With growing environmental concerns, the concept of sustainability and sustainable business practices have taken a front seat. Consumers are becoming more aware and companies are compelled to label their brands with a green supply chain to prove their trustworthiness. They are forced to answer questions regarding their processes and green supply chain, their carbon footprints, disposal and recycling practices. But how can companies develop a green supply chain? By adopting structural and methodological shifts in any and all supply chain strategies and/or actions.
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Factors Compelling Organizations to Implement a Green Supply Chain
There are several factors that play a significant role in order to drive green supply chain in an organization which are as follows,
- Mounting power and fuel costs have forced organizations to opt for low power consuming IT solutions, renewable energy sources and increased focus on recycling wastes.
- Increase in greenhouse gas emission has led to conscious efforts to reduce organization’s carbon footprints.
- Climate change across the globe at an alarming rate is the main cause of concern.
- Environmental policing to implement a carbon credit system has coerced organizations to follow certain process and product related specifications.
- Increased awareness among the public of the environmental changes and its forecasted impact.
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Benefits of a Green Supply Chain
Transforming your traditional supply chain to a green supply chain requires the inclusion of the ‘environment’ factor in each and every stage of the product development and manufacturing process. It requires CPOs and supply chain managers to develop innovative and efficient environmental technologies and processes to tackle the ‘green’ issue. This demands the organization to eliminate waste in each phase of the supply chain, which can be achieved by lean manufacturing as it emphasizes on economies of scale in production while stressing on high quality environment friendly products to meet customer demands. It contributes by reducing inventory levels, and saving space and energy costs. Besides these, there are several ways to bring the green hue in your supply chain such as,
- Improves reverse logistics as it emphasizes effective re-use, repair, recycle and re-distribution of containers and pallets, packaging materials thereby reducing pollution levels.
- Green supply chain management will help organizations gain a competitive advantage and thereby improve the company reputation in the market and help in attracting new customers.
- It will lead to reduction in operation costs as resources are re-used and recycled thereby increase the production and process efficiency.
- Leads to improvement in product quality as processes are streamlined, thereby increasing customer delight and loyalty.
- Last but not the least, a benefit of greening your supply chain is that it will positively impact the environment.
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