Green Supply Management: A Guide to Sustainable Practices
Traditional supply chains can take up a lot of resources and contribute to pollution and global warming. As businesses grow, so do supply chains, making sustainability a challenge.
Green supply chain management helps by switching to green practices. It also makes operations more efficient. Businesses can now cut their operational expenses, follow environmental policies, and build a stronger brand image.
By reading this blog, you'll find out how green SCM works, why it’s important, and how your business can use it successfully.
Meaning of Green Supply Chain
Supply chains cover every stage of a product's journey, from material sourcing to packaging to disposal.
Green Supply Chain Management (GSCM) does all of this but makes it sustainable. It makes sure that each step reduces resource consumption, minimises waste, and limits carbon emissions.
Green SCM includes ways of working with eco-conscious suppliers, using renewable or recycled materials, and optimising logistics for lower fuel consumption. It also includes getting rid of waste sustainably.
What Makes Up a Green Supply Chain?
To build a green supply chain, it is crucial to be aware of the components that make it, such as sourcing, transportation, or packaging. Here's a closer look at them:
1. Sourcing That's Sustainable
Greening the supply chain is about making production more sustainable. 3D printing reduces waste by using only the materials needed. Machines that run on renewable energy are helping to reduce pollution. These changes make production faster and reduce its effect on the earth.
2. Greener Transportation
Shifting to electric and hybrid vehicles is key in green SCM. Optimise delivery routes by using route-planning software. These will reduce fuel consumption, lower emissions and also cut operational costs.
3. Packaging That Cares
Packaging that helps the planet and not just litter is important in green supply management. More companies are looking for ways to make packaging part of the solution, not just another source of waste. Some are even linking packaging to reforestation.
For example, look at Thaely[1] - they use recycled boxes containing seeds that grow into trees when buried.
Businesses can cut down on waste and help the environment by using reusable and biodegradable materials and linking their efforts to tree-planting initiatives.
Importance Of Green Supply Chain Management
Resources are becoming scarcer, and consumer expectations are accordingly shifting. So, how can green SCM manage these expectations and help businesses cut costs? Read on to find out.
1. Driving Innovation in Product Design
Greening the supply chain makes businesses rethink how they make products, which means using fewer materials. It could also mean making things last longer or easier to recycle.
IKEA is one company that does this well. They use renewable materials like sustainably sourced wood and biodegradable plastics.
Their products are also designed to be taken apart and recycled when they’re no longer needed. So not only is this better for the environment, but it also makes products stand out to conscious buyers.
2. More Opportunity for Green Funding and Incentives
By making supply chains more eco-friendly, companies can get grants, tax breaks, and other incentives. Take IREDA (Indian Renewable Energy Development Agency)[2], for example.
They offer funding to businesses working on renewable energy projects. It's a win-win because it is better for the planet and easier on the budget.
3. Improves Supply Chain Resilience
Focusing on sustainability makes a supply chain more resilient. By diversifying suppliers, cutting down on dependence on specific raw materials, and sourcing locally, companies can better manage risks.
These risks include climate-related issues, such as floods or droughts, that can slow down the supply line. When companies use different suppliers in various locations, they are less likely to experience big problems. This is because they don't rely on just one supplier.
5 Ways Green Supply Chains Drive Sustainability
Given below are 5 common ways in which green supply chains are helping companies stay efficient while remaining eco-conscious
1. Cutting Back on Fossil Fuels
The most important goal that green SCM has is reducing the use of fossil fuels. It switches to renewable energy sources like solar or wind power and also helps in cutting down carbon emissions.
For instance, businesses can install solar panels on warehouses or switch to electric delivery vehicles.
2. Reducing Waste at Every Stage
Green SCM aims to reduce waste. This happens at every stage of the production process. It does this by reusing materials, opting for recyclable packaging, or improving disposal methods.
Businesses can repurpose waste or byproducts. Extra fabric from clothing production can be turned into insulation, or leftover food waste from factories can be converted into biogas.
3. Partnering for Sustainable Sourcing
In Green SCM, you choose suppliers who have the same environmental and ethical values as your company. Working with them will ensure that the raw materials sourced are renewable or responsibly harvested.
This ensures you are not only protecting the environment but also supporting the local communities.
4. Meeting Regulations While Innovating
Laws and rules make sure that businesses don't function in a way that will harm the environment. This may include restrictions on emissions or the use of harmful chemicals.
Meeting these standards makes businesses think differently. They find ways to adapt, like using less energy or switching to plant-based plastics.
5. Building Trust Through Transparency
A number of people now care about how brands treat the environment. A study found that 80% of consumers[3] think about this before buying something.
Sharing honest updates with your customers, like how much waste is being cut or where materials come from, helps build trust. It also makes customers stick around and gives businesses an edge as more people look for brands that match their values.
4 Ways to Make Green Supply Chain Management Work for You
Making a supply chain green takes action. Here’s where to begin:
1. Map Out Your Supply Chain
Look at your supply chain closely and find out which part harms the environment the most. Maybe a part of your supply chain is producing too much pollution or is using up a lot of energy.
Address the high-impact area first. It will bring the most improvement in making your supply chain sustainable.
2. Set Goals You Can Measure
Setting clear targets for yourself can help with keeping you more focused towards your goal, like cutting emissions by 20% in the next five years or so.
Doing this will help you see what is working for you and what is not. And you can always tweak your approach and keep moving forward if you notice that the production is not going according to your expectations.
3. Use Eco-Friendly Materials
Reduce, reuse, and recycle wherever possible to minimise waste. Using waste management apps can help track, sort, and dispose of waste the right way. They give a clear picture of how much waste is being created and where it’s going.
With this information, businesses can fine-tune their recycling efforts and even come up with new ways to repurpose materials instead of tossing them out.
4. Track Progress and Stay Accountable
You can’t improve what you don’t track. This could be anything from cutting down waste, using less water, or lowering carbon emissions. Use key metric indicators to measure your success.
A good way to stay accountable? Publish an annual impact report. It doesn’t have to be perfect, just an honest look at what’s working and what still needs work.
These reports will help you stay on track and let customers see how you are actually achieving your sustainability goals.
3 Challenges of Green Supply Chain Management
For sustainability to work, businesses must address the challenges that come with green supply chain management.
1. Securing Land
Securing land is often the biggest challenge that any renewable energy project faces. They need large spaces, and finding such spaces is not always the easiest task to accomplish.
Delays can happen if the local communities do not agree. They might not want to lose their agricultural land or might not like the compensation they are getting. This kind of conflict only leads to approvals and negotiations becoming more difficult.
2. Financial Struggles
Small and medium-sized businesses (SMEs) often struggle financially because of tight margins. This makes greening the supply chain even more difficult for them as they can't always afford sustainable technologies.
Because of this, green supply chain management also has difficulty in becoming popular.
3. Complying With Environment Regulations
Many rural areas in India have environmental regulations that are either too weak or not enforced. This occurs due to a lack of monitoring, corruption, and limited resources.
Local businesses are slower to go green. This creates a gap in how sustainability is practised across the country. To fix these challenges, the solution needs to fit each region.
What works in one place might not work in another. Stronger laws could help, and so could more community involvement. When people push for change, businesses are more likely to listen.
The Future of Green Supply Chain Management
The way businesses manage supply chains is shifting. Through refurbishing, repurposing, and recycling, circular economy models are proving that products don't always have to be disposable.
It is increasingly becoming common knowledge that the longer a product lasts, the lesser impact it leaves behind.
Governments worldwide are tightening sustainability laws, making compliance non-negotiable. India’s ‘Extended Producer Responsibility (EPR)’ framework puts recycling duties squarely on manufacturers.
Partner with GrowthJockey for Smarter, Sustainable Solutions
More companies now see that green supply chains help both the planet and their customers. Stricter rules and changing expectations push businesses to do better. Many are adopting circular economy practices and using technology to track progress.
At GrowthJockey, we help businesses make their environmental goals a reality. Get in touch with us today to find any gaps, set up the right solutions, and make things easier and more effective for your business.
FAQs
1. What is meant by green supply chain management?
In simple words, green supply chain management works by integrating some practical eco-friendly practices throughout the product lifecycle to minimise their environmental impact, all while maintaining operational efficiency and sustainability.
2. What is an example of a green supply chain?
Unilever is a good example of a company that prioritises sustainable sourcing for its products. The company achieves this by making sure that all its materials come from certified sustainable farms. They also cut down on trash by reusing materials in their packaging, which helps them work better and be more environmentally friendly.
3. What are the three main approaches to green supply chain management?
The three main approaches are sourcing sustainably, making sure the production is eco-friendly, and optimising logistics to be more responsible.
This means making sure that the materials you are getting are ethically sourced and aiming to reduce your energy and waste when manufacturing.
Also, rethinking transportation so there is less fuel consumed and less carbon emissions, and lastly, reuse materials in your packaging.
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