Green Supply Chain Management Strategies for Sustainability

1. MGT 563OPERATIONS STRATEGIES Dr. Aneel SALMAN Department of Management Sciences COMSATS Institute of Information Technology, Islamabad

2. Recap Lecture 16 • Supply Chain Metrics • Improving Supply Chain • Ethics in Supply Management • SCM and Uncertainty • Supply Chain Management – Key Issues

3. Three dimensions of sustainability

4. Environmental Sustainability • Eco-system integrity • Carrying capacity • Biodiversity

5. Social Sustainability • Cultural identity • Empowerment • Accessibility • Stability • Equity

6. Economic Sustainability • Growth • Development • Productivity • Trickle-down

7. Green SCM Integrating environmental thinking into supply chain management, including product design, material sourcing and selection, manufacturing processes, delivery of the final product to the consumers, and end-of-life management of the product after its useful life. Srivastava, 2007

8. Green SCM • It involves traditional Supply chain management practices that integrate environmental aspects such as natural resource conservation, limiting on pollution, recycling used products and so on.

9. Green SCM leverages the role of the environment in SC value creation. Environmental Value Drivers Tangible Outcomes Green Supply Chain Programs Profitability Supply Chain Value Asset Utilization Service Level Employee Satisfaction Customer Stakeholder Interests Environmental Sustainability Reputation Continuity Community Quality of Life Alliances Technology Intangible Value Drivers Source: Forging New Links, GEMI, 2004

10. GrSCM improves operations by employing an environmental solution • Improves Agility – GrSCM helps to mitigate risk and speeds up innovations • Increases Adaptability – green supply chain analysis often leads to innovative processes and continuous improvements • Promotes Alignment – GrSCM involves negotiating policies with suppliers and customers, which results in better alignment of business processes and principles.

11. Supply chain activities which impact the environment Production Packaging Transportation Sourcing Location of facilities Disposal of products and recycling Product design

12. Some best practices on Green Supply Chain management Xerox remanufacture their own products for secondary marker Canon and Kodak reuse parts Exide use their smelting plant to recycle batteries in India Usage of reusable Plastic shipping containers

13. Issues in Sourcing Environmental friendly process Packaging Certification Controlling emissions Vendor evaluation in terms of environmental performance

14. Issues in Transportation Infrastructure Outsourcing to nearest supplier Better maintenance Better routing and scheduling Synergy and save on environment with shared resources

15. Issues in Network design Co-location Co-processing Optimal location De-centralised locations in non-capital intensive facilities

16. Issues in Product design Design for remanufacturing Design for recycling and disposal Design with recycled and waste materials

17. Issues in disposal and recycling Redesign of network for collection and disposal Closed-loop supply chain Handling and storage Transportation Location of remanufacturing and recycling facilities Recovery portion of materials and components Economical network design Many reverse networks are Informal networks

18. Road map to sustainability • Investigate where your company can conserve resources and compose a strategic sourcing and supplier engagement • Engage your employees as champions of the effort • Implement conservation measures throughout operations and facilities, improve efficiency of site operations and balance the economies of stock levels, service and order quantities

19. Road map to sustainability • Optimise network and transportation and provide integrated service management, returns, reverse logistics and parts management • Communicate your green efforts to stakeholders • Seek ways to integrate an overall strategic approach to sustainability in all areas of your company • Support industry and community sustainability initiatives

20. Rewards of Going Green • Economic benefits from increased efficiency. By reducing wastes, companies decrease handling expenses, fines, and even costly inputs. Supplier's savings may be passed along to buyer companies. • Competitive advantage through innovation. Efficient production is enhanced through the use of cleaner technologies, process innovation, and waste reduction. Reduction in wastes equals dollars earned. • Improved product quality. Supply chain partnerships help maintain relationships between buyers and suppliers leading to increased control over product quality.

21. Rewards of Going Green • Consistent corporate environmental goals. In an era of multi-faceted, non-vertical manufacturing, companies include supplier outreach to address corporate environmental goals. • Improved public image. Consumers, investors, and employees respond positively to companies with a reputation for good environmental performance.