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)”