Study on Practicing Green Supply Chain Management in China

Study on Practicing Green Supply Chain Management in China Wang Ling China University of Geosciences Beijing, P.R.China, 10083 Abstract: Green supply chain management is a mode for modern enterprises to realize their sustainable development. Based on the exposition of the necessity of practicing a green supply chain management in China, this paper exerts an analysis on the resistance against effecting the green supply chain management and clarifies the ways to practicing green supply chain management in China. Key words: green supply chain; green supply chain management; sustainable development 1 Introduction Human society is developing at full speed meanwhile its fast development is bringing about with it such problems as serious environmental pollution, ecology losing its own balance and a threat to the existing sustainable development trend. Industrialization has been put into a dilemma in its development. i.e. how to make a most possible value for society and enterprises by making a possibly utmost use of resources has now turned out to be a problem concerned by all. Therefore a very important task is how to realize an organic unification of heightening enterprises economic benefits with environment protection, resources utilization and ecological balance, so as to pursue after a green supply chain management adaptive to environment and resources conditions, to help society and enterprises to reach a sustainable development. Green supply chain as an important part of green making has been put into their studies by some universities, yet their studies only center onto a conceptual and theoretical profile at present time. Based on analyzing the intention of green supply chain management and combined with our national conditions, this paper tries to inquire into the necessity of practicing green supply chain management and the resistances met on the way and the main channel to realize the management. 2 Intention of green supply chain management Green supply chain management is still developing and getting improved in its concept and intention up to the present day. No unified and authoritative definition is formed yet in academic circles. Judging from predecessors viewpoint and referring to the definition of supply chain management, the writer holds that the green supply chain management can be describes as a modern management mode in which such factors as environmental influence and resources efficiency are taken into comprehensive consideration in the whole supply chain. The management mode takes green producing theory and supply chain management technique as its basis, with a purpose to assure its products having a minimal environmental affection and gaining the highest resources efficiency in the whole process from materials collecting, processing, goods packing, storing, transporting and using, up to goods scraping. Green supply chain includes the whole process right from products designing up to its final retrieving covering those aspects such as green designing, green materials choosing, green supply process, green production, green packaging, green distribution, green consumption and green retrieving. 3 The necessity to practice green supply chain management in China 3.1 To practice green supply chain management is a fundamental need for China society to keep a sustainable development As traditional supply chain takes enterprise s inner efficiency other than social efficiency as its standard, and this makes ecological-type enterprises lose the chance to build its union, while on the contrary the other enterprises are developing at the cost of social efficiency, like a fish swimming freely in the water. Social capital should have flowed to the enterprises with high social efficiency, but it has flowed instead to those enterprises with low social efficiency. The tilt and mal-position of social resources disposition of this kind will inevitably exert their influence on the enterprises and the whole 167

society in their sustainable development in the end. So from a long-term point of view, green supply chain management is capable of promoting social resources to gain a reasonable and high-efficient disposition and helping those enterprises swimming in the market economy jump off the inferior status in which they were put in competition. 3.2 To practice green supply chain management is capable of enhancing enterprises in their competitive power In practicing green supply chain management, enterprises will have following benefits: (1) It would bring the enterprise a good fame and create for the enterprise an image with a green product brand and all this will attract more and more good words from the public for its products and help it to erect a good social image, so as to enlarge its market share for its products; (2) From a short-term point of view, the product cost might be raised temporarily due to practicing by the enterprises the green supply chain management. From a mid-and long-term point of view, however, the final product lifetime cost will be lowered down because the brand new ecological design adopted by the green supply chain management will decrease the usage of raw materials and energy, as well as such expenses in bringing environment under control as expense for sewage draining-off and cost for disposing wastes and trashes, etc. (3) The success gained in exerting green program by the upstream of the supply chain can be enlarged by the supply chain in its successive behaviors, therefore, the enterprises exerting the green supply chain management can not only easily meet the environment protection criteria by themselves, but promote the other enterprises on the said supply chain to meet the environment protection requirement as well. 3.3 Practicing green supply chain management helps to keep away from the green barriers met with in international trade Having joined in WTO, China will omni-directionally involve herself in international market competition. Though joining in WTO means lessening tariff barriers of various kinds, yet there still exist varied green barriers. And with the appearance of the concept of pursuing nature and advocating green consumption, those green barriers will certainly be enhanced continuously. Green barriers include green tariff system and green market access allowance system, of which green tariff means: to levy an import add-on duty to those products deemed by the nation to be the ones that might cause environment pollution and affect ecological balance; to exert a control over, apply coercive measures to and even impose sanctions on the import of products from abroad. Although the barriers will inevitably yield new difficulties for our products to access into international market, but they will also bring us a new market opportunity concurrently. Only to speed up the implementation of green supply chain management can we seize the opportunity to cope with the challenge. 4 Analysis on the resistance against the implementation of green supply chain management in China 4.1 No strong sense in green concept The study on green supply chain management is now still in its primary stage internationally, and hasn t formed its systematic theory. As our country is still a developing country by now, local governments and enterprises always develop their economy at the cost of environment. They have no green production sense, therefore it is even more difficult to practice such green concept in our country. The reason for this is: (1) The idea of green consumption hasn t been formed yet in our people viewing the situation as a whole, although the sense begins to go towards greenization among part of them. They haven t fully realized the necessity of green consumption to persistent development and that would turn to affect the implementation of green supply chain; (2) The dim consumption consciousness existing among most of enterprise staff prevents the green supply chain management from its successful implementation. 4.2 There exist no perfect laws and regulations related As our study on green supply chain management has just forged ahead with its first step, we haven t any set of perfect laws and regulations to exert an effective standardization on and supervision over the 168

enterprise behaviors related to green supply chain management. For instance, the existing standard collecting sewage-draining-off fee is far lower than the one for the comprehensive control on pollution, and due to this lower cost, some enterprises prefer choosing a direct handing of the sewage-draining-off fee other than bring the pollution under control by themselves. This would lead to a conflict of the individual object pursuing the maximal profit by the supply chain members with the integral object of the green supply chain, and the principle of mutual tolerance between production and environment protection won t be followed among supply chain members, and this would exert affection onto the practice of the green supply chain management. 4.3 There exist technical difficulties in practicing the green supply chain management The green supply chain mode emphasizes that all such links as design, production, the interflow of goods and materials, sales and retrieving should practice greenization, and this would greatly add more contents to the green supply chain management and increase more difficulty in its practicing. On the other hand, as the green supply chain management emphasizes on knowledge innovation, it would ask enterprises to make a overall transforming and level-upgrading of the existing production technology. The difficulties exist in technology would be a big barrier erecting on the way for most of our enterprises in their successfully practicing the green supply chain management. 4.4 Short of an integrated network platform in practicing green supply chain The speedy development of network technology offers a more ideal practicing environment for the setting-up and developing of the green supply chain. To assure the co-operation among the enterprises on the green supply chain, it is necessary for enterprises to set up an integrated network platform to support their respective own enterprises so as for them to find out quickly and accurately their respective cooperative parties most beneficial to the environment protection. 5. Ways to practice effectively the green supply chain management in China 5.1 The countermeasures adopted by the Government to practice green supply chain management 5.1.1 Making corresponding steering-type policy In the process of pushing the enterprises to practice green supply chain management, the Government will play an important role in two aspects: one is to make laws and regulations for environment protection so that those enterprises behaviors harming environment and ecology be restrained; the other is to declare corresponding policies to encourage the practicing of the green supply chain management. Referring to the countermeasures adopted by well-developed countries, the Government, in practicing its management, should make green policies and supporting measures not only for bringing about a temporary solution but for getting at the root. Processing in an orderly way and step by step, the Government should select those industries to practice its green supply chain management, e.g. the industries on which green supply chain has been practiced abroad; those industries which will exert greater affection on their mutual co-operation and those industries which possess a bigger export volume and are easily harmed by green barriers. Concurrently the governments at all levels should also encourage the industry associations of varied kinds to establish a unified greenized industry criteria, to promote the founding of green supply chain alliance and make the alliance to play a role in the constraining to and management of the behaviors by the allied industries. 5.1.2 Guiding green consumption correctly Green consumption is a driving force in the process of practicing the green supply chain management. Consumers demand will force the enterprises improve their products and their environmental achievements in their producing and marketing process. The related Governmental organs should strengthen their propaganda on green consumption, try hard to initiate green consumption, guide consumers to select conscientiously their ways of life and consumption which would be beneficial to the saving of resources and environmental protection, so as to turn gradually all activities closely related to energy-saving, garbage-sorting and retrieving, and the down-cutting of products of lump-sum usage into a conscientious ones accepted by the whole public, and penetrate green idea into the whole consuming activities and promote the forming of a coordinate development status among enterprises, consumers and environment. 5.1.3 Actively building up the green resources database 169

Data-sharing is the prerequisite and assurance to realize the idealization of the whole green supply chain activities. The data-sharing in green supply chain management includes all data related to green manufacturing techniques at home and abroad, green transportation, patents of green products, green materials and green management technology, etc. It is very difficult to rely merely on some individual enterprise or several enterprises to realize the collection and sorting of all green information, and newer environmental demands on green supply chain management might come from outside with the social and enterprises development. For this, the Government or related organs should actively set up this green resources database to provide the green supply chain management with essential information and intelligence support. 5.2 Measures for practicing enterprises green supply chain management 5.2.1 Molding an enterprise s culture adaptive to the green supply chain management The enterprises should form a powerful cohesive force from within, unify all staff members to form a common green value viewpoint. It should take the green culture as its guiding ideology in practicing the green supply chain management and penetrate the ideology into all aspects of the enterprises business. The green culture is such a business one which takes the development of green production as its root, the green business as its assurance, meeting the demands of the staff members as its motive power, to realize a business culture among enterprises staff members, enterprises, ecology and persistent social development. The green culture is the soul of green supply chain management model. 5.2.2 Establishing strategically cooperative partnership The objects aimed by green supply chain management cover individual principal parts on the green supply chain, including suppliers, manufacturers, distributors, retailers, customers and transporters, etc. Therefore, in the process of practicing green supply chain management, not only those enterprises on some key nodes are required to set up and strictly follow the environment control criteria, but those enterprises both in upper and lower stream are also demanded to follow the same criteria as mentioned above. Only in this way can the individual enterprises on the supply chain share their common success. Firstly, the core enterprises should carefully select the applicants for joining in the green supply chain. The leading core enterprise on the supply chain connects with suppliers upwardly and communicates with distribution channels downwardly. Not only the said core enterprise itself sets up and strictly follows the environment control criteria, but all downstream enterprises and end-users should have to observe the same criteria. And only by doing so, can be upgraded the green level of the whole green supply chain. So when setting up the green supply chain, the assessment on and selection of the co-operative partners exerted by core enterprise appear specially important, not only taking into consideration of such traditional factors as their production capacity, cost of production, quality of product, date of delivery and reputation, etc., but also carrying out a comprehensive assessment on the potential chain members by means of a suitable green index system; the said core enterprise should concurrently exert an efficient management on its co-operative partners, keep abreast of their status in practicing environment protection, combine the supervision of environment quality with the authentication of co-operative manufacturers qualification, and treat the environment control as part of exerting an overall quality control. Secondly, remold the co-operative relationship with suppliers and distributors. Technology s renewal with each passing day, industries keeping-on their own merging and development cost continuously rising, all this makes it difficult for any enterprise to preserve its leading role in all fields of technology. In the meantime, core enterprises, suppliers and dealers, no matter who he is, all have to be constrained by the same strict environment regulations and share the consequences when they meet with green barriers on their way of doing business. Once a supplier on the chain is forced to close his business due to his violation of laws of environment protection, the operation of the whole supply chain will have to stop its running. For this reason, the allied enterprises under the green supply chain should have to constitute such an operation mode with a synchronous sense, unified standard and operation as a whole. Lastly, it is required to enhance the exchange and control of information and technology among supply chain members. The mode of green supply chain management focuses itself on the communication of information and co-operation in practice. All co-operative partners on the supply chain can, via network, workstation, or bulletin, exchange among themselves environment protection 170

criteria and environment protection demand, supply information related to environment protection, propaganda green culture, discuss and solve such problems as related to environment by such means as letters and propaganda manuals, etc. The manufacturers, suppliers and dealers should have keen sense to catch up the green demands raised by the market, propaganda the green nature of their own products via an effective information publication, change the consumers in their consuming partiality; knowledge and knowledge renewal in workmanship, material, package, etc. should be shared timely and effectively among chained enterprise members. Making use of internet technique to set up information management system for supply chain and adding environment information into daily regular information exchange among enterprises are beneficial to improve the information and knowledge exchange among the chained members and will play a key role in helping green sully chain to operate with high efficiency. 5.2.3 Making business process reconstitution (BPR) organically combined with green supply chain management The BPR core means to re-think over, design and change the mechanism formed under the old environment, operated and checked by functional units, and to effectively set up a business process across functional units so as to upgrade the enterprises in the whole operation efficiency and competent force. The enterprises should adopt a viewpoint of over-all and systematic reconstruction to start their BPR. and help the enterprises on the green supply chain continuously optimize in their business development the overall business flow, information flow and inner institutional framework, and pursue the realization of the best green supply chain. References [1] Wang Bo and others. Study on Green Supply Chain Management in Enterprises sustainable development.[j] Scientific Management Study, 2004.2(in Chinese) [2] Wu Dichong. Study on Green Supply Chain[J]. Grouping Technology and modernization of Production, 2002.2(in Chinese) [3] Yang Chunji. Simple Explanation of Green Supply Chain Management[J]. Value Project, 2003.6(in Chinese) [4] Li Xuejian. The Construction of Enterprise Culture and Green Supply Chain[J].Xi An Electrics & Sci-Technology University Journal, 2004.3(in Chinese) [5] http://www.chinaxh.com.cn 171