Corporate Governance and Ethics

Green Supply
Chain
Submitted By:
Dhruv Goyal 15B
Faozia Quraishi 16B
Harshad Mohod 19B
Nannaparaju Naishadh 29B
Suneethi Venkat 48B
Varnika Goel 51B
 Introduction

Case Study : GSK

-Challenges
-Solutions
Contents
Contents -Key Business Benefits

Case Study : Nike

-Challenges
-Solutions
-Key Business Benefits

Key Takeaways
 Introduction
Green Supply Chain -

Incorporates environmentally sound

procedures within the supply chain
Product design, sourcing and selecting
materials, manufacturing and
production, operation, and end-of-life
management fall under this category
Value creation throughout the supply
chain to lower environmental impact

Advantages include increased asset efficiency, decreased waste production, increased

innovation, lower production costs, reuse of raw materials, increased profitability, and
the perception of added value by the clientele
Why implementing GSCM
is important today?
One of the primary greenhouse gases causing global warming is CO2,
which is produced by a variety of activities from industrial operations to
driving a car

The US Environmental Protection Agency (EPA) estimates that

since 1970, CO2 emissions have increased by about 90%

Climate change is already having an effect on a variety of natural

resource-dependent businesses, from forestry to commercial fisheries

Businesses may help to slow or stop global warming and safeguard

the future of our world by switching to more sustainable practises
Types of Green Supply Chain Practices:
Green Purchasing:
Finding suppliers who offer products and services that are environmentally
friendly is just as crucial as greening one's own business
The foundation of the supply chain is the sustainable sourcing of commodities

Green Manufacturing:
Emphasizes the use of less non-renewable natural resources, the reduction of
waste and pollution, and the limitation of emissions.
Cutting back on energy use is the most important part of turning green

Green Warehousing:
Aims to make warehouses run more effectively while consuming less energy
A few ideas to enhance a business include installing installation, utilising
alternative energy sources like hydro and wind power, adding windows to
optimise natural light
 Trends
Minimizing Air Freight:
Air freight is the fastest and most effective method of shipping
Not very energy efficient
More businesses are realizing the benefits of employing air freight just for short-
term needs and depending on rail and ocean freight for continuous requirements

3D Printing:
Uses nearly no material waste and is exact
3D printing uses less energy and money than other machinery and processes
Decreases the likelihood of overproduction

Carbon Emissions Trading:

Countries trade carbon credits in an effort to reduce CO2 emissions
The maximum quantity of CO2 that each nation may emit is capped
The permission to emit additional CO2 into the atmosphere can then be obtained
by purchasing carbon credits from nations with lower carbon emissions
 Technology developments that are
impacting green supply chain practices:
Internet of Things:
Organizations can track equipment, inventory, and energy consumption in real time

Artificial Intelligence (AI):

Aids in process automation, efficiency improvement, and human mistake prevention
Can be used to streamline manufacturing procedures, estimate product demand
utilizing data, analyze delivery routes, and determine the fastest route

Robotics:
Robots have a lot of potential for optimizing operations across the supply chain
For instance, tiny deliveries could be made by drones considerably more effectively
Additionally, automated traffic judgments made by self-driving vehicles might
optimize everything from delivery routes to fuel economy
 GSK Case Study
GSK is one of the world’s leading research-
based pharmaceutical and healthcare
companies, developing and supplying
medicines to a global market.
The company employs more than 97,000 Announcement made in September 2022:
people in over 100 countries and has an
extensive worldwide supply chain. From 2023, the company will require and
One third of GSK’s carbon impact comes support suppliers to take action on
from raw materials. sustainability commitments and make
For GSK to be successful in achieving its improvements on emissions, energy, heat,
environmental sustainability goals, it needs transport, waste, water and biodiversity
its suppliers to take bold action.
 Challenges
As a key part of its commitment to being a responsible business, GSK
needed to understand its supply chain’s sustainability credentials.
To do so, the following questions had to be addressed:

How could it engage with groups of

How could it identify areas of potential
suppliers effectively and efficiently
collaboration to improve sustainability?
without putting a cost and resource
burden onto its supply chain?
Is there scope for additional data tracking
How could it quickly and accurately
on raw materials such as wood fibre?
understand and compare supplier
sustainability performance in terms of
carbon, energy, water and waste?
 The Solution
GSK is actively targeting its suppliers, requesting that they share energy consumption, water
use, waste output and carbon emissions data and publish it openly on Ecodesk.
GSK has so far communicated with over 550 suppliers to submit their data to help it
better understand and map supplier sustainability performance.
Suppliers have not been charged and have responded well to GSK’s requests with an
81% response rate.
GSK is using the collated data to prioritise its efforts to reduce suppliers’ environmental
impacts. For example, GSK met with Granules, the company that supplies the active
ingredient it uses in Panadol. Together, they identified opportunities to reduce energy
use by 16% and have set up a collaborative programme to realise these savings.
Ecodesk is working with GSK closely on developing tools and services to help it better
understand its supply base for a range of raw material products.
 Key Business Benefits
Supplier engagement – raising awareness of key sustainability issues for all
suppliers to improve cost efficiencies.

Identifying risk in paper packing – Working with its suppliers GSK is tracing the
source of all its wood fibre to ensure that it comes from responsible sources.

Internal capacity building on sustainability and energy efficiency – GSK’s

procurement team increase understanding of supplier sustainability for continuity
and cost issues. It essentially embeds sustainability into the heart of the business.

New supplier screening – GSK has used Ecodesk to help screen suppliers to
identify efficient and sustainable partners

Time saving – automated reporting has significantly reduced GSK time on supply
chain sustainability analysis, a process that was previously spreadsheet based.
 Nike Case Study
With the pandemic afoot, Nike took the Before the second half of 2020, Nike’s North
opportunity to move up the overhaul of American operations were mostly centralized
its operating systems. in Memphis, TN.
From opening multiple regional Now, it has turned this center into omni-
distribution centers in both Europe and channel facilities, the company has started
the United States to creating a using a multi-node network that includes
dedicated train system called Nike’s regional service centers.
“Sole Train,” Nike has been busy This multi-node regional distribution network
innovating its internal processes to is possible through the development of
accommodate the customer’s needs in a innovative, demand-sensing and inventory
faster and more efficient way, aiming to optimization technology platforms. These
promote long-term growth. help the brand predict and plan ahead for
the consumer demand in each region.
 Challenges
However, even with this new approach to sustainability, each component of Nike’s
supply chain continued to pose a unique, yet significant, risk to the environment

Raw Materials – Nike uses six main raw materials in

Manufacturing – Nike outsources its
its products each of which requires huge amounts of
manufacturing to third parties outside the US,
resources (e.g., water) and energy (emitting GHGs)
which use machines that consume vast amounts
to produce. In one pair of shoes, 60% of the
of energy (again, emitting greenhouse gases)
environmental impact comes from materials.
and produce waste in the form of excess fabrics.

Distribution – Finished goods are taken from End Consumer – Even after products
factories to Nike-owned distribution centers reach the end consumer, as much as 25%
and shipped to end consumers all around the of the energy footprint of a product can
globe, requiring further energy consumption come from consumer activities such as
and increasing the company’s carbon footprint. washing/drying and disposal.
 The Solution
Raw Materials
71% of Nike’s footwear and apparel products use at least some recycled materials
Manufacturing
Nike’s contract manufacturers have cut energy use per unit in half since 2008, meaning it
takes about half the energy and emissions to make a pair of shoes today
In 2015 alone, 54M pounds of factory scrap was transformed into premium materials used in
Nike footwear and apparel products
Distribution
By 2025, Nike aims to use 100% renewable energy in its owned and operated facilities, has
already implemented on-site renewable energy generation at some of its largest facilities

End Consumer
Reuse a Shoe program has recycled about 30 million pairs of shoes
 Key Business Benefits
Customer Centricity
Through the use of AI and machine learning, Nike has been able to forward-position the
products consumers are more likely to purchase.
It has also implemented services like Buy Online, Pick Up in Store, Ship to Store and No Rush Shipping
options for sustainably-minded consumers. It also offers Direct Order Drop that guarantees
consumers have what they want, at the time and place they want it.

Automation Packaging
In these new distribution centers, Nike has Changes at Nike also included turning to
also implemented the use of more than 1,000 more sustainable packaging solutions. It has
“cobots,”, aka collaborative robots, to help its reduced the number of split packages and
employees sort, pack and move products, leveraged pop-up cartons made from 65%
making it a quicker process, decreasing the recycled content, improving the company’s
physical strain and letting them concentrate packaging on sustainable and customer level.
on higher-value activities.
 Key Learnings
Establishing a green supply chain results in cost savings

Rethinking Materials:
Recycling materials during production results in cost savings
Producers now build new goods at a lesser cost than using fresh plastic by turning waste
plastic into 3D printing filament

Reusing Waste:
Rubbish is recycled to create new revenue streams
Some food producers give organic waste to nearby farmers to use as fertilizer

Transport Optimization:
Simplified logistics offers numerous opportunities to reduce costs and carbon footprint
More cost-effective and environmentally friendly to switch from moving goods largely via air
freight to another route, like ocean freight
 Key Learnings
Following best practices have been adopted by almost all the sustainability leaders:

They have established long-term sustainability goals.

They require first-tier suppliers to set their own long-term sustainability goals.
They include lower-tier suppliers in the overall sustainability strategy.
They task a point person on staff with extending the firm’s sustainability program to first-
and lower-tier suppliers.
The MNCs we studied set and monitor social and environmental targets for their first-tier
suppliers regarding second-tier suppliers.
MNCs work with their major suppliers to map the connections and interdependencies in
their supply networks, including those at the lower-tier level.
MNC's offer training to suppliers, provide incentives for implementing sustainable practices.
To further encourage first-tier suppliers to cascade the MNCs’ sustainability requirements
into their own supply networks, MNCs use supplier sustainability awards, long-term
contracts, and preferred status.
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