Greening the rusty supply chain. Critical factors for effective GSCM. Critical factors for GSCM include:

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1 Article Greening the rusty supply chain Green supply chain management (GSCM) is important in enterprises achieving profit and market share objectives by reducing environmental risk and impact. It is a new management paradigm, but it lacks sound and comprehensive theory for companies due to regulatory uncertainty and constantly shifting boundaries. This article looks at how managers can make sense of the regulations and apply the model. Critical factors for effective GSCM Critical factors for GSCM include: Corporate Synergy System (CSS) top management support; compliance statements; product testing reports; green purchasing; environmental auditing for suppliers; establishing environmental requirements for purchasing items; and supplier evaluation and selection. And, for product recycling and life cycle management: collaboration on product recycling with same sector companies; joining local recycling organizations; applying life cycle assessment (LCA) to conduct eco-reports; Bill of Materials (BOM); produce disassembly manuals; and establish a database of environmental products. Corporate Synergy System As Taiwanese companies manufacture a large proportion of the world's consumer electronics, the majority of electrical and electronics manufacturers follow these practices already because the Taiwanese government has the Corporate Synergy System (CSS). Large companies work with their upstream suppliers and downstream buyers to achieve common goals such as industrial waste minimization. CSS systems enhance international competitiveness, improve product quality, enhance environmental performance, and reduce production costs. Compliance statement One of the most significant measures for GSCM practices is to request that suppliers provide compliance statements. This process can ensure that suppliers guarantee that all the materials, parts, and products manufactured conform to regulations. Likewise, it holds them responsible for any liability incurred.

2 Product testing report A component s testing report is a crucial document in determining where RoHSrestricted substances exist within its manufacture. Assembly manufacturers in Taiwan are using compliance-testing reports as an essential requirement in ensuring that components do not contain chemical substances that exceed their allowed limits, so they are able to determine who is responsible when products violate environmental legislation. The Bill of Materials (BOM) Although manufacturers are required to know prohibited substances in their products, it is also important to know the substances and materials used in them. BOM represents a single product or assembly, or a group of products, which can aid recognition of any RoHS-restricted substances in the final product. Establishing environmental requirements for purchasing items Green purchasing as a management approach ensures that products comply with various environmental regulations and consumer requirements. Environmental standards in purchasing provide a basis for constructive dialogue with suppliers involving a joint commitment to quality improvement. In turn, this should motivate suppliers to be more concerned with the activity of their own suppliers. Green purchasing By incorporating green principles into purchasing, companies can provide design specifications to suppliers that include environmental requirements for green purchased items. This assists in deciding which suppliers to collaborate with for materials, equipment, parts, and services that support environmental goals. Collaborative R&D with suppliers Suppliers may be able to help customers understand environmental effects and their causes in the supply chain if they employ a collaborative approach in purchasing. Eco-design initiatives could include developing common roadmaps for improving environmental performance and working together with suppliers to attain goals. Involving suppliers in the design process can generate significant environmental and business benefit. Information systems Effective GSCM involves the collection and incorporation of relevant information on each department within a company, including products and components, and reports and documents provided by suppliers. Companies must establish a database for information received from suppliers so that they can use it to determine compliance with environmental regulations. Implementing an enterprise resource planning system helps centralize procurement information worldwide and ensure the close monitoring of all suppliers in high-risk business areas. Joining local recycling organizations To comply with the EU's Waste Electrical and Electronic Equipment (WEEE) Directive, companies may decide either to undertake the recovery of used products on their own, or to establish cooperation via local or more extended networks for the collection and recycling of similar products.

3 Collaboration on products recycling with same sector companies The WEEE directive encourages a set of criteria for collection, treatment, and recovery of waste electrical and electronic equipment and makes producers responsible for financing these activities (WEEE, 2003). Collaborating on this is cheaper and reverse logistics programme can bring cost benefits to the companies by emphasizing resource reduction, adding value from the recovery of products or by reducing the disposal cost. Produce disassembly manuals Producers are required to educate consumers about the recycling and recovery options available to them, and explain that they must not dispose of WEEE together with their general household waste. To facilitate recycling, provide product disassembly manuals as a reference for disassembly workers to implement the nondestructive detachment of components or modules. Green design By incorporating the green issue into new product development, green design is a systematic method for companies to reduce the environmental impact of their products and processes while simultaneously cutting costs and increasing product marketability. Environmental education and training Initially, companies encounter challenges when implementing green initiatives related to GSCM practices. These practices are generally very complex, and most employees are not aware of green principles. Implement education and training in green issues. Top management support Getting the top management onboard early on is crucial to the success of GSCM programmes. Senior management must support the initial exposure assessment and someone within the company must take responsibility for directing the effort. Environmental policy for GSCM A company can facilitate GSCM practices by establishing an environmental policy for its suppliers as a green manifesto regarding green purchasing, green design, and supplier auditing, etc. Cross-function integration The broad scope of GSCM leads to complexity and difficulty in its implementation, so a cross-functional team of representative personnel should be integrated to achieve optimal synergy. The cross-functional teams should consist of personnel from sales, environmental teams, purchasing, and other relevant departments, all of which you find in organizations with the most advanced strategies for sharing sustainabilityoriented information. The most successful GSCM systems incorporate environmental issues, with a firm's existing supply chain management strategies applied throughout the design, procurement, and distribution processes. Employee involvement Staff must take responsibility for the individual impact and requirements of environmental regulations. Put in place a corporate-wide compliance team to deal

4 with meeting the regulations. An effective communication platform It is essential to establish an effective communication platform between companies and suppliers. Companies should provide clear, consistent, and frequent communication about environmental issues with their suppliers and other partners in the green supply chain. To do so, suppliers must understand how to carry out the green initiatives of GSCM in accordance with the requirements of clients. In addition, companies need to communicate their environmental goals within their hierarchy. It must ensure that the people throughout the organization understand how these goals relate to their individual functions. Companies need an internal communication platform not only to raise the awareness of their employees on GSCM but also to eliminate the barriers in the way of successful implementation. Establish an environmental risk management system for GSCM A risk-based supply chain compliance programme should combine components risk with the suppliers risk in determining the situation along the green supply chain. Supplier evaluation and selection Supplier selection is a critical activity in purchasing management. A company may be at risk. It can lead to a disrupted supply chain if you don t give appropriate consideration to supplier selection. Tracking the development of directives Similar regulations have spread throughout the world, and the emerging issue of green product has picked up rapidly in Asia. This is particularly true in countries such as Japan, Taiwan, and Korea, which are forerunners in terms of green electronic products. Companies need to track the development of environmental regulations with respect to the emerging hazardous substances because the restricted substances and exemption index is continuously updated. Otherwise, without a systematic mechanism for collecting the information on environmental regulations related to hazardous substances, enterprises cannot avert the risk while their green products exceed the allowed amount of chemicals. Applying LCA to carry out eco-reports The "life cycle assessment" principle is the basis for a "cradle to grave" approach, and is an appropriate tool that will facilitate the analysis of environmental impact and build the eco-profile of products. Establish a database of environmental products A company must establish a database for information received from suppliers. Manufacturers must integrate eco-design considerations into the product design stage and establish eco-profiles for products via a lifecycle approach. The highest priority is an inventory of environmental data for products throughout their lifecycles as a foundation for generating eco-profiles. It is essential to launch an environmental database of products in order to acquire data for analysis of the environmental impact of green products. Accept, improve, and prioritize These GSCM practices help enterprises identify areas of GSCM that require acceptance and improvement, and prioritize effort. As such, they may help you green

5 the rusty supply chain. October This is a shortened version of "Critical factors for implementing green supply chain management practice", which originally appeared in Management Research Review, Volume 33, Number 6, The author is Allen H. Hu.