In recent years, green supply chain management (GSCM) has become a critical factor in increasing the competitive advantages of businesses. This article will look into the development of sustainable green supply chain management and businesses across different industries that can benefit from adopting GSCM.
What is Sustainable Green Supply Chain?
Sustainable green supply chain has been receiving spotlights on the international stage. According to the United Nations, it is the management of environmental, social, and economic impacts, and the encouragement of good governance practices, throughout the life cycles of goods and services.In the past few years, a lot of businesses around the world had begun to incorporate ethical and environmental responsibilities into their business strategies and everyday operations. While the trajectories of the supply chain are evolving, there are emergences of different green supply chain management (GSCM) solutions to help revolutionize the management of today’s global supply chains. The following will dive deeper into the benefits for businesses to adopt a sustainable green supply chain approach, examples of some pioneers in this field and how these green supply chain management strategies ease the headache of businesses during their journeys of going “green”.
Why is Sustainable Green Supply Chain so important for businesses across different industries?
To business owners, efficiency and productivity are the keys to growing a profitable business. For years, the majority of companies, particularly in the consumer product sector, are not paying adequate attention to the adverse social and environmental impacts posed by their suppliers. Most of the time, profitability outweighs sustainability. While it’s true that implementing green supply chain management (GSCM) could be costly in the initial stage, it will eventually benefit the companies in the long run.In recent years, companies of different sizes are embarking on the journey towards a more sustainable supply chain. Not only does this trend alleviate the social and environmental risks, but such practice can also bring enormous benefits to businesses across industries, including economic returns and positive brand identity.The following points are summarized with reference to publications published by EY named “The state of sustainable supply chains” in 2016 and ‘True Gen’: Generation Z and its implications for companies by McKinsey in 2018.
- Comply with International Principles and Standard
- In the face of increasing scandals around the world concerning corporate ethics and corporate governance, many governments have responded with greater oversight of corporate activities. A lot of Multinational Corporates (MNCs) are striving to become the forerunner on the world stage by coming up with holistic sustainable strategies to comply with international principles and standards.
- Increase Profitability
- One of the essences of sustainable green supply chain management is to streamline business operations, such as better use of sustainable materials, ensuring a safe working environment, lean production, and quality management, etc. These approaches would result in cutting down unnecessary operational costs. By reducing costs, it also means increasing your ROI and revenue. In the long run, it translates into a higher valuation for businesses.
- Fulfill Corporate Social Responsibility
- A sustainable green supply chain has many dimensions. Other than the environmental aspect, issues around fair labor practices, anti-corruption, and human rights are also of paramount importance in practicing sustainable green supply chain. By incorporating these ethical practices, companies can rule out investors’ concerns over these topics and ensure businesses are running with efficiency and transparency.
- Build a Positive Brand Image
- There is growing consumer support for the improvement of sustainability in global supply chains. Not only does sustainable green supply chain practices streamline business operations and improve the quality of your product, but it can also help with your customer acquisition. Adopting green supply chain management is a powerful way to construct a positive brand image and create a unique or at least favorable brand identity in response to your green initiatives. In doing so, businesses can enhance their brand reputation, hence gaining consumers’ trust and loyalty in the long run.
- Encourage Corporate Innovation
- By implementing green supply chain management, companies are injecting new values and visions within the businesses. It can bring a positive impact to the company culture, where employees and managerial staff are more willing to innovate and explore different opportunities to develop new products and services revolving around sustainability.
