Benefits of Green Supply Chain

Benefits of Green Supply Chain


Vivek Sood




October 14, 2020

Following are some of the key benefits of green supply chains:

Positive impact on financial performance

Despite ample evidence to the contrary, there persists a myth that going green costs additional expense. Some of the factors responsible for persistence of this myth are inertia, the lack of a systematic approach and an unwillingness to engage in sustained and changed thinking that is necessary to create a green supply chain.

However, the most fundamental benefit of Green Supply Chains is a positive long term net impact on the financial performance of the organization. This has been proven by both analysis and empirical evidence.

Sustainability of Resources

Green Supply Chains sponsor the effective utilization of all of the available productive resources of organizations. By incorporating Green Supply Chain Management thinking through their entire business decision making process, organizations may now purchase green input resources that will flow through environmental friendly production process to produce the desired green outputs.

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. Also, the production of hazardous substances can be reduced, thereby preventing organizations from being fined as a result of violating environmental regulations.

Consequently, the relevant operational costs are reduced whilst; the efficiency of using resources is improved.

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 will give competitive edge over the competitors in the market place. It will also strengthen the brand image and reputation in market place.

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.

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.

Besides the above six benefits, there are additional advantages that can be generated by GSCM:

Green Supply Chains : An Action Manifesto. This book was awarded certificate as “The Most innovative Supply Chain book in the last decade (2000-2010)”

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Vivek Sood

Our Quick Notes On Five Flows Of Supply Chain Management

Part of our new “Quick Notes” series – this report answers your most pertinent questions of the topic.

  • What are the five flows of SCM?
  • Why are they important TO YOU?
  • How can you map, track, and optimise these flows to serve YOU?
  • What is the importance of difference between "Supply Chain" and "Value Chain"?
  • What are the stellar case studies of each of the five flows?


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  • Read the benefits of Green supply chain and Thanks to you provide systematic points about it. I used as it as in my case-study which is very helpful. Thanks again.

  • It’s always in a business’ or nonprofit’s best interest to eliminate as much risk as possible. There are already so many unknowns in every industry, so any opportunity to minimize the risk should be optimized. When it comes to sustainability, a green supply chain puts you at less risk of being accused of “anti-environmental and unethical practices.”

    Your business or nonprofit already know the advantages of being a sustainable company. It’s time to start reaping the benefits of having a green supply chain as well. By doing so, you’ll be able to use your resources and money more efficiently, stand out from your competition, and avoid risk. How else does your company benefit from having a green supply chain? Tell us, we’d love to hear your ideas.

    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.

  • As reading your above blog post it is clear that you are very well known master in the green supply chain it seems too great that how you have briefly described green supply chain.
    Can you just tell me what is the difference between Green Supply Chains and Sustainable Supply Chains?

    • Sorry, must have missed your question earlier, because of my travel schedule. Green supply chain is environmentally sustainable supply chains. In addition, there are other sustainable supply chains – such as socially sustainable, commercially sustainable, etc. – the names are self-explanatory.

  • The least expensive shipping modes often also have the lowest environment impact. However, it’s important to balance the economic and ecologic advantages of bulk shipping with the impacts of larger order sizes and carrying more inventories. To implement the changes that will have the most impact on sustainability and/or bottom line, a big picture view is needed. Utilizing modeling software to evaluate alternative supply chain network design scenarios is a great option.

  • Read the benefits of Green Supply Chain then I feels that Technology also plays an important role like reducing documentation by encouraging Green supply chain. In the logistics front initiatives like e-AWB, paperless transactions, trade facilitation cargo community platforms are leading the way. Cargo community platforms are giving the required impetus to the industry to Go Green. Great thinking- I used these terms in my business research.

  • In today’s world logistics cost not only refers to money, it also includes the external costs of climate change, air pollution, dumping of waste, soil degradation, noise, vibration and accidents. Reducing this cost is Green Logistics. Green logistics is quickly gaining prominence throughout the logistics and supply chain industry as protection of environment has appeared as one of the top rated objectives among the governing bodies all over the world.

  • Ecological principles have been extended to many departments within the organization, including the supply chain. Environmental management of the supply chain made its appearance in recent years. This concept encompasses all steps in the manufacture of the first to the last stage of the lifecycle, from product design to recycling. Green Supply Chain Management can also be used for other economic sectors like government, education and services apart from manufacturing.

  • Improved environmental awareness among the community is very important. Vendor selection based on Green IT practices, sharing of best practices in companies across the supply chain, end to end obedience along the supply chain are the instrumental factors behind a successful and flourishing Green IT strategy. Corporate policies are concentrating more on identifying and lowering the carbon footprints caused by their IT equipment, infrastructure and people.

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