Green Supply Chains

13 Pages Posted: 5 Apr 2010

See all articles by Andrea Larson

Andrea Larson

University of Virginia - Darden School of Business

Abstract

Unlike conventional supply chains, green supply chains are designed to ensure that value creation, rather than risk and waste, accumulates at each step, from design to disposal and recovery. As a primer, this note is suitable for undergraduate, MBA, or executive students exploring corporate response to environmental degradation, rising energy and materials prices, and the growing challenges of international global supply chains. Managing complex relationships and flows of materials across companies and cultures poses a key challenge for green supply chains. But “greening” a supply chain nets many benefits.

Excerpt

UVA-ENT-0136

October 21, 2009

Green Supply Chains

On February 1, 2007, Wal-Mart President and CEO Lee Scott announced his company's “Sustainability 360” program would expand Wal-Mart's sustainability efforts from its operations and into its supply chain by “tak[ing] in,” as Scott said, “our entire company—our customer base, our supplier base, our associates, the products on our shelves, the communities we serve.” Wal-Mart customers could now track the company's “Love, Earth” jewelry all the way back to the mine or buy fish certified by the Marine Stewardship Council. In 2006, he company expected to save about $ 25 million annually on diesel fuel after collaborating with suppliers to reduce packaging and to improve the efficiency of truck routes and loading procedures. Furthermore, Wal-Mart enlisted the nonprofit Carbon Disclosure Project, institutional investors with$ 41 trillion in assets as of September 2007, to help Wal-Mart's suppliers of DVDs, toothpaste, soap, milk, beer, vacuum cleaners, and soda to assess and reduce their carbon footprints. Indeed, with roughly 61,000 suppliers, two million employees, and 176 million customers per week, Wal-Mart's operations and those it spurred, from product design and resource extraction through final consumption and disposal, could massively affect societies and the environment. As such effects attracted attention, so, too, did the benefits of and the need for greener supply networks.

Green supply chains (GSCs) became Supply Chain Digest's number-one supply chain trend of 2007 as more companies such as Wal-Mart embraced them. Fully developed green supply chains consider sustainability for every participant at every step, from design to manufacture, transportation, storage, and use to eventual disposal or recycling. This attentiveness would reduce waste, mitigate legal and environmental risks, minimize and possibly eliminate adverse health impacts throughout the value-added process, improve the reputations of companies and their products (enhances brands), and enable compliance with increasingly stringent regulations and societal expectations. Thus green supply chains offer the opportunity to boost efficiency, value, and access to markets through improving a company's environmental, social, and economic performance.

Improving Upon Conventional Supply Chains

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Keywords: life cycle analysis design environment cradle to cradle reverse logistics

Suggested Citation

Larson, Andrea, Green Supply Chains. Darden Case No. UVA-ENT-0136. Available at SSRN: https://ssrn.com/abstract=1583323

Andrea Larson (Contact Author)

University of Virginia - Darden School of Business ( email )

P.O. Box 6550
Charlottesville, VA 22906-6550
United States

HOME PAGE: http://www.darden.virginia.edu/faculty/larson.htm

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