Research note
From reversed logistics
to green supply chains
Remko I. van Hoek
The author
Remko I. van Hoek is a Professor at the University of
Ghent, Belgium, and a Post-Doctoral Researcher at the
Erasmus University, Rotterdam, The Netherlands.
Keywords
Supply-chain management, Reverse logistics,
Environmental management strategy, Green issues
Abstract
To lower the environmental damage of business we need
to examine our ``ecological footprint''. We need to move
forward with the business at the same time. In order to
solve that dilemma, a value-seeking and proactive
approach to greening is proposed in the (general)
management literature. However, literature on the role of
supply chain operations, mostly published in the area of
reversed logistics, has failed to develop grounded theory
and frameworks to support the application of such an
approach. Furthermore, research is needed that goes
beyond the partial and fragmented contribution of
reversed logistics. This research note looks at challenges
for research on green steps to take, and green supply
chains to make in practice, as a step up to lowering the
ecologic footprint of supply chains.
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Supply Chain Management
Volume 4 . Number 3 . 1999 . pp. 129±134
# MCB University Press . ISSN 1359-8546
129
Introduction
Hart (1997) explained that the principle of
the ecological footprint indicates the rele-
vance of greening initiatives for countries.
The footprint is defined as the amount of land
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
contribution.
Environmental management is gaining
increasing interest among researchers in
supply chain management. Handfield and
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
al., 1998) and Murphy et al. (1995) found
that 60 per cent out of a group of 133
managers surveyed considered environmental
issues to be highly important and 82 per cent
expected that the importance would further
increase in the years to come. However, based
on a literature review of supply chain and
logistics management literature, Carter and
Ellram (1998) state that despite some early
attempts and initial steps, a grounded theory
or framework for greening is lacking. Hand-
field et al. (1997) also state that the existing
literature has provided only a broad frame-
work for classifying organizational
relationships with the natural environment,
failing to address the conditions and factors
that must be overcome for a company to
become ecologically sustainable. Research
initiatives are needed to overcome this
problem. Specifically, research may have to
move beyond reversed logistics into the
development of green supply chains.
This research note looks at key areas for
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
cross-company and cross-border supply
chain. This approach fits best within a
 From reversed logistics to green supply chains
Remko I. van Hoek
value-seeking approach of the environment
that leverages potential contributions of
greening to the business. The focus on
greening as a competitive initiative also
represents a more proactive approach of
greening, instead of reactive compliance with
regulation. Hopefully, research along the lines
suggested here can support business in
achieving the next leap forward.
Why reversed logistics is not enough
As reversed logistics is gaining increasing
interest and relevance the question becomes
whether it is enough to limit greening efforts
to one segment of the supply chain and to
single companies. Figure 1 displays a
commonly used scheme for environmentally
friendly initiatives in a company. The scheme
indicates that there is much more to greening
than the reversed flow of goods only. Green-
ing can start right at the source with supply
conditions and can work its way through
storage and packaging practices to distribu-
tion and to end-consumers. However, the
scheme does not explicitly reflect the cross-
company dimension. The reversed flow, for
example, can take different forms, from
collection to return shipments into the dis-
tribution channel, followed by dis-assembly
and re-use of selected parts. Alternatively,
used goods could be shredded and scrapped
and re-entered into production as raw
materials. Returned goods, or elements of the
product, could even be returned to suppliers
and supply chain partners for them to
re-manufacture. Those possible supply chain
applications should be taken into
Figure 1 Environmental friendly chain
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Volume 4 . Number 3 . 1999 . 129±134
consideration. One step further, dis-assembly
operations in the reversed flow might call for
proactive ``design for dis-assembly'' right in
the initial product design stage of both
supplier and customer. Wu and Dunn (1995)
state that to minimize the total environmental
impact of a business it must be evaluated from
a total system perspective. The supply chain
represents this holistic system perspective and
represents the focus for far-reaching greening
initiatives.
Green approaches
Despite the fact that categorizations of green
approaches are being criticized for their broad
nature, they do have something to say.
Fundamentals of greening as a competitive
initiative were explained in detail by Porter
and van der Linde (1995). Their basic
reasoning is that investments in greening can
be resource saving, waste eliminating and
productivity improving. As a result, green
initiatives can lower not only the environ-
mental impact of a business but also raise
efficiency, possibly creating major competitive
advantages in innovation and operations.
Kopicki et al. (1993) introduced three
approaches in environmental management:
the reactive, proactive and value-seeking
approach. In the reactive approach companies
commit minimal resources to environmental
management as they start to procure some
products with some recycled content, start
labeling products that are recyclable and use
filters to lower the environmental impact of
production. However, filters are an ``end of
pipeline'' initiative used to comply with
 From reversed logistics to green supply chains
Remko I. van Hoek
environmental legislation that do not take
away any of the causes of the environmental
impact. In the proactive approach, companies
start to pre-empt new environmental laws by
realizing a modest resource commitment to
initiate the recycling of products and design-
ing green products. In this approach the
company assumes responsibility over product
re-use and recycling as an element of
environmental management. The most far-
reaching approach is value-seeking, in that
companies integrate environmental activities
into a business strategy and operate the firm
to reduce its impact on the environment as a
strategic initiative. The CEO establishes a
strong environmental commitment and the
capital commitment is shared among partners
in the supply chain. Operating systems in the
value-seeking phase may include the (re-)
design of products for dis-assembly, the use of
life-cycle analysis and creating an involvement
of third parties. In this approach environ-
mental management assumes supply chain
wide responsibility as opposed to ad hoc and
fragmented organization (generation one) or
functional silo organization (generation two).
Walton et al. (1998) use a comparable three
phase model that starts with ``comply with the
letter of the law'' (reactive) and goes from
``clean up'' to proactive. Despite the fact that
Kopicki et al. (1993) use the proactive phase
as a second phase the explanation of the
proactive approach provided by Walton et al.
(1998) is comparable to that of the value-
seeking phase of Kopicki et al. (1993).
Companies are integrating environmental
management into corporate strategic planning
and into day-to-day processes as they adopt a
resource-productivity framework to maximize
benefits attained from environmental pro-
grams.
The extension of the Kopicki et al. (1993)
framework offered by Walton et al. (1998) is
that they state that companies will only thrive
in the final phase of environmental manage-
ment when they act as a whole system that
includes customers, suppliers and other
players in the supply chain. By explicitly
developing a supply chain approach in the
environmental management process, the
impact on operations is leveraged throughout
the chain, expanding the domain to a much
wider arena. They detail how such an
approach requires that cross-functional and
cross-company processes are addressed,
including product design, suppliers'
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processes, evaluation systems and inbound
logistics. Of course, this approach requires a
much more far-reaching effort of players in
the supply chain and larger investments than
those in filters. This indicates the need for a
strategic approach and in-depth development
of opportunities. Walley and Whitehead
(1994) also mention the value-based
approach as the most far-reaching approach
in environmental management. They charac-
terize this approach as systematic, through the
strong commitment and integration of flexible
strategies and structures, throughout the
supply chain. Flexibility relates to the ability
to exercise different options, applied in the
Recap project through the development of
various new channel structures depending on
the type of application of recycled material.
Within this approach three types of activities
are undertaken: operational, technical and
strategic activities, depending on the impact
on value and the scope of discretionary
response. Hart (1997) introduced the
distinction between today's greening efforts
and tomorrow's targets, internal and external
efforts. The difference between today's efforts
and tomorrow's targets appears to be
relatively similar to the scope of discretionary
response, the external dimension meets the
supply chain approach. Table I lists the
characteristics of the three approaches.
Green steps to take
If a supply chain approach is so important in a
value-seeking greening initiative, how should
businesses develop such an approach? Figure
2 highlights some of the changes needed in
the evolution from reversed logistics to green
supply chains. First, this evolution fits within
a move away from reactive approaches
oriented at complying with regulation to a
more far-reaching attempt to seek value,
proactively and gain competitiveness, as
explained in the previous section. The
perspective then changes from greening as a
burden to greening as a potential source of
competitiveness. Such competitiveness may
be based on:
. creating a marketing edge by using
greening as a unique selling point with
environmentally conscious customers;
. leveraging innovation. Design for dis-
assembly for example, can be based on
smart product connectors which are
 From reversed logistics to green supply chains
Remko I. van Hoek
Table I Management approaches to greening
Reactive approach/comply with legislation
Minimal resources committed
Ad hoc organization
Responsibility falls on individual who initiates program or government
affairs office
Filters and other end-of-pipeline solutions
Procure products with recycled content
Label products that are recyclable
Proactive approach/pre-empt new legislation
Modest resources committed
Top management commitment
Functional approach
Prepare environmental policy statement
Perform environmental audit
Initial recycling and re-use initiatives
Designing green parts and products
Value-seeking approach
Strategic commitment; integrate environmental project in strategy
Supply chain initiative
Systematic
Flexible
Design products for dis-assembly and recycling or re-use
Environmental life-cycle analysis to evaluate products
Critically review and reassess existing processes, products and services
Ask suppliers to commit to waste reduction goals
easier to (dis-)assemble, lowering assem-
bly lead-times; or
. cost-savings realized through resource-
savings. Using less fuel for example, by
lowering trucking miles, not only lowers
emissions but also saves on fuel expenses
and drivers' working hours.
The scope of actions in the chain has to
change from an initial sale to that of the entire
product usage life-time, not only because of
environmental impact during its use (instead
Figure 2 From reversed logistics to green supply chains
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Volume 4 . Number 3 . 1999 . 129±134
of during production and distribution only)
but also because of the future return flow.
Some companies, like MCC (a wholly owned
Mercedes company) that makes the new
Smart car, are already experimenting with this
concept. Establishing a relationship with
customers is used to facilitate customer
loyalty and follow up orders. Smart uses
product upgrades and adjustments (e.g. dif-
ferent coloured door panels etc.) as a carrier
for the enduring customer contact (see also:
van Hoek and Weken, 1998). During the life
of the car (the use by a customer) clients can
have the car adjusted to changing needs with
add-on modules and even new body panels.
As a result the product's life cycle can be
extended and waste volume can be lowered;
only modules are abolished not entire cars.
Why not use these initiatives to expand the
scope of actions beyond its initial life into a
second and third life, while raising customer
loyalty and raising the number of repeat
orders? The related solutions to greening are
thus more reduce and re-use initiatives than
end-of-pipeline solutions. The latter do not
take away the cause of emissions, they just
filter the emission after the occurrence. If we
really look at greening opportunities
throughout the supply chain we can address
environmental impact right at the source and
throughout the process and migrate from low-
end solutions to solutions far higher in the
greening hierarchy, with a far more significant
impact on greening (see Figure 3). Again the
scope of greening initiatives then moves
beyond individual companies to the supply
chain.
The question then becomes how to re-
define Figure 1.
Figure 3 Hierarchy of strategies
 From reversed logistics to green supply chains
Remko I. van Hoek
Green supply chains to make
Table II provides an attempt to redefine the
context and scope of greening initiatives in the
supply chain. First of all, the supply chain
involves multiple players. The first row lists a
number of them, reaching as far as raw
material suppliers and retailers. All of these
players can play an important role in greening
the supply chain. In the downstream stages
products are taken back into circulation after
their initial life cycles. These are then
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,
materials are to be selected upstream, the
design for assembly used midstream has to
favor dis-assembly and transportation and
packaging downstream has to be environ-
mentally conscious.
If a supply chain is to really assume
responsibility over its ecologic footprint it is to
be evaluated on these grounds. The supply
chain footprint has to be measured against
different indicators than the original footprint
measure. In that respect, a set of performance
measures relevant for these activities is
identified and listed in the final row of Table
II. Materials can be selected against emission
rate and energy consumption standards.
Re-use of materials can be measured against
the percentage of ``virgin'' or new materials
used in parts production. Ideally, this
percentage should be as low as possible.
Dis-assembly and shredding can be measured
as volume of goods handled per time unit.
Transportation can be assessed in terms of
loads against capacity of transport equipment.
A high degree of utilization is an indicator of
the efficiency of transportation. Driving
Table II Players, activities and evaluation of greening efforts throughout the supply chain
Upstream
Players Raw materials suppliers
Parts suppliers
Green activities Material selection
Re-use of materials
Relation performance Emission rates and energy
measures efficiency per material % of
virgin material
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empty trucks around creates emissions with-
out economic value. Packaging cannot only
be evaluated based on packaging material
used but also by the amount of air or useless
space in the package. Returns handling can be
measured in terms of volumes handled to
indicate the size of the operation. More
important is the volume selected for recycling/
entering the re-use supply chain, as this
provides an indication of the effectiveness of
the return flow of goods and the value of
products returned.
Conclusion
As supply chains are becoming increasingly
globalized and multi-company based, the
ecological footprint principle deserves a
broader application in the supply chain.
Footprints are not only nation-based as
suggested by Hart (1997); the scope of supply
chains is far broader. This also implies that a
focus on reversed logistics, as commonly used
in the literature, is no longer adequate. Based
on the existing literature, this paper presents a
categorization of green approaches and
suggests the value-seeking approach as the
most relevant in greening the supply chain as
a whole (instead of logistics, and regulatory
compliance alone). In order to develop
greening approaches as a competitive initia-
tive, various elements have been suggested,
including sets of actions for various players
along the chain, as well as, measures of
success. Much research still has to be done to
support the evolution in business practice
towards greening along the entire supply
chain. Hopefully, this paper has identified
some of the steps to take, while minding our
footprint.
Midstream Downstream
Main suppliers Wholesalers
Manufacturers Importers/distributors
Retailers
(Design for) dis-assembly Packaging
Scrap, shred Returns handling
Transportation Returns shipment
Volume of goods dis- Amount of ``air'' in package
assembled per hour Volume selected for
Degree of utilization recycling
transport equipment
 From reversed logistics to green supply chains
Remko I. van Hoek
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