How Supply Chain Activities and Processes Can Be Made Green - Essay Example

Reading Header: SUPPLY CHAIN MANAGEMENT Your institution: Your name: Course name: Course instructor: March 24, 2010 Executive summary This research postulates that supply chain management is just but one of the various activities undertaken by organization as they strive to achieve their goals, and that the activities that firms get involved in include designing, manufacturing, purchasing, packaging and transportation. This paper therefore discusses the fact that all of these processes can be tailored to include environmental issues and be beneficial to both the organization and the environment. Hence, corporate social responsibility, according to this research paper, is the practice which organizations adopt to regulate their activities. The company’s’ main goal is to make profit and add value to its shareholders. But in recent decades business world has experienced a new evolution of integrating social responsibility function in its models. Businesses therefore have to self regulate themselves by adhering to law, following ethical standards and international norms. For example, profit oriented organization should get involved in tree planting, waste management, engaging community in their operations, giving part of their profits back to the community through community project initiatives, bursaries to needy students and running their business in an environmental friendly manner. Introduction Supply chain management has been defined differently by various stakeholders. For example, the Council of Supply Chain Management Professionals (CSCMP), Supply chain management revolves around the planning and management of all activities involved in sourcing, procurement, conversion, and logistics management. It also includes the vital part of coordination and collaboration with channel members, which can be customers, suppliers, intermediaries and third-party service providers. Supply chain management, in essence, incorporates management of demand and supply across and within corporations. In the recent past, the self-organizing and loosely coupled business networks cooperate in order to provide services and product offerings hence has come to be referred to as the Enterprise Extended Therefore supply chain management is the means by which manufacturers, wholesalers, and other businesses are able to make their products and services available to the customers. SCM involves how the products move from their point of origin to the point of consumption. Supply chain can be defined as a set of organizations directly connected to one or more of the downstream and upstream flows of products, services, information and finances, from a source to a customer 'Supply chain management' simply is managing a supply chain. Because of the today’s changing environmental conditions countries are taking steps to reduce global warming by reducing carbon emission from their industries. This has been implemented by requiring industries to adopt green measures in their operations. Green supply chain aims to confine the wastes within the industry and conserve energy and prevent discharging of dangerous materials to the environment. Green supply chain management if managed properly and right strategies adopted can be very helpful to the company. I am going to discuss the old initiative that the company has been using and the new initiative that the company should adopt to comply with the environmental requirements. Traditional chains and green chains differ in several ways. First, old chains often concentrate on economic objectives and values, i.e. they are more profit oriented while green chains give significant considerations to environmental issues also. When a traditional chain does take ecological standards into account, it is often lacking its optimization scope. For example, conventional chains barely take into account human toxicological effects, and totally abandoning the effects on environment. Also, they often devote efforts more on controlling the final product, while allowing negative effects to occur during the production process. On the other hand, green, integrated, ecologically-optimized supply chains diversify their scope to include the ecological effects on the natural environment and the entire value-adding process. This results to low ecological impacts during the production process. The choice of the customers and suppliers is also very different in traditional and green supply chains. In the traditional supply chains the predominant standard is always price. In green chains the environmental objective is an important part of supplier selection criteria. The company must evaluate carefully the supply based on the past relationship and the supplier sensitivity to environmental issues. When the company wants to acquire new supplier for the goods and materials it should do thorough investigation on how the supplier handle his environmental related matters. There is an initial perception that green supply chain management is expensive compared to the traditional supply chain management. However recent findings revealed that if the company can adopt optimal planning and incorporate innovation in its implementation of going green it can really reduce cost in most cases. The efficiency of the entire cost problem must be evaluated for effective management. Green chains are relatively inferior in terms of flexibility and speed. Unlike traditional chains which have a large number of material and suppliers. Because there few businesses which have fully adopted green policies in all their business systems it becomes difficult to get the suppliers who can meet all the needs of the company in terms of materials. This means a company will have to rely on suppliers who still use the traditional chains. Also the green chains are not flexible since very few options are available. How supply chain activities and processes can be made green 1. Designing the product Green design should emphasize on environmentally conscious design and life cycle analysis. In designing a product raw materials used can be changed to make them less toxic or more environmental friendly. The term used for designing a product which addresses environmental concern is EcoDesign. For example, hybrid car is one of green products. There are benefits that go with green design for both the manufacturer and supplier. First, there is going to be improvement of product design and efficiency which leads to overall waste reduction. Also by adopting green design the company’s products will stand out from others and make them more impressive to the consumers. Being environmental conscious will make you different from others. The challenges of green design are less convincing as compared to the benefits. One the problem when one wants to go green is cost outlay. This is because the company has to change the way it is currently operating and adopt different methods. For example the company will have to incorporate new materials which are more environmental friendly while removing others which have a negative effect on the same. This might demand that the company will have to dispose some machines used. Another challenge is to really establish how is the final consumer will respond to the changes on the new product design. Some consumer might view the product as inferior compared to the old designed products. 2. Manufacturing the product In manufacturing the company can apply green by reducing the energy and resource consumption. Where possible the company should reuse remanufacture, or recycle materials. Also, the use of biodegradable and non-toxic materials in the manufacturing process. This will reduce the harmful emissions and wastes. Environmentally, beneficial innovations require that the people concerned have enough knowledge on the characteristics of the product, processes, materials and technologies. There is a need to have an effective exchange of knowledge between the members of the supply chain. This is going to stimulate innovations which are profitable and beneficial to the company. Whether the company is going to remanufacture, reuse or recycle depend on the type of the product and the characteristic of the materials. The advantage with going green in manufacturing processes is that the manufacturer and supplier relationship is cemented because both come together to deliberate on environmental issues that will affect them. Also has a long term benefit since the company is assured of its future by conserving environment where it gets the low materials. For example, when food processing companies reuse the byproducts to manufacture fertilizers, the fertilizers are sold to farmers who produce more crops to be used again by the manufacturers of food products. The disadvantage of going green in manufacturing stage is that the cost of acquiring new machines which will be compatible with the new production processes might be high. 3. Purchasing When sourcing for materials the company through the procurement or purchasing department evaluates the suppliers and decides on who they should source from. Purchasing department should ensure that the supplier’s environmental activities are friendly. The company should also formulate policies that bar it from dealing with suppliers who violate environmental standards. It is beneficial to be sensitive on green purchasing since the company’s actions are going to affect the suppliers. Most suppliers will also go green so that they can continue to have business. This is going to be effected by many other suppliers and the long term effect will be all companies will have adopted the environmental standards and make the planet earth a safer place. The only big challenge in adopting green purchasing is to match the suppliers who have met the ecological requirements. 4. Packaging Today, packaging is a way of promoting and differentiating a product from the others. Also packaging is necessary for transporting finished goods to the market. For consumers, packaging will help them identify the product, its maker, time for usage and any other feature of the product. Green packaging materials should be used. These are materials with the least or no impact on the environment. For example bioplastics which are biodegradable belong to this category. Another way to go green packaging is to educate the consumers of the product on the best way to dispose the package after use of the product. This is done by writing on the package the procedure of disposal. The advantage with green packaging is that the product will sell more because the consumers, who most of them are friends of nature will prefer products which address their life during and after use. Another advantage is that the environment is protected from dangers that might arise is case of harmful packages disposed. 5. Transport Transport is also an important activity of supply chain management. Transport is the means by which raw materials are carried to the factory or warehouse and finished goods are made available in the market. The company should also make sure that it evaluates the transportation process and where possible make the process environmental friendly. This can be achieved by reducing the carbon emission from motor transport by ensuring they are well maintained. Also the company should adopt means of transport which have less or no harmful effect to the environment. For example, locomotive transport has low air pollution and also can be able to carry a large luggage than motor vehicle which use fuel which burns and emit dangerous gases to the air. Another way a company can reduce environmental pollution is to make sure the transport route used when transporting goods is always the shortest. This in effect reduces the distance covered and fuel burned to the environment. In other words the company should apply the transportation model which minimizes time and distance. This is advantageous to the company since it will reduce both cost and time per unit. The challenge with going green in transportation, it is going to involve a lot of logistical calculation to come up with the best choice. Conclusion In the recent years businesses around the world have formulated and adopted various strategies that are in alignment with the interest of the environment. Although environmental agencies have not given specific guidelines on how to operate in an environmental standard manner, many businesses have realized that there is a cost saving benefits by adopting these environmentally friendly practices. These new activities have changed the old supply chain and more innovations are being brought up and embraced by organizations. The end product will be that all businesses will have to adopt these practices and exceptional businesses will not survive. Methods of determining successful green supply chain management are relatively new and not fully developed. However, a company can efficiently and effectively make the supply chain green. 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