Green supply chain is gradually becoming a trend in an economy that is increasingly focused on the environment. This is a new development direction for businesses that want to create an eco-friendly brand and improve their company's competitiveness in a demanding economy. Let's learn more about this green logistics model with Viindoo in the following article.
1. What is a green supply chain?
Green supply chain is a logistics model that works effectively while ensuring environmental friendliness, as well as efficient use of natural resources. Green logistics management is the addition of environmentally friendly elements to the supply chain management process.
This supply chain development trend is associated with activities such as green design, green operation, green production, etc.
About green purchasing:
This is the purchase of raw materials and finished products that have little impact on the environment and human health. To see if these raw materials and finished products are really "green", businesses need to compare the correlation between them. For example, instead of buying disposable water bottles, you can use reusable bottles, etc.
About green production:
Businesses invest resources to develop environmentally friendly products. This production process is widely applied in renewable energy systems and “green” technology products. For example, the Japanese company Toyota has successfully created a car engine that can reduce CO2 emissions into the air.
Businesses are trying to "green" their production systems through reducing pollution, industrial waste by cutting the use of natural resources, trying to reuse what is considered waste, and minimizing the amount of emissions released in the process of creating products.
For example, BMW has applied a green logistics model through programs to recycle solid waste and reduce the need for landfill, creating a water conservation initiative that saves the earth more than 9.5 million gallons of water every year.
Green supply chain
>>>> Learn Details: What is a supply chain? Components in the supply chain
2. The role of green logistics
The role of the supply chain is very large, specifically:
For the environment:
- Reduced prodigality
- Reduced waste
- Reduced pressure on the environment
- Improved production processes
- Reduced raw material costs
- Increased competitive advantage
- Increased flexibility
- Improved long-term relationships with partners
- Protected human health
- Less negative impacts of waste on the community
- Fulfilled corporate responsibilities to the community
3. Components in the green supply chain
Green supply chains have become an important part of every business's implementation of social responsibility. The ultimate and most important goal of green supply chain management is to optimize the relationships between economy, society and the surrounding environment. Therefore, businesses need to associate sustainable development goals with the effective and rational use of natural resources in an environmentally friendly direction.
Green Supply Chain includes:
- Searching and selecting raw materials from suppliers that ensure standards of environmental friendliness and health safety for consumers.
- Using a reverse supply chain strategy to cut costs, making efficient use of raw materials, and ensuring that goods are handled appropriately when problems arise.
- Creating an optimal storage system in terms of energy use.
- Searching for a variety of methods to reduce waste in packaging and product packaging to minimize the discharge of hazardous substances into the environment.
- Combining many methods of transporting goods and giving priority to the use of methods that limit the amount of harmful gases released into the environment.
Green supply chain consists of many components
4. Criteria for evaluating green logistics chain
A supply chain is assessed as "green" and environmentally friendly when it meets 2 mottos and 3 criteria according to the 2E-3R model.
- Efficiency: Cut down on input resources and ensure energy saving
- Environment-friendly chain: Ensure environmental friendliness throughout the supply chain
- Reuse: Reuse waste products in production and distribution.
- Recycle: Recycle the waste generated during product production and circulation.
- Reduction: Reduce harmful emissions and reducing environmental pollution
Green supply chains must meet many criteria
5. Some businesses that apply green supply chains
IKEA is a multinational brand specializing in manufacturing and home appliances from Sweden. IKEA creates a global appeal with a variety of models, impressive designs and environmental friendliness.
IKEA tries to apply green supply chain to business processes
IKEA has made efforts to apply the green supply chain to its business, specifically:
- Non-polluting materials
- Safe and environmentally friendly production process
- Efficient management in packaging and transportation processes
Vinamilk is the leading brand specializing in supplying the dairy products in Vietnam. Vinamilk holds the largest market share in the domestic dairy industry today. Enterprises are trying to create an environmentally friendly green supply chain.
- Clean, environmentally friendly raw materials.
- Modern, closed supply process that does not harm nature.
- Intelligent transportation and distribution process, which can minimize the CO2 emissions into the environment.
Vinamilk always chooses clean and environmentally friendly raw materials
Walmart is known as a multinational retail company with more than 12,000 stores spread across 28 countries around the world. At Walmart, consumers can find most of the items they need. And this company is also caring more about the environment by bringing a green supply chain with the following criteria:
- Efficient management to supply and choose environmentally friendly raw materials.
- Environmental-friendly packaging process that causes less environmental pollution.
- Transport operations that can limit harmful emissions.
- Reversed logistic model to cut costs.
- Clean energy sources in production and distribution of products.
In the above post, Viindoo has compiled the relevant information of green supply chain. Hopefully through the article, businesses will understand more about the role and benefits of this supply chain and pay more attention to the environment during production and business.