Benefits of a Green Supply Chain Essay Example

that could affect external factors. Normative mechanisms may involve new customer demands, while coercive ones may arise from pressure exerted by environmental groups or enforcement of environmental regulations. The mimetic mechanism occurs when external factors become so formidable that businesses adopt Green Supply Chain Management (GSCM).

GSCM practices may arise from various external/internal factors and can have negative implications. Firstly, GSCM is a costly method, and its benefits may not be immediate. Secondly, Testa & Iraldo (2010, p. 962) note that GSCM is a long-term process and cannot be expected to enhance competitiveness in the short run.

Successful Green Supply Chain Management (GSCM) practices require collaboration with business partners. As a study suggests, involving partners in the development of environmental plans can lead to better results and improved performance. It is crucial for companies to include their suppliers and partners in their improvement actions in order to ensure real "environmental quality" of products or services. Ignoring such efforts might lead to negative repercussions for the supply chain and customers. In today's interconnected world, products, services, and distribution demand closer relationships between companies.

According to Savitz (2006, p. 26), a company should strive to find their "sustainable sweet spot" to ensure long-term viability by managing their operations in a way that enhances their roots in the environment, social fabric, and economy. Achieving this sweet spot provides significant long-term advantages over competitors. For instance, PepsiCo was successful in reducing costs and improving the environment by decreasing energy consumption, waste, and packaging while also addressing water supply and quality challenges for communities where their plants are located and important suppliers.

According to Savitz (2006, p. 25), PepsiCo's efforts to improve

the environment had a positive impact on their economic sustainability. Similarly, Walmart implemented a sustainability strategy in 2005, which involved the use of renewable energies, waste reduction, and the sale of environmentally sustainable products. Plambeck and Denend (2011, p. ) note that Walmart's green initiatives resulted in improved public relations, enabling the company to open new stores and increase sales in existing locations.

According to Plambeck and Denend (2011, p. 17), Walmart has discovered a way to increase its revenue by decreasing waste in its supply chain. For instance, the company used to spend $16 million annually to transport plastic waste from its stores to landfills, but now it converts the plastic into pellets and sells them to packaging suppliers, resulting in an additional $28 million in profits each year.

Walmart has made a commitment to eliminate "20 million metric tons of greenhouse gas (GHG) emissions from the company's global supply chain by the end of 2015" (Plambeck ; Denend, 2011, p. 18) and is continually making efforts to identify and execute solutions for environmental problems. The operation of a green supply chain presents multiple sustainability opportunities, some of which may not appear obvious initially. According to Savitz (2006, p. ), these opportunities include reducing costs through waste reduction, generating revenue by using waste as source material, entering new markets through product redesign or repurposing, and attracting skilled and dedicated employees who value an organization's commitment to sustainability.

73). Starbucks serves as an excellent illustration of an organization that has successfully capitalized on numerous opportunities. By implementing progressive measures to reduce their environmental footprint, Starbucks has enjoyed a range of benefits. CEO Howard Schultz integrated substantial sustainability

strategies into the company's overarching business strategy.

Howard Schultz outlined several strategies for Starbucks to become more environmentally and ethically responsible. These include being a leader in ethical sourcing and supporting organizations like Fairtrade and Conservation International to treat farmers with respect and dignity (Schultz, 2011, p. 07). Additionally, Starbucks aims to develop a sustainable economic model by reducing costs, building a world-class supply chain, and creating a culture focused on quality, speed, and expense management (Schultz, 2011, p. 108).

Starbucks has revamped their entire brand with an emphasis on sustainability, green initiatives, organic products, and utilizing recycled and repurposed materials.

It is crucial to note that coffee and the local community hold significant value, as pointed out by Schultz (2011, p. 278).

Starbucks has become a global leader in implementing a sustainable economic model, achieving success. According to Fr. William Byron, the highest ethical level in business goes beyond legal and ethical obligations and is defined as "discretionary" or "philanthropic responsibility" (Byron, 2006, p.).

In 2008, Starbucks had a workforce of 176,000 employees and global sales that surpassed $10.3 billion as reported in the 2009 Corporate Philanthropy Report.

Starbucks has contributed $22 million to communities across the world since 1997, with the Ethos Water Fund playing a role in this by striving to increase access to clean water and promote awareness of the global water crisis.

Water scarcity has impacted 420,000 people in affected countries. Starbucks contributed $5 million for Gulf Coast Recovery after hurricanes Rita and Katrina and continues to show support for those in need.

Starbucks is committed to being socially and environmentally accountable. There is a rising consciousness among consumers about firms that manufacture environmentally-friendly goods, which could impact

their purchasing choices. In 2008, Josephine Baker and Ritsuko Ozaki conducted an environmental consumer product survey covering questions that concerned environmental beliefs, practices, as well as marketing and branding concepts concerning the attitude towards eco-friendly products (Baker ; Ozaki, 2008, p.

According to Baker and Ozaki (2008), it was found that products that meet both subjective and environmental needs can be more appealing to consumers. This is because consumers are interested in products that can save money, be safe for children, and demonstrate sustainable actions. The study concluded that emphasizing these aspects can be beneficial for businesses. (p. 293).

J. M. points out that "greener" product selections can benefit the company, the consumer, and the environment. Therefore, companies must be aware that consumers may base their purchase decisions on environmentally-friendly options, which will impact supply chain management operations.

In 2009, Cruz and D. Matsypura conducted a study that explored social responsibility and environmental decision-making. The study adopted a model that incorporated the multi-criteria decision-making behavior of different stakeholders, including manufacturers, retailers, and consumers. The criteria for decision-making included maximizing net profit, minimizing emissions, and minimizing risks. The experiment aimed to identify how these decision-makers make their choices with respect to the environmental impact of their actions (p. 622).

According to Cruz ; Matsypura (2009, p. 643-644), three assumptions were needed for the study. The first assumption stated that if social responsibility activities increased, then transaction costs would decrease. The second assumption stated that the emission function relied on transaction volume between parties and the level of social responsibility activities by decision-makers. Lastly, the third assumption stated that lower costs, lower risk, and increased sales all lead to

higher profitability for companies.

According to Cruz and Matsypura (2009), the research findings suggest that a customer-supplier bond promotes environmental innovation in manufacturing. Nonetheless, if a company expands its socially responsible actions, the ROI increase may decrease proportionally (p. 645). Such actions are towards benefiting society in general.

According to Howard Schultz, management should prioritize taking care of their employees and showing concern for their local communities (Schultz, 1997, p. 292). One way that Starbucks demonstrated its commitment to social responsibility was by being among the first American agricultural importers to implement an ethics framework for their suppliers. This framework involves educating suppliers about the company's mission and values, communicating goals to the broader coffee industry, and gathering information during visits to select origin countries (Schulz).

According to Schultz (1997), our goal was to take action in ways that were accountable and could have measurable impacts. Additionally, Fr. William Byron emphasizes the importance of human dignity and defines it as the recognition of an individual's intrinsic value (Byron, 2006, p. 6).

Starbucks has established partnerships with their suppliers, which have brought economic and social advantages to both the company and coffee growers. According to Denise Kleinrichert (2008), Starbucks not only pays higher prices for coffee beans that are grown by community-based farmers but also invests in the development of housing, health clinics, schools, and other projects in coffee-growing communities. As a result, such alliances have had a significant impact on third world countries. Additionally, Schultz has visited Africa several times as a part of these efforts.

According to Schultz (2011, p. 238), all farmers should be treated with respect and dignity as they are crucial to their business. The primary

focus of Starbucks is its partners, who Schultz aspires to treat with human dignity, acknowledging that each one of them deserves a sense of self-worth and financial provision for personal and family needs (Schultz, 1997, p. 138). Schultz hopes that other companies will follow in Starbucks' footsteps towards positive societal impact.

Numerous companies are adopting the "Global Reporting Initiative" (GRI), a framework that aids in overseeing and divulging sustainability pursuits. Environmental aspects such as GRI emissions fall under this category. In the context of reporting, accountability and precision hold significance. Transparency is a key element in all domains of a corporation. As the government will be enforcing compliance, in the long haul, it will be advantageous to disclose carbon emissions and strategies relating to lessening the impact of climate change.

It is believed that government intervention can be advantageous for companies as they strive to comply with established regulations and standards. Andrew Savitz's perspective that sharing both mistakes and the corrective actions taken is an effective approach to improving a company's image and credibility with stakeholders and the public is something I agree with (Savitz, 2006, p. 221). Lean and Green practices share a strong connection through a synergy where positive influence from all partners increases the benefits of the relationship, often described in the equation 1 + 1 = 3.

According to Dues, Tan & Lim (2011, p. 93), in order to achieve synergy between Lean and Green paradigms, Lean practices must enhance Green practices while Green practices must be integrated upstream in the entire supply chain rather than just manufacturing.

According to Dues, Tan & Lim (2011, p. 94), Lean practices are beneficial during the

product design phase. There is evidence of positive overlap between the Lean and Green paradigms, specifically in waste reduction techniques, people and organization, lead time reduction, supply chain relationship, KPI: service level and tools/practices.

(Fig 1. Dues, Tan & Lim, 2011, p. 97) states that the utilization of Lean and Green methodologies in waste reduction leads to a reduction of waste in the supply chain.

Both Lean and Green practices involve a substantial amount of employee participation and require close cooperation with supply chain partners for optimum performance. Effective collaboration allows for efficient sharing of best practices and information, resulting in a fully integrated supply chain (Dues, Tan & Lim, 2011, p. 97). Additionally, Key Performance Indicators (KPIs) are essential in both practices. While Green products enable companies to differentiate themselves from competitors, Lean practices aid in providing customers with increased value delivery.

Both Lean and Green paradigms utilize certain tools, including value stream mapping (VSM), which is used to map all supply chain processes (Dues, Tan, & Lim, 2011). The incorporation of Lean practices can aid in facilitating Green practices and result in substantial company benefits. Therefore, integrating innovative concepts like sustainability into supply chain operations is crucial.

Immediate sustainable measures are necessary to address our environmental concerns. In particular, supply chain operations must effectively utilize resources and minimize their carbon footprint. The implementation of Green Supply Chain Management can enable supply chains to achieve success in economic, social, and environmental aspects. To emphasize the urgency of the situation, I quote: "We stand now where two roads diverge. But unlike the roads in Robert Frost's familiar poem, they are not equally fair. The road we have long been

traveling is deceptively easy, a smooth superhighway on which we progress with great speed, but at its end lies disaster."

The available path less taken is our sole opportunity to achieve a destination that guarantees the protection of our planet. This is the other fork of the road which Robert Frost mentioned as the one “less traveled by”.