Achieving Excellence through Green Supply Chain Management in Manufacturing Industries E-Book

Harleen Kaur

• Herausgeber: BookRix
• Kategorie: Fachliteratur
• Sprache: Englisch

Veröffentlichungsjahr: 2018

Beschreibung

GSCM theaters a dynamic role in persuading the total environment effect of any industry involved in supply chain actions and backing to sustainable performance development. GSCM is evolved from SCM. In the 1990s, as competition build up, the enhanced cognizance of green practices has caused firms to act in a morally and generally accountable method in the supply chains. In 1995, GSCM fascinated significant academic interest. In 2010, GSCM received uppermost attention. With GSCM practices in concentration, firms advance in environmental managing policies in reaction to the alterations of ecological necessities and their influences on supply chain processes.

Leseprobe

Harleen Kaur, Dr. Chandan Deep Singh

Achieving Excellence through Green Supply Chain Management in Manufacturing Industries

BookRix GmbH & Co. KG80331 Munich

Chapter 1

CHAPTER 1 INTRODUCTION

1.1.         SCM Introduction

A supply chain is a system which comprises of all parties involved such as supplier, manufacturer, wholesaler, retailer, customer, distributor, etc., in producing and delivery services or products to final consumers in upstream and downstream both sides through physical distribution, the course of info and investments. The five stages suppliers, manufacturer, wholesalers, retailers, and consumers are associated with anend to end flows of merchandises, information, and capital. Handling a supply chain network is difficult and challenging since the system includes various sub-systems, actions, relationships, and processes. SCM practices take account of a set of tactics and undertakings developed by industry to effectively incorporate supply and demand for refining the administration of its supply chain. By accumulating a “green” constituent in the SCM methods, GSCM activities comprise a set of green technique in locating, built-up, circulation and reverse logistics.

The main attention of SCM is to deliver theright product to the right consumers at the correct cost, right time, precise quality, right form and accurate quantity. In addition, the short-term planned objective of SCM is to decrease cycle time and inventory and thus to raise productivity, while the longstanding aim is to increase profits through marketplace share and client satisfaction. The paybacks that can be consequential from SCM have been long renowned for the SCM works. For example, the calculated profits of SCM comprises of inferior supply chain costs, complete productivity, inventory reduction, forecast precision, supply performance, contentment cycle time and fill rates. SCM conveys enhancement up to 60 per cent, which ranges between 10 per cent and 60 per cent. Fulfillment cycle time registers the highest progress from 30 per cent to 60 per cent. In the perspective of small and medium firms, cost effective SCM is dangerous for its survival and development as purchasing cost marks up the largest share of sales revenue which is roughly 80 percent.

The possible profits of SCM include greater than before customer service and approachability, enhanced supply chain communication, risk declining, reduced product improvement cycle time processes, reduction in replication of inter-organizational procedures, inventory reduction and advancement in electronic trading. It has been found that the implementation of SCM practices could deliver remunerations in terms of decreased inventory level, lesser lead time in production, better flexibility, predicting accuracy, cost saving, and precise resource planning.

Supply Chain involves the flow of products and services from the producer or manufacturer to the customer or consumer. Supply Chain Management (SCM) is a wide based capacity that includes all business and functional processes required in however not restricted to Manufacturing, Procurement, and Transportation of finished goods; Warehousing, Inventory and Distribution Management.

A basic supply chain is comprised of a few components that are connectedto the development of products.

Customer:The chain of events starts with the customer when they choose to buy a product which has been available to be a sale by an organization. The customer connects with the sales department of the organization and places the order for a particular quantity to be delivered on a particular date. If that product is yet to be manufactured, the customer’s requirements will be included which need to be fulfilled by the manufacturing department.Planning:The manufacturing department will develop a plan for manufacturing products according to the customer’s requirements. In the planning process, all the requirements mentioned by the sales order of the customer will be consolidated with other orders.To manufacture the product, the organization will then need to buy the required raw materials.Purchasing:The list of all required raw materials and services is sent to purchasing department, and the purchasing department directs purchase orders to suppliers to supply the raw materials on the required date to the production site.Warehouse and Inventory:The received raw material is checked for the quality and stored in the warehouse. The supplier then sends a receipt to the organization for the materials.Production:The finished products are manufactured according to the customer’s requirements using the raw material purchased from the suppliers.Transportation:The finished product arrived at the warehouse and then transported to the customer before or on the date specified by the customer.After the product has been received by the customer, the organizations will send a receipt for the delivered products.

1.2.         Brief history

In 1985, the first supply chain investigation was done. After that in 1995, “total cost of ownership” model was developed and the Supply Chain Council was created in 1996. Following this, the Council of Supply Chain Management Professionals was created in 2004. The bond which ties each of these is broad and widely which assume the position on supply chain operations. In a global industry, situation portrayed by geographically distributed markets, procurement sources of raw material over the world and less expensive production and labor markets accessible in developing world, the trade of demand and supply is continually changing and developing.

Business deeds can position a momentous danger to the environment in relationships of emissions of carbon monoxide, packaging materials waste, toxic resources, traffic jamming and other practices causing industrialized pollution.Green supply chain management (GSCM)is deliberated as an ecological revolution. The conception of GSCM is to incorporate environmental philosophy in the methods of supply chain management (SCM). GSCM targets to decrease or eradicate wastages which include lethal chemical, emissions, solid waste and energy alongside supply chain like designing of the product, resourcing and selection of materials, the process of manufacturing, distribution of final product and its end-of-life management.

GSCM theaters a dynamic role in persuading the total environment effect of any industry involved in supply chain actions and backing to sustainable performance development. GSCM is evolved from SCM. In the 1990s, as competition build up, the enhanced cognizance of green practices has caused firms to act in a morally and generally accountable method in the supply chains. In 1995, GSCM fascinated significant academic interest. In 2010, GSCM received uppermost attention. With GSCM practices in concentration, firms advance in environmental managing policies in reaction to the alterations of ecological necessities and their influences on supply chain processes.

1.3.         GSCM Introduction

The term green supply chain management mainly refers to those concepts which integrate the sustainable environmental processes into the outmoded supply chain. This process can include product design,  manufacturing, production, material sourcing, and end of life management.

According to this definition, green supply chain management refers to a wide range of products from product design by recycling or destroy. In this process, the products are passed through a cycle of life. For example, as same as human beings, they also pass through the cycle of life such as birth, maturity, and death. The product life cycle involves a degree of structure to the life of products which provide the directions for the functional efforts to produce and deliver the product.

It is generally used to describe a supply chain for improved performance in the measurability, sustainability, and cost reduction through the measurement of other metrics. The supply chain management helps to tells us that how the friendly environmentally practices helps to create value adding facilities for the company. The following picture represents product life cycle from various stages in the green supply chain management. Firstly, the material is extracted for design and production, after that it is ready for consumption and use. In the last stage end of life, management is enabled for recycling and recovery for further processing. It could also be helpful to reduce the waste from the environment.

1.4.         Reason for converting SCM to GSCM

The developing issues in the worldwide market for green concerns and the shortage of natural resources have constrained officials to observe supply chain systems from an environmental point of view. Industries with high environmental risks, including automotive, chemical, plastic, and heavy manufacturing, have continuously considered advancements in environmental performance by way of one of the essential competitive needs, adjoining lower costs, lead-time, and quality. Green supply chain management (GSCM) is a developing field inspired by the requirement for environmental awareness.

Green supply chain management is one of the best systems for satisfying the challenge to lessen carbon emission and improve sustainability due to its capability to enhance the environmental performance of any business. Organizations could adopt the suitable eco-friendlymethods and can make standard to follow for other non-green organizations. Although sustainable supply chain purposes are becoming more crucial, the emphasis value for money, risk, bottom line, delivery times and adaptability are not decreasing. In reality, environmental duty has progressed from a trend to a business importance because it supports the organization to accomplish their business objectives.

GSCM and traditional SCM techniques are highly different at various levels of working from manufacturing to reverse logistics. Traditional SCM is commonly driven by the lone agenda of the economy as its critical objective while GSCM takes into consideration both the environmental as well as economic intentions. SCM out rightly discards eco-friendly techniques whereas GSCM stresses green, combined and environmentallyimproved practices. Customary SCM is extradedicated on controlling the final manufactured goods, with no concernfor the resultant harmful properties on the atmosphere during distribution and manufacturing.

Increasing energy costs: Increasing power and fuel costs with the cost of related raw materials necessary for operating have carried into focus the need for a more cost effective green alternative. Low power IT resolutions, energy sources substitutes and re-utilizing can have anoptimistic impact on increasing the end line in profitable business.

Global panicover carbon dioxide emission: Business policies are focused more on recognizing and depressing the carbon footstepsinitiated by their IT gear, setup, and the general public.

TemperatureChange: Global warming is affecting the climate, ice caps, and glaciers equally the southern hemisphere and northern hemisphere in anundesirable way. The increase in the sea level due to the decline in the ice caps and glaciers is turning out to be a chief cause of worry for the ecologists all acrossthe globe.

Management and Ecological Protection Agency guidelines: A businessorganization needs to track certain provisions to attain Energy Star Rating and other eco-friendly certifications. Discipline by regulating agencies to implement carbon recognition obedience is anadditionalinspirational factor for Green IT enterprises.

Improved environmental awareness among the community: Vendor selection based on Green IT practices, sharing of best practices in companies across the supply chain, anend to end obedience besides the supply chain are the contributory factors in areas of a fruitful and prosperous Green IT policy.

1.5.         Advantages and limitations of GSCM1.5.1.     Advantages of GSCM

The most fundamental benefits of green supply chain management are a positive long term benefitsand help to improve the financial performance of the organization. The following are some benefits of GSCM –

Sustainability of resources

Green supply chain sponsors the operative utilization of all the available resources of the company. By inducing the green supply chain management in entire business making processes help to purchase the green input resources that will support to flow environmental friendly manufacturing process to the recommended green outputs. It makes the effective use of available resources which are present in the organization and helps to reduce the waste.

Lowered costs/ Increased efficiency

As it is discussed above, green supply chain management is the principle of reducing the waste by making the effective use of available resources. Within the operative management of resources and suppliers, it can help to decrease the cost of production, promote the recycling and reuse the raw materials which are also helpful to reduce the waste from the environment. It also helps to reduce the production of chemical substances materials for a better resulting of environmental protocols. With the help of these consequences, we can lower the overall costs of the material by increasing the efficiency of products.

Product differentiation and competitive advantage

Green supply chain management helps to position the friendly products in the environment according to the perceptional view of customer’s. It helps to create the assorted products in the market so that it is not similar to anyone else. With the help of this, we can attract new profitable customers for our organization. It will give the competitive edge to the several types of competitors in the market. Besides all these things it also fortifies the brand image and reputation in the market place.

Adapting to regulation and reducing risk

The organizations which adopt the green supply chain management in their business practices can reduce the risk of manufacturing of that product which is not environmentally friendly. It strengthens the ethical practices in the business process. Green supply chain management makes efforts to create the sustained dedication of possessions, actions and management protocols so that the organization or business can earn more profits. 

Improved quality and products

It helps to improve the quality of products by enabling the new advanced techniques because some organizations manufacture that type of products which are advanced in the technologically and environment-friendly. If these types of products have been manufactured by the company, then it will automatically enhance the brand image and reputation in the minds of customers. So, the green supply chain management helps to improve the superiority because the customers basically get attracted to the products by their quality and affordable prices.

Besides the above five benefits of green supply chain management, there are some additional advantages also generated such as–

Effective managements of traders and sellers.It creates the transparency in the supply chain of products.It also has a better control on product safety and quality.Helpful to increase the sales and revenues in the organization.It helps to reduce the waste and makes effective use of it by recycling and reuse.Distributionof technology, capital, and Knowledge among the chain partners.

1.5.2.     Limitations of GSCM

With many advancements in green supply chain management, there are some limitations also arising because the company and organizations must have to spend a lot of money for implementing Research& Development programs: