In today’s context, being green is a necessity for all participants in logistics and supply chain management. Those companies that have adopted a green approach are convinced that being environmentally conscious is a win-win for the business and environment. Some of the key drivers of green logistics supply chain management are as follows:
- Mounting energy costs—Increasing power and fuel costs, together with the cost of related raw materials used in infrastructure building and functioning has led to chances for looking into green alternatives that can significantly lead to a reduction in the price. Reducing the power consumed by IT apparatus, energy-efficient lighting and cooling, substitutive energy sources, recycling, and tele-presence can help develop the bottom line in the business. Many corporate policies now target for decreasing their impact on the surroundings.
- Climate change—Global warming impacts weather, ice caps, and glaciers. On an average, mountain glaciers and snow cover have reduced in both the northern and southern hemispheres. This widespread lowering in glaciers and ice caps has contributed to observed sea- level rise.
The environmental policies in diverse geographies can be largely classified as regulatory (bans, permits, and standards), financial (gains for adherence and reduction), and educational (environmental reporting, audits, product labeling, and so on). The manufacturing companies are looking for a greener supply chain to reduce the environmental impacts and offer an eco-friendly service to end consumers.
- Changing customer demand—Consumers have become conscious about the environment. They want that the process by which the products are manufactured and delivered to them should create minimum impact on the environment. In addition, the demand of environmentally friendly products is increasing. As per Dr. David Suzuki and Dr. Faisal Moola: “protecting our planet is no longer seen as a fringe activity. Most people now consider themselves to be environmentally aware and are taking steps to help.”
- Regulatory compliance—Most of the countries have evolved policies and enacted laws to prohibit products and processes harming the environment. The destructive materials and polluting processes are banned. In this era of globalization, it has become important for the companies to comply with the regulations of the concerned countries.
- Competitiveness—Corporations across the globe are now adopting green policies, practices, and procedures to remain competitive in the market and also be acceptable by the consumers. Consumer forums are compelling corporation to be green in all their activities, processes, and practices. Adoption of green principles and best practices like recycling, reducing energy consumption, etc., can significantly reduce costs and improve operational efficiency. The rising cost and increasing demand of fuel is further acting like a stimulus for the implementation of green supply chain management.
Source: Sople V.V (2013), Logistics Management, Pearson Education India; Third edition.
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