Benefits of a Green Supply Chain
“Man has lost the capacity to foresee and to forestall. He will end by destroying the earth.” ~Albert Schweitzer Currently, our world is experiencing radical changes in the earth’s ecosystems due to man’s misuse and neglect. Human beings have disrupted the balance between the energy systems and all living species. Therefore, our entire global ecosystem is deeply flawed and unbalanced. Al Gore believes, “The emergent power and accelerating momentum of Earth Inc., the rapid growth of destructive resource-consumption patterns, the absence of global leadership, and the dysfunctional governance in the community of nations have all combined to produce flows of pollution that are seriously damaging the integrity of the planetary climate balance that is essential to the survival of civilization” (Gore, 2013, p.280). Part of the solution to the problem will be to integrate a plan for a company’s supply chain operation to become more “green” to help in “attracting customers who value sustainability and making the world more sustainable” (Chopra & Meindl, 2013, p.501). Green Supply Chain Management (GSCM) may help companies achieve several benefits in their bottom lines: economic, environmental and social. GSCM is defined as “an increasingly widely-diffused practice among companies that are seeking to improve their environmental performance. The motivation for the introduction of GSCM may be ethical (e.g. reflecting the values of managers) and/or commercial (e.g. gaining a competitive advantage by signaling environmental concern)” (Testa & Iraldo, 2010, p.953). There are two basic factors which determine why a company adopts a green supply chain. External factors are “mostly linked to stake-holder’s pressure” and internal factors “are a specific business-led strategic process.” (Testa & Iraldo, 2010, p.954). External factors may be influenced by three institutional mechanisms: “normative, coercive and mimetic” (p.954). A normative mechanism may include new customer requirements. A coercive mechanism may be the cause of an enforced environmental regulation or pressure from an environmental interest group. The “imitation-led” or mimetic mechanism occurs “when external factors become so strong that they induce the adoption of GSCM” (Testa & Iraldo, 2010, p.954). GSCM practices may be a result of a combination of these external/internal factors. There are some negative implications which may result from GSCM practices. First of all, GSCM is an expensive approach and the benefits may not be seen in the short run. Secondly, “GSCM cannot support competitiveness in the short run as it should be seen as a long term process” (Testa & Iraldo, 2010, p. 962). Thirdly, successful GSCM practices entail the requirement of involvement of business partners in collaboration. A study indicates in order to produce environmental improvement results: “The more a company is able to involve its business partners in the development of co-operative environmental plans, the more it is able to achieve the expected results and improve its performance. The most significant consequence concerning green management strategies seems to be that a real “environmental quality” of a product or service cannot be guaranteed to the customer or to the final consumer if a company does not make efforts to stimulate and involve its suppliers (and partners in other phases of the product life cycle) in its improvement actions” (Testa & Iraldo, 2010. para 8). It is essential for a supply chain to evaluate the possible negative repercussions of GSCM practices. The world we live in is interconnected through products, services and distribution which increase the demands for companies to develop closer relationships between one another. From an economic perspective, a company will want to find their “sustainable sweet spot”. “The sweet spot embodies the literal...
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