Green Supply Chain Essay Example

Union (Hermann, Helms & Sara's 2005, p. 339). Indeed, various environmental regulations are put into place to serve for the contemporary demand of environmental monitoring. Bacon & Slacken (2006, p.

799) define environmental monitoring as involving in simply evaluating the outcomes of environment efforts made by suppliers (e. , gaining the certification of ISO 14000 or of environmental monitoring, in the future, it is predicted that there should be a shift from environmental monitoring to more strategic environmental collaboration between supply chain participants. Bacon and Slacken (2006, p. 799) state that environmental collaboration requires the buying organization to devote specific resources to assist its suppliers in developing a more integrated and effective Grass. Collaborative activities may include Joint planning and knowledge sharing on product design or process modification with respect to long term environmental protection.

The advent of environmental collaboration signals a transition from a passive approach of environmental performance scrutiny to a more proactive approach of cooperation between members of the supply chain to realism the goal of greening the supply Hahn. Definition and analyses of Green Supply Chain Management Turning to the strategy for supply chain activities implemented by businesses in the light of increasing pressures on environmental protection, there is a new term, Green Supply Chain Management (Grass), which aims to indicate how the enterprise applies the 'green' element into each stage and each participant of the whole supply chain.

Sacristans (2007) defined Grass as 'integrating environmental thinking into supply chain, including product design, material sourcing and selection, manufacturing processes, delivery of the final product to the customers as well as ND of life management of the product after its useful life'

(cited in Insignias, E 2009, p. 197).

Basically, the most important point made in the above definition is the greening of the whole supply chain, ranging from the creation of more CEO product designs, more implementation of green purchasing/procurement and environmentally friendly manufacturing, and better handling of waste or end of life (ELL) products.

To systematize the overarching greening process of the whole supply chain, Sacristans (2007, p. 57) utilizes a diagram to illustrate what needs to be considered to ensure consistent Grass: The author explains three main issues that a company needs to take into account when deciding to pursue a greener supply chain management. This starts from understanding the importance of Grass and what positive impacts it can bring about to the organization, which will be discussed further in the next section about benefits and challenges associated with Grass.

Next, Sacristans (2007) emphasizes the Green Design stage of a product, including life-cycle analysis of the product (LLC) and environmentally concern deign (CD). Fiske (1996) defined Green Design as the systematic consideration of design issues elated to environmental health and safety over the product life cycle, hence, to obtain the optimal outcome, it involves multidisciplinary expertise, including pollution prevention, resource conservation and waste management, Just to name a few (cited in Insignias 2009, p. 01). Life cycle assessment of product and environmentally concern design all collaborate to assist in the process of Green exploiting raw materials out of the environment to disposing it back into the environment (Arena et al, cited in Sacristans 2007, p. 59). These activities include extracting and processing raw material, manufacturing, transportation and striation, remunerating, reuse and final disposal (Genuine,

cited in Insignias 2009, p.

201).

Based on LLC of a product, supply chain practitioners can figure out which supply chain activity or process has the most negative impact on environment, therefore, are able to have timely and suitable modifications to production and logistics strategies. CD attempts to design the product as sustainable as possible taking into account possible environmental impacts that could be eliminated from using the new product design. As a result, CD can bring about design for recycling, sign for disassembly and design for waste minimization (Insignias 2009, p. 04).

It is worth mentioning that the Green Design is possibly the most important and initial stage a company should consider when deciding to apply Grass because the design of a product plays a crucial role in the environmental performance of a sequence of later supply chain operation activities. In regards to the Green Operations, Sacristans (2007) pinpoints there are three main activities, green manufacturing & remunerating, reverse logistics and network design and waste management.

Insignias (2009, p. 05) opines that the aim of green manufacturing is to minimize environmental impacts related to the production by using appropriate materials and technology. In the above diagram, reducing the usage of raw/virgin materials and integrating recycling into the manufacturing process are recommended. Besides, slightly different to green manufacturing, the purpose of green remunerating is to retrieve used products to like-new condition (Lund, cited in Insignias 2009, p.

05). Therefore, it involves either the reusing of intact parts of used products for later manufacturing activities, or the product/ eternal recovery process, in which, used products can be repaired/ refurbished or even disassembled for re-usage and selling

to another party. This is not only helpful to economically gain back the product value at the end of its life cycle but also reduce the waste amount landfill. In this sense, Hook (1999, p. 32) studies the practice of a Mercedes company implementing car upgrades and adjustments for its customer, specifically, during the life of the car, customers can have the car modified to their changing needs, such as different colored door panels or new engine for the car.

The author then raises a worth-contemplating rhetorical question about whether it is possible to extend the life cycle of a car by adding on new modules and body panels rather than totally replacing an old model car with a totally new one.

He also emphasizes that greening is more about reduce and reuse initiatives rather than end-of-pipe management. As a consequence, expanding the initial life of a product into the second or third life by upgrading the old used product will tremendously contribute to the greening process of a company while simultaneously raising the number of customer returns and updated orders for upgrading demands. That an organization will want to take into consideration.

It is defined as the management of the flow of raw material from the point of consumer back to the point of the origin for the purpose of recapturing value or proper disposal (Rogers & Tiber-Limbed, cited in Insignias 2009, p. 206). Due to its similar nature to the forward logistics methodology, RL requires similar investments in logistics network and design and effective transportations and infrastructure to optimize its efficiency in regard to greening the supply chain.

The activities comprise of collecting

used rodents, sorting them into different categories, pre-processing and transporting them back to the manufacture. Waste management is the final process discussed in the Green Operations stage, which involves source reduction, pollution prevention and disposal. These activities endeavourer to mitigate the environmental impacts of waste, such as hazardousness and pollution, during the production and operation process as well as at the end of its life cycle.

After analyzing the Grass model recommended by Sacristans (2007), it is notable that, the coordination of green design, green manufacturing and remunerating, verse logistic and waste management should be highly prioritize throughout Grass to ensure the highest result which could be achieved. For example, a design- for-disassembly product could facilitate the disassembly process in remunerating and RL, while a combination of a sound design network for RL, which is closely linked with locations of waste management areas could reduce the time and labor for handling and solving the disposal of non-value products.

Especially, a smooth collaboration between RL and green remunerating can expedite the process of re- manufacturing products to more timely serve customers' demands and hence, more keel enhance economies benefits for the company. Benefits & challenges of Grass Turning back to the section about the importance of Grass, Sacristans (2007) advises that the company should understand the reasoning and advantages behind the decision of taking a Grass approach.

The question raised here is that aside from the avoidance of consumer boycott, what other benefits are which make it imperative for enterprises to adopt Grass.

According to GHz and Saris (2004), the implementation of Grass can bring about cost savings for an organization through a decrease in the

archiving of raw materials and energy consumption as well as via the reuse of recycled materials or of intact components inside each used product (cited in Mathematician et al 2013, p. 284).

Besides, cost reductions could be also achieved thanks to enhanced productivity as a result of the redesign of a product and its packaging, and reconfiguration of the production process or distribution network. The second prominent benefit is the reputation of a company as being 'environmentally friendly and the ensuing increase in customer loyalty and patronage. Adopting Grass also contributes to production differentiation through impaired to other counterparts (Dubbed & Smith, cited in Mathematician et al 2013, p.

284). Specifically, Luau and Wang (2009, p. 50), use resource-based view theory to emphasize the contributing role of reverse logistics to a company's long-term strategy in obtaining competitive advantage. The resource-based theory mentions that the use of 'rare, valuable, in-imitable and UN-substitute resources' differentiates the company from other competitors and therefore confers the company with competitive advantage. In other words, a strategic, effective application of reverse egoistic system or Grass, which is hard to imitate and mitigate in a short period of time may assists the company in gaining long term competitive advantage.

In addition, complying with Grass also helps reduce environmental risks, which may negatively impact on the operation of a company, such as scarcity of main resources necessary for manufacturing, water or land pollution, and hazardous emissions detrimental to employees' health (Mathematician et al 2013, p. 284) Despite of crucial benefits, there are a plethora of challenges associated with implementing Grass, which substantially hinder organizations from deploying Grass practice.

Person (2005) summarizes there are

four main barriers categories, attitudinal and perceptions barriers, information related barriers, resources barriers and technical barriers (cited in Mathematician et al 2013, p. 284).

The attitudinal and perception barrier implies the unwillingness of top management in adopting Grass due to fear of failure or resistance to changes. The second barrier is about the lack of information and awareness among both employees and top management within an organization about environmental impacts and relevant legislations.

This highly educes the possibility of the implementation of Grass into the business operation. The resources barriers highlight problems associated with financial burdens regarding investments in green logistics system and the shortage of human resources necessary for deploying Gram's strategies. The technology barrier emphasizes a need for advanced technology, material and expertise to change from a traditional to a more environmentally friendly logistics approach.

Aside from aforementioned barriers, which are more likely to occur within an organization, Walker et al (2008, p. 74) adds a few more external barriers.

Firstly, rigid environmental regulations may restrict green innovation by determining the best available techniques for environmental protection. Next, poor supplier commitment is one of the most prominent issues faced by many companies. According to Westerly (1999, cited in Walker et al 2008), companies are not willing to share information on their environmental performance due to fears of exposing weaknesses in Grass or revealing to other companies competitive advantage.

Thirdly, industry specific barriers are mentioned, emphasizing characteristics inherent to each industry, which to some extent impede the application of Grass.

Weaker et al (2008, p. 81) mention an example of a pharmaceuticals company, which priorities doctors' recommendations of purchased products for treating patients over

environmental performance of the suppliers. Flexibility in the implementation of Grass by different companies. In fact, each organization can opt for different Grass paradigms and select the best set of Grass activities accommodating to the size of its business, its economic situation, characteristics inherent to each industry and business operations as well as the presence of financial supports from the government if possible.

For example, automotive and electronic industries are more highly likely to implement reverse logistics model in comparison with food processing industry due to the quick perishing nature of food products.

Another example is that a multinational company company, which received intensive financial assistance from its local authority, will more possibly implement directly Grass into its strategic SC operation, while a smaller company with an absence of governmental support has a higher tendency to seek for a PL providers to help deploy Grass or even hardly apply Grass into its ally operation (Luau & Wang 2009).

The case study Realizing the fact that reverse logistics and CEO design has attracted numerous attentions from academicians and scholars, the case study selected below will focus on analyzing the implementation of a combination of CEO design and reverse logistics model into the Grass system of a company named Quantum Corporation. Quantum Corporation was the biggest global supplier of hard disk drives (HAD) for personal computers in 2000 (Matthews 2004, p. 105).

As part of ongoing improvements, the company conducted investigations regarding environmental concerns across the industry and recognizes that there was an increase of customers' interest in environmental performance of the company and many of its competitors have plans to apply Grass practices.

In response to

growing application green SC practice, Quantum decided to pursue the design and implementation of a packaging reuse program. In reality, approximately 95% of Quantum's HAD products were shipped in bulk packaging on pallets to original electronic manufacturers (MEMO) of distinct locations worldwide.

Besides, due to the fragility nature of HAD products, the condition of packaging for HAD shipment was strictly assessed as nearly perfect, hush, the packaging can be reused up too certain number of times. It can be said that the high volume of bulk shipment and the high quality condition of packaging are attributable to the decision to redesign the packaging for take back and reverse logistics purposes, in an attempt to achieve cost savings and reduced energy consumption. The old design of bulk packaging container requires 13 discrete components and is able to hold 12 drives.

In contrast, the new design reduced the number of discrete packaging components from 13 to 5 and is also able to hold 20 instead of 12 drives (Matthews 2004).

The newly designed packaging consisted of 1 corrugated paperboard box, 4 corrugated corner box supports, 1 expanded polyurethane foam tray and 1 polyurethane foam lid. Of these pieces, only 2 of the 4 corrugated supports and the foam tray and lid can be reused while the outside box and 2 of the remaining supports will be recycled in regards to safety for HAD products. Notably, the reusable packaging components can withstand at least 10 uses.

The subsequent logistics process included air transportation for sending back recycling of the packaging (Matthews 2004).

Detailed strategies related to reverse egoistic should be also taken into consideration, such as selection of

appropriate Memos, which are responsible for operating the sorting and recycling of packaging based on geographical advantages and also, which transportation most suitable for reverse logistics in respects with generating the best economic outcomes and most positive environmental impacts. Benefits and risks associated with implementation 1.

Benefits: Cost savings through reducing the usage of raw materials for packaging (from 13 to 5 components), reuse of still-perfect condition components of packaging. Even though it was recorded an increase in cost for reverse transportation, sorting and quality control and storage, Quantum quantified an overall cost saving of around 40% after implementing Packaging Reuse Program (PR). This resulted from a reduction of nearly 80% in packaging material cost and 25% less expenditure on logistics handling, which is attribute to the larger holding capacity of the new design of bulk packaging container (holding 20 instead of 12 drives).

More environmental efficiency was reported with a 57% decrease in electricity consumption, 39% less overall energy SE and 42% less carbon dioxide (Matthews 2004).

In the long term run, this PR can bring about competitive advantage for Quantum as a-hard-to-imitate green supply chain system, in terms of not only cost savings but also the reputation as a environmentally friendly company. 2. Risk: Uncertainty in forecasting the quantity of reusable packaging sent back to MEMO may lead to the bullwhip effect, in other words, a gap between the amount of packages collected and the actual amount MEMO receive.

This may affect the speed of packaging process and selling HAD products to end-customers. In the same light, any breakage in the reverse logistics system, for instance, due to delay in transportations or work

constructions will negatively affect the quantity of reusable packaging returned to MEMO.

Quantum also raised the issue of that since it takes time for customers to separate packing from other general waste; ramp-up of collection sites was slower than expected. This slower ramp-up schedule leads to unexpectedly increased management costs at these sites.

Mis-delivery and timely problem may be caused by incomplete removing of multiple sets of shipping information on the reusable trials since the cluster of this information may mislead supply chain staffs about the real date or time for delivering to final customers. Future recommendation Challenges occur in Grass have provoked thoughts about what should be done to minimize the impacts of disruptions in Grass. In response to this issue, Hook (1999) calls for more thorough collaboration between players involved in both upstream and downstream of the SC.

The author also recommends a shift of a company from a merely reactive response to the demand of environmental protection, to a more proactive approach, and if possible to the most far-reaching approach of value seeking. Reactive approach indicates initial practices of a company in committing to environmental management, for example, starting labeling products as recyclable or procuring some products with some recyclable components. More advanced, in the of used products.

The highest level of environmental management can be seen in the value-seeking approach when the companies integrate environmental activities into its business strategy and consider operating business with minimal impacts on environment as part of its strategic initiative.

Only within this final approach, elaboration could be witnessed to occur between participants in the SC since the company has more motivations and initiatives to request

upstream suppliers and manufacturers and downstream customers to comply with environmental activities.

Added values can be generated through cooperative SCM activities, vertical/ horizontal knowledge sharing and more effective collaboration on CEO product design for more environmental efficiency and economic benefits. If every single company applies the value seeking approach into its operation, negative impacts on environment could be dramatically minimized as a result of more coordinated, hesitated and large-scale environmental management controlled by the thorough SC system. Indeed, Hook (1999) is adamant that the company only thrives in the final phase of value seeking and accompanying with the prosperity, environment can be improved.