewardship and the Marine Stewardship Councils. These groups are united in their green programmes and have implemented the Green Procurement initiatives. The initiatives have simplified purchasing by consumers and organizations who advocate environmentally processed products. (Emmett and Sood, 2010, p. 68)

Impact of GrSCM on Organizations

Because of the initiatives and standards implemented, there has been close partnerships between governments and suppliers in understanding environmental impact and aligning environment priorities.

Green SCM has also enhanced close coordination and collaboration between private and public agencies; supply chain partners are sharing each others’ experiences and information. The supply chain performance has improved. (Emmett and Sood, 2010, p. 68)

Green SCM at SONY Corporation

One important attribute of Green SCM is that it aims to satisfy the ‘green’ specifications of consumers. An example of the impact of the initiatives is an incident that occurred in Holland involving electronics giant SONY Corporation.

A SONY cargo was not allowed to enter Holland because of the metal Cd which was used as connectors in SONY play stations. This incident created damage – albeit temporary – on the reputation of the company.

Sony mended their tarnished reputation by developing SS-00259 technical standard (SONY, 2004 cited in Wang and Gupta, 2011, p. 8) restricting their suppliers from using toxic material in their product. The standards provided a clear partnership between SONY and her suppliers and also provided green products for consumers.

Dell Computer’s Green SCM

Another example is Dell Computer’s guidelines to its suppliers. Through SCM, Dell is able to estimate its carbon output. Dell strictly enforced its guideline to suppliers by having them sign the standards known as Electronic Industry Code of Conduct (EICC).

Suppliers should follow the standards and should be certified. The EICC is the industry’s standards and regulations promoting CSR in the industry. The regulations are based on basic standards which concern welfare of employees and employers, a safe and healthy environment for the workers, and ethics governance in organizations. (Wang and Gupta, 2011, p. 8)

Apple Inc.’s GrSCM

Apple Inc. also saw the importance of Green SCM. Apple management chose partners carefully by having close relationships with artists and music groups, for example the U2. Apple’s attention to business strategies went as far as convincing, and gaining the trust of, companies for distributing Apple products. (Paley, 2008, p. 141)

The management style of Jobs, a co-founder of Apple, also worked. Jobs provided advocacies and managed work personally by controlling all aspects of a product, from hardware and software to the services they offer.

Most of the time, Jobs and his people spent coming up with the next product which became in-demand to match their other products which have been successful before. Jobs also saw to it that the company keeps in close contact with suppliers, and with suppliers’ suppliers. Jobs’ style of leadership is a model to emulate. His people see him as some father image and a good leader.

GrSCM at Toyota

Toyota has been implementing an effective SCM with Toyota Production System. Their process has flexible production methods which have been proven effective because Toyota was able to feel the gains when it was still struggling as a small company. Lynch (2008) emphasizes that “it took many years … to develop kaizen and kanban, and to have them adopted across the company” (p. 772).

Toyota produces most of their auto components in-house, meaning they do not outsource many of the car components. The principle behind this is to minimize environmental problems with their suppliers. Toyota sees to it that their manufacturing plants strictly adhere to green SCM. But they do outsource some parts or components from companies in China. These outsourced parts are not major components of Toyota cars.

Toyota developed hybrid cars to answer to the growing demand for environmentally friendly products. A hybrid car works on electricity and gasoline, but there is less carbon emission. Toyota developed the hybrid Prius, a controversial product but was manufactured in-house with less impact to the environment. (Toyota, 2011)

Prius was a concept that Toyota developed into and from a knowledge-based technology, what is described as “core technology, path-breaking vehicles, and new routines of product development for the 21st century” (Lynch, 2008, p. 93).

The concept evolved from the idealistic vision and creative imaginations of Toyota engineers to develop a twenty-first century vehicle. This is what made Toyota a world leader, for without this innovation, management believed it was on a ‘steady path of incremental innovation, rather than moving radically to a new level of existence’ (Lynch, 2008, p. 93).

Prius is a highly-computerized hybrid car, but as to how tested was this technically before it was totally introduced to the public is still in question (or it was only questioned because of the series of complaints and accidents). Toyota maintains the Prius is a tested product, the result of years of innovation, experimentation, added with knowledge and expertise from a pool of valued engineers, technicians, and consultants.

Hybrid Prius is a promise fulfilled by Toyota management to help reduce materials detrimental to the environment and to see to it that manufacturing plants are environmentally friendly. Management’s decision to push through with the Prius project was motivated by their desire to help minimize global warming and introduce for low-emission vehicles.

This gave Toyota an opportunity to break old technical systems with revolutionary, environmentally friendly technologies. It had long worked to reduce emissions in internal combustion engines. Toyota had been into the program of Zero Emission Vehicle, and one of Prius’s features is its being fuel efficient.

This in-house production proved very beneficial for three reasons:

  • It enabled the accumulation of knowledge, techniques, and skills – Prius produced more than 300 patents in its entire built.
  • The hybrid was done in a short time because of the in-house strategy. Toyota management commented that they had a six-year advantage of mass-producing hybrid cars than other automakers because of their in-house strategy.
  • The company improved technology with less costs. Through in-house R&D, Toyota has reduced costs of major hybrid components.
  • More knowledge has been created in the developmental drives including alternative energy, such as natural gas, diesel engines, gasoline engines, and electronic vehicles. (Lynch, 2008, p. 98)

Prius is revolutionary because of the clean-air and fuel-saving features – with the lowest emissions possible, an action guideline that concerns the environment, and one of the contents of the Earth Charter of 1992, which Toyota started to focus as part of alternative technologies programmes. When Prius was finally decided for production, it was the first mass-produced and best selling gasoline-electric hybrid car in the world.

Outcomes of Implementing GrSCM

A number of outcomes and benefits have been recorded on implementing Green SCM to business practices. One primary benefit is that efficiency in SCM is developed and maintained.

Other benefits range from environmental to technological and economical. When it comes to environmental benefits, greenhouse gases are reduced because of the reduction in waste, pollution and environmental abuse.

Technological benefits include creating technological advancement through more research and development initiatives in the field of environmental design for green supply chains. New technologies that focus on environmental design can also be developed. Financial and operational improvements are also seen as primary benefits. (Emmett and Sood, 2010, p. 8)

Economic benefits mean more profits for the company due to the positive impact of green supply chains. Production costs are also minimized. Contrary to belief that adding environmental innovations means additional costs on the part of the organization, green supply chains have reduced procurement costs. Organizations that implement environmental processes also would like to conduct business with organizations that have the same environmental objectives.

There are also reduced compliance and disposal costs when it comes to disposing of hazardous materials. Disposal of hazardous materials, which are harmful to the environment, is properly guided by environmental laws. (Emmett and Sood, 2010, p. 8)

Regulatory benefits include leadership edge on the part of the organization in terms of regulatory wave; the organization becomes a leader of innovation through its implementation of environmental design, and aspects of organizational learning. On this area, global warming, which is a major concern of environmentalists and policy makers, is addressed.

Social benefits for green supply chains include positive feedback coming from other organizations within the industry, marketing opportunities developed, and recognition as green innovator. There will be increased sales since environmentally friendly products are much in demand by communities which are concerned of their clean neighborhood.

The workplace is also improved because of the need for a safer and clean environment in factories and manufacturing plants. Workers are safe and more secured in the new environmental setting. (Emmett and Sood, 2010, p. 8)

Responsibility to green SCM

It has become imperative upon organizations to implement Green SCM. Green SCM has been considered by organizations to provide environmental sustainability. Organizations also recognize that they have the obligation to green SCM after considering pressure from customers, governments and other organizations.

Suppliers also feel the pressure from both organizations and their own workers. Organizations feel that they have to implement CSR which can be considered a predecessor of Green SCM, although these two are not exactly the same in structure and concept.

Organizations have the responsibility to respond to mounting pressures from both the environment and people. Environmental issues can be squarely addressed by Green SCM. In the 1960s, environmental problems were not a part of any program or activity.

Environmental effects from industries were only brought to public awareness by groups like the Green Peace. Since this awareness is not part of organizational consciousness, every CEO and top management of organizations have no recourse but to make Green SCM a major management initiative.

Application of Green SCM to Company: Green Supply Chain Strategies

Recycling is one of the most popular and perhaps the most positively perceived and doable of all the waste management practices. Recycling will return raw materials to market by separating reusable products from the waste products and materials. Recycling helps ease the continued use of the resources, lessens the need for searching raw materials from the environment and reduces environmental impact.

An example is the practice in construction industry. Controlling construction and demolition waste (C&DW) through recycling is quite popular and commendable. The process is the reuse-recycle-reduce technique (3Rs) which can be done through control aspects “such as design quality, applied technology and habitual construction methods”. (Ekanayake and Ofori, 2004; Huete et al. 1998 cited in Rodriguez et al., 2006, p. 335)

Recycling has been applied in many areas of human endeavor. It provides financial benefits and is helpful to the environment. It can add profit to the company and helps in job generation. Recycling construction waste products is a practical alternative and provides considerable amount of savings for the construction company.

A landfill can directly help in solving the problem of waste disposal. But a landfill operation can also cost so much money for the community or for a private organization. Landfills need manpower and management.

More companies have been receptive to adoption of GSC. The graph below shows the response rate of companies who have adopted green supply chain in their operations

Shows the response rate of companies who have adopted GSC. Source: WIPRO, Greening a supply chain (2009)
Figure shows the response rate of companies who have adopted GSC. Source: WIPRO, Greening a supply chain (2009)

Barriers to Green SCM

There are a number of barriers that implementation of Green SCM implementation encounters; some of these is the problem of legislation conflicts, a not-well-defined incentive coming from top management of the organization, lack of adequate resources for implementation, and also inadequate technology.

For all these barriers, there are solutions, and quite simple solutions. As we can see in these barriers, negative or ‘lack of’, the only solution is to provide. The problem of legislation conflicts is when some legislators would try to oppose, or are negative about EMS or Green SCM, and would try to file legislations what would negatively affect the undertaking about Green SCM.

Environmental advocacy is a change management and therefore there are managers and employees who are resistant to change. It takes time to introduce changes in the workplace and the ability to introduce new technology and models.

Therefore, the organizational higher-ups should provide the atmosphere of change and allow employees to adjust to the situation. Organizations that are in the process of changing their new set up, or are practicing Green SCM, have many questions to ask. These questions might be illuminated once everybody has the will to cooperate.

Case Study: Advanced Electronics Company, Saudi Arabia

Advanced Electronics Company (AEC) is a private company in Saudi Arabia, founded under the directives of the Saudi government. Its main business is electronics and similar applications like electronics manufacturing and systems integration. They also conduct repair and maintenance of products.

The company works under the supervision of the Saudi government, and has branches all throughout the country and abroad. The company’s work specialty includes design and development of products and systems. It aims for the Saudization of the local economy; meaning the workforce is composed of purely Saudi nationals. (Advanced Electronics Company, 2011)

AEC is also affected by the growing tide of globalization. It is a knowledge-based organization, and its workforce is composed of a pool of talented and expert individuals. AEC has invested on its employees.

The Saudi government relies heavily on this concentration of talents from a private company. The company also aims for customer satisfaction and loyalty; that is why, its products and services are quality-oriented. The company adheres to quality management and best practice. The company’s financial standing is as healthy as ever.

As a researcher conducting study on AEC, I regularly visit this company because of the Green SCM it practices. But I will try to look into their green SCM practices of which I can improve and provide practical recommendations, should they agree to my proposal. I will also intend to compare best practices in Green SCM with that of the company’s existing SCM practices.

Green SCM

This company has a wide market and plays an important role in the Saudi economy. It manufactures electronic products which need application of green supply chain management considering that electronic waste pose a serious threat to the environment.

Saudi Arabia promotes environmental protection through minimization of greenhouse gas emissions and promoting a sound ecological balance. The country has signed the Kyoto Protocol enforcing limits to greenhouse gases and CO2 emissions.

AEC also applies green SCM but to a limited extent. Some of the processes are in line with the traditional supply chains; design, manufacturing, transporting, and other functions in the supply chain, are not yet applied with green SCM. There is also no application with green logistics where products do not pose a threat to the environment.

AEC supply chain is applied with material control with added value to supply chain. Material control emphasizes ‘planning, receiving, warehouse, inventory, and shipping’ (AEC, 2011).

Some aspects of green SCM are incorporated in the company’s material planning. It adheres to cost effectiveness by manufacturing cost-effective electronic products with lesser materials in manufacturing to minimize environmental impact. Planning is an important part of product making.

Recommendations for AEC Management

AEC needs to improve its Green SCM with the following fundamentals:

  1. AEC has to review environmental performance and measures.
  2. AEC needs to align, revise and keep in consonance with present trends in environmental programmes.
  3. The company needs more environmental planning, identify environmental factors and the requirements from the Saudi government regarding electronic waste.

It is not so clear how the company has discarded its electronic waste. In the United States, electronic wastes are properly monitored and are disposed in accordance with existing regulations.

The organization has implemented the 3Rs as a way of accepting change and the concept of Green Supply Chain Management. AEC accepts old products from customers for recycling.

One remarkable technique they have employed is accepting old products and the customer can acquire discount for new products they would buy. This process is one way of recycling. The old item – that is still functional – would not be sold but would be donated to some institutions of the government.

There are school leavers and undergraduates in the country who need help. The government of Saudi Arabia is helping these youths by providing them job through recycling of old appliances. The young school leavers would sell them to small business establishments and households.

Green SCM is not yet fully implemented within the different departments of AEC and to its many branches. But it is an encouraging sign that the management has been receptive of the change and is making headway to its full implementation. There are also suggestions coming from line managers and well-meaning employees to enforce environmental programs, particularly in the concept of the 3Rs.

When time comes that this Researcher would visit the company, or one of its branches, I will have the opportunity to make recommendations regarding this study of Green Supply Chain Management.

The company is one of the fastest growing companies in the country when it comes to electronics. It has helped the government on this respect, and it is believed that the government too is doing its share to help private companies and organizations in the subject of Green SCM.

Conclusion/Recommendations for Future Study

Extracting raw materials from the environment causes a serious threat to the environment. Since it is inevitable for people and organizations to make new products for the basic needs, this extraction and continuous production have to be controlled through systematic way wherein the environment can be diverted back to its normal state.

The process of extraction is part of supply chain. But supply chain is continuous process that covers many activities. Along its implementation, various environmental degradation and abuse occur.

Green SCM has been introduced by organizations and people concerned of the environment. Green SCM seems to be the answer to the growing demand of environmental programmes to save Mother Earth from the natural catastrophe due global warming and climate change.

Globalization has affected almost all aspects of business and organizations. A multiple of products have flooded supermarkets and retailers worldwide. With this flooding of products, the environment is endangered, worsening global warming and climate change.

Most companies are focused on implementing environmental programmes with respect to internal production. Emmett and Sood (2010) disclosed that these companies can shift production by outsourcing thereby reducing their carbon footprint.

But this does not reduce environmental degradation; it is just passing on the dirt to somebody’s backyard. The solution should be to apply Green Supply Chain and provide a holistic approach to carbon management. (Emmett and Sood, 2010)

Green supply chain management modifies many aspects of the traditional supply chain. It has concepts which are new to the understanding of employees and top management of corporations, for example carbon footprints. Although this maybe new to some organizations, the responsibility lies on top management to provide knowledge base for their people.


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