As a part of designing an effective supply chain we are now faced with a new additional dimension of environmental sensitivity. What exactly does this mean? Well with very organization’s focus to reduce its process impact on environment, it has to resort to what we call Green Supply Chain Management, which primarily has two dimensions namely, supply chain management and environment management. Both the twin engines ensure that supply chain network efficiency is increased without compromise to the environment.
Value drivers in Green Supply Chains
Greener Supply Chains will have a direct impact on bottom line of the company and an indirect impact on the top line. Greener supply chain involves making best use of the resources available (increasing asset utilization) and optimizing supply chain networks. SAP products like SAP TM are well aligned to meet this market requirement. The reason sighted for indirect impact on top line is due to the fact that very few customers will want to do business with you only because you are environment friendly. Unless the benefits of improved supply chains in terms of costs are passed on to the customer his incentive to do business with you is still grim.
One of the major issues in environment management is pollution. Pollution at all levels raw material stage, finished goods distribution stage, disposal stage. Green Supply Chain Management will have to ensure efficient supply chains with an aim of sustainable development.
Right Recipe for success
Every organization trying to implement Green Supply Chain Management will have to ensure that it aligns with company’s business goals- namely increasing value to all the stakeholders
|Owners||Increase Top and Bottom line|
|Employees||Greener work environment|
|Customers||Better value deals|
|Community||Better community living|
Towards a more Strategic Dimension
Once Green Supply Chain Management is aligned with business goals, it has to be backed by the right investment in right technology that will help the organization to leap into the next dimension. Investing in products like SAP TM ensure increase in operational efficiencies and higher return on investment.
Green Supply Chains need to be backed by process improvements through innovations. We have a long way to go before we realize and benefit from Greener Supply Chains.