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The Challenges of Having 'Green' Supply Chain Management

There are a few good ways of entering a green supply chain management strategy, and an increasing amount of literature every year is being devoted to discussing so-called green SCM.

Undoubtedly, going green is a great move for a consumer-company. But there are problems that need to be addressed the further down a value chain you go. And these problems can be a plethora of items, including a level of uncertainty regarding market position, stakeholders concerns and change.

Manufacturers and suppliers will fear that by operating along green supply chain practices they could become too expensive compared to their competition. Consider a market where there are five firms producing aluminum, if you choose to implement a closed-loop supply chain to reduce waste and create re-manufactured products, you might out-price yourself compared to your competition.

Downstream firms aren’t the only firms that feel uncertainty towards implementing a green supply chain management strategy. Upstream firms such as retailers might fear they can over-price their products and consumers will no longer be interested in purchasing.

Yet out-pricing yourself isn’t the only uncertain aspect consumer-facing firms can face. Supply chain managers also need to consider uncertainty towards change as well as uncertainty towards stakeholder positions.

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