Designing the Green Supply Chain

Nowadays green logistics is an often heard buzz-word, but already eleven years ago Beamon published an article about the challenges with creating Green Supply Chains.

Traditional vs. Extended Supply Chain

A traditional supply chain has been mostly a one-way street. The issues analyzed were eg. the number of echelons, buyer-supplier relationships and inventory levels.

As a basis the extended supply chain has to consider at least the recycling / re-use and remanufacturing processes to be complete. More important though the strategy of the company has to be adjusted to include environmental aspects as waste, resource / energy use and pollution as well.

Emerging Risks & Performance measures

These new aspects also come with certain problems.

1. The uncertainty associated with the replacement/recovery process (in time requirements, quality, and quantity of returned products, packaging, and/or containers)
2. The reverse distribution process itself (collection and transportation of used products, packaging, and/or con- tainers)

In addition new performance measures beside the traditional customer satisfaction and cost have to be established to assess and manage the environmental aspects. Measures have to be created which can be used to estimate the total impact of the product life cycle.

Evolving to a Green Supply Chain

Beamon suggests the following steps to evolve into a green supply chain:

1. Identify processes
2. Develop a performance measurement system
3. Measure the supply chain system
4. Prioritize
5. Develop alternatives and select approach
6. Establish auditing and improvement procedures

Conclusion

I was thinking a lot about the risk measures suggested in this article. The concept of Beamon concludes with steps on how to evolve to a green supply chain (not as the title suggest “design” it). For this “re-design” task, where each single process has to be analyzed, a detailed measuring system might be adequate. But how should you design a new green supply chain from scratch?