Traveling through time and space.

Chapter 222: Building Green Supply Chain Management in Family Enterprises

Mu Yang was delighted to see his Taoist cultural souvenirs receiving rave reviews in the market, with tourists returning home with their bags, filled with a keen interest in Taoist culture and a love for exquisite souvenirs. However, he understood that business development must go beyond product innovation; it must also adapt to the trends of the times and shoulder social responsibility. Guided by the concept of sustainable development, Mu Yang focused on building green supply chain management for his family business. Filled with a deep sense of mission and responsibility for this endeavor, he embarked on this significant journey of green transformation.

Mu Yang arrived at the family business's purchasing department, where a bustling scene unfolded. The spacious office was filled with neatly arranged desks and chairs, and filing cabinets overflowed with various procurement documents and supplier information. Staff sat at their computers, intently processing purchase orders and analyzing data. The sounds of ringing phones and keyboards mingled. Mu Yang's arrival imbued the already busy atmosphere with a sense of solemnity and anticipation.

"Hello everyone, today we're going to discuss the green transformation of family businesses, focusing on building a green supply chain management system. This is not only environmentally responsible, but also a key step in enhancing our company's competitiveness. In today's market environment, consumers are increasingly focused on environmental protection. Only by keeping up with this green trend can we win more customers' favor." Mu Yang's expression was firm, and his eyes swept over every purchasing staff member. His eyes seemed to convey unquestionable determination and expectations for the future. "We must establish green procurement standards, control from the source, and select suppliers who truly value environmental protection."

Purchasing Manager Lao Zhang pushed his glasses up, looking embarrassed. "Mr. Mu, your idea is sound, but implementing green supply chain management involves considerable costs. Support costs for suppliers, like technical support to help them improve their production processes and hiring professional environmental consultants, can cost [X] yuan per consultation. Then there's the cost of third-party environmental certification. Applying for just one basic certification costs around [X] yuan. It's all quite a bit of money. And in the short term, it's difficult to translate these investments into actual economic benefits, which puts pressure on our cost control and profit growth. According to our current budget, in the first two years of implementing green supply chain management, we expect costs to increase by [X]%, while profits may only increase by [X]%."

Mu Yang pondered for a moment and said seriously, "Lao Zhang, I understand your concerns. But in the long run, a green supply chain can enhance our brand image and attract more environmentally conscious customers, which will bring greater market share and long-term benefits. We can develop a detailed cost budget and benefit evaluation plan and gradually optimize the cost structure. For example, we can negotiate with suppliers to share the cost of technological improvements and at the same time give them certain commitments on purchase volumes, so that they have the confidence to invest in environmental protection."

Afterward, everyone engaged in a lively discussion about the specifics of green procurement standards. Some suggested prioritizing suppliers that use renewable energy, which would significantly reduce the company's indirect carbon emissions. Others suggested incorporating suppliers' carbon emissions into performance metrics and setting clear reduction targets. Still others proposed rigorously scrutinizing suppliers' raw material sources to ensure they use sustainably sourced materials. After intense discussion, a series of stringent green procurement standards were ultimately finalized, including requirements for suppliers to provide recyclable packaging, reduce raw material waste, and employ environmentally friendly production processes. These environmental requirements were then incorporated into procurement contracts.

To better implement green procurement standards, Mu Yang and procurement staff visited a supplier. It was a parts factory. Upon entering, the roar of machinery filled the air, workers busily working on the production line, and the smell of oil and metal filled the air. Mr. Wang, the supplier's representative, warmly greeted them.

"Mr. Wang, our family business is building a green supply chain, and we hope your company can work with us," Mu Yang said sincerely. "For example, can we make some improvements to the production process to reduce the impact on the environment? We understand that your company's current production process still has room for improvement in wastewater treatment, which not only puts pressure on the environment but may also affect our shared green goals."

Mr. Wang looked hesitant. "Mr. Mu, we also want to improve our green production capabilities, but technological transformation requires a significant investment of money and time. Furthermore, we have concerns about the implementation of green standards and cost-sharing. We're worried that increasing environmental investment will increase product prices and affect our competitiveness. Our preliminary estimate is that to meet your company's environmental standards, we'll need to invest [X] million yuan in equipment upgrades and process improvements, which will increase product costs by [X]%."

Mu Yang responded with a smile: "Mr. Wang, we understand your concerns. We can provide certain technical support and information sharing to help your company optimize its production processes. In terms of cost sharing, we can jointly explore reasonable solutions, such as providing certain price subsidies based on the purchase volume, or gradually absorbing the costs in long-term cooperation. Moreover, once your company achieves green production, it will not only meet our cooperation needs, but also open up more environmentally friendly customer markets. We can provide your company with some potential customer information to help you expand your business scope."

After in-depth discussions, the two sides reached a preliminary cooperation agreement. The supplier promised to actively improve its production process, and the family business also expressed its willingness to provide technical and financial support.

After leaving the supplier, Mu Yang arrived at a third-party environmental certification agency. The environment was quiet, the decor simple and professional, and the staff were focused on processing various certification documents and data. Dr. Li, the head of the certification agency, warmly welcomed Mu Yang.

"Dr. Li, we hope to entrust your organization to evaluate and certify the green supply chain management of our family business to ensure that our green level meets relevant international and domestic standards." Mu Yang said sincerely, "We attach great importance to the professionalism and credibility of certification. We hope that your organization can provide us with a comprehensive and accurate assessment."

Dr. Li nodded in agreement. "Mr. Mu, this is a very wise choice. However, the differences in certification culture among different third-party environmental certification bodies will have a certain impact on the assessment results and the credibility of the certification. Some organizations focus more on theoretical indicators and may focus more on document review and literal compliance with standards during the assessment; others place greater emphasis on actual operational results and will conduct in-depth inspections of the company's daily production processes and environmental management practices. We will uphold a professional and rigorous attitude and comprehensively evaluate your company's green supply chain. During the certification process, we will conduct a detailed review of multiple dimensions such as the company's energy consumption, waste disposal, and supply chain transparency."

When discussing the certification details, Mu Yang learned that the certification process requires detailed data support and on-site audits, which means that both the family business and the supplier companies will need to invest more effort in preparing relevant materials and undergoing inspections. For example, they will need to provide detailed energy consumption details and waste emission reports for the past year, as well as tracking records of suppliers' environmental performance.

After returning to the family business, Mu Yang organized a supplier communication meeting, during which competition and conflict between different suppliers in vying for orders from the family business gradually emerged.

A supplier representative excitedly stated, "To meet green standards, we've invested heavily in improving production equipment and updated three production lines, spending [X] million yuan. We hope to receive more orders in return. If there's no significant increase in orders, it will be difficult to recoup our initial investment."

Another supplier responded: "Everyone is working hard to improve green production capabilities. We can't just look at investment, but also product quality and supply stability. We have always guaranteed high-quality product delivery, which is also an important basis for cooperation."

Mu Yang hurried to mediate: "Everyone, we see your efforts. We will comprehensively consider the implementation of green standards, product quality, supply stability and other factors to allocate orders. The goal is to jointly build a sustainable green supply chain and achieve mutual benefit and win-win results. We can establish a supplier evaluation system to evaluate everyone's performance every quarter. Suppliers with outstanding performance will receive more cooperation opportunities and preferential policies."

As the development of green supply chain management progresses, the conflict between the traditional supply chain management culture of family businesses, which emphasizes cost and efficiency, and the green supply chain management culture, which focuses on environmental protection and sustainability, has become increasingly prominent. Some older employees, accustomed to traditional procurement models, are less comfortable with the strict requirements of green procurement standards.

A veteran buyer complained, "We used to only consider price and delivery time, but now we have to consider so many environmental factors, which makes purchasing more difficult. Furthermore, some suppliers that meet environmental standards charge high prices and have unstable delivery times, which makes our work very difficult."

Mu Yang patiently explained, "Times are changing, and our business philosophy must also keep pace. A green supply chain not only protects the environment but also provides long-term competitive advantages for businesses. We must actively learn and adapt to new management models, which will benefit each of us, the business, and society. We can organize specialized training to help everyone better understand green procurement standards and processes. We will also establish an incentive mechanism to reward employees who excel in green procurement."

To ease cultural clashes, Muyang organized a series of training and exchange activities, inviting experts to explain the importance and practical methods of green supply chain management to employees, fostering experience sharing and conceptual integration between new and veteran employees. During the training, experts used real-world case studies to help employees intuitively understand the positive impact of green supply chains on corporate development. During exchange activities, new employees shared their understanding of green concepts and innovative work practices, while veteran employees shared their experiences in procurement negotiations and supplier management.

After several months of hard work, the family business's green supply chain management has begun to show results. With technical support, suppliers have successfully improved some production processes, reducing waste emissions and energy consumption. A third-party environmental certification agency has also completed a preliminary assessment. While some details still need to be refined, the overall level of greenness has been recognized. In the most recent assessment, the family business's green supply chain achieved an improvement of [X]% in energy efficiency and a reduction of [X]% in waste emissions.

"I am very pleased to see that we have taken solid steps in green supply chain management. But we cannot be satisfied with this. We must continue to optimize and improve to truly realize the company's green supply chain operations. In the future, we must continue to expand the coverage of the green supply chain, incorporate more suppliers into the green system, and jointly contribute to the cause of environmental protection." Mu Yang said with emotion at an internal meeting of the family business.

In the days to come, Mu Yang will continue to lead the family business and continue to explore and move forward on the path of green supply chain management, allowing traditional business culture to deeply integrate with green environmental protection culture, and contribute more to the sustainable development of the enterprise and the green transformation of society.