Green Supply Chain Management Practices for Sustainability

People’s rising concern about environmental impact and the prioritization of sustainability in this era of 4.0 Industrialization has given birth to the concept of going green across industries. In industries like retail or manufacturing, supply chain management (SCM) is an integral part of the entire product lifecycle management process. SCM encompasses the process of overseeing and coordinating the lifecycle of a product, from sourcing raw materials to the final delivery to customers. 

As it involves processes such as production, storage, and transportation, wastes are generated at every stage of the SCM process. This necessitates the integration of green practices into the SCM to reduce waste generation and environmental impact. Keeping sustainability at the heart of its operations, global manufacturers and retailers often adopt green supply chain management (GSCM) practices to embrace sustainability.

This article takes us through the concept and importance of GSCM, the most implemented GSCM practices, and the advantages and challenges associated with their implementation. It also provides examples of some companies that have espoused this approach. So, let’s dive into the write-up to learn all aspects of green supply chain management.  

Understanding Green Supply Chain Management

Green Supply Chain Management, or GSCM, is a supply chain-wide management approach for environmental management that includes environmental practices and strategic positioning to help companies achieve their environmental goals. The concept has received more attention in the last few decades, driven by the challenge of global warming and resource scarcity, which compelled companies to go green. Organizations that prioritized public interest, legislation, and competitive opportunities were under pressure to reduce the environmental impacts driven by their SCM. 

Digital transformation remained closely knitted to this concept, as the integration of technologies into the various SCM operations contributed to the mitigation of environmental and sustainability issues. Technologies like robots are being used in production, warehousing, and logistics to reduce the amount of waste generation and carbon footprint throughout the SCM. 

The key target of supply chain management is to minimize resource consumption, greenhouse gas emissions, and waste generation while ensuring economic and environmental sustainability. GSCM aims to seek environmentally responsible solutions to optimize SCM operations. According to the 2024 Voice of Consumer Survey by PwC, consumers are willing to pay 9.7% more for goods that meet environmental criteria, are made from eco-friendly or recycled materials, are sourced locally, and are produced in a low-carbon footprint supply chain.  

GSCM: A Holistic Supply Chain Strategy 

As GSCM incorporates environmentally conscious practices into every stage of the SCM, it contributes to the protection of the planet while driving business success. Moreover, it is a holistic business strategy that prioritizes a range of factors. Those are as follows:

Resource Efficiency

Deployment of GSCM helps in optimizing processes and leveraging technologies like analytics, robotics, and more to help businesses use resources more efficiently. This leads to savings in costs along with environmental benefits. For example, automating repetitive tasks could reduce the burden of manual tasks that are done by human resources. 

Sustainable Practices

GSCM is more than just complying with regulations. It's about looking for environmentally friendly solutions to create sustainable and positive impact.

Eco-Friendliness  

It fundamentally focuses on integrating eco-friendly practices to reduce environmental damage caused by SCM processes, including waste generation, resource consumption, and greenhouse gas emissions.

Advantages of Green Supply Chain Management

Taking the green path provides some measurable advantages to one’s business and the environment. This goes for the green supply chain as well, for it not only generates value for the business but also for society, the economy, and the environment. Here is how GSCM delivers value:

• Cost Reduction: Streamlining of operations through technological integration helps businesses eliminate waste from the supply chain and optimize resource utilization.

• Compliance: By implementing GSCM practices in your business, you can stay ahead of the environmental laws and regulations to avoid disruptions and penalties.

• Strengthened Brand Value: Any company that adopts GSCM practices demonstrates a commitment to sustainability. This, in turn, attracts eco-conscious consumers towards the business and strengthens stakeholder relationships. 

• Improved CSR Practices: Companies now use internal and external Corporate Social Responsibility (CSR) practices to address GSCM needs. With a strong internal CSR foundation, a company’s employees develop a sense of responsibility towards the environment and adopt sustainability in their jobs to ensure the company improves its GSCM efficiency.

• Enhancement in Innovation: As GSCM encourages the deployment of eco-friendly processes, technologies, and products, it gives the company an opportunity to drive innovation in its operations, helping it win a competitive advantage.

Challenges of GSCM

Despite the multiple benefits that GSCM offers to a business, it has its own set of challenges. Let’s find out about them.

• Initial Implementation Costs: Organizations transitioning to GSCM have to incur initial implementation costs related to infrastructure transformation, technology investments, employee training, and process reformatting.

• Suppliers' Resistance to Green Practices: It is notable that not all suppliers like to engage in green practices, especially when they lack resources and finance. It is crucial to talk them into the process and support their adoption for successful implementation.

• Poor Alignment of GSC Objectives with Primary Business Goals: Aligning supply chain objectives with a business’s primary objective is often a tough nut to crack. Ensuring profitability while still contributing to environmental outcomes can be challenging. Companies planning to adopt GSCM must have enough resources and finances to implement their initiatives.

Top 5 Green Supply Chain Practices of 2025

With each move of a greener supply chain, companies protect the planet and secure their future through adaptability, trust, and efficiency. Below are the top 5 green supply chain management practices to follow in 2025-

AI-Driven Demand Forecasting and Route Optimization

AI-powered demand forecasting leverages machine learning to analyze a vast amount of data, including sales, weather, market conditions, and social media, to predict future consumer demand with accuracy. AI also optimizes the product distribution route by analyzing real-time and historical data like weather, traffic, and vehicle capacity to identify the most cost-effective and efficient route.

Just-in-Time Lean Approach

By adopting the Just-in-Time approach for inventory management,

goods are produced only when needed. It also minimizes waste, excess inventory, and storage expenses. 

Blockchain For Supply Chain Transparency

Blockchain leverages a secure, immutable, and shared digital ledger to record every transaction in the supply chain procedures. This provides unmatched transparency, traceability, and efficiency throughout the supply chain.

Eco-Friendly Packaging

By embracing eco-friendly packaging, manufacturers can reduce waste generation and carbon footprint across the supply chain.

Advanced Analytics and IoT for Real-time Monitoring

IoT uses connected devices and sensors to collect data about asset condition, location, and environmental factors. These gathered data are then analyzed using AI and machine learning to ensure real-time monitoring, automation, and transparency of processes.

Top Companies that Have Adopted GSCM Practices in Their Supply Chain

• Apple: Apple is committed to using 100% renewable energy and has reduced its carbon footprint to a large extent.

• Walmart: Walmart has a goal of achieving zero emissions by 2040.

• IKEA: This furniture giant is known for using sustainable materials in their products, selling solar panels and LED lights, and implementing energy-efficient practices.

• Unilever: It has the ambition of making plastic packaging recyclable and reusable by 2025. 

• Amazon: Amazon has launched the “Shipment Zero” program to ensure all shipments are carbon-free, aiming to make all shipments net-zero by 2030. 

The Silicon Journal is also contributing to the development of GSCM across industries through its informative content. This US-based business publication is also featuring topics of innovation, technology, finance, healthcare, energy, and more through its articles, news, and blogs.