Group 8b Green Supply Chain

Green Supply Chain

Group 8B :

Anurag Singh Ashwin Unnikrishnan Jatin Mishra Siddharth Mishra Shruti Agrawal

Green Supply Chain What

Why

Who

•Need and awareness of environment

Where

•Green Supply Chain leverages role of environment in Supply •Retailthe Industry friendliness Chain Value Creation. At all stages of supply chain •IT Industry •Ill effects of global warming • Factory •Food & Beverage Industry •Product differentiation and competitive •For the benefit of the employees , community and the environment •Distributor •Power Plants advantage •Whole-seller •Manufacturing Plants •Government •The environmental regulations impact at each Supply •Retailer •Finance Industry Chain level is examined for reduction•Cost Savings

•Improved public image

GSC Metrics The Greeno-meter  Measurement done at all levels of a supply chain • Energy and Water savings in factories • Fuel savings in transportation and logistics • Savings in usage of environment friendly packaging material • Savings by recycling waste • Carbon footprint • Avoided landfill • Regulatory Violations

The Stats … How effective Green supply chain have been??

Financial benefits timeline for green supply chain initiatives

Success Factors • Strategic Alignment – Starting from the top

• Measure for value not just cost • Focus on Business Value

How to Go Green.. The supply chain way ??  Design products using environment friendly raw materials  Choose the right suppliers  Make the manufacturing process efficient:  Reduce energy consumption, harmful emissions  Decrease the cost of scrap and material losses  Convert wastes to by-products

How to Go Green?? Contd.  Reduce the production of hazardous materials  Recovering and recycling materials through take back programs  Seeking advice from organizations like WWF to improve processes  Certifying products and spreading awareness among consumers

Wal- Mart’s Example  1989: Campaign to convince suppliers to provide environmentally safe products (biodegradable and recyclable packaging)  2005: Lee Scott committed 3 goals – • To create zero waste • To be supplied 100% by renewable energy • To sell products that sustain environment and resources

Key efforts by Wal-Mart  Hybrid diesel-electric trucks and refrigerated trucks (25% fuel efficiency, 400,000 tons CO2)  Implementation of web based scorecard by the suppliers  Knowledge and process assistance through non profit in its networks (e.g. Beijing Olympics)  Commitment to large volumes (e.g. Organic cotton)  Buying & selling 12 week’s RoHS compliant PCs from Toshiba

Impact on the bottom line of the companies  Examples of how green supply chain has affected the bottom line i.e. financial performance of companies: • Texas Instruments: Saves $8 million each year by reducing its transit packaging budget • Pepsi-Cola: Saved $44 million by switching from corrugated to reusable plastic shipping • GM reduced its disposal costs by $12m with reusable container program with the suppliers

Is this enough? How about sustainability?

Reference- http://www.greenbiz.com/images/090514-supplychain-full.jpg

Trade Off- Various Levers •Design-Material Selection, Disposability, Recyclability, Energy Efficiency •Packaging-Reuse/Recycling, Materials •Processes-Manufacturing, Transportation •Components-Substitutes, Sourcing, Locations •Energy-Fossil Fuel Based/Renewable Source •Inventory Policy-JIT/Vendor Managed, Frequency •Transportation-Modes, Shipment Frequency, Load Consolidation Reference- http://www-05.ibm.com/innovation/uk/green/pdf/SOLUTION_OPERATIONS_mastering_carbon_management.pdf

Trade-Off Logistics and Distribution Shipment Consolidation- JIT and direct customer delivery policy requires smaller loads that are shipped more frequently and while this increases the responsiveness and reduces inventory it increases the carbon footprint. A change in the overall policy of fewer but large shipments would effectively solve the problem. However this would come at the cost of increased storage and inventory levels. Modes of Transportation- Company may now have to choose between low carbon transportation viabilities. This would also include optimizing the FTL, vehicle requirements(Speed and Driving patterns). Network Optimization-Will have to be relooked at. The new strategy would have to address carbon variable and the impact on various operations(facility placement/transportation/distribution etc).

Reference- http://www-05.ibm.com/innovation/uk/green/pdf/SOLUTION_OPERATIONS_mastering_carbon_management.pdf

Best Practices Aligning Green Goals with the Bottom Line Improving Processes using Green Supply Chain Suppliers and Reusability

Reference- http://logistics.about.com/od/greensupplychain/a/GSC_Best_Prac.htm

Thank You JATIN

SIDDHARTH SHRUTI

ASHWIN

ANURAG