With retrogression of environment and ballon in consumer awareness, government regulations sustainable supply chain has become paramount for the companies. Many companies across the world have inculcated green practises in their supply chain. This article describes the concepts, benefits & modus operandi of sustainable supply chain management in Indian context
Sustainable supply chain has been adopted by many companies globally as well as in India. First instance of Sustainable Supply Chain can be traced back to 2003, where companies like Hewlett-Packard, IBM, Xerox and Digital Equipment Corporation had introduced some initiatives towards Sustainable Supply Chain Management. Green Supply Chain is quickly gaining importance throughout the industry as protection of involvement has appeared as one of the top-rated objectives among the governing bodies all over the world. Other drivers of Green Supply Chain are increase in energy cost, climate change and improved environmental awareness among the communities. In this article we have discussed the Green Initiatives adopted by the Indian companies to implement sustainability in Supply Chain.Green Supply Chain
A supply chain is a network of organizations, people, activities, information, and resources involved in deploying a product or service from supplier to customer. The key objective of SCM is to fulfil customer demands through the most efficient utilization of resources, including distribution range, inventory, and labour. Supply chain sustainability (SCS) is a holistic view of supply chain processes and technologies that addresses the environmental, social and legal aspects of a supply chain’s elements as well as their cost effectiveness. SCS is based on the rationale that socially responsible products and practices are not only beneficial for our planet and the people who live here, they are also congenial for building positive brand awareness, lowering risk and improving long-term profitability.
Need of Sustainability in Supply Chain in Indian Context
Sustainability of Resources
Green Supply Chains sponsor the effective utilization of all of the available productive resources of organizations. A lead in this segment was taken by Tata Chemicals when it came up with a green and innovative solution for its solid waste treatment — the sludge and sediments from the soda ash manufacturing process were used as raw materials to make cement.
Lowered Costs/Increased Efficiency
At the core of Green Supply Chain Management is the principle of reducing waste by increasing efficiencies. Effective management of resources and suppliers, can reduce production costs, promote recycling and also, the reuse of raw materials. A great implementation of this, was recently done by United Parcel services. Where they started using electric bikes for point to point delivery, thus reducing operation cost as well as carbon footprint.
Product Differentiation and Competitive Advantage
It helps an organization to position itself and its products as environmentally friendly in the customers’ perception. Besides attracting new profitable customers for organizations, it also strengthens the brand image and reputation in market place. In 2008, ITC launched paper craft premium business paper which was meant for office and home use. Specialized chemical treatment enabled it to become eco friendly with longer archival value.
Adapting to Regulation and Reducing Risk
Organizations adopting Green Supply Chain practices can reduce the risk of being prosecuted for anti-environmental and unethical practices. A demonstrated effort towards creating an effective Green Supply Chain through the sustained dedication of resources, activity, measurement and management protocol, will be highly regarded in the event that any questions arise. This can be learnt by the recent closure of Sterlite Industries. Sterlite Industries Thoothukudi a subsidiary of Vedanta Resource was long opposed by local residents for polluting their environment as well causing a range of health problems and has been subject to many closures on grounds of violating environmental norms.
Improved quality and products
Organizations that produce products which are technologically advanced and environment friendly will find this will enhance the brand image and brand reputation in customers’ mind. Tata Motors recently launched TIGOR electric vehicle which has reduced pollution and increase energy efficiency
Besides the above six benefits, there are additional advantages that can be generated by GSCM:
Effective management of Suppliers
Dissemination of technology, advanced techniques, capital and knowledge among the chain partners
Transparency of the supply chain
Large investments and risks are shared among partners in the chain
Better control of product safety and quality
Increased sales and revenue
Beneficial uses for waste
Tata Motors recently launched TIGOR electric vehicle which has reduced pollution and increase energy efficiency
Benchmark to Green Supply Chain
Packaging weight directly impacts the sustainability. New technologies like micro cellular foaming allows us to achieve better rigidity and reduction in packaging weight while keeping the same performance specification.
Consumerism has taken the centre stage in the world today. This has led to massive pressure on limited natural resources. Recycling is one of the simplest solutions to this problem. It reduces the amount of waste produced at the same time reducing the burden on the natural resources. Recycling and reusing packaging material should be employed for sustainability.
Lower energy and material used in product life cycle
90% of the total carbon emission of any product takes place even before any consumers starts using them. Hence lowering the material and the energy used for producing a product can help reduce the overall carbon footprint of the product intern reducing its negative impact on the environment.
Procurement is one of the initial steps of any Supply Chain. Companies like Samsung Electronics have already started providing technical and economic support to their suppliers for green supply chain. For wrangler the supply chain starts from land itself, they assist the cotton growers to use sustainable techniques like cover crops, crop rotation and conservation tillage.
Establish supplier auditing and control
Nowadays companies audit their suppliers to ensure that they are adhering to the guidelines laid down by the company to sustain a green supply chain. Leading consultancy firms like Delloite have understood the importance of sustainability in supply chain. It provides auditing mechanism and green data of the suppliers to the client company.
Water Use and Emission
Water is life. The growing pressure on water resources from population and economic growth has major impact on our social, economic and environmental well-being. Some of the beverage companies have started many sustainable practices. They have started water replenishment programs in which for every litre of water used they replenish half a litre of water. Example of such a company is Coca Cola.
It is paramount for organizations to move towards Sustainable Supply Chain Management. It is not a fad, it has become a necessity. Sustainability in supply chain has the potential to provide financial benefits, environmental benefits and social benefits. It also enhances a company’s reputation and brand value.