Green Supply Chain Management: Practices and Benefits

The 3Ps of GSCM

The company managers face a number of encounters in administering profitable and competitive corporations while trying to embrace the comprehensive ethical and social tasks. Such encounters appear in the overall banner of Corporate Social Responsibility. In fact, the CSR needs the corporations to assimilate the ecological, as well as the social, operational business concerns. At the same time, the managers are required to communicate with the company shareholder in a healthy manner. Therefore, Triple Bottom Line that is closely related to 3Ps, is implanted inside the CSR of the corporation. The initial bottom line is the customary measure of corporate or economic cost-effectiveness (Chan & William, 2012).

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The next bottom line denotes the people of the company in regard to the measure and account of collective responsibility and performance in the firm. The last bottom line is the corporation’s planet. The company’s environment is the description that quantifies the extent of the conservational responsibility of the organization in the previous and existing performances.

Economic Performance

With the purpose of coping with several operational problems, corporations ought to integrate the surrounding concerns into strategic planning. These bottlenecks arise from societal and legislative concerns over a particular issue. Indeed, the integration of concerns heightens the capability of companies to endure uncertainties at the commercial setting boundary. The researchers argue that advanced organizational performance based on GSCM is accredited to corporations’ abridged legitimate risks. Such risks are linked to the marketing and cost benefits of constant inventions, enhanced corporate status, as well as desecration.

Certain scholars assert that the vast investment associated with the GSCM practices might inhibit profitability. Equally, the researchers considered low hanging fruit ideas to argue that corporations might experience difficulty in realizing cost savings from the GSCM practices owing to the ratification of the observable inadequacies. Therefore, in regards to chain management, GSCM can generate superior long-term presentation via the enriched control of risks and growth of competencies. Nevertheless, GSCM is not likely to generate sales performance or short term profitability, given the huge investment involved. The recent assessments in industrial companies in China determine that GSCM practices are capable of increasing the performance of the corporation (Chan & William, 2012).

Social Performance

The influence of GSCM on social performance depends on information sharing and internal organizational learning between the employees. The internal environment alignment remains the essential corporate beliefs and standards of the corporation. The individual creed is attached to the whole corporation in regard to the encouragement instilled by the managers. The in-house, environmentally friendly coordination helps the employee improve the collective awareness of the significance of the liable operation. The notion, in turn, inspires the workers to pursue different means of reducing the operational impacts to increase profitability (Rituraj & Kumar, 2012).

Conversely, the organizations require confronting the diverse constraints enacted by different important establishments. Supposed the corporation in question works within the boundaries acceptable by these establishments, they increase the legitimacy and stability for increased existence. The GSCM practice positively impacts the firm once such managerial discernment descends into the delineation of peripheral environmental orientation.

Environmental Performance

The organizational, environmental orientation is a cherished and elusive resource that directs strategic activities to heighten performance. The export investments with higher echelons of marketing coordination are extremely appropriate to embark on strategic practices in zones of marketing communication, development of the new product, and pricing. Similarly, both external and internal conservation positioning are essential determining factors for the company’s environmental practices.

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Therefore, both empirical and theoretical studies maintain that GSCM environmental orientations positively impact corporate performance. Notwithstanding the credibility for external and internal orientations to positively impact GSCM, the two alignments originate from dissimilar sources, and their individual effect on GSCM arrives from diverse conduits (Tritos & Adebanjo, 2013).

The GSCM drivers

Several external and internal aspects affect the GSCM. The internal factors linked to strategic business procedures while the external factors are related to shareholder pressure. The influence of such aspects on environmental and economic performance may be distinguished by the basis of the pressures. The company’s commitment to conservational matters advances the likelihood of GSCM application (Lee & Rha, 2013). Equally, the incentive for employing GSCM activities might arise from outside supposed the company competences is inadequate for introducing the Green Supply Chain. The scholars have examined the GSCM presentation with respect to different pressures to find the association amid the company’s GSCM and environmental or economic presentation. The corporations must study the drivers and formulate counter dealings with varied GSC activities.

The mediation mechanism of green supply chain management and moderations affects competition intensity. These activities might positively influence economic and environmental performance as well as the supply chain flexibility and agility. The flexibility of the supply chain implicates the control of demand, permits a company to efficiently and rapidly respond to the consumer and partners wants.

The GSCM activities grounded on outside pressure are completely connected to supply chain suppleness. The implementation of GSCM guidelines afflicts the company with amplified operational costs and reduced speed in production. Hence, supply chain resource obligation will be increased to cater for extra total costs, delivery costs, industrial costs, as well as the costs of inventory and RIO (return on investment) (Tritos & Choon, 2013). Equally, GSCM activities established on outside drivers are clearly linked to Supply chain resource necessity. Bearable competitive advantage attainment is via non-substitutable, inimitable, rare, and valuable resources. Given that the strategies of the companies depend on the internal abilities of sustainability and competency, the internal resources influence the SC presentation and interior green activities.

Therefore, GSCM may develop the economic capabilities of the enterprise to generate fresh products and services besides innovation constantly. Such capacities permit the company to respond to the marketplace forces speedily. The enterprises are able to realize internal capability by the elementary competences as sustainable growth, product stewardship, and pollution prevention. Firms having the capacity to apply green practices efficiently handle the institutional pressure and conservational regulations since green practices relate to the economic and environmental enactment (Lee & Rha, 2013).

On the other hand, GSCM activities based on internal drivers are completely allied to the GSCM performances based on external drivers. Likewise, the GSCM activities staged on interior pressure is clearly linked to supply chain agility. The GSCM practices grounded on in-house pressure are completely associated with the requirements of the supply chain. Thus, the presentation of Supply Chain is measured on agility, productivity, and incomes. The efficient SC resources encompass RIO (return on investment) as well as inventory, industrial, supply, and overall costs. Output denotes consumer grievances, distribution faults, lead time in manufacturing, consumer feedback, backorder, and the level of consumer services.

Elsewhere, suppleness means the capacity to react to the uncertainties associated with fresh product ability, approachability, delivery, and capacity. The companies with responsive SC are capable of interacting with dealers effectively to enhance performance (Lee & Rha, 2013). Flexibility inspires the organization to respond with little cost, effort, and price in time to augment performance. Consequently, the procedure of improving elasticity positively influences the general performance besides improving the assortment of products and services. Flexibility as a driver tends to reduce the budget and time needed to adapt resources into services and products. It also lessens inventory and total cost of the supply chain that, in effect, develop the operational productivity.

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The GSCM strategies

In the struggle to achieve the organizational objectives and goals, the upper management of every corporation has to use certain strategies. In this perspective, Green Supply Chain Management initiates a number of planned approaches through the management in their bid of employing the safety measures towards captivating and instigating green investments. Therefore, GSCM has diverse strategies ranging from closed-loop strategies, innovation-based strategies, efficiency-based strategies, to risk-based strategies (Manikee, 2013). A number of researches have scrutinized the corporate strategies based on the different systems of administration as the center for competition in particular marketplace ventures. Flexibility, reliability, along with cost, frequently remains as the focal points and priorities for competition in several corporations.

Closed-loop approaches

The closed-loop cheap is important in every organization as it assists in the application of green enterprises. In fact, closed-loop strategies comprise the design of manufactured goods. The design is undertaken by means of inverse logistics as well as product take back that falls in the components of supply chain meant for the reduction of surpluses (Sakaris & Lai, 2008).

Novelty based strategies

Every stage of supply chain configuration in an organization needs modernization. The innovation of the supply chain structure proves to be essential in that it assists in setting apart the exceptional marketing of a single corporation from its rivals. The novelty based strategies consist of more comprehensive product development and administrative considerations for the customers. Hence, consumer consideration, along with extensive product development, takes place in the course of designing phases of the GSCM.

Productivity based strategies

The organization ought to be considered in regard to the business surrounding the generation of negligible waste. The aspect of a generation of minimal waste is only palpable through the Green Supply Chain Management activities. As such, the productivity-based strategies take into account the practices of ensuring efficiency in the objectives of operations such as quality (Manikee, 2013). The corporations must abide by the control measures of quality standards with the purpose of teaming up to confront the ill influences of the business environment.

Risk-based strategies

The different strategies might, in one way or the other, affect the implementation of other GSCM activities. Effect on other GSCM practices impacts the overall performance of the organization since such activities can never do not part from the general tactical plan of the business. Thus, the risk-based strategies allude to the insertion of elementary clauses related to the contracts of purchases for the dealers to bump into the relevant requirements by the supervisory body. In order to apply the Green Supply Chain, a set of procedures and guidelines are required. The set processes and instructions help the corporation to adhere to the methods based on the conservation of the operations for increased performance (Manikee, 2013).

On the other hand, there are nearly 12 stages that may lead an organization to a greener Supply Chain. The product is redesigned by the corporation; then, reconfiguration is done before the company shifts to the green merchants. The other steps involve the reduction of the distances, changing the service level reimbursements, reduction in wrapping, and strategizing for reverse Supply Chain practice. Similarly, an amalgamation of consignments, scheduling for shorter paths, harmonization with allies, enchanting an all-inclusive lifespan view, and timely commencement of business are all important steps (Manikee, 2013).

The GSCM practices

In the implementation of Green Supply Chain Management, the pro and re-active practices, together with the eco-design practices, influence the intangible, economic, and environmental performance of the organization. The re-active activities consist of by-law and lawmaking, while pro-active practices include inverse logistics, Eco-design, and green procuring activities. However, eco-design activities can be divided into packaging and product-related.

Legislation and regulatory practices

The contribution of supervisory and government agencies in GSCM is significant. In many republics, operative enticement programs and green regulation can be established due to the involvement of government mediation. The pertinent public guidelines are fundamental to establishing the greening of the Supply Chain. Scholars assert that regulatory and legislative activities emanate in diverse techniques (Tritos & Adebanjo, 2013). Today, several corporations are making attempts to speed up the Supply Chain greening in rejoinder to the tough regulations and legislation. The efforts take account of reviewing the social and conservational unrest ahead of by-laws.

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Reverse logistics practices

The reverse logistics practices since efficiency in the GSCM network increases organizational effectiveness and deliver productive economic paybacks. The growth of the inverse logistics operation delays certain GSCM aspects regardless of the importance of inverse logistics on GSCM implementation (Tritos & Choon, 2013). Most of the studies about reverse logistics find a basis in the developed nations. Such practices comprise of redistribution, reuse, recycling, and recovery, as well as product manufacturing and returns. The reverse practices relate to Supply Chain in relation to wrappers and components of the end products.

Eco-design practices

The eco-design activities are significant in that effects on products (80%) are swayed in the course of design. Packaging and product-related designs are the two classifications of the eco-design activities. In regards to packaging-related eco-design, the corporations and their providers need to pool resources for efficiency in the usage of green packing of merchandise. The components of green wrapping encompass avoidance of dangerous materials, reduced packing to ensure waste minimization and recyclable and reusable packing. Conversely, the purchasing company must keenly pursue the chances of utilizing the reused and recycled gears in reverence to the product-related design (Tritos & Adebanjo, 2013).

The practice helps in saving costs at the commencement of Supply Chain, given that the conservational effects of the production transpire at all levels. In order to sustain economic and operational performance, it is important to measure eco-design in relation to the company’s products, the employment of lifecycle valuation, and design the recyclable or biodegradable contents into products.

Green procuring practices

The espousal of green procurement is an ordinarily acknowledged dimension of GSCM activities. The SME’S possessing GSCM inventiveness gives the green performance of the dealers more consideration. The purchasing might set out joint research, friendly sharing of information, and training to make sure that the dealers encounter their set goals. Certain corporations embrace less collective methods such as the adoption of ISO certification (ISO 14001) that is driven by the pressure from the customer as outside motivators. Resources reduction, recycling, and acceleration of reprocessing are the other green buying facets. It is apparent that particular corporations assume evaluative and agreement tactics to the GSCM activities of the dealers. In essence, the firms evaluate the suppliers in view of environmental requirements and criteria for the conservation and growth management structure (Tritos & Adebanjo, 2013).

The GSCM framework

Generating an orderly parameter for operative GSCM application requires a collaborative framework. The GSCM framework includes inverse logistics (RL), greener supply or advertisement, greener administration, and greener designing of the product. In the framework, RL consists of recycling, remanufacturing, and reuse of resources. Equally, the green industrial process involves emission reduction, reduction of waste, and resource consumption lessening. The green product design comprises a life cycle assessment (LCA) and environmentally conscious design (ECD) of the goods (Morteza & Tang, 2013).

Reverse logistics

RL practices include remanufacturing, reuse, and recycling. The ecological shipping and packaging material recycling consists of new life recycle (use for the same function), and conventional recycling where the product is utilized for another purpose. However, remanufacturing entails overhaul, refurbishment, and repair of material to lengthen their lifespan. Recycling helps corporations to reduce pollution of water and air, usage of energy, and utilization of new resources. Proper administration of such helps in cost reduction and open up more profitable business prospects through taking back (Sungjae, 2013).

Green dissemination and promotion

The green promotion may refer to the adjustment of advertisement, changes in wrapping, alterations in the process of manufacture, product adjustment, and advertisement or promotion. Green marketing has a leading significance since it is mainly the advertisement that offers the image of the business in environmental obligation. It backs the green existence devoid of stressing on the product and services. Owing to the influence of green distribution on the natural milieu, it is also essential in SCM greening (Sungjae, 2013). The green distribution depends on the green transport service, a service with abridged negative influence on the natural atmosphere and human wellbeing. Thus, green distribution and marketing have an impact on the overall performance of the company.

Green industrial procedure

The process of green manufacturing aims to lessen the usage of energy, resources, and raw material. The flow structure has an analysis of life cycle, dynamism, and industrial potency as the methods for minimizing resource and energy depletion. Likewise, reprocessing helps to recover the content of non-operative products and material used (Morteza & Tang, 2013). The reduction of emission appears in two ways. With the use of pollution control gadgets, effluents, emissions, and control are captured, kept, treated, and predisposed. Secondly, effluents, emissions, and prevention are lessened, altered through improved process inventiveness, material substitution, and organization.

Green material administration

The GSCM practices include the replacement of dangerous processes or material with less dangerous ones. The green material administration recovers besides separating and selecting materials. The used materials must be easy to single out with the usage of less material in one product to sustain the compatibility with the current manufacturing substructure. Equally, the use of more flexible materials for manifold product presentations is encouraged. To streamline the procedure of retrieval and lessen the quantity of scrap, a lesser amount of secondary operations must occur (Morteza & Tang, 2013).

The green product design

The LCA caters for the procedure of evaluating and assessing the resource, occupational health, and ecological concerns of the produce. The scope of LCA includes tracing the energy and material movements of products. In fact, LCA remains as the foundation of growth to regulations, taxes, and green laws. Therefore, it is possible for corporations to employ the LCA in reinforcing product growth while minimizing the general environmental effects. Conversely, the ECD aspires to design goods with fixed conservational respects. The ECD may break into DFD (designing for disassembly), and DRF (design for recycling) stages that help corporations in reducing the product complexity through the classification of design specifications. Hence, complexity provides for precise software for DFD with DFR helping to improve the selections for materials (Espuña, & Laínez, 2009).

The GSCM benefits

In the normal organizational setting, the GSCM is supposed to encourage concerted effort and efficiency amongst corporate allies and their principal companies. The Green Supply Chain Management aids in the cost-saving accomplishments, waste minimization, and enhancement of environmentally friendly performance. The combined effect is likely to heighten marketing social contact, competitive advantage, and damage image of the company. Supposed the Green Supply Chain Management activities ought to be embraced fully by every corporation; there is a need for a discernible relationship between the agencies and increasing competitiveness along with cost-effective performance (Tritos, & Adebanjo, 2013). Hence, different establishments will implement the Green Supply Chain Management activities once they recognize that the aspect might consent into explicitly advantageous in line with operations and finances.

Enhanced image of the public

The GSCM encourages environmental performance in many organizations. As a result, the personnel, shareholders, as well as the consumers, will act in response with positively to the corporations having a prestige for decent conservational presentation.

Reliable business conservational objectives

In certain levels of the corporate environment, the corporation might face complexity and non-vertical development. Such tribulations require GSCM as it will try to assist the businesses in including the dealer outreach in order to discourse the goals set under any corporate environment.

Developed quality of the product

The Green Supply Chain Management helps corporations in developing high-quality products. Through Supply Chains enterprises, the corporation will enjoy the preserved relations with the dealers. The healthy relationship, in turn, the most important as it amplifies control and command over the quality and design of the product.

Economic benefit through novelty

It is evident that green supply chain management has diverse economic benefits. The use of innovation has ensured resourceful production in organizations. The GSCM innovation improves through a reduction of the wastes, process modernization, as well as the usage of domestic technologies. In fact, waste reduction is equivalents to earned dollars. The best example of the factual level related to process novelties carried out with the aim of competitive advantage is ‘Arvind Eye Care’ in India. The facility possesses a benefit of eliminating blindness besides tracking definite ways such as intensifying the competence of medics to operate an additional number of clients due to innovation in the laid processes and procedures.

Competitive advantage from augmented productivity

The Green Supply Chain Management activities assist the corporation with waste reduction. The reduction of waste increases productivity, thus a competitive advantage. Indeed, corporations having such imitativeness tend to lessen the luxurious inputs and management costs. In general, the methodologies of the Green Supply Chain Management enable the companies to access competitive advantage for increased performance.

IT as an enabler of the GSCM

GSCM is the practice of employing the inputs that are environmentally welcoming with the aim of renovating such inputs into productivities. The intended output ought to be reused and domesticated during their development to generate ecological Supply Chain. Information and Technology have remained important to most organizations, and it can be equally important to the implementation and realization of GSCM. The influence of IT in Green Supply Cain Management appears both in contexts of software and hardware. In regard to the software, IT enables an operative Supply Chain teamwork, implementation, and organization to moderate the resource rations. From the perspective of the hardware, IT is capable of generating a greener SC through optimization of the inputs required in the upkeep of the company. The technology benefactors are developing and inventing energy effective resolutions with advantageous influences on the atmosphere (Murdoch, 2009).

Streaming business processes (Software perspective)

Enabling disposal and retirement of products in the SC

Disposal has great importance as it helps in reducing the effects of business on the surrounding. The regulations put in place by the government to deal with the problem of waste are not enough. IT has enabled the disposal and retirement of products in the SC. For instance, the web solution (Waste Trace) helps in addressing the problem of recovery, recycling, and collection of wastes (Murdoch, 2009). IT novelty reduces costs and increases efficiency in operation for improved performance.

Enabling SC collaboration

The collaboration in transport administration runs in line with GSCM. The solution by Information Technology provides facilitation and engagement of providers in the SC. In turn, this enables the corporations to lessen the general energy supplies and attain a healthier usage of transport resources.

Enabling SC execution

The IT aids in rationalizing the processes in business in order to minimize the used resource during the implementation of production. The mechanization of asset tracing logistics enables the reduction of consumed resources for advanced services.

Enabling SC planning

The GSCM information technology expedites the combined planning renewal and estimation in organizations (Murdoch, 2009). The optimization of transport leads to management by exception that leads to cost-effective and efficiency in operations.

Optimizing hardware resource to support the business (Hardware perspective)

Lifecycle to disposal and retirement of IT assets

Almost all corporations ought to utilize the lifespan tactic (IT hardware) that enables the disposal and retirement of wastes. The technique that encourages reprocessing and renovation through solutions such as Gari software impacts the performance positively.

Leveraging shared infrastructure

A little amount of resources is enough for the effectivity in operations owing to the mutual groundwork IT inventions. The software requires a modest amount of energy and equipment to implement. Thus, the GSCM IT results in decreased utilization of natural resources and reduced e-waste. The encouraged IT labor force augments the productivity of the firm (Murdoch, 2009).

Re-architecting of data storage and processing operations

The productivity of an organization can increase with ease, given the implementation of data storage and processing procedures. In some circumstances, the evaluation of data storage can take place in places of solution redesigning, insufficient search mechanism, low-speed access, redundant copies, standard storage, over-allocation, and low utilization during solution enactment.

Right-sizing IT infrastructure

The global greening of IT has got a boost from hardware gadgets like Intel, HP, and IBM that are inventions for the data storage system and computation of energy effectiveness. Several companies experience elevated efficiency with reduced use of raw materials owing to the right-sizing if the Information Technology set-up (Murdoch, 2009).


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