Green Supply Chain: Procurement

Green Supply Chain: Procurement

AUTHOR

chiefstaff

TIME TO READ

minutes 

UPDATED ON

January 8, 2019

Vivek SoodProcurement also known as purchasing is “Securing supplies, materials, and services of the right quality in the right quantity at the right time from the right place (source) at the right cost price”.

So the procurement in traditional supply chain could procure you the best possible cost to meet the needs of the purchaser in terms of quality and quantity, time, and location. However Green Procurement will require collaboration between suppliers / manufacturers / producers and requires suppliers to implement, and possibly certify, Environmental Management Systems.

“In turn therefore, Green Procurement provides education to suppliers about the use of efficient materials’ for pollution prevention. This also helps manufacturers to design for disassembly and develop with their own suppliers, new materials, parts or processes to address environmental concerns. Therefore Green Procurement represents an important aspect in the total end to end Green Supply Chain

The role of Green Procurement in Green Supply Chains will require the creation of a healthy relationship with the buyer’s first level of suppliers and to create a platform to build a model to align incentives for suppliers, manufacturers and other service providers; who in turn, will need to engage with their own supply chain through the second level of suppliers and so on up the supply chain back to the primary sector suppliers.

Green Procurement aims to reduce overall expenditure on organizations products and services by removing or minimize the usage of “hazardous to green initiatives” in the entire supply chain. This also reduces expenditure on waste treatment of end-of-life products and other by-products.”

Green Procurement emphasizes waste reduction at source and sets up the procedure to consider this before procuring any good and has a number of quantifiable benefits.
Learn more about these benefits and challenges of Green Procurement in Green Supply Chain – An action manifesto.


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MORE INTERESTING READING
  • This study investigates the procurement process affecting green-supply chain management in manufacturing industry in Thailand. Empirical data was collected from the sample group which consists of CEOs, sale managers, and procurement managers from 210 organizations in 4 manufacturing industries: electrical and electronics, auto parts, metal and aluminum, and plastics. Structural equation consists of; antecedent variables which involve top management commitment and customer pressure; dependent variables which concern business performance and environmental performance; and mediator variables which contain employee involvement, green regulations, and collaborative partners. The result of the investigation indicates that top management commitment affects employee involvement, green regulations, and collaborative partners. In addition, employee involvement affects business performance rather than environmental performance while green regulation solely affects environment performance. Ultimately, collaborative partners affect business and environmental performance significantly.

  • I read a lot about green supply chain. Is it any method to make a business network in the right way? or anything else? Do I get it in the right way?

  • Before an organization can go green, it has to want to go green. But question here is, why should an organization want to be green? The benefit of becoming a green procurement organization is to strengthen the brand image. An organization that has gone green is seen as a good corporate citizen. This increases its image in the eyes of the public.

  • Green procurement has impacted not only performance of organizations, but also on the brand reputation. It has become increasingly significant for organizations facing competitive, regulatory, and community pressures to balance economic and environmental performance. The sustainable procurement enhances organizational operations improving organizational performance, availability of resources influence organization Performance. Most of the companies adopt green procurement practices in all their operations and processes. This is because green procurement management is associated with economic benefits to the company.

  • Such an interesting and informative articles Vivek. Strategic green procurement is key to success in any business under the current volatile, uncertain, complex and ambiguous environment. There are tremendous pressures from government institutions, pressure groups, and other institutions on every manufacturing unit aiming to divert the attention of the organization toward environmental, social and economic dimensions while making any sourcing decisions.

  • It is imperative to proactively strategize and develop a robust supplier network capable of innovating newer products and services which is ultimately sustainable for the business. The organizational policies directly influence green procurement practices and further green procurement practices enhance sustainable innovation performance in supplier networks. In fact, Going green doesn’t cost more. Most of the times it actually saves money.

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