Traditional and Green Supply Chain
January 8, 2019
Traditional Supply Chain
In a traditional supply chain, the flow of materials and information is linear and from one end to other. There is a limited collaboration and visibility. Each supply chain partner has limited information regarding, for example the carbon footprint and Green House Gas emission of the other partners. Hence, each player may be concerned about his own footprint and may try to reduce this, irrespective of the impact on upstream and downstream supply chain. There may be some focus on end-to-end supply chain costs but due to limitations of information sharing the costs are far from optimized in most cases.
Green Supply Chain
In contrast, Green Supply Chains consider environmental effects of all processes of supply chain from the extraction of raw materials to the final disposal of goods. Within the Green Supply Chain, each player motivates other players to go green and provides the necessary information, support and guidance, for example, through suppliers’ development programs or customer support. Environment objectives and performance measurement are then integrated with financial and operational objectives. With this integration, the green supply chains then will strive to achieve what any individual organization on its own could not possibly achieve: minimized waste, minimized environmental impact while assuring maximized consumer satisfaction and healthy profits. Some of the key differentiators of Green Supply Chains are:
- The top management commitment to a culture of continuous and the on going collaborative innovation towards “greener” supply chains
- Allowing all of the supply chain partners a role in creating specifications, options and examining alternatives during the product design phase itself
- The efficient use of technology to capture data, run scenarios, communicate information and to make decisions
- The removing and getting out of a traditional strategic “stage gate” sourcing mentality that creates rigid parameters on information dissemination, collection and analysis
- The making of sustainability to be a cost issue, as well as, a CSR issue
Source : Emmet & Sood – 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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