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What is Green Supply Chain? An Overview

Last updated on Nov 23,2022 819 Views

The adverse effects of pollution are not something of the future. We can see it now in the form of out-of-season heavy rains, floods, earthquakes, etc. Our efforts to protect the environment are not just for the future generation but those living on this planet now. So many people have been affected by natural disasters that there is an urgent need for everyone to take a green initiative. The supply chain is the largest function in any company, and implementing a green supply chain is the way to make the firm environment-friendly. 

What Is A Green Supply Chain?

A green supply chain is one where modern eco-friendly methods are integrated into the conventional supply chain. This results in reducing waste and carbon footprints. Such practices also help improve efficiency. There are various opportunities to introduce environmental friendliness at every stage of a supply chain. Transporting raw materials from vendors by train can reduce the ill effects caused by road transport. Completely avoiding or reducing the use of plastic in packaging is a great way to reduce the impact on the environment. Reducing the use of paper can also reduce the adverse effects on nature. 

There is pressure from customers on companies to reduce their carbon footprints. More users prefer to buy from companies that implement measures to reduce environmental impact. Governments are also putting pressure on industries to reduce pollution and be more environment-friendly. It is forcing more companies to implement the green supply chain and benefit from it. But there are difficulties when trying to put the practice in place. So, what is the way to create a sustainable supply chain? We will briefly see how a company can make its supply chains more eco-friendly. 

Those aiming to become supply chain professionals will benefit greatly from learning the process in detail. The Advanced Certificate Course in Operations, Supply Chain and Project Management deals with this subject in detail. A visit to our website can show the topics that are taught in this course. 

Ways To Implement A Sustainable Supply Chain

Way to Implement a Sustainable Supply chain

  1. Redesign The Product

Even a minor change to the product design can result in reducing the impact on the environment in a big way. Companies can look at changing certain components to make the product more eco-friendly. Sometimes it is even possible to eliminate some ingredients without making a major difference in the finished goods. Reducing the number of parts will also result in less transportation of components. It is another way to create a green supply chain. The usage of new technologies may help make the product more environment-friendly. 

  1. Changing The Manufacturing Process

Certain manufacturing processes consume more raw materials and power. Companies must look at ways to change the process in a way to reduce consumption. Some organisations have changed the power source to more modern and less polluting ones. Reducing waste and reusing them can decrease the impact on the environment. Implementing a green supply chain is also possible by making the production process more efficient. Proper maintenance of machinery can also help in reducing waste and improving production efficiency. 

  1. Purchasing From Green Suppliers

Another way to implement a green supply chain is by procuring raw materials and other needs from suppliers using sustainable methods. A look at such suppliers can result in more benefits for the organisation. It may help the company meet even future government regulations on environmental protection. The organisation can be ready when new rules are announced. Advertising the fact that it procures materials only from green suppliers can be advantageous. It will give the firm the advantage of becoming more appealing to new categories of customers who look at environmental protection seriously. 

  1. Reducing Transport Distances

Burning fossil fuels harms the environment. Logistics is one of the important components of a supply chain. Transporting materials to and from the factory results in burning a lot of fuel. Companies must look at ways to reduce this as much as possible. They can start searching for suppliers closer to home so that the fuel used is less. Organisations can also rent warehouses closer to the markets where they have a strong presence. It will reduce the number of times goods are sent from the factory to that area. 

  1. Change Service Level Agreements

Certain clauses in service-level agreements may result in increased carbon footprints. Conditions like just-in-time supplies will increase the number of deliveries, and the quantities each time may be short. It will result in increased use of fuel for each trip. Companies must change the agreements to remove such clauses and accept larger and less frequent supplies to reduce the impact on the environment. It is another excellent way to implement a green supply chain while also reducing costs. 

  1. Reduce Packaging Sizes

New packing materials and packaging methods allow companies to reduce the volume and weight of goods. It allows trucks and containers to carry more articles. As a result, the use of fuel per item reduces greatly. The transportation costs come down while reducing the impact on the environment. When there is less packaging material, the burden to recycle it at the end of the supply chain is also less. Using lesser packaging materials also helps reduce carbon emissions during manufacture. It helps companies put in place a green supply chain and save the environment from destruction. 

  1. Consolidate Shipments

Including more articles in one pack reduces shipment costs and transport. Consolidating shipments is an excellent way to implement a green supply chain. Companies must try to get orders containing more items to send them all in one package. They can offer incentives to customers who buy more items in one order. To achieve this, organisations must have better planning for stocking goods and raw materials. They must also plan the location of their facilities well. 

  1. Planning Routes Better

Companies that make regular supplies in their vehicles must plan the routes better to reduce fuel usage. Even those organisations offering service to clients must plan the route for their service personnel. Such planning must be done using modern technology so that each vehicle has to travel only the shortest route to complete the job. Proper planning of trips using modern software and technology can help implement a green supply chain. It will help reduce costs and the impact on the environment. 

  1. Coordinating With Partners

Companies must be ready to convey their concerns regarding the impact on the environment to their partners. This must include both vendors and distributors. Such coordination can help in reducing carbon footprints to a great extent. Planning your raw material requirements and conveying them to the vendors will help to avoid unplanned supplies. In the same way, the organisation must find out customer requirements from the distributors in the area. It will help make fewer supplies, thereby reducing the cost of transportation. The reduction in the consumption of fuel results in a green supply chain

  1. Start The Process Immediately

Companies need to start implementing the green supply chain process immediately. This will help the firm make itself ready for any new regulations. Moreover, the initiative will communicate to customers the organisation’s concern for the environment. This can go a long way in earning their loyalty and getting new customers. Starting the process immediately will also help to stay ahead of the competition. It will help the establishment plan investments needed to change to a sustainable supply chain process. Putting the plan into action immediately will also alert partners to become more environmentally friendly. 

You can learn the steps to implementing an environment-friendly supply chain on the Advanced Certificate Course in Operations, Supply Chain and Project Management. Visit our website to understand what the course offers and how it will help you become a supply chain professional. 

Advantages Of Having A Green Supply Chain

  1. Cost Reduction

It is common to think that implementing a green supply chain comes at an increased cost. On the other hand, when the process is streamlined to reduce waste, the cost comes down. When finding suppliers that are closer to the manufacturing facility to reduce fuel consumption, the company benefits by reduced transport costs. Changing from paper documents to digital ones helps in reducing the impact on the environment greatly. This will also help in reducing the cost to a great extent. Using a lesser number of components to reduce carbon emissions also helps in lowering the cost of manufacturing the product. 

  1. Digital Transformation Reduces Errors

This is another big advantage of having a green supply chain. One of how a company can reduce the impact on the environment is by reducing or avoiding the use of paper. This means that everything will be communicated and stored digitally. There is no chance of any document missing or falling into the wrong hands. This can greatly reduce errors in the supply chain operation. Going digital also ensures that everyone has access to information while at the same time helping them take action immediately. 

  1. Helps Companies Remain Compliant

More and more governments are introducing new regulations to reduce adverse effects on the environment. Companies must stay compliant with these rules, failing which, they can be penalised heavily. When the organisation takes the initiative to implement green supply chain methods, it is automatically following the regulations. Such an initiative also helps the firm become compliant with laws that are likely to be enforced in the future. The company will also remain within the law and doesn’t have to fear any penal action. It also improves its reputation among customers. 

  1. Improves Reputation

Many people today look at how a company fulfils its social responsibilities. A firm that creates a green supply chain has a better reputation among people as it makes this world a much safer place to live in for future generations. This helps the organisation get better candidates for the firm. Many youngsters value firms that take green initiatives and will love to work for them. Even the existing employees will feel proud working for such a company. They will remain loyal, resulting in better employee retention. 

  1. Earn More Business

The main goal for any establishment is to increase its sales. Implementing a green supply chain helps in this as customers are more inclined to buy products from a firm that upholds such values. They like to be associated with an organisation that has the reputation of fulfilling its responsibilities to society. It will also help the firm get new business partners and expand the operation to new areas. An increase in sales and revenues will result from the expansion of business. 

Attending the Advanced Certificate Course in Operations, Supply Chain, and Project Management will help you learn more about the benefits of creating a sustainable supply chain. Visiting our website will help you understand more about the course. You can also learn about the challenges that the establishment is likely to face when trying to make the changes. 

Challenges In Implementing An Environment-Friendly Supply Chain

Challenges in Implementing an Environment-Friendly Supply Chain

  1. Increased Initial Expenses

The initial expenses involved in changing the process can be a deterrent for many companies. Finding new suppliers, transporters, or other partners come at a cost. Any change in packaging may require investment in new machinery. 

  1. Difficulty In Monitoring The Change

Supply chain officials are already overworked, and taking on the additional responsibility of bringing the change can be overwhelming. It is not easy monitoring the change across departments and business partners. This is another challenge in implementing a green supply chain

  1. Getting Others On Board

It may be easy convincing the company’s stakeholders to make the change. But suppliers and distributors may not be convinced about spending money to make their processes more environmentally friendly. It may take a huge effort to convince them. 

Summing Up

The day is not far away when every company will be required to put in place processes that reduce adverse effects on the environment. As governments and other bodies become more aware of the need to reduce the carbon footprint, more regulations are likely. Organisations should take the initiative and make their processes more eco-friendly. Implementing a green supply chain can help a lot in reducing damage to the environment. Supply chain officials must start looking at ways to bring about the change as early as possible. 


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What is Green Supply Chain? An Overview