8.2.1: Green supply chain management

Green supply chain management (GrSCM) is modeled on traditional supply chain management practices, but integrating environmental criteria and concerns into all organizational processes and decisions. A GrSCM aims to minimize wastes within a system to conserve energy and prevent the dissipation of dangerous materials into the environment. It recognizes the disproportionate environmental impact of supply chain processes to product outputs within a company’s operational processes. By integrating environmental thinking into supply chain management, these companies have the opportunity to optimize information and material flows within their value chains while minimizing costs. The diagram below illustrates a model of a green organizational supply chain.

Source: SARKIS 2015

Traditional and green supply chains differ in several ways. Traditional chains focus on economic objectives and values, while green chains consider ecological values alongside a company’s business objectives. When a traditional supply chain takes ecological standards into account, it is often limited in its scope. For example, traditional chains actively consider human toxicological impacts, while leaving out the impacts on the environment. They also often tend to focus more on the control of the final product, rather than on negative effects within the entire supply chain.

Green supply chains, however, extend the scope of sustainability beyond human toxicological effects, to consider the full environmental impacts alongside economic objectives. The summary table below highlights the differences between the features of traditional and green supply chains.


Traditional Supply Chains

Green Supply Chains

Objectives and values


Economic and Ecological

Ecological Optimization

High ecological impacts

Integrated approach

Low/Minimal Ecological Impacts

Supplier Selection Criteria

Suppliers selected on price

Short-term monetary based relationships

Suppliers selected on environmental performance and price

Long term mutually supportive relationships

Cost Pressure and Prices

High cost pressure

Low Prices

High cost pressure

Moderate – High Prices

Speed and Flexibility



%d bloggers like this: