Environmental considerations in supply chain management indicate the goal towards sustainability. Environmental considerations take into account two types of designs that are designed for recycling and design for disassembly. The practices and principles of the environmental dimension of sustainability have been discussed many times but in connecting to social dimension. Also, there is increasing emphasis on the product-based green supply that is considered to be a sustainable goal and allows extended environmental perspective to the entire value chain as it considered the needs of stakeholders such as designers and suppliers. The number of firms implementing the activities on “green” supply chain management is increasing and it also allows cooperation with the suppliers in terms of manufacturing lines as well as final product. In this way, whole supply chain flow is sustainable. In addition to this, green supply chain management also reduces wastes and increases efficiency by identifying the costs, benefits, and risks associated with the processes of the supply chain.
One of the main problems to the environment is the waste and emissions in the supply chain that needs to be controlled and recycled so that the production processes can be regarded as effective in terms of environmental problems. It is stated that the companies are emphasizing on the concept of sustainability in the supply chain management as they face pressures from different stakeholders, customers, and government because of increasing awareness regarding environmental protection that provides with sustainable business development. It is suggested the direct, as well as indirect potential impacts on the environment, are reduced with the help of environmental supply chain management that affects the final product by the organization.
Cost reductions through the concept of sustainable supply chain management lead to enhanced competitiveness and influencing the economic dimension of sustainability. It also allows resource reduction through the processes of waste elimination and recycling and reuse. Implementing environmental supply chain management also improves the environmental performance of manufacturing processes as well as a final product within the entire supply chain. However, the studies rarely take into account environmental dimension of sustainability when working on costs and delivery performances. There is need to connect the financial consideration with the environmental related supply chain management. Also, the environmental performance in daily operations is highly influenced by the relationship between the environment and supply chain of the business. Three main approaches to handle environmental issues are:
- A practical approach in which the firms recycle and reuse the materials and products and develop environmental legislations accordingly
- The responsive approach that acts as the end of pipe control for pollution
- Value-seeking approach in which integration between the business strategy and supply network-wide obligation is carried out for environmental behavior