FOCUS Green
Supply Chain Management readies for a green explosion
T
he implications of Green SCM for companies in the Asia Pacific region are wide reaching. CHaINA Magazine spoke with Nicolas Pechet, Vice President, China of GIA Group in regard to new research they have done into sustainable practices in the manufacturing and logistics industries in the Asia-Pacific region. Why is green SCM so important to international purchasing or production directors? Nicolas Pechet (NP): Ultimately, “green” supply chain management offers an expanded way to think about cost reduction and profit enhancement. We have seen how a dip in Western consumption creates severe problems for Asian suppliers, amongst both direct manufacturers and subcontractors. This creates a great deal of operating leverage between Asian manufacturers and Western markets today. Western businesses can use this leverage to push for more environmentally sustainable manufacturing, sourcing and logistics practices in the Asia Pacific region. However, pushing better green practices will require Purchasing, Supply Chain or Production directors to have a keen understanding of the local practices and unique regulatory landscape of each Asian country they operate in.
“Case studies can be incredibly insightful and yield green SCM best practices to reduce costs and increase revenues. Seasoned and well informed SCM executives study and learn from such cases continuously.” explains Mr. Nicolas Pechet
Asian examples of “green” best practices The Chinese sugar refinery and Indian paper firm case studies brilliantly apply the green “3Rs” principle of “Reduce, Reuse and Recycle”; with both firms diversified into related industries - sugar, paper, alcohol and cement – and utilizing waste products of the other industries as raw materials or for power generation. Case studies also highlight the importance of building effective incentives with external parties (suppliers, competitors, customers and government) to improve the robustness of the supply chain system on all levels: local, national and international.
Reduce, Reuse & Recycle waste products
Raw materials for another product
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Energy generation for plant
Establish supporting network of external parties motivated to ensure sustainability of green supply chain
Suppliers Government
NOVEMBER/DECEMBER 2009
1.Logistical centralization for economies of scale. 2.Share logistical overhead with partners for cost reduction. 3.Optimize transportation routes to further reduce costs.
Customers Competitors
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