Green_Supply_Chian

Introduction Competitive advantage, greening the supply chain are some of the evolving concepts which include working collaboratively with suppliers on green product designs, holding awareness seminars, helping suppliers establish their own environmental program. These concepts arises from the understanding that customers and other stakeholders do not always draw the line between a company and its suppliers. Large companies who usually initiate greening the industry have many suppliers and business partners who belong to the category called small and medium enterprises (SMEs). Because of lack of initiative and funding limitations, SMEs have not really shown much interest in greening their processes. On one side SMEs contribute a lot toward the total production of goods and services while on the other side they have been accused of being the biggest polluters. SMEs do contribute to around 60-70% of entire pollution in the world. Considering the current scenario, companies are realizing that today's business is about value, trade with respect, trust among suppliers and distributors. The today's consumer is more concerned about the products he purchases regarding where it comes from and how it is produced. The awareness among the consumers about the product information urges companies to do business using fair methods and socially responsible trading systems. The business practices should also be free from any kind of exploitation and damage to the environment. The manufacturers need to address the environmental issues about the product at the source level rather than controlling them after product is produced. In developing countries like India economic growth, enhancing foreign exchange, investment and generation of employment constitute a leading source to fight against poverty. Greening the Inbound Logistics Phase The negative impact on the environment is created at different points in the supply chain. The amount of impact may vary from point to point. So, it is the essential to tackle the environmental problem at the point where it maximum. In whole supply chain, it is the source where the pollution is created at maximum level. The company has to address on the prevention of pollution at the source. The source generally refers to the suppliers. However, to ensure the environment friendly raw material is being used in the production process, manufacturers have to monitor the production processes of the suppliers themselves. This ensures that the suppliers use environment-friendly raw material as well as processes. It also ensures the minimum emission of green house gases, minimum generation of the hazardous products. The suppliers should also use the energy that is free of emissions and use the transportation that is pollution-free. The lead companies' environment performance directly depends upon the environment performance of its suppliers. Many companies in India have large business houses and presence across the whole world. They do businesses with global customers spread across Europe, US. In order to export and market the product in foreign market, the product should follow the regulatory standards of the country in which they are sold. The entire supply chain should follow the proper environmental standards. These global customers are located at far-off places across different countries and it becomes impossible for them to check on the environmental performance of the manufacturing companies that they are dealing with. These global customers prefer an international stamp or accreditation like ISO 14001 certification. If a manufacturing company does not follow the regulations regarding environmental concerns then the customers may reject the product completely and that would give a setback to the manufacturing company in the world trade. Having this certificate with the manufacturing company, customers assure that the company they are dealing with concerns about the environmental issues. So, many large companies are going for the ISO 14000 certification not only for the sake of environmental performance but also for the sake of overcoming export limitations. Some of the companies also go for having their own Environmental Management System (EMS) besides the ISO certification. In many cases in India, some of the regulations in the EMS are quite stricter than the regulations in the ISO certification. This kind of system in place actually gives the manufacturing company a competitive advantage. In order to reduce the pollution or waste at the source, the manufacturing companies have to work in tandem with the suppliers regarding the kind of raw material. Any product starts building up at the design stage. Now a days, companies go for “Design for Environment” (DFE) approach. The DFE includes use of fewer hazardous substances, more recycled and recyclable material designed for manufacturing. This involves creating the parts that can be reused as well as recycled. The DFE also includes the design for disassembly concept wherein the product is designed in a way that it can be easily disassembled. Getting adjusted in accordance with the manufacturing company, there is a source of opportunity as well as a constraint for the suppliers. On one hand they get access to all the information, resources and technology while on the other hand, they have to tie up with the manufacturing company, locking up in such a manner that they may lose out on the opportunity of tying up with other firms. Going green is a cascading effect. If a manufacturing company goes green then its suppliers have to go green. Then in turn the suppliers of the supplies have to go green. All the environmental-friendly procedures are being handed down to the from manufacturing company to suppliers to supplies of suppliers. In an effort to implement the EMS more effectively, manufacturing company as well as suppliers try to reach out to the communities around them and environmental awareness process gets spread all over. In India, challenges and problems faced by companies in greening their suppliers are varied. On one side, they completely lack the interest while on other side they are eager tom implement but lack in manpower, technical know-how and funding. The suppliers are nor worried about the violation of the regulations put for environmental-friendliness. This poses a hilarious task before the companies to convince the suppliers about he benefits of going green. While at the same time, a company can not force the suppliers to abide by the regulations put as it does not yield results. The government agencies under the government of India have taken up many environmental awareness programs. They offer environmental consultancy to SMEs at lower rates and provide the technology at subsidized rate. These kind of initiatives can not be attained in one day but have to done step by step. This requires continuous interaction between the suppliers and the manufacturing company. To create an awareness among the suppliers about the benefits that the green technology offers, many manufacturing companies arrange for seminars at their factory. This in turn help suppliers come together and exchange the best practices among themselves which ultimately helps the overall industry. In such seminars the company talks about the environmental problems and the role the associated industry in reducing the negative impact on the environment. The company talks about land pollution, water pollution, air pollution. It also talks about the corrective measures to be taken in order to avoid or reduce that. Ex. To reduce the air pollution, use CNG (Compressed Natural Gas) instead of petrol and diesel. In such seminars suppliers are encouraged to improve their environmental performance not only for the sake of doing it but for risk reduction, cost saving, lowering operational costs, improving public image and customer satisfaction. For example, suppliers in Chemical industry can supply the raw material to the manufacturing company in plastic containers or glass bottles, which they can take back and give them for recycling. Some of the big giants like Nestle go extra mile. They provide suppliers with the required resources for going green. Some companies arrange for the experts to go at suppliers site and help them solve the problems in implementing the green technology. In order to convince the suppliers to go green, a recognition scheme can be very effective. The manufacturing firm reward the suppliers who have done well in going green. The SMEs are flexible and versatile. The implementation at SMEs will not be a big problem. What they need is only funding for implementation. The suppliers can be rated on the basis of environmental performance. Some of the companies are now trying to integrate the quality with the environment management. They want to satisfy the two conflicting objectives that is going for highest quality which would be harmful to the environment. The company must visit the suppliers' premises at least once in a year to check on the appropriateness of the procedures being followed by them. The employees at the suppliers end should be aware of all the environmental concerns. In today's business environment, due to the shortened life cycle of a product companies are continuously developing new products which are recycled. This requires involvement of suppliers in the value chain. For building the trust between supplier and the manufacturing company, suppliers should use the partnership model instead of arm's length model. General Motors in US used arm's length model which is suitable only for short gains and whenever there is no dependency upon the suppliers. Toyota in Japan used the partnership model of supplier management which ensured sustainable supply from the suppliers. In environmental management, partnership model suits best as we want a coordination between suppliers and manufacturers for efficacy. Greening the Production phase The essential features of greening the production phase constitute the prevention of pollution before it is produced, closed loop production system, de-materialization. The closed loop production system includes recycling of materials internal to company. While de-materialization means use of less material without sacrificing quality. The environmental impact of a process can be minimized by having the complete change in the inputs required for that process. For example, in auto manufacturing, 80% of environmental concerns are due to paint shop. This impact has been reduced by the material substitution such as water-borne and powder paints, which is looked upon as an innovative approach. It is evident from many incidences that the suppliers of the industry become the source of innovations and new product development. Problems in countries like India: there is a lack of environmental awareness among people poverty is so extensive that there is always a continuous thrust for economic growth at any cost lack of funding lack of technical know-how The another term 'design for re-manufacturing' encourages company employees create parts and products that can be put back into the production process and reused at the end of their useful life. The company with assistance from suppliers should make greener and smarter parts. Re-manufactured parts help the company save money as the purchase of new parts becomes unnecessary. The company can hope to achieve its set target for “zero to landfill”.This shift has also benefited waste suppliers (who provide service for waste treatment) in many ways. There is reduction in landfill costs, risk from hazardous wastes is reduced. By having coordination with the suppliers, a company can improve the flow of material and information across the business functions. Cutting down the waste at every stage in the production increases the productivity and sustainability in the company. The smooth flow of the material, waste reduction at every stage lead to lean manufacturing. The greatest difficulty in implementing ISO 14001, EMS is changing the mindset of human beings. Motivating people to think about environmental concern requires lot of training and spread of awareness among them. Greening the outbound logistics The outbound logistics involve all the activities required to deliver the product or service to the customer in its final form. The outbound logistics includes packaging, transportation, waste treatment plant. The companies should be more flexible when it comes to the end product. The companies should redesign old products, introduce completely new products which are more environment-friendly. Sometime, the benefits of going green are intangible in nature, such as creating goodwill, community respect and competitive advantage.