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					 Research note                                                 Introduction

From reversed logistics                                        Hart (1997) explained that the principle of
                                                               the ecological footprint indicates the rele-
to green supply chains                                         vance of greening initiatives for countries.
                                                               The footprint is defined as the amount of land
Remko I. van Hoek                                              required to meet a typical consumer's needs.
                                                               It was argued that countries should assess the
                                                               impact of their economy on the environment
                                                               and resource consumption. For example, the
                                                               footprint of The Netherlands, is 15 times the
                                                               area of the entire country! Still, our econo-
                                                               mies should flourish and march on, so then
                                                               what kind of cautious steps should we take?
                                                               Greening supply chains can make a significant
The author                                                        Environmental management is gaining
Remko I. van Hoek is a Professor at the University of
                                                               increasing interest among researchers in
Ghent, Belgium, and a Post-Doctoral Researcher at the
                                                               supply chain management. Handfield and
Erasmus University, Rotterdam, The Netherlands.
                                                               Nichols (1999) mention greening as a critical
                                                               future avenue in this area. Also, managers are
                                                               assigning increasing importance to environ-
                                                               mental issues (see, for example, McIntyre et
Supply-chain management, Reverse logistics,                    al., 1998) and Murphy et al. (1995) found
Environmental management strategy, Green issues                that 60 per cent out of a group of 133
                                                               managers surveyed considered environmental
Abstract                                                       issues to be highly important and 82 per cent
To lower the environmental damage of business we need          expected that the importance would further
to examine our ``ecological footprint''. We need to move       increase in the years to come. However, based
forward with the business at the same time. In order to        on a literature review of supply chain and
solve that dilemma, a value-seeking and proactive              logistics management literature, Carter and
approach to greening is proposed in the (general)              Ellram (1998) state that despite some early
management literature. However, literature on the role of      attempts and initial steps, a grounded theory
supply chain operations, mostly published in the area of       or framework for greening is lacking. Hand-
reversed logistics, has failed to develop grounded theory      field et al. (1997) also state that the existing
and frameworks to support the application of such an           literature has provided only a broad frame-
approach. Furthermore, research is needed that goes            work for classifying organizational
beyond the partial and fragmented contribution of              relationships with the natural environment,
reversed logistics. This research note looks at challenges     failing to address the conditions and factors
for research on green steps to take, and green supply          that must be overcome for a company to
chains to make in practice, as a step up to lowering the       become ecologically sustainable. Research
ecologic footprint of supply chains.                           initiatives are needed to overcome this
                                                               problem. Specifically, research may have to
                                                               move beyond reversed logistics into the
Electronic access
                                                               development of green supply chains.
The current issue and full text archive of this journal is        This research note looks at key areas for
available at                                                   research and identifies possible areas for                                 management action. In particular it is
                                                               proposed that reversed logistics alone may not
                                                               be enough and that a focus on the entire
                                                               supply chain is more relevant for under-
                                                               standing the impact of business practices on
                                                               the environment. This represents a new
                                                               application of the footprint principle, in the
Supply Chain Management
Volume 4 . Number 3 . 1999 . pp. 129±134                       cross-company and cross-border supply
# MCB University Press . ISSN 1359-8546                        chain. This approach fits best within a
         From reversed logistics to green supply chains                   Supply Chain Management
                      Remko I. van Hoek                              Volume 4 . Number 3 . 1999 . 129±134

value-seeking approach of the environment                   consideration. One step further, dis-assembly
that leverages potential contributions of                   operations in the reversed flow might call for
greening to the business. The focus on                      proactive ``design for dis-assembly'' right in
greening as a competitive initiative also                   the initial product design stage of both
represents a more proactive approach of                     supplier and customer. Wu and Dunn (1995)
greening, instead of reactive compliance with               state that to minimize the total environmental
regulation. Hopefully, research along the lines             impact of a business it must be evaluated from
suggested here can support business in                      a total system perspective. The supply chain
achieving the next leap forward.                            represents this holistic system perspective and
                                                            represents the focus for far-reaching greening
Why reversed logistics is not enough

As reversed logistics is gaining increasing                 Green approaches
interest and relevance the question becomes
whether it is enough to limit greening efforts              Despite the fact that categorizations of green
to one segment of the supply chain and to                   approaches are being criticized for their broad
single companies. Figure 1 displays a                       nature, they do have something to say.
commonly used scheme for environmentally                    Fundamentals of greening as a competitive
friendly initiatives in a company. The scheme               initiative were explained in detail by Porter
indicates that there is much more to greening               and van der Linde (1995). Their basic
than the reversed flow of goods only. Green-                reasoning is that investments in greening can
ing can start right at the source with supply               be resource saving, waste eliminating and
conditions and can work its way through                     productivity improving. As a result, green
storage and packaging practices to distribu-                initiatives can lower not only the environ-
tion and to end-consumers. However, the                     mental impact of a business but also raise
scheme does not explicitly reflect the cross-               efficiency, possibly creating major competitive
company dimension. The reversed flow, for                   advantages in innovation and operations.
example, can take different forms, from                        Kopicki et al. (1993) introduced three
collection to return shipments into the dis-                approaches in environmental management:
tribution channel, followed by dis-assembly                 the reactive, proactive and value-seeking
and re-use of selected parts. Alternatively,                approach. In the reactive approach companies
used goods could be shredded and scrapped                   commit minimal resources to environmental
and re-entered into production as raw                       management as they start to procure some
materials. Returned goods, or elements of the               products with some recycled content, start
product, could even be returned to suppliers                labeling products that are recyclable and use
and supply chain partners for them to                       filters to lower the environmental impact of
re-manufacture. Those possible supply chain                 production. However, filters are an ``end of
applications should be taken into                           pipeline'' initiative used to comply with

Figure 1 Environmental friendly chain

       From reversed logistics to green supply chains                   Supply Chain Management
                    Remko I. van Hoek                              Volume 4 . Number 3 . 1999 . 129±134

environmental legislation that do not take                processes, evaluation systems and inbound
away any of the causes of the environmental               logistics. Of course, this approach requires a
impact. In the proactive approach, companies              much more far-reaching effort of players in
start to pre-empt new environmental laws by               the supply chain and larger investments than
realizing a modest resource commitment to                 those in filters. This indicates the need for a
initiate the recycling of products and design-            strategic approach and in-depth development
ing green products. In this approach the                  of opportunities. Walley and Whitehead
company assumes responsibility over product               (1994) also mention the value-based
re-use and recycling as an element of                     approach as the most far-reaching approach
environmental management. The most far-                   in environmental management. They charac-
reaching approach is value-seeking, in that               terize this approach as systematic, through the
companies integrate environmental activities              strong commitment and integration of flexible
into a business strategy and operate the firm             strategies and structures, throughout the
to reduce its impact on the environment as a              supply chain. Flexibility relates to the ability
strategic initiative. The CEO establishes a               to exercise different options, applied in the
strong environmental commitment and the                   Recap project through the development of
capital commitment is shared among partners               various new channel structures depending on
in the supply chain. Operating systems in the             the type of application of recycled material.
value-seeking phase may include the (re-)                 Within this approach three types of activities
design of products for dis-assembly, the use of           are undertaken: operational, technical and
life-cycle analysis and creating an involvement           strategic activities, depending on the impact
of third parties. In this approach environ-               on value and the scope of discretionary
mental management assumes supply chain                    response. Hart (1997) introduced the
wide responsibility as opposed to ad hoc and              distinction between today's greening efforts
fragmented organization (generation one) or               and tomorrow's targets, internal and external
functional silo organization (generation two).            efforts. The difference between today's efforts
   Walton et al. (1998) use a comparable three            and tomorrow's targets appears to be
phase model that starts with ``comply with the            relatively similar to the scope of discretionary
letter of the law'' (reactive) and goes from              response, the external dimension meets the
``clean up'' to proactive. Despite the fact that          supply chain approach. Table I lists the
Kopicki et al. (1993) use the proactive phase             characteristics of the three approaches.
as a second phase the explanation of the
proactive approach provided by Walton et al.
(1998) is comparable to that of the value-                Green steps to take
seeking phase of Kopicki et al. (1993).
Companies are integrating environmental                   If a supply chain approach is so important in a
management into corporate strategic planning              value-seeking greening initiative, how should
and into day-to-day processes as they adopt a             businesses develop such an approach? Figure
resource-productivity framework to maximize               2 highlights some of the changes needed in
benefits attained from environmental pro-                 the evolution from reversed logistics to green
grams.                                                    supply chains. First, this evolution fits within
   The extension of the Kopicki et al. (1993)             a move away from reactive approaches
framework offered by Walton et al. (1998) is              oriented at complying with regulation to a
that they state that companies will only thrive           more far-reaching attempt to seek value,
in the final phase of environmental manage-               proactively and gain competitiveness, as
ment when they act as a whole system that                 explained in the previous section. The
includes customers, suppliers and other                   perspective then changes from greening as a
players in the supply chain. By explicitly                burden to greening as a potential source of
developing a supply chain approach in the                 competitiveness. Such competitiveness may
environmental management process, the                     be based on:
impact on operations is leveraged throughout              .    creating a marketing edge by using
the chain, expanding the domain to a much                      greening as a unique selling point with
wider arena. They detail how such an                           environmentally conscious customers;
approach requires that cross-functional and               .    leveraging innovation. Design for dis-
cross-company processes are addressed,                         assembly for example, can be based on
including product design, suppliers'                           smart product connectors which are
                           From reversed logistics to green supply chains                     Supply Chain Management
                                        Remko I. van Hoek                                Volume 4 . Number 3 . 1999 . 129±134

Table I Management approaches to greening                                     of during production and distribution only)
Reactive approach/comply with legislation                                     but also because of the future return flow.
Minimal resources committed                                                   Some companies, like MCC (a wholly owned
Ad hoc organization                                                           Mercedes company) that makes the new
Responsibility falls on individual who initiates program or government        Smart car, are already experimenting with this
affairs office                                                                concept. Establishing a relationship with
Filters and other end-of-pipeline solutions                                   customers is used to facilitate customer
Procure products with recycled content                                        loyalty and follow up orders. Smart uses
Label products that are recyclable                                            product upgrades and adjustments (e.g. dif-
Proactive approach/pre-empt new legislation                                   ferent coloured door panels etc.) as a carrier
Modest resources committed                                                    for the enduring customer contact (see also:
Top management commitment                                                     van Hoek and Weken, 1998). During the life
Functional approach                                                           of the car (the use by a customer) clients can
Prepare environmental policy statement                                        have the car adjusted to changing needs with
Perform environmental audit                                                   add-on modules and even new body panels.
Initial recycling and re-use initiatives                                      As a result the product's life cycle can be
Designing green parts and products                                            extended and waste volume can be lowered;
Value-seeking approach                                                        only modules are abolished not entire cars.
Strategic commitment; integrate environmental project in strategy             Why not use these initiatives to expand the
Supply chain initiative                                                       scope of actions beyond its initial life into a
Systematic                                                                    second and third life, while raising customer
Flexible                                                                      loyalty and raising the number of repeat
Design products for dis-assembly and recycling or re-use                      orders? The related solutions to greening are
Environmental life-cycle analysis to evaluate products
                                                                              thus more reduce and re-use initiatives than
Critically review and reassess existing processes, products and services
                                                                              end-of-pipeline solutions. The latter do not
Ask suppliers to commit to waste reduction goals
                                                                              take away the cause of emissions, they just
                                                                              filter the emission after the occurrence. If we
                       easier to (dis-)assemble, lowering assem-
                       bly lead-times; or                                     really look at greening opportunities
                  .    cost-savings realized through resource-                throughout the supply chain we can address
                       savings. Using less fuel for example, by               environmental impact right at the source and
                       lowering trucking miles, not only lowers               throughout the process and migrate from low-
                       emissions but also saves on fuel expenses              end solutions to solutions far higher in the
                       and drivers' working hours.                            greening hierarchy, with a far more significant
                                                                              impact on greening (see Figure 3). Again the
                  The scope of actions in the chain has to
                                                                              scope of greening initiatives then moves
                  change from an initial sale to that of the entire
                                                                              beyond individual companies to the supply
                  product usage life-time, not only because of
                  environmental impact during its use (instead
                                                                                 The question then becomes how to re-
Figure 2 From reversed logistics to green supply chains                       define Figure 1.

                                                                              Figure 3 Hierarchy of strategies

          From reversed logistics to green supply chains                          Supply Chain Management
                       Remko I. van Hoek                                     Volume 4 . Number 3 . 1999 . 129±134

Green supply chains to make                                      empty trucks around creates emissions with-
                                                                 out economic value. Packaging cannot only
Table II provides an attempt to redefine the                     be evaluated based on packaging material
context and scope of greening initiatives in the                 used but also by the amount of air or useless
supply chain. First of all, the supply chain                     space in the package. Returns handling can be
involves multiple players. The first row lists a                 measured in terms of volumes handled to
number of them, reaching as far as raw                           indicate the size of the operation. More
material suppliers and retailers. All of these                   important is the volume selected for recycling/
players can play an important role in greening                   entering the re-use supply chain, as this
the supply chain. In the downstream stages                       provides an indication of the effectiveness of
products are taken back into circulation after                   the return flow of goods and the value of
their initial life cycles. These are then                        products returned.
scrapped, shredded and dis-assembled in the
midstream stages by manufacturers and main
suppliers. The suppliers in the upstream
stages can then recycle and re-use the parts
and modules. In the initial production,                          As supply chains are becoming increasingly
materials are to be selected upstream, the                       globalized and multi-company based, the
design for assembly used midstream has to
                                                                 ecological footprint principle deserves a
favor dis-assembly and transportation and
                                                                 broader application in the supply chain.
packaging downstream has to be environ-
                                                                 Footprints are not only nation-based as
mentally conscious.
                                                                 suggested by Hart (1997); the scope of supply
   If a supply chain is to really assume
                                                                 chains is far broader. This also implies that a
responsibility over its ecologic footprint it is to
                                                                 focus on reversed logistics, as commonly used
be evaluated on these grounds. The supply
                                                                 in the literature, is no longer adequate. Based
chain footprint has to be measured against
                                                                 on the existing literature, this paper presents a
different indicators than the original footprint
                                                                 categorization of green approaches and
measure. In that respect, a set of performance
measures relevant for these activities is                        suggests the value-seeking approach as the
identified and listed in the final row of Table                  most relevant in greening the supply chain as
II. Materials can be selected against emission                   a whole (instead of logistics, and regulatory
rate and energy consumption standards.                           compliance alone). In order to develop
Re-use of materials can be measured against                      greening approaches as a competitive initia-
the percentage of ``virgin'' or new materials                    tive, various elements have been suggested,
used in parts production. Ideally, this                          including sets of actions for various players
percentage should be as low as possible.                         along the chain, as well as, measures of
Dis-assembly and shredding can be measured                       success. Much research still has to be done to
as volume of goods handled per time unit.                        support the evolution in business practice
Transportation can be assessed in terms of                       towards greening along the entire supply
loads against capacity of transport equipment.                   chain. Hopefully, this paper has identified
A high degree of utilization is an indicator of                  some of the steps to take, while minding our
the efficiency of transportation. Driving                        footprint.

Table II Players, activities and evaluation of greening efforts throughout the supply chain
                               Upstream                        Midstream                      Downstream
Players                        Raw materials suppliers         Main suppliers                 Wholesalers
                               Parts suppliers                 Manufacturers                  Importers/distributors
Green activities               Material selection              (Design for) dis-assembly      Packaging
                               Re-use of materials             Scrap, shred                   Returns handling
                                                               Transportation                 Returns shipment
Relation performance           Emission rates and energy       Volume of goods dis-           Amount of ``air'' in package
measures                       efficiency per material % of    assembled per hour             Volume selected for
                               virgin material                 Degree of utilization          recycling
                                                               transport equipment

         From reversed logistics to green supply chains                          Supply Chain Management
                      Remko I. van Hoek                                     Volume 4 . Number 3 . 1999 . 129±134

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