To improve the increasingly devastated environment, the global economy is paying more attention to environmental protection activities. Green economies are the target to be realized for developed countries. At that time, the Green Supply Chain is considered a new development direction for businesses focusing on building an environmentally friendly brand image. What is a green supply chain? Let's GREEN IN Find out through the article below!
1. Concept of green supply chain
Green Supply Chain is understood as the combination of environmentally friendly factors into the supply chain management process, at the same time, products in use can be transformed into recycled items in today's life. The process of developing a green supply chain will always go hand in hand with the management of links directly related to it, typically green design, green purchasing, green operations, green production, green input - output logistics, etc.
Examples of green purchasing: Purchasing products that are environmentally friendly and do not harm human health when comparing these products with competing services/products serving the same purpose. You can buy and sell energy-saving products, limit the use of disposable products.
Example of green manufacturing: Companies that create environmentally friendly products, focusing on applications in renewable energy systems and clean technology equipment. For example, Toyota has developed engines that help reduce CO2 emissions, contributing to environmental protection.
2. Key components of a green supply chain
For businesses, green supply chains play an irreplaceable role in fulfilling social responsibilities. The main goal of green supply chain management is to help optimize the relationship between the economy, society and the environment.
Key components of green supply chain management include:
- Search and select raw materials from suppliers that comply with regulations and standards on environmental protection and ensuring human health.
- In order to minimize costs, optimize raw material sources and ensure the handling of goods when problems occur, it is necessary to apply a reverse supply chain strategy.
- Build warehouse systems and inventory management software with the goal of optimizing energy usage.
- Seek innovative solutions to reduce waste from product packaging and minimize the release of toxic substances into the environment.
- Flexibly combine many modes of transportation, prioritizing vehicles that help reduce toxic emissions, contributing to environmental protection.
3. Distinguishing the concept of green supply chain from traditional supply chain
| Green supply chain | Traditional supply chain | |
| Impact | Aiming for sustainable development, minimizing environmental pollution and applying advanced technology. | Financial efficiency and time are the two factors that are given top priority, not focusing on the process of repelling negative impacts on the environment. |
| Risk management | Incorporate strategies to minimize environmental risks and comply with sustainable development regulations. | Mainly managing financial and production related risks, with little concern for environmental factors. |
| Supply chain | Collaborate with partners/suppliers to share sustainable values. Build equity in the chain. | Mainly focused on reducing costs and improving efficiency, with little regard for social and environmental factors. |
| Technology applications | Using modern technology to manage transportation information, optimize supply chain with advanced solutions. | Technology is applied but modern solutions have not been fully exploited, mainly focusing on basic needs. |
4. Benefits of green supply chain for businesses
It can be seen that green supply chain will have a huge impact on businesses that want to build an environmentally friendly brand image. Some of the great benefits of this green logistics model include:
4.1. For the economy
The first benefit of a green supply chain is that it can optimize business operations to increase productivity, reduce unnecessary waste, and promote economic development. Not only that, thanks to a green supply chain, the use of resources becomes more optimal, minimizing waste and saving input material costs.
In addition to the above benefits, when applying green supply chains, businesses can also expand their access to many new markets, increase brand image recognition as well as increase competitiveness in the market.
This model also helps businesses deploy flexible production processes that can easily adjust to market fluctuations and customer needs. At the same time, businesses can build long-term relationships with suppliers and partners thanks to transparency and commitment to sustainable development.
4.2. For the environment
When deciding to follow a green supply chain, businesses will carry out activities that minimize waste through the manufacture of items and the use of recycled materials. In addition, implementing solutions such as cutting greenhouse gas emissions and using energy efficiently helps limit negative impacts on the natural environment.
4.3. For society
Quality products produced through the development of green supply chains help ensure the health of consumers. In addition, reducing pollution helps limit the harmful impact of production activities on the community. In addition, businesses implementing green supply chains often organize many volunteer activities and social support to demonstrate their responsibility to society.
5. Conclusion
The above article has helped you learn about green supply chains. Hopefully our information will be of some help to you as well as contribute to the process of environmental protection. Don't forget to follow the next articles at GREEN IN for more updated information!