Advantages and Disadvantages of Green Supply Chain Management (2024)

In present times the increase in environmental issues, environmental degradation, air pollution, and global warming has become a matter of concern for business organizations, societies, and governments in Singapore.

Consequently, green supply chain management (GSCM) is a new concept adopted by Singaporean companies for greening the supply chain.

What is meant by the Green supply chain?

The concept of a green supply chain is the process of using inputs that are environmentally friendly and transforming them into outputs through change agents that can be reused and reclaimed at the end of the product life cycle.

The green supply chain will include the manufacturing process, material selection and sourcing, product design, and final delivery of the product.

For example, DHL in Singapore has adopted a green logistic model recently.

What are green supply chain management practices adopted in Singapore?

Some popular green practices are

• Green material Sourcing: purchasing materials that have eco-friendly characteristics such as recyclability, reusability, and non-use of hazardous chemicals.
• Green Marketing: using products that have a minimum negative effect on the environment’s beauty.
• Green management: it will help with reducing carbon emissions, environmental compliance improvement, increasing efficiency, and achieving societal commitment.
• Green manufacturing: it improves the financial, environmental, and operational performance of firms. It reduces the harmful impact of manufacturing.
• Green warehousing and distribution: it will reduce waste, value addition, help in energy reduction by using green products.
• Ecological design: green components and materials incorporating cleaner technology and green design of products will improve the environmental performance. It should be in accordance with the environmental compliance requirements laws of Singapore.
• Reverse logistics and Green transportation: remanufacturing, recycling, and reusing are the reverse logistics practices that help in cost reduction. Green Logistics will help the firm in providing improved quality.
• Biofuels and renewable energy: using these can help in economic growth and obtain a sustainable environment. Logistics consume greater energy therefore these can help reduce carbon emissions thereby improving enterprise profitability.

The most significant factor is the cost minimization adopted by the firms in making the supply chain operations green.

Green practices provide an opportunity for the company in Singapore to capture new exports and new markets to the pro-environmental countries such as the UK, Germany, the USA, and others.

Advantages of green supply chain management

Moving towards adopting a green supply chain would be suitable for your business as it

1. Minimize pollution: to minimize energy and pollution and hazardous products must not be disposed of in an open area.
2. Reduced waste: by the adoption of lean policies and improved process management, managers can eliminate waste.
3. Lower transportation cost: to reduce Greenhouse gas emissions, Singaporean companies will cut down shipments that will use fewer fuels and will minimize the tear and wear of trucks.
4. Tax benefits and rebates: implementing solar panels and water heaters qualify for purchase price rewards and tax credits. This assistance would be provided by local municipalities, state governments, electric companies, and water districts.
5. Decreased environmental impact: using long-lasting products, recycling paper, less electricity, reducing trash, and less water will benefit the environment and the business.
6. Improved public image: generating positive Public Relations by promoting the environmental contribution of your organization through press releases. Including the green initiatives on ads and product packaging. It will earn you the customer attention who prefer green products.
7. Reduced utility cost: using energy-efficient technology such as CFL/ LED bulbs, low-flow toilets and water conservation will result in cost savings.

Disadvantages of Green Supply Chain Management

Going green helps in protecting the natural system of the earth but for business, it means bearing extra prices

1. Expensive: purchasing wind power electricity or switching to solar power can be costly for your corporation and may incur a premium price.
2. Data risk: going completely paperless will directly risk your data Record Keeping. The system crash, theft of computers, viruses, and hacking of sensitive information can prove disastrous.
3. Increased product prices: using green materials in your facility or production process can lead to a higher cost that is passed to the customers or have to be borne by the company’s expense.
4. Customer backlash: if consumers get aware of a company getting involved in greenwashing then it may harm its credibility. Greenwashing is the process by which the company can make a false claim of their product being environmentally friendly

Green Logistics & Sustainable Supply Chain Management Used by Many Countries

Various studies have outlined the countries which are best in hosting a company’s supply chains.

The best countries for supply chains are Switzerland and then followed by Norway.These are the links that will take a product coming from a natural resource through the process of production and finally to the consumer.

Conclusion

A sustainable supply chain and green logistics practices have become significant due to their economic benefits and regulatory obligations.

Green supply chain management has enabled organizations to improve productivity, supplier, quality, process, and products in Singapore.

Few recommendations identified while implementing it are

• Transportation improvement.
• Green initiatives should be according to the company’s strategic objectives.
• Minimal environmental impact while adopting green practices.
• Optimal distribution solutions and proper inventory management

From the above discussion, we have seen both benefits and risks involved in going green.

It’s up to the company whether going green would be worth it or not.

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