Introduction

As the world grows more conscientious of environmental issues and global warming, companies are adopting greener and more sustainable business practices. Companies are reevaluating their supply chains, from purchasing, manufacturing processes, managing the use of materials, logistics, and distribution of final products. Green Supply Chain Management drives value creation across a supply chain to reduce environmental effects. Improved environmental performance means lower waste disposal and lower overhead costs.

Companies like IKEA, Target, Tesla, and Walmart are pouring billions into sustainable initiatives, making public announcements, while investors and consumers keep a close watch. Many assume that low-cost supply chain options are incompatible with a green supply chain. However, it’s not always the case. Green initiatives can be cost savers. For example:

• Packaging optimization results in reduction of packing materials
• Eliminating hazardous materials reduces handling, disposal and regulatory costs
• Alternative, sustainable or reusable, materials reduce cost of production
• Eliminating waste reduces the cost of disposal
• Reduced shipments lead to less fossil fuel consumption

Walmart has been recognized as one of the revolutionary companies implementing a green supply chain. The company has dedicated time and effort into investing in on-site solar systems and additional partners with suppliers and governments to improve access to renewable energy. All in all, the company has committed to reducing its emissions by 18% by the year 2025.

Caterpillar is one of the leading re-manufacturing companies in the world that brings back end of life products to usable conditions, thereby significantly reducing its environment impact through their sustainable business model.

Figure 1. Implementing a Green Supply Chain