Introduction
Supply chains can be considered as the blood vascular system of business. The focus on the supply chain can be seen in that a large portion of costs is associated with the effectiveness of the supply chain, not to mention another factor of competitiveness such as time reduction. In that regard, increasing the effectiveness of the supply chain can be seen as a priority for companies. One of the trends of the research in the field of the supply chain is investigating the alignment of supply chains with the business strategy of companies (Mitra & Bhardwaj, 2010). One of the trends in business, in that regard, is the incorporation of corporate social responsibility consideration into supply chain practices. In that regard, the present paper will report the effectiveness of green supply chain management as a practice for increasing the effectiveness of business.
Main Text
Green Supply Chain Management (GrSCM) can be defined as a set of practices reflected through either environmental collaboration, i.e. environmental activities addressing environmental issues in the supply chain, or environmental monitoring of the supplier’s environmental activities. The choice between the aforementioned activities is based on whether the supply chain of a company is internalized or externalized (Vachon, 2007).
On the one hand, it can be stated that such direction in the supply chain is a way of aligning the chain with the business strategy of the company. The focus on the environment led to that performance measures of companies in terms of costs and services are now supplemented with environmental performance measures as well. Greening the supply chain is not an optional choice, but “a conscious strategy” (Sen, 2009, p. 99). Such strategy finds its reflection in the ultimate goal of the business which is increasing the value for shareholders value. An investigation of the incorporation of green supply management practices found that they influence the image of the company, contributing positively to its corporate social responsibility, and also increasing shareholder value in the long term (Sen, 2009).
On the other hand, the incorporation of GrSCM practices has a direct impact on companies’ performance, through indicators such as efficient usage of resources and environmental protection (Thun & Müller, 2010). AN investigation of a green supply chain in the German automotive industry revealed, that despite the need for resources for implementing such practices, those practices are market-driven and demanded by customers, and thus, are perceived as a source of competitive advantage (Thun & Müller, 2010).
Conclusion
There are many innovations in the supply chain which are brought as a response to the changes in the external environment of organizations. Green supply chain management can be seen as one of the responses which are gradually shifting from being a source of competitive advantage for the company into a practice that will be established as the norm in the supply chain, representing another stage of the development of such business direction. As consumers become more and more aware of the environmental problems, they also become interested in purchasing green products – products that are produced and distributed using green supply chains.
References
Mitra, A., & Bhardwaj, S. (2010). Alignment of Supply Chain Strategy with Business Strategy. [Article]. IUP Journal of Supply Chain Management, 7(3), 49-65.
Sen, S. (2009). Linking Green Supply Chain Management and Shareholder Value Creation. [Article]. IUP Journal of Supply Chain Management, 6(3/4), 95-109.
Thun, J.-H., & Müller, A. (2010). An empirical analysis of green supply chain management in the German automotive industry. Business Strategy and the Environment, 19(2), 119-132. Web.
Vachon, S. (2007). Green supply chain practices and the selection of environmental technologies. International Journal of Production Research, 45(18-19), 4357-4379. Web.