1

About Green Supply Chain Management (GSCM):

Supply chain management (SCM) is the oversight of materials, information, and finances as they
move in a process from supplier to manufacturer to wholesaler to retailer to consumer. Supply
chain management involves coordinating and integrating these flows both within and among
companies. It is said that the ultimate goal of any effective supply chain management system is
to reduce inventory.
Green supply chain management means integrating environmental thinking into a supply chain
management, including product design, material resourcing and selection, manufacturing
processes, delivery of the final product to the consumer as well as end-of-life management of the
product after its useful life. The economic growth increases the level of energy and material
consumption, which contribute to the environmental issues and resource depletion problems. It
has become increasingly significant for organizations facing competitive, regulatory, and
community pressures to balance economic and environmental performance. Nowadays, most
organizations are starting to go green in their business as concern to environmental sustainability.
They have realized the greater benefit of the green technology adoption in business operation,
which also affected suppliers and customers.

Due to continuous globalization and innovative changes the organizations are inevitably required
to response quickly to the fast-changing competitive environment . According to Hervani et al.
(2005) and Srivastava (2007), GSCM practices are considered as material management, green
purchasing, green manufacturing, green design, reverse logistics and green
distribution/marketing that refer to the environmental integration of supply chain management
with consumers end-of-life management. Bangladesh construction sector is booming by
making a great contribution to the GDP of 10 % (UNEP, 2012). In Bangladesh, the lack of
environmental practices lead environmental hazard, climate change, less energy efficiency,
insufficient waste management and more carbon accumulation in the atmosphere. The
application of environmental laws and regulation is rare. As GSCM has already been sought as a
sustainable tool to improve the supply chain and overall business operation, this study has
intended to review the relevant literature to provide a perspective of GSCM practices which can
be employed in Bangladesh construction industry.

Need for green supply chain management:

Todays enterprises have established global networks of suppliers to take advantage of various
characteristics to build their competitive advantage. This poses a major challenge to the supply
chain managers to balance at low costs and innovate to substantiate both environmental &
economic sustainability. (Pagell (2004). Green supply chain management (GSCM) has emerged
to help managers balance these competitive requirements. Environmental practices in SCM pose

inherent complexity due to multiple stakeholders, uncertain implications and international

presence and have been a challenging field for researchers. Research is very important to support
the development of management practices to turn the entire supply chain into a green supply
chain. GSCM research so far can be considered ad hoc, fragmented and partial. Therefore, more
integrative contributions are needed, especially in the dissemination of best practices.

Figure 1: Environmental impact of each stage of supply chain

Green SCOR:
Green supply chain management is seen as an important stride companies need to take on the
road to sustainable practices. SCOR Model (Supply Chain Operations Reference) has been
developed by the Supply Chain Council (SCC is now merged with APICS) in order to guide
companies applying SCM principles. The Green SCOR model was also developed as an
integrated green supply chain management tool that allows companies to manage their supply
chains environmental impacts, resulting in more efficient operations which have minimal impact
on the environment. This chapter will talk about how SCM principles can be modified to reduce

the adverse effects of company operations on the environment, especially using the Green SCOR
model.
SCOR breaks the supply chain down into processes within the six categories shown in Table 2-1.
Category
Plan

Source

Make

Deliver

Return

Enable

Description
Processes
associated
with
planning,
scheduling, and coordinating supply
Chain activities.
Processes associated with procuring material,
physically receiving material, and storing raw
materials.
Processes associated with transforming raw
material into a finished product. In defense
maintenance, repair, and overhaul operations,
the Make category is used to model
maintenance activities
Processes associated with storing, packaging,
and delivering finished products to the
customer.
Processes associated with delivering and
receiving material from a customer to a
supplier, commonly called reverse logistics.
Processes that facilitate the movement of
materials
(e.g.,
business
rules,
data
management,
performance
management,
contract management, asset management, and
compliance management

These processes are further broken down to form three process levels. Level 1 defines the scope
of the supply chain and is used to evaluate competitive performance of the entire chain. Level 2
configures the supply chain into three primary types:

Make to stock
Make to order
Engineer to order.

Level 3 defines the processes that compose a supply chains operations. These levels define a
companys ability to perform via the application of best practices and the use of performance
metrics. Levels 1 and

2 are shown in Figure 2-1. Further process decomposition can be performed if it is useful for the
specific analysis; however, this is beyond the scope of the SCOR model.

Figure 2: SCOR process

SCOR processes can be replicated to model supplier and customer interactions across the supply
chain. In this way, a user can use the same six high-level processes to model an entire supply
chains operations, as shown in Figure 3.

Figure 3: SCOR depiction of end to end supply chain

Within each SCOR process, the model includes a process element table that defines the process,
provides metrics for measuring the process, and lists best practices for managing the process,
complete with software features of that practice. As an analytical tool, these tables are the true
power behind the model. They allow organizations to compare and link their operations using a
common language and measurement base. A sample table is shown in Figure 4.

Figure 4: SCOR process elements table

SCOR users have found the models approach of breaking supply chains into common, discrete
process activities to be a very effective method for improving performance. The common
language of SCOR makes it easy for an organization to compare its performance against others
within the same industry. Likewise, the common processes allow for faster application of supply
chain management best practices.

Relationship between Green SCOR and SCM:

Supply chain management involves all facilities, functions, and activities associated with flow
and transformation of goods and services from raw materials to customer, as well as the
associated information flows. SCM can be regarded as an integrated group of processes to
source, make, and deliver products. Namely SCM deals with the corporate functions of
procurement, pro-duction and distribution. SCM can be applied in service industries (hospitals,
fast food, supermarkets, retail), petroleum industries, chemicals industries (continuous
processes), textile industries (ready to wear clothing) and many others. The specific SCM
applications are influenced by type of process (continuous, batch, project, mass production),
number of stock keeping units (SKUs) and government regulations among other factors.
Sustainable supply chains are becoming more important as firms focus on the resource
consequences of the operations that they carry out. The three Ps of sustainability can be listed as

People, Profits and Planet. These concepts can easily be applied to supply chain operations as
well. As the world population is increasing the waste generated also increases. The growing
waste problem can be reduced by applying the principles of 4R many of which are related to the
operations of the supply chain

Reduce: For example, designing concentrated detergent that uses less packaging
Reuse: Using reusable packaging
Recycle: Packages used in transportation can be recycled and turned into new packages
Recover: Energy can be gained from waste

Creating a sustainable supply chain can start with the design of the products. Products can be designed in such as way so as to consume less materials, result in less transportation costs and be
easily disassembled so that parts can be used for remanufacture or refurbishing. As an example,
polyester fabric 100% recyclable, polar fleece may be made by recycled soda bottles, also the
new BMW i30 interior is made from recycled materials. Firms can generally follow these
principles for design for the environment or DFE:

Use fewer materials

Use recycled materials or recovered components.
Dont assume that natural materials are always better
Dont forget energy consumption.
Extend the useful life of the product
Change designs, some consumers solutions may require services rather than products,
an ex-ample could be using laundry services rather than selling washing machines
Involve the entire supply chain so they share the responsibility in terms of the
environmental impact

We can see Walmart as an example of applying the above principles. Stores use solar panels,
windmills, and skylight thereby reducing the power consumption. Spoiled food is composted and
resold as fertilizer using a 0% waste policy. Stores sell power saving light bulbs such as Compact
Fluorescent (CFL) or LED lights.

Capabilities of Green SCOR model:

SCOR metrics are aligned with five specific supply chain performance attributes defined by the
model. Because SCOR was developed as a supply chain model, these attributes do not directly
address environmental concerns. To effectively develop environmentally oriented metrics, we
needed to link the performance attributes to environmental impacts. We investigated several
options for managing the placement of environmental metrics, including creating a sixth
attribute, Environmental Impact, which would have its own definition. We wanted to avoid
changing any of the fundamentals of SCOR, however, and needed to avoid creating an attribute

that would be too easy to dismiss when performing analysis, thus negating the purpose of our
efforts. Table 3-2 shows the SCOR performance attribute definitions with their corresponding
environmental definitions. The environmental definitions serve only as a guide to assist our
development of metrics. They ensure the metrics for each process element are consistent; they
are not recommended for addition to the SCOR model itself.
Performance Attribute
Reliability

SCOR definition
The performance of the supply
chain in delivering: the correct
product, to the correct place,
at the correct time, in the
correct
condition
and
packaging, in the correct
quantity, with the correct
documentation, to the correct
customer.

Responsiveness

The velocity at which a supply

chain provides products to the
customer

Flexibility

The agility of a supply chain

in responding to marketplace
changes to gain or maintain
competitive advantage.

Cost

The costs associated with

operating the supply chain

Asset Management Efficiency

The effectiveness of an
organization
in managing assets to support
demand satisfaction. This
includes the management of

Environmental Definition
The ability to deliver the
correct product reduces waste
from product discards; reduces
air emissions and fuel use
from extra transportation for
returned products. Proper
documentation enables all
players of the supply chain to
keep better track of hazardous
materials or toxins that are
embedded in certain products;
thus allowing them to arrange
for proper storage, handling,
and disposal.
The environmental impacts
that affect the speed of
material movement, including
regulatory or pollution control
steps within a process.
The degree to which a firm
can meet the environmental
demands of its customers.
This pertains to the products,
their
production,
transportation
and recyclability, etc.
The costs of environmental
compliance and cleanup as
well as energy costs.
Managing assets in a manner
that reduces environmental
impacts and
reduces internal costs.

all assets: fixed and working

capital.

Areas to Green the supply chain:

Designing of products
Production
Materials purchase
Packaging
Warehousing
Logistics & Reverse Logistics

Benefits of Green supply chain management: (Emmett and Sood (2010) )

There are many benefits of Green supply chain management. Some of which are discussed in
bellow:
Positive impact on financial performance: Despite ample evidence to the contrary, there
persists a myth that going green costs additional expense. Some of the factors responsible for
persistence of this myth are inertia, the lack of a systematic approach and an unwillingness to
engage in sustained and changed thinking that is necessary to create a green supply chain.
However, the most fundamental benefit of Green Supply Chains is a positive long term net
impact on the financial performance of the organization. This has been proven by both analysis
and empirical evidence.
Sustainability of Resources: Green Supply Chains sponsor the effective utilization of all of the
available productive resources of organizations. By incorporating Green Supply Chain
Management thinking through their entire business decision making process, organizations may
now purchase green input resources that will flow through environmental friendly production
process to produce the desired green outputs.
Lowered Costs/Increased Efficiency: Green Supply Chain Management is the principle of
reducing waste by increasing efficiencies. Effective management of resources and suppliers, can
reduce production costs, promote recycling and also, the reuse of raw materials. Also, the
production of hazardous substances can be reduced, thereby preventing organizations from being
fined as a result of violating environmental regulations. Consequently, the relevant operational
costs are reduced whilst; the efficiency of using resources is improved.
Product Differentiation and Competitive Advantage: It helps an organization to position itself
and its products as environmentally friendly in the customers perception. Besides attracting new
profitable customers for organizations, it will give competitive edge over the competitors in the
market place. It will also strengthen the brand image and reputation in market place.

10

Adapting to Regulation and Reducing Risk: Organizations adopting Green Supply Chain
practices can reduce the risk of being prosecuted for anti-environmental and unethical practices.
A demonstrated effort towards creating an effective Green Supply Chain through the sustained
dedication of resources, activity, measurement and management protocol, will be highly regarded
in the event that any questions arise.
Improved quality and products: Organizations that produce products which are technologically
advanced and environment friendly will find this will enhance the brand image and brand
reputation in customers mind. Besides the above six benefits, there are additional advantages
that can be generated by GSCM:

Effective management of Suppliers

Dissemination of technology, advanced techniques, capital and knowledge among the
chain partners
Transparency of the supply chain
Large investments and risks are shared among partners in the chain
Better control of product safety and quality
Increased sales and revenue
Beneficial uses for waste

Challenges of Green supply chain Management: Overall, the green supply chain industry
sector has a number of challenges. However, it is first important to note that when we look at
supply chain, we start with product innovation and the marketing impact. We also end at the
supply chain with consumer products and product recall. Sales planning is a second function.
The third function would be manufacturing planning and manufacturing operations. We involve
procurement (the purchasing organization) and we look at the overall manufacturing and
transportation in that process.
5

Major Challenges: 5 major challenges of supply chain management are describes in

bellow:

1. Standard: Standards is the most confusing aspect. The major standards out there include the
U.S. Greenhouse Gas Protocol, SO standards, ISO 14065, an EPA standard called the
Greenhouse Gas Reporting Rule, and the Wal-Mart Sustainability Index. The challenge is that
each organization may have to comply with all of these different standards. They may comply
with only part, and the issue faced by manufacturers, retailers and supply chain professionals is
that the awareness or knowing what to go after is a challenge. The first step for someone new to
the sector is to understand what standard they need to comply with and understand what
direction to go. This needs to be done first.

11

2. Awareness: Three years ago one of the first things we picked up was a report called the
Carbon Disclosure report. Now I think its probably in its third iteration. Each year a different
consulting group goes out to actually write this report. They survey different organizations in
different categories. One of the things that is always constantly improving is the awareness piece
which assesses the level of awareness of the C-staffs. This awareness is improving but has been a
challenge since we got involved in 2007. The good thing is that the U.S. government is actually
forcing compliance. For example, in 2011 federal contractors, roughly about five hundred
thousand of them, will have to show evidence that theyve measured their greenhouse gas
emissions along with having a developing program.

3. Business Development: Social responsibility, competitive pressures, as well as lot of others

issues out there are hard to measure. Business case development is one of those things that
organizations are fighting through.
4. Sustainability program implementation: Implementation is a big challenge. We found that
the implementation is a challenge because the organizations dont know which standards to
pursue. I wrote a book to actually help organizations with implementation of the U.S.
Greenhouse Gas protocol and the January 2011 requirement for federal contractors to comply
with federal standards. In the book we divide implementation into three phases:
1.

Direct emissions

2.

Purchase energy (water included)

3.
All indirect emissions (all indirect carbon emissions, such as purchasing, outsourced
activities, travel, and looking at employee commute.
5. Communication Planning: The environmental sustainability green space is very broad. It
encompasses everything from renewable to various definitions and terms. Organizations have to
get the communication strategy under control pretty quick as they start to go out and implement
new programs

Conclusion: Global market demands and governmental pressures are driving businesses to
become more sustainable. Hence Green supply chain management (GSCM) initiatives are the apt
practices that can improve competitiveness and environmental performance leading to
sustainability. The subject launches a number of challenges for managers, academics and
researchers. GSCM involves a paradigm shift in which the issue of sustainability is no longer
seen as a source of costs, representing a potential source of competitive advantage for
companies. Manufactures today are under pressure to adopt these strategies to create an
environmental stance that is a driver for reduced costs and risks, increased revenues, and
improved brand image. Organizations which have taken up the environmental position go

12

beyond the basics of cutting waste and operating efficiently to adopt the strategy of Lean and
Clean to be really green.

References:
Beamon, B. M. (1999). Designing
management, 12(4), 332-342.

the

green

supply chain. Logistics

information

Emmett, S., & Sood, V. (2010). Green supply chains: an action manifesto. John Wiley & Sons.
Pagell, M. 2004. Understanding the factors that enable and inhibit the integration of operations,
purchasing and logistics. Journal of Operations Management, 22 (5): 459-487.
SCOR Model and the Green Supply Chain (PDF Download Available). Available from:
https://www.researchgate.net/publication/286060731_SCOR_Model_and_the_Green_Supply_Ch
ain[accessed May 9, 2016].
Srivastava, S. K. (2007). Green supplychain management: a stateoftheart literature
review. International journal of management reviews, 9(1), 53-80.
Walton, S. V., Handfield, R. B., & Melnyk, S. A. (1998). The green supply chain: integrating
suppliers into environmental management processes.International journal of purchasing and
materials management, 34(1), 2-11.
Walton, S. V., Handfield, R. B., & Melnyk, S. A. (1998). The green supply chain: integrating
suppliers into environmental management processes.International journal of purchasing and
materials management, 34(1), 2-11.
Zhu, Q., & Sarkis, J. (2004). Relationships between operational practices and performance
among early adopters of green supply chain management practices in Chinese manufacturing
enterprises. Journal of operations management, 22(3), 265-289.