GREEN SUPPLY CHAIN MANAGEMENT: AN ENVIRONMENTAL APPROACH FOR MANUFACTURING INDUSTRY

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1 GREEN SUPPLY CHAIN MANAGEMENT: AN ENVIRONMENTAL APPROACH FOR MANUFACTURING INDUSTRY Amit Kr.Tanwer 1 ; Dr.D.R.Prajapati 2 ; Dr.Permider Jit Singh 3 1 Research Scholar, 2 Astt.Professor, 3 Assoc.Professor, Department of Mechanical Engineering, PEC University of Technology, Chandigarh, India 1 bkamitroorkee@gmail.com; 2 drprajapati@pec.ac.in; 3 perjay2000@yahoo.com ABSTRACT The supply chain has been traditionally defined as a one way, integrated manufacturing process where in raw material are converted into final products, then delivered to customers under this definition, the supply chain includes only those activities associated with manufacturing, from raw material acquisition to final product delivery. However, due to recent changing environmental requirements affecting manufacturing operations, increasing attention is given to developing environmental management (EM) strategies for the supply chain. This research investigate the development in environmental supply chain and present overview of GSCM with four key themes and describe the elemental differences between extended and traditional supply chain and develop a general procedure towards achieving and maintaining GSCM. Keywords: Green Supply Chain Management (GSCM), Green Design, Life cycle analysis (LCA), Reverse Logistics (RL), Performance Measure 1. Introduction In global scenario, the customers and communities are demanding the environmentally friendly products. This pressures and extremely serious the manufacturing industries for green practice from raw material to finished product and up to the end user to disposal[7]. we live in a decade where environmental sustainability has been an important issue to business practice. Since the early 1990's, manufacturers have been faced with pressure to address environmental management (EM) in their supply chain [28]. This paper will provide over view of the green supply chain management. the key theme that came out of the green supply chain management literature. over the past twenty years are the concept green design, green operations, reverse logistics, waste management and green manufacturing [11, 25]. The purpose of this paper; however is to discuss some of these issues and provide an overview of the academic perspective of the green supply chain management. This paper will provide a brief introduction to traditional supply chain management & extended supply chain management. 2. Overview of Green Supply Chain Green supply chain redefined as the new challenges to manufacturing and production enterprises worldwide. The challenge is to develop ways in which industrial development and environmental protection can symbiotically coexist. The first step in meeting their challenge is to re-define the basic structure of the entire supply chain, by accommodating environmental concerns associated with waste and resource use minimization [5]. GSCM Defined: * GSCM is defined as: Green supply chain management (GSCM) = Green purchasing + Green manufacturing/material management + green distribution/marketing + Reverse logistics [12]. * Green supply refers to the way in which innovations in supply chain management and industrial purchasing may be considered in the context of the environment. Amit Kr.Tanwer; Dr.D.R.Prajapati; Dr.Permider Jit Singh Page 134

2 Table 1 The chronology of green supply chain management S. No. Broad Area of GSCM Author,year Contribution ment 8. Waste manage ment Sarkis & Cordeiro [22], Nagorney & Toyasaki [16] reducing waste Trends of waste management 1. GSCM Fortes[10] First Article on GSCM developed by Kelle & Silver (1998) on optimal forecasting system for org. 2. Green Design 3. Green Design 4. Green Design/ LCA Navin Chandra's [17] Ashley[3], Allenby & Richards [1], Zhang, Kuo et al. [29], Arena et al.[2], Beamon[5], De Ron Penev[8] Article on need for a green design to reduce the impact of product waste. Expanded the frame work of green design Life cycle analysis is frame work of green design 9 GSCM Olugu et al.[19], Shang et al.[23], Ninlawan et al.[18], Assessing the performance of the supply chain 3. Supply Chains and Their Component 3.1 Traditional Supply Chain The traditional supply chain is defined as an integrated manufacturing process where in raw materials are manufactured into final products, then delivered to customers. figure 1 illustrates the structure of the traditional supply chain. Design, modelling & analysis of the traditional supply chain has primarily focused on optimizing the procurement of raw materials from suppliers and the distribution of products to customers. The issues considered with in the scope of analysis include [4]. 5. Green operati ons/ RL Tibben & Limbke[27], Pohlen & Farris[20], Stock[26]. Case studies on reverse logistics, plastic & Bottle, recycling Fig. 1 The Traditional Supply Chain 6. Green operati ons/ RL 7. Waste manage Carter & ellram [6], Shih [24], Nagorney & Toyasaki [16],Min et al.[15] Roy & Whelan [21] Academic perspectives of reverse logistics Created a standardised model for Production/distribution scheduling : scheduling the manufacturing and/or distribution schedule. Inventory Levels: determining the amount and location of every raw material, sub assembly and final assembly storage. Number of stages: determining the no. of stages that will comprises the supply chain. This involves either increasing or decreasing the chain's level of vertical integration by combining stages or separating stages respectively. Amit Kr.Tanwer; Dr.D.R.Prajapati; Dr.Permider Jit Singh Page 135

3 Distribution centre (DC)- customer assignment : determining which DC(s) will serve which customers Plant -product assignment: determining which plant (s) will manufacture which product Buyer- Supplier relationship: determining and developing critical aspects of the buyer-supplier relationship Product differentiation step specification: determining the step with in the process of product manufacturing at which the product should be differentiated. 3.2 The Extended Supply Chain The ultimate objectives of extending the traditional supply chain is to allow consideration of the total immediate and eventual environmental effects of all products and process(known as product & process stewardship). The evolution of manufacturing enterprises from traditional, problem solving environmental management techniques to fully integrated environmental management (EM). Thus in the earliest evolutionary stages of environmental management, organizational separate environmental performance from operational performance. The fully integrated extended supply chain contains all of the elements of the traditional supply chain, but extends the one way chain to construct a semi closed loop that includes product and packaging recycling, reuse and/or remanufacturing operations[5]. Fig. 2 The Extanded Supply Chain The extended supply chain is illustrated in fig.2. Figure -2 represents the traditional supply chain links as solid lines, and the links corresponding to the extended supply chain as dashed lines. The "W"s enclosed by diamonds represents waste materials. The major component of GSCM are such as: Inbound logistics, outbound logistics, packaging and reverse logistics.lin et al.[14] 3.3 Recycling and Re-Use Recycling is the process of collecting used products, components and/or material from the field, disassembling them (when necessary), separating them into categories of like materials (e.g. specific plastic types, glass, etc.) and processing into recycled products, components and/or materials. In this case, the identity and functionality of the original materials are lost. The success of recycling depends on: 1) whether or not there is a market for the recycled materials, and 2) The quality of the recycled materials (since most recycling processes actually reduce the value of the material from its original value, as the material itself has degraded) Re-use is the process of collecting used materials, products or component from the field, and distributing or selling them as used. Thus although the ultimate value of the product is also reduced from its original value, no additional processing is required. 3.4 Remanufacturing The process of remanufacturing consists of collecting a used product or component from the field, assessing its condition, and replacing worn, broken, or obsolete parts with new or refurbished parts. In this case, the identity & functionality of the original product is retained. The resulting (remanufactured) product is then inspected and tested, with the god of meeting or exceeding the quality standards of brand new products. Thus, in some cases, the remanufactured product can exceed the original product in quality and/or function. This is due to the fact that during the remanufacturing process, the design of the replaced parts and/or components may have been improved since the original product was manufactured. The unique advantage of remanufacturing is that, unlike recycling and re-use, the process of remanufacturing does not degrade the overall value of the materials used. 3.5 Inbound Logistics This address the delivery and purchase of material. This component will be influenced by supplier and vendor management issues. Lin et al.[14] 3.6 Outbound Logistics Amit Kr.Tanwer; Dr.D.R.Prajapati; Dr.Permider Jit Singh Page 136

4 This component includes transportation warehouse, and distribution planning. out bounded logistics is more concerned with customers requirements and finished goods. Lin et al.[14] 3.7 Green Design Green design is an important sub topic to green supply chain management. It is about designing a product or a service that encourages environmental awareness [10]. Fiksel [9] argues that organizations have definite potential to become eco-friendly towards product remanufacturing. 3.8 Life-Cycle Analysis Life cycle analysis is an important sub-concept to green design. Life cycle analysis was introduced to measure environmental and resource related products to the production process [25]. This measurement involves in stages from extraction of raw material, production, distribution, and remanufacturing, recycling and final disposal[10] 3.9 Reverse Logistics Reverse logistics (RL) is the opposite of traditional or forward logistics [5]. Collection is the first stage in the recovery process. Products are selected, collected and transported to facilities for re-manufacturing [25]. Jayraman & Luo [13] claims that customers on average return about 6% of the products they buy. These products can be from plastic & bottles to boxes. Organizations are able to cost-save if they can capture this 6% return from the consumers. Srivastava [25] suggested a model to manage product returns and the findings shows that reverse logistics can cost save only if done correctly. 4. Performance Evaluation of GSCM An important component in supply chain design and analysis is the establishment of appropriate performance measures. A performance measure, or a set of performance measure, is used to determine the efficiency and/or effectiveness of an existing system, or to compare competitive alternative systems[5]. 4.1 Procedure for Achieving Green Supply Chain Management In order to achieve the green supply chain, manufacturing organizations must follow the basic principles established by ISO In particular, organization must develop procedures that focus on operations analysis, continuous improvement, measurement, and objectives. An implementation procedures for extending the supply chain includes the following tasks: (i) Identify process: for each product with in the supply chain, identify all inputs, outputs, by products, and resources. (ii) Develop a performance measurement system: Given the complexity of most supply chains, a single performance measures will likely be inadequate in assessing the true performance of the supply chain. Thus, a system of performance measures will be necessary such a performance measurement system must include measures for the three environmental categories as i) waste (all forms) ii) energy use iii) resources use ( material consumption) as well as operational measures. (iii) Measures the supply chain system: Calculate the actual composite performance at each step in the supply chain process for each product. The composite performance, therefore, may be a single numerical value, or a vector of numerical values. (iv) Prioritize: prioritize the process step in order of increasing composite performance. (v) Develop alternatives & select approach : Develop alternatives for performance improvement and select a preferred approach. (vi) Establish auditing & improvement procedures: establish schedules and procedures for auditing & continuous improvement, including emergency. Conclusion The supply chain concept grew out of the recognition that the process of transforming raw materials into final products and delivering those products to customers is becoming increasingly complex. The extension of the traditional supply chain requires the establishment & implementation of new performance measurement system. This system will enable organization to become and remain competitive while achieving sustainable process. References 1. Allenby S. and Richards D(1994), "The greening of industrial eco-system " Washington : National Academic Press. 2. Arena U., Mastellone M.L. & Perugini F.(2003), "The environmental performance of alternative solid waste management options: A life cycle assessment study" Chemical engineering journal, vol.96, pp Amit Kr.Tanwer; Dr.D.R.Prajapati; Dr.Permider Jit Singh Page 137

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6 25. Srivastava S.(2007), "Green supply chain management: A state of the art literature review", International Journal of management review, vol.- 9,No.-1, pp Stock J. (1998), " Development and implementation of reverse logistics programs" Oak 27. Tibben-Lembke R.S.(2002), "Life after death: Reverse logistics and the product life cycle " International Journal of physics distribution & logistics management, vol.-32, pp Wu H.J. and Dunn S.C.(1995),"Environmentally responsible logistics system", International Journal of physics distribution & logistics management, vol.25, pp Zhang H.C., Kuo T.C., Lu H. & Huang S.H.(1997), " Environmentally conscious design and manufacturing : A state of the art survey" Journal of manufacturing system, vol.16, pp 3TT Amit Kr.Tanwer; Dr.D.R.Prajapati; Dr.Permider Jit Singh Page 139