ABOUT GREEN SUPPLY CHAIN MANAGEMENT

 

Green Supply Chain improves operations by employing an environmental solution

•          Improves Agility—Green supply chain management help mitigate risks and speed innovations.

•          Increases Adaptability—Green supply chain analysis often lead to innovative processes and continuous improvements.

•          Promotes Alignment—Green supply chain management involves negotiating policies with suppliers and customers, which results in better alignment of business processes and principles.

Green supply chain efforts need to rise above the cost center view

•          Green supply chain projects need to be clearly defined in terms of the business value to the organization. 

–         Clear value will gain senior management support.

–         Clear value will help secure buy-in from other organizations

•          Environmental programs are viewed as business cost centers.

–         Environmental, safety, and health (ESH) resources are often scarce in an organization.

–         ESH offices are targeted early during cost cutting programs.

 

•          ESH offices have difficulty articulating their business value.

–         The inability to articulate the value of green supply chain effort in business terms lowers their profile.

–         Many executives have misconceptions of how green supply chain efforts will impact their operations.

–         Without a clear business value proposition, it is difficult to get executive support for projects.

Consider the existing business model when planning GSC projects.

•          Many businesses have internal hurdles that must be overcome for any improvement effort.

–         Inconsistency in supply chain operations (by unit, region, product, etc.)

–         Business viewed through existing operations—resistance to change

–         Focus on short term goals and short-term results

–         Limited partnership experience—especially in the environmental office.

•          To be successful, the project manager needs to understand the organization and plan for the applicable hurdles.

–         Develop communication/evangelization plan.

–         Build a project team with broad functional representation.

–         Clearly articulate project business value.

–         Use outside experts where in-house expertise doesn’t exist.

Green supply chain best practices focus on the business results first.

Green Supply Chain Best Practices

•          Align green supply chain goals with business goals

•          Evaluate the supply chain as a single life cycle system

•          Use green supply chain analysis as a catalyst for innovation

•          Focus on source reduction to reduce waste

Aligning GSC improvements with your business goals creates strategic value.

•          Before embarking on green supply chain improvements, you need to determine the role of the environment in your business.

–         Product Differentiation?

–         Managing Competitors?

–         Cost Reduction?

–         Risk Management?

–         Redefining Markets?

  

•          When green supply chain programs are properly aligned to corporate goals, successes become leading indicators of business success.

–         Environmental indicators on the Balanced Scorecard

–         Greater drive for innovation

–         Stakeholder support

Now, GSC programs are moving from compliance to value creation

Environmental, Safety, and Health Business Contributions

                                                                                                                                                                 

                   Traditional Cost Avoidance                                     Emerging Value Creation

Companies are starting to view GSC as a strategic analysis tool

Evaluating the supply chain as a system leads to life cycle optimization

System View of Environmental Life Cycle

Green supply chain management is a driver for process improvements.

•          In general, pollution and waste represent incomplete, ineffective, or inefficient use of raw material.

•          Green supply chain analysis provides an opportunity to review processes, materials, and operational concepts.

•          As with continuous improvement programs, green supply chain analysis targets:

–         Wasted material

–         Wasted energy or effort

             –     Under-utilized resources

 Green Process Improvement Approach

Identify the waste streams

 

Measure or identify the opportunity cost of the waste

 

Create innovation vs. treatment bias toward waste reduction

Focusing on source reduction programs drives higher value improvements

Waste Reduction Opportunities in the Life Cycle

Use tools such as Green SCOR to help define and analyze GSC problems.

Green SCOR Concept

Green SCOR is a modification of the SCOR model that includes environmental elements

Green SCOR Content

Implementing Green supply chain properly will drive real business value

•          Green supply chain concepts manage environmental impacts where they occur—ideally before they occur.

•          Best practices focus on the business, not social, value that green supply chain management creates.

–         Align green supply chain goals with business goals

–         Evaluate the supply chain as a single life cycle system

–         Use environmental analysis as a catalyst for innovation

–         Focus on source reduction to reduce waste

•          Successful implementation requires raising the profile and perceived value of environmental projects.

–         Articulate project value in terms of business value

–         Create the project to work within the organizational culture

–         Use effective tools (e.g., Green SCOR) to enable project execution