Green Supply Chain

Management in Asia-Pacific
GIA Industry White Paper

August 2009
Global Intelligence Alliance 2009. All rights reserved.
Contact: Kelvin Inn kelvin.inn@globalintelligence.com Kim Khoo kim.khoo@globalintelligence.com
Web: www.globalintelligence.com
Tel: Singapore (65) 6423 1681 Hong Kong (852) 2107 4299

All Rights Reserved 2009

www.globalintelligence.com

Contents
This contains excerpts from GIAs Green Supply Chain Management
in Asia-Pacific White Paper. For the free white paper, please visit
www.globalintelligence.com or email info@globalintelligence.com.
Executive Summary
To green or not to green?
Asia-Pacifics stance on green practices
Green supply chain management tools
Asia-Pacific green SCM case studies

Not included here

Not included here
Not included here

This GIA Industry White Paper provides an overview of green supply chain management practices in the Asia-Pacific region. The report is provided as
is, free of charge and without any warranty or guarantee. Global Intelligence Alliance rejects responsibility for errors or omissions, or for any loss or
consequential loss arising as a result of decisions taken based on its contents.
2009 Global Intelligence Alliance. All rights reserved. This report is copyright, however individual pages or portions thereof may be copied
referencing Global Intelligence Alliance as the source.
Global Intelligence Alliance (GIA) is a strategic market intelligence and advisory group. GIA was formed in 1995 when a team of market intelligence
specialists, management consultants, industry analysts and technology experts came together to build a powerful suite of customized solutions
ranging from outsourced market monitoring services and software, to strategic analysis and advisory.
Today, we are the preferred partner for organizations seeking to understand, compete and grow in international markets. Our industry expertise and
coverage of over 100 countries enables our customers to make better informed decisions worldwide. For further information please see the About
Global Intelligence Alliance section at the end of this report, contact the author or visit www.globalintelligence.com
Green Supply Chain Management in Asia-Pacific | Aug 2009

www.globalintelligence.com

Abbreviations and acronyms

3Rs

Reduce, Reuse and Recycle waste

management strategies, in order of
importance

CDM

Clean Development Mechanism

CPG

Consumer Packaged Goods

CSR

Corporate Social Responsibility

EPA

Environmental Protection Administration,

Executive Yuan, Taiwan

ESG

Environmental, Social & corporate

Governance issues in responsible
investing

EU

European Union

GG

Guitang Group (China)

GSC

Green Supply Chain

GSCM

Green Supply Chain Management

ICT

Information and Communications

Technology

ISO14000

Standards for an Environmental

Management System (EMS) set by the
International Organization for
Standardization (ISO)

LCC

Low Cost Country

Green Supply Chain Management in Asia-Pacific | Aug 2009

MOE

Ministry of the Environment, Japan

MNC

Multi-National Corporation

NDRC

National Development and Reform

Commission , China

NEA

National Environment Agency, Singapore

PRI

Principles for Responsible Investing

REACH

Registration, Evaluation, Authorisation and

Restriction of Chemical substances (European
Community directive 2002/95/EC)

RoHS

Restriction on Hazardous Substances

(European Community directive 2002/95/EC)

SCM

Supply Chain Management

SPB

Seshasayee Paper & Board (India)

VC

Venture Capital

WEEE

Waste Electrical and Electronic Equipment

(European Community directive 2002/96/EC)

www.globalintelligence.com

Executive summary

www.globalintelligence.com

Executive summary

Green SCM adoption set to rise, affecting most

industries in the Asia-Pacific region
Asias Rationale For Going Green
MULTIPLE
STAKEHOLDERS
(retailers,
customers,
consumers,
government) are
driving new focus
on sustainability
and corporate
governance in the
market place.

MARKET FORCES (scarce

resources, bottom line
improvement need) are
driving firms new focus
on green-ing their
supply chains manufacturing, sourcing
& logistics.

IMPACT on all industries

Green supply chain management offers an
expanded way to think about cost reduction
and profit improvement.

Firms in Asia, as the major

sources of raw materials,
components and finished
products worldwide, are
being pressured by
MAJOR DOWNSTREAM
CUSTOMERS (e.g.
Walmart) to go green.

IMPACT on consumer
durable & nondurable
goods such as:
1. Food & Beverages
2. Consumer
electronics
3. Apparel

STRICTER EUROPEAN ENVIRONMENTAL

REGULATIONS (RoHS, WEEE, REACH) have
influenced Asian governments to pass
similar laws that focus on process &
pollution prevention and product
regulation; these force change within
companies competing in the global supply
chain, and also affect their relationships
with other organizations.

IMPACT on UPSTREAM suppliers:

Chemicals, Paints, Additives, Oils
Materials - Cement, Concrete,
Ceramics, Glass, Iron & Steel, Paper,
Minerals & non-ferrous Metals, Textiles

IMPACT on DOWNSTREAM users:

Cosmetics
Electronics

Green Supply Chain Management in Asia-Pacific | Aug 2009

www.globalintelligence.com

Executive summary

Case studies yield some green supply chain best

practices to reduce costs and increase revenues
Asian examples of green best practices

The Chinese sugar refinery and Indian paper firm case studies brilliantly apply the green 3Rs principle of Reduce, Reuse
and Recycle; with both firms diversified into related industries - sugar, paper, alcohol and cement and utilising waste
products of the other industries as raw materials or for power generation.

Case studies also highlight the importance of building effective incentives with external parties (suppliers, competitors,
customers and government) to improve the robustness of the supply chain system on all levels: local, national and
international.

The Japanese IT multinational case study illustrates the benefits of centralization, sharing infrastructure and route
optimization in a local context, that can result in relatively large efficiency improvements and cost reductions.

Reduce, Reuse & Recycle

waste products

Establish supporting network of external

parties motivated to ensure sustainability
of green supply chain

1. Logistical centralization for economies of

scale.
2. Share logistical overhead with partners for
cost reduction.
3. Optimize transportation routes to further
reduce costs.

Raw
materials
for another
product

Energy
generation
for plant

Suppliers

Customers

Government

Green Supply Chain Management in Asia-Pacific | Aug 2009

Competitors
www.globalintelligence.com

To green or not to green?

www.globalintelligence.com

To green or not to green

Green supply chain adoption driven by management,

organizational learning, market pressures and
government regulations

Inhibitors

Drivers

Company/management

Scarce
resources &
unstable
prices mean
competitive
advantages
from better
resource use
& efficiency
Insufficient
management
commitment
and supply
chain partner
support

Source: Global Intelligence Alliance research & analysis

Market

International
customer pressure
and competitive
advantage for
suppliers, e.g. 2ndtier local supplier
could be chosen over
MNCs home supplier

Consumers are
environmentallyconscious and apply
institutional pressure,
e.g. Principles of
Responsible Investment
(RPI) framework &
Environmental, Social &
corporate Governance
(ESG) criteria

Insufficient
green SCM
knowledge by
many SC
professionals

Company/management
Green Supply Chain Management in Asia-Pacific | Aug 2009

Government

Fears of high
upfront costs
and long
payback
period

Government
introduction of stricter
domestic and
international
regulations, e.g. RoHS,
WEEE and environmental
guidelines such as
ISO14001

Inconsistent government
regulations across Asian
countries increases
compliance complexity,
except where strictest
standards adopted

Government
www.globalintelligence.com

Future

Now

Now

Future

To green or not to green

Green supply chain has tangible cost & efficiency

advantages as well as intangible & emotional benefits
Tangible
Suppliers and Manufacturers
Reduced input costs (raw materials,
utilities, logistics) and overall
production costs
Reduced waste disposal costs.
Better operational efficiency and
resource usage leading to possible
competitive advantages.
New revenue opportunities
Customers
Lower lifecycle cost of ownership for
customers
Environment
Lower environmental load for local
environment and ecosystem
Society
Less consumption of finite global
resources

Green Supply Chain

Management (GSCM)
Benefits

Intangible
Suppliers and Manufacturers
Greater ease of manufacturing (e.g.
less waste) and improved quality
(more consistent)

Emotional
All Supply Chain Players
Improved motivation, pride
and moral about doing good
for society among stakeholders
throughout supply chain (e.g..
employees, shareholders,
management, partners)
Improved corporate image and
branding for suppliers and
manufacturers
Improved customer feelgood factor and quality of life

Customer
Higher levels of convenience and
satisfaction (e.g. detergent that
cleans in cold water)
Environment
Overcome cynicism over
environmental concerns
Society
Greater care and attention to
environmental issues in non-work
context

Source: Global Intelligence Alliance research & analysis

Green Supply Chain Management in Asia-Pacific | Aug 2009

www.globalintelligence.com

To green or not to green

More companies in every economic sector are taking the

first step towards managing carbon emissions
80

Carbon Disclosure Project (CDP4) - 2006

Carbon Disclosure Project (CDP5) - 2007
Carbon Disclosure Project (CDP6) - 2008

70
Percent Responding (%)

Carbon Disclosure Project response rate

90

60
50
40
30
20
10
0

Source: Carbon Disclosure Project

Green Supply Chain Management in Asia-Pacific | Aug 2009

www.globalintelligence.com

To green or not to green

Greener supply chains being enabled by current VC

investment in green technologies for future use
Venture capital investment in green energy
technologies by industry, Q3 2008

According to Greentech Media, VC

investment in green energy
technologies in US, EU, Israel and
Australia exceeded US$2.8 billion in
Q3 2008, continuing the growth
momentum from previous quarters
(1Q 2008=US$998 million, 2Q 2008=US
$1.3 billion).
VC investment and interest in green
energy technologies is expected to
continue.
Every niche in green technology is
being explored, especially solar
energy.
Strong investment is expected to
lead to commercialization and wider
adoption of technology within a short
time period.

Source: Greentech Media, 2008

Green Supply Chain Management in Asia-Pacific | Aug 2009

www.globalintelligence.com

To green or not to green

Downstream product specifiers have major roles to

play in driving greener supply chains
Product Specifiers

Pharmaceuticals

Components
manufacturer

76 % of procurement
survey source from China

Automotive & Transportation

Other

Industrial

Raw materials
provider

50 % of procurement
survey source from
India

Major influencer for greener supply chains

ICT

Transportation &
logistics services

CPG

Industrial equipment
manufacturer

Other Asia (49%):

Thailand, Taiwan, Korea, Singapore,
Malaysia, Vietnam, Burma and the
Philippines

Source: Global Intelligence Alliance analyses with survey data from eyeforprocurement, 2008.

Eyeforprocurement conducted a Sourcing in Low Cost Countries Survey in March and April 2008.
Sourcing practices of 200 procurement professionals, senior executives from manufacturers, retailers and 3PLs operating in various verticals in
North America, Europe, Asia and Africa were surveyed.
59% of respondents were based in North America, 23% in Europe and 13% were from Asia and Africa.
Green Supply Chain Management in Asia-Pacific | Aug 2009

www.globalintelligence.com

To green or not to green

As a key source for components, equipment & raw

materials, Asias role in green supply chains is crucial
Low-cost source country (% respondents)

Asia, especially China and India,

continues to be the top region for
low cost sourcing.
Components and raw materials
sourcing from Asia shows strong
growth, becoming prime targets for
green SCM efforts.
Green SCM requires high levels of
cooperation with suppliers,
implying better management of
supply chains at supplier companies.

! Other Asia includes Thailand, Taiwan, Korea, Singapore, Malaysia, Vietnam, Burma and the Philippines

Products / services sourced in low cost countries (% respondents)

Walmart started greening its

supply chain in 2005
First, it reorganised its internal
supply chain.
Second, it put pressure on
1000s of its Chinese suppliers in
2008 to green their supply
chains also, e.g. reducing
packaging used and improving
product energy efficiency.
Regulations such as RoHS/WEEE and
REACH are especially relevant for
pollution control of all components
and raw materials.

Green Supply Chain Management in Asia-Pacific | Aug 2009

Sources: (1) eyeforprocurement survey, 2008;

(2) news articles
www.globalintelligence.com

To green or not to green

Survey of APAC countries indicates consumers are

prepared to pay a higher price for going green
According to a TNS survey of 17 countries and
13,000+ respondents, consumers are willing to pay
the higher price required to go green.
In Japan, consumers were the most enthusiastic
with 70% accepting a 5% price premium.

How much more would consumers be willing to

pay for green products?
Willingness to pay more for eco-friendly products
Thailand

94%

In Singapore 38% would pay 10% more, in Australia

this was 33%, followed by 26% in Japan.

Malaysia

82%

Korea

81%

Consumers most likely to think green for food,

with the majority believing it is 'right' or 'fair' for
retailers to adopt choice editing, or the practice
by which they remove unsustainable products from
the shelves, leaving only environmentally-friendly
options.

Singapore

70%

Consumers willing to shoulder part of the cost for going

green

% consumers accepting a 5% price premium

Japan

70%

Australia

57%

Singapore

55%

Thailand

49%

South Korea

41%

Hong Kong

55%

Malaysia

40%

Australia

54%

Hong Kong

35%

Japan

50%

Source: TNS

Green Supply Chain Management in Asia-Pacific | Aug 2009

Source: TNS
www.globalintelligence.com

Thank You for Your Attention

These slides are excerpts from

the GIA White Paper: Green
Supply Chain Management in
Asia-Pacific.
Download the entire White Paper
for Free

Contact Us
For additional information about the
Global Intelligence Alliance and our
services, please send email to
info@globalintelligence.com or log on
to the GIA website for the contact
information of the GIA company
nearest to you.

The report has been published under the

GIA White Paper series at
www.globalintelligence.com.

Green Supply Chain Management in Asia-Pacific | Aug 2009

www.globalintelligence.com

About GIA

Outlook for green supply chain in Asia Pacific | Aug 2009

www.globalintelligence.com

GIA is a strategic market Intelligence

and advisory group
Global Intelligence Alliance (GIA) was formed in 1995
when a team of market intelligence specialists,
management consultants, industry analysts and
technology experts came together to build a powerful
suite of customized solutions ranging from outsourced
market monitoring services and software, to strategic
analysis and advisory.
Today, we are the preferred partner for organizations
seeking to understand, compete and grow in
international markets. Our industry expertise and
coverage of over 100 countries enables our customers
to make better informed decisions worldwide.

Green Supply Chain Management in Asia-Pacific | Aug 2009

www.globalintelligence.com

Access local knowledge in over

100 countries
GIA Group has 12 offices on 4 continents.
Together with affiliated GIA Member
companies, certified GIA Research Partners
and consultants, GIA provides access to
local knowledge in over 100 countries.
All GIA Network companies adhere to GIAs
Research and Analysis Quality System as
well as the SCIP Code of Ethics.

Green Supply Chain Management in Asia-Pacific | Aug 2009

www.globalintelligence.com

- page 18

We understand your business

With a track record of supporting thousands of clients
around the world, we bring you practical expertise in your
markets, as well as knowledge from our practices covering
11 industries and all the key business functions.

Industry Practices
Automotive
Chemicals
Construction & Property Development
Consumer & Retail
Energy, Resources & Environment
Financial Services
Private Equity
Logistics & Transportation
Manufacturing & Industrial
Pharmaceuticals & Healthcare
Telecommunication, Technology & Media
Functional Practices
World Class Market Intelligence
MI for Strategic Planning
MI for Marketing & Sales
MI for Product & Innovation Management
MI for Supply Chain Management
M&A and Partnering

Green Supply Chain Management in Asia-Pacific | Aug 2009

www.globalintelligence.com

International
Baltic Region
Belgium
Brazil
Canada
Central & Eastern Europe
China
Finland
France
Germany
Hong Kong
India
Japan
Netherlands
Russia
Singapore
South Africa
Tunisia
UK
United Arab Emirates
USA East Coast
USA West Coast

Global Intelligence Alliance Group

Gateway Baltic
Global Intelligence Alliance Belgium
Global Intelligence Alliance Latin America
Global Intelligence Alliance Canada
EasyLink Business Services
Global Intelligence Alliance China
Global Intelligence Alliance Finland
RV Conseil
Global Intelligence Alliance Germany
Global Intelligence Alliance Hong Kong
Global Intelligence Alliance India
McRBC
Global Intelligence Alliance Netherlands
ALT R&C.
Global Intelligence Alliance Singapore
Butterfly Effect Intelligence
Tunisie RV Conseil
Global Intelligence Alliance UK
GCC Consulting
Global Intelligence Alliance USA East Coast
I.S.I.S. Integrated Strategic Information Services, Inc.

Green Supply Chain Management in Asia-Pacific | Aug 2009

info@globalintelligence.com
baltics@globalintelligence.com
belgium@globalintelligence.com
brazil@globalintelligence.com
canada@globalintelligence.com
cee@globalintelligence.com
china@globalintelligence.com
finland@globalintelligence.com
france@globalintelligence.com
germany@globalintelligence.com
hongkong@globalintelligence.com
india@globalintelligence.com
japan@globalintelligence.com
netherlands@globalintelligence.com
russia@globalintelligence.com
singapore@globalintelligence.com
southafrica@globalintelligence.com
tunisia@globalintelligence.com
uk@globalintelligence.com
uae@globalintelligence.com
usaeast@globalintelligence.com
usawest@globalintelligence.com

www.globalintelligence.com