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Green Supply Chain Management

25 Jun 2020

Logistics and supply chain management is an integral part of any business. India, which has steadily adopted ‘smart’ technologically empowered operations has seen a major transformation in logistics and supply chain management as well, which reflects a growing concern for environmentally responsible economic activity even as the focus remains on reducing poverty and bringing about economic growth.  

India, like many other countries, is working towards achieving Sustainable Development Goals (2) and is moving towards a green supply chain.

Green Supply Chain Management (GSCM) is the adoption of processes that are sustainable and effective in minimising the ecological impact. It refers to the recent innovations in supply chain management making these processes green, such as green purchasing, green manufacturing/materials management, green distribution and reverse logistics.

With consumers, especially millennials, now showing a clear preference for environmentally-friendly products, several organisations see great merit – and profit – in going green. 

Transportation, warehousing, waste management and packaging form the various modules in any given supply chain, with transportation being critically important since it contributes to the increased global CO2 emissions. Adoption of green transportation replaces fossil fuel with bio-fuel or other environment-friendly technologies and fuels like CNG, hybrid, battery operated vehicles and equipment, etc.

Companies, following the green supply chain, are now switching to environmentally safe components and finished goods. Bio-degradable material, used for packaging, can reduce the harmful impact on the environment. Recycled packaging material, paper instead of plastic are now increasingly being used. India is also investing in LED lighting, electric automobiles and smart grid technology. Waste generated by companies is further treated and used as input material in other operations.

Traditional warehouses consume large amounts of energy and often account for wastage of energy. Green warehousing is about adopting technology empowered management systems (WMS) to optimise operations and reduce waste. Additionally, alternative energy sources like solar panels, recycling water and energy-efficient lighting sources help supply chain providers to go green. 

Reverse logistics is also a green concept that has taken significant shape in the Indian industry. It refers to a set of activities conducted after the sale of a product, involving the return of the product to the manufacturer for service, or recycling. Consequently, it forms a closed loop of the supply chain starting from sourcing, manufacturing and recycling/disposing of the product.

An organisation’s holistic growth is affirmed with its supply chain’s green performance. As part of its initiatives to promote the concept of green supply chain, the CII-Godrej Green Business Centre  organised a workshop in December 2019 in Chennai. Green supply chain strategies, green procurement, perspectives on packaging and logistics and enhancing the environmental performance of suppliers/vendors were discussed amongst key stakeholders.

In the wake of the Coronavirus lockdown, India’s supply chain, like those all over the world, has been severely afflicted. With nations in lockdown, businesses have taken a hit, and economic growth has been deeply affected.  As the outbreak changes the way people and businesses operate, the need to become more conscious environmentally and prefer green alternatives wherever possible becomes very important.  The future for green supply chain looks promising.