Green supply chain management aims to reduce environmental impact across a company's entire supply chain. It requires companies to consider environmental impacts of both upstream suppliers and downstream distribution and product recovery. Key issues include optimizing transportation to reduce carbon emissions, and closing material loops through effective post-sale product collection and recycling. The European Union is working to establish more sustainable transportation systems and circular economies through policies like the 2011 White Paper on Transport, which targets a 60% reduction in transportation greenhouse gas emissions by 2050 compared to 1990 levels. Companies are also developing their own green supply chain initiatives, like product recovery networks for electronics waste and reuse/remanufacturing programs.

1. Supply chain management and the environment
For years the producers’ responsibilities were finished when the product was on the shelves in
the shop or when the guarantee period was over. Supply chain (SC) management was perceived
as the planning and control of the flow of goods from the sourcing base to the final consumers,
accompanied with the necessary information and money for the independent entities along that
chain. Traditional supply chain management focuses on low cost, high quality, reduced lead time
and high service level. The introduction of the Extended Producer Responsibility in a number of
countries and industries has changed the rules of the market behaviours. Nowadays
manufacturers need to take into consideration the post-consumption phase of their products, the
so called end-of-life phase (EOL): the environmental burdens incurred during different stages of
the product transfer from manufacturer to final user and then to the disposal site. The interest in
environmentally friendly supply chain management has risen considerably in recent years. This
can be seen by the number of initiatives taken by companies. Brand-owners are very often
perceived to be responsible for environmental problems in the entire supply chain from to the
sourcing base to end-of-life recovery issues. It is expected that the manufacturers should reduce
sources of waste and pollution throughout their entire SCs, across multiple entities, upstream
(suppliers) and downstream (distributors and consumers). An environmentally friendly supply
chain connects with partners who should make managerial decisions with regard to environmental
consequences. It enhances competitiveness and creates better customer service, resilience and
increased profitability.
Green SCM can reduce the ecological impact of industrial activity without sacrificing
quality, cost, reliability, performance or energy utilization efficiency, meeting
environmental regulations to not only minimize ecological damage but also to ensure
overall economic profit.
Companies are forced to adopt ecologically responsive practices to meet legislative requirements
but they can also benefit from “green” behavior. For example, building the technological and
organizational capacity to collect, recycle and reuse waste or returns stream can enhance the
availability of materials as well as clear up the supply channels. According to Srivastava (2007),1
green SCM can reduce the ecological impact of industrial activity without sacrificing quality, cost,
reliability, performance or energy utilization efficiency, meeting environmental regulations to not
only minimize ecological damage but also to ensure overall economic profit. Environmentally
friendly behavior can also contribute to the competitive advantage of having a “green image” of
products, processes, and technologies.
Environmentally friendly supply chain management requires a continuous course of actions in
order to decrease the environmental impact of products and technology used by a manufacturer
and its pre-chain (supplies) and post-chain (collection, inspection and reprocessing activities).
There are a number of problems covered within the framework of environmentally friendly supply
chain management but in our opinion, the two main issues that need to be addressed by
managerial decision-making are:
• greening the supply chain operations by reducing the total carbon footprint of products’ delivery
process. From a logistics perspective, the main contributor of carbon footprint and greenhouse
emissions besides the manufacturing operations is transport.
• closing the materials flow loops: including issues related to the collection of used products, their
recovery and reuse.

2. Greening the supply chain operations by optimization of transport processes and CO2
reduction
Trade globalization, offshoring of manufacturing operations to low-cost countries, just-in-time
deliveries; all these stimulate growth of the international freight of goods between continents and
countries. Frequent and prompt deliveries require more means of transport, whereas the absence
of co-operation among companies and processes coordination result in increased congestion on
main European roads. In addition, freight transport demand over the last decade has continued
to grow by more than GDP (with the exception of 2008 and 2009). The transport industry accounts
for about 7% of GDP and for over 5% of total employment in the EU.2
In the process of preparing
the 2011 White Paper on Transport, a number of simulations were performed. Results show that
in a “no policy change” scenario, total passenger transport activity would increase by 51%
between 2005 and 2050 while freight transport activity would go up by 82%. The share of CO2
emissions from transport would increase to 38% of total CO2 emissions by 2030 and almost 50%
by 2050. Overall, CO2 emissions from transport would still be 31% higher than their 1990 level by
2030 and 35% higher by 2050.3
Additionally, aviation and maritimewould contribute an increasing
share of emissions. Environmentally friendly transport operations within the supply chain require
an implementation of resource efficient policies, a reduction of energy consumption, an
introduction of cleaner energy and a better utilization of the infrastructure. There are still obstacles
on the way to the creation of an efficient environmentally friendly transport system within the
supply chain. The central obstructions are presented in Figure 1.
Environmentally friendly transport operations within the supply chain require an
implementation of resource efficient policies, a reduction of energy consumption, an
introduction of cleaner energyand a better utilization of the infrastructure.
In March 2011 the European Commission published a new White Paper on Transport in which
sustainability issues played a very important role. Their target was the creation of a de-carbonized
transport system.

3. The first goal of the new transport policy is to keep the transport growing and supporting mobility
while achieving the goal of 60% GHG emissionreduction by 2050 comparingto the levels of 1990.
The next goal – an efficient core network for multimodal intercity travel and transport – requires
the consolidation of large volumes for transfers over long distances. It is assumed that in 2050,
freight shipments over short and medium distances (below 300 km) will be transported mainly by
trucks. New technologies for green vehicles are crucial, regarding the short design-to-market
introduction of new engines and cleaner fuels. For long-haul freight de-carbonization, the goal
should be achieved by making the multimodal transport economically attractive for shippers.4
The
next goal is to achieve the global level-playing field for intercontinental freight, where air transport
will continue to dominate. The next challenge is clean urban transport. The new transport policy
assumes three steps: 1) to halve the use of conventionally fuelled cars by 2030; 2) to achieve
essentially CO2-freemovement of goods in major urban centres by 2030; 3) to eliminate traditional
vehicles by 2050. These actions might be a real change for cargo deliveries in the cities.
The new challenge might be setting an open standard for the design of new infrastructure,
vehicles, and necessary devices. In the EU, there still exists a large divergence in transport
infrastructure between Eastern and Western member states. Most of the existing transport
infrastructure has been designed to serve a national rather than a European economy.
A still existing problem is the lack of comprehensive standards on infrastructure design, power
supplies, traffic management and data exchange. The emphasis should be placed on mounting
the existing infrastructure’s gaps in the multimodal infrastructure (which allow easy transport of
cargo with different means of transport e.g. long distance with ships and last-miles delivery with
trucks). The cost of the development of EU infrastructure to meet the demand for transport has
been estimated at over €1.5 trillion between 2010-2030.5
The important role to play in the
investments process should have not only regional and national governances but also
multinational and multimodal logistics operators. (see Figure 2)
Among European companies, over 99% are small and medium size enterprises. This situation
leads to the dispersion of demand for transport services and a big number of LTL (less than
container load) shipments. According to EU statistics the average use of available capacity of
vehicles during the supply or distribution stage is at 54%. For rail transport, this value is 48%
(there are differences between EU memberstates).A challenge is the aggregation of this demand
through IT solutions, which will allow companies to perform frequent and small deliveries while

4. minimizing the costof carriage, increasing load factor and lowering congestion. Examples of such
a solution can be found in the book, Sustainable Transport. New Trends and Business
Practices.6
Another challenge for an environmentally friendly supply chain management is the
application of low emission means of transport. European Transport is still 97% dependent on
fossil fuels. A binding target of a 10% share of the renewable energy sources in transport by 2020
seems difficult to meet.
Closing of materials flows by improvement of post-sale logistics operations
In the computer industry there is an abundance of examples of efficient practices for product
recovery in both environmentally friendly and economical ways. Since 2005, member states of
the European Union have begun implementing the WEEE Directive (on electrical equipment
waste management), which requires manufacturers to provide the recovery network for used
electronic devices. The WEEEis the fastestgrowing wastegroup, mainly becauseof its very short
life cycle, growing demand and a decreasing unit cost of products. The analysts estimate that the
number of PCs is growing at just about 12 per cent annually. At that pace, it will reach 2 billion
units by early 2014. Also, the number of mobiles and household appliances is growing very rapidly.
As a result, the volume of e-waste is increasing three times quicker than other waste categories.
According to the WEEE Forum, the European Union itself is generating over 8 million tons of e-
waste per annum. The manufacturers have created a number of alliances, which help them to
collect and reprocess WEEE. According to the WEEE Forum7
in 2010, the leading recovery
institutions have collected over 31,000 tonnes of consumer electronics and ICT equipment in EU
member states.
The analysts estimate that the number of PCs is growing at just about 12 percent annually.
Also, the number of mobiles and household appliances is growing veryrapidly. As a result,
the volume of e-waste is increasing three times quicker than other waste categories.
The growing volume of returned products requires proper planning tools for dynamic decision-
making. The dynamic configuration of reverse supply chains within a pool of cooperating
companies is a challenge. Recovery networks involve the collection of used products from the
customers, for reprocessing and future redistribution to the market. The customers become re-
suppliers, so the reverse flow of materials is supply-driven not demand-driven. It is difficult to
control the timing and the amount of returns that are pumped into the recovery network by
products’ users.The manufacturers of personal electronics and ICT equipment try not only to fulfil
the legal obligations but also to gain the benefits of a two-way economy.3R policy (recycle,reduce,
reuse) is reflected already in the design phase of products, where manufacturers put pressure on
the durability of the products, easy disassembly, the systematic reduction of the quantities of
components and elimination of harmful substances, so that at the end of the initial life cycle the
largest number of elements/materials can be recovered. They design products, packaging and
supplies that make efficient use of resources. Another good practice is the utilization of useful
components and materials from recyclable products. Computer companies try to stimulate the
reverse flow of products by lease programs where return dates are defined. The lease programs
are mainly addressed to institutions; however, individual returns are less coordinated. The return
products are refurbished or remanufactured as appropriate, repackaged and resold. Companies
offer remarketed products for most product types, and follow strict processes to protect user data

5. and to meet environmental requirements. For example, Hewlett-Packard offers its customers
recycling and reuse programs. In 2011, HP reached their target of recycling 2 billion pounds of
electronic products and supplies since 1987. In 2011 itself, about 3.44 million units of hardware
were recovered for reuse and remarketing (26,700 tonnes). Over 133,9008
tonnes of equipment
and supplies (mainly toners) were subject to material or energy recycling. HP also uses a network
of vendors (service providers) to process, resell and recycle returned products. The company
issues Global Reuse and Recycling Standards that define the conditions and requirements for
storing, handling and processing returned equipment in ways that prevent the leak of harmful
substances. Nowadays, the company has a network of about 500 recycling providers’ locations
around the world. HP also owns facilities (one in the USA and two in Europe).
Recovery networks involve the collection of used products from the customers, for
reprocessingandfuture redistribution.The customersbecome re-suppliers,sothe reverse
flow of materials is supply-driven not demand-driven.
Another example is IBM. Its Global Assets Recovery Services (GARS) is nowadays one of the
world’s largest recovery networks. The company benefits from cooperation with its supply chain
partner Geodis, which owns twenty-one remanufacturing facilities worldwide. The products are
sold through IBM’s sales network as certified remanufactured equipment, which help to optimize
redistribution channels and assets recovery value. In the past years, GARS has recycled more
than 55,800 metric tons of product and product waste. Over 37,800 of the recycled metric tons
have been ferrous and non-ferrous metals.9
A professional assets recovery program provides a good opportunity to find value in older
equipment and to enhance the organization’s reputation as an environmentally friendly institution.
However, despite the success stories,there remain challenges for closing the materials loop. The
important issues which need to be addressed are as following:
• Recovery network configuration – companies have problems with stimulating the time and
quantity of returns. Due to dynamic changes in the recovery network, planning many weeks in
advance is difficult because forecasts quickly become out-dated;
• Optimizing the recycling process that takes into account technical, economic, legal and
environmental issues;
• Development of decision support platforms for the strategic and operational planning in reverse
logistics applied to the multi-stage collection network;
• A holistic approach to reverse logistics, including a hierarchical process of decision-making on
the allocation of recourses;
• The efficient vehicles routing planning in the recovery networks.
Further challenges and applications
In the book Environmental issues in supply chain management – new trends and applications we,
as editors, have tried to highlight:
• Environment and supply chain operations. The objective of this area is to present a general
framework to understand how supply chain operations can be improved when environmental
issues are taken into account;

6. • Reverse logistics – the chapters included in this area are good examples of supply chain best
practices in equipment waste recovery and management;
• Sustainability in sector specific solutions. The chapters present good examples of both
quantitative and qualitative studies where the reader can see the application of environmental
management to real cases.
This book provides a broad scope of current issues important for the development of
environmentally friendly supply chain management. It is a composition of theoretical trends and
practical applications. The advantage of this book is the presentation of practical application from
a number of different countries around Europe.