by chiefstaff

December 5, 2015

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:

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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  • Every large global company has implemented enterprise planning systems to help keep their supply chains running. Billions of dollars are spent each year on upgrades and new implementations of these planning systems. But the unfortunate reality is that traditional planning systems all fail to properly address three key requirements of today’s business, which can be categorized as Adaptability, Agility, and Advanced Analytics.

  • Good article Vivek. The difference between traditional and green supply chains is really wide. Despite the public’s focus on the environment, benefits attributed to reducing a company’s environmental impact are not at the forefront of supply chain executive’s minds. It appears that many executives are still unaware that improved environmental performance means lower waste-disposal and training costs, fewer environmental-permitting fees, and, often, reduced materials costs.

  • The effect of the company’s sustainability policies are being felt worldwide through its supply chains. Fully developed green supply chains consider sustainability for every participant at every step, from design to manufacture, transportation, storage, and use to eventual disposal or recycling. This attentiveness would reduce waste, mitigate legal and environmental risks, minimize and possibly eliminate adverse health impacts throughout the value-added process, improve the reputations of companies and their products, enhancing brands, and enable compliance with increasingly stringent regulations and societal expectations.

  • When we say traditional, we mean the systems that primarily rely on human interaction and intervention with the occasional utilization of outdated digital tech. This is the type of supply-chain management operation that isn’t going to survive for much longer. And blockchain is their unwitting yet perfectly-suited executioner. As many businesses have applied the optimization strategies to their supply-chain management, the traditional supply chain has failed to achieve the desired results.

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