Introduction strategic management with most of the companies

Introduction

Typical
supply chain involves suppliers, manufacturer, warehouse, retailers and finally
customers. Due to existence of superior alternatives, today customers are more
demanding, looking for wide variety of products at shortest possible delivery
time, even willing to configure the product to their specifications. This has
brought the shift from passive acceptance of customer to active involvement in
the design and delivery of products and services. The exceptions of earlier
supply chain like desired product delivered in right quantity to the right
location in time, damaged free and correctly invoiced are reality of today.
Traditionally the focus of supply chain network is economic benefit i.e. cost
minimization or profit maximization.

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The
concept is changing from economic value to market value to Relevance. Increased
pressure on cost and globalization of supply chain have further complicated the
supply chain. These have brought tremendous changes in the traditional supply
chain. The supply chain has become an integral part of strategic management
with most of the companies and even considered as competing strategy.

 

In
today’s environment, the concept of integrated supply chain is widely used by
large enterprises. Still in classic supply chain, the concept of environment or
TBL (Triple bottom line) is not considered. It will be pertinent to mention
here that organizations are also looking at CSR initiatives as part of their
larger responsibility towards society. CSR activities focuses more on business
ethics, local employment and local concerns whereas green supply chain
management focus on environmental issues. Shell Puget was fined in US for
non-compliance of environmental regulations1. This indicates that
legal framework is tightening noose around the companies for violations in
regard to environment. There are many more1 alike examples.

 

Now-a-days
manufacturing industries are seen as culprits for damaging the environment. The
current state and trend of environmental degradation (from regulatory,
consumer, and moral standpoints) indicate a need for a change in manufacturing
philosophy. There must be a fundamental shift in the way production systems
operate. Beamon , (1999) have mentioned in his study that to achieve sustainability
huge reductions in waste generation is needed and need for change in concept of
product disposal.The greening of supply chain involves the consideration of
environment. The increasing customer awareness about environment, legal
framework and pressures from stakeholders (consumers, government regulatory
bodies, competitors, non-profit or non-government organizations, investors,
employees, shareholders, etc.) have forced the organizations to think of Green
supply chain. Thinking Green has become buzz word in today’s corporate world.
In 1997, Kyoto protocol was adopted by both developed and developing countries
to reduce the CO2 emission (Greenhouse gas).

 

The
concept of green supply chain applies to product or services through entire
product life cycle. All products manufactured within the supply chain, and the
applied materials and substances used in the process are expected to meet
environmental standards for design, development, distribution, use, disposal or
recycling.  The comprehensive approach
includes reducing energy, water consumption and greenhouse gas emissions,
increasing use of renewable energies, Enhancing appropriate waste management
and training of employees. The growing awareness about the conservation of
environment is partly attributed to media also. The consumers in the developed
countries are more concerned about the environmental friendly products. The
biggest challenge of the green supply is to integrate the suppliers and
customers in a collaborative way.

 

A
Green or Sustainable Supply Chain can be defined as “the process of using
environmentally friendly inputs and transforming these inputs through change
agents – whose byproducts can improve or be recycled within the existing
environment. Green supply chain management can be defined as integrating environmental
thinking into supply-chain management, including product design, material
sourcing and selection, manufacturing processes, delivery of the final product
as well as end-of-life management of the product after its useful life. We can
define green supply chain management (GSCM) as management practice which
considers the impact of environment in its existing supply chain, use of
resources efficiently, elimination or minimization of waste ( energy, water,
air, hazardous materials) and reverse logistics. Sustainable supply chain
includes forward supply chain and closed loop supply chain including reverse
logistics, remanufacturing, and product recovery.

 

Green
supply chain management is now-a-days a part of strategic management at board
level of many companies. European automotive companies like BMW Group,
Volkswagen, PSA Peugeot, Ford, Volvo, Land Rover, Jaguar, Scania, Daimler and
Toyota have already formed the automotive working group on supply chain
sustainability. They are working on common guiding principles for
sustainability. There is no conclusive evidence or empirical evidence available
which states that GSCM practices have positively impact the profitability of
the organization.

 

 

There
has been enough literature which discuss about enablers, barriers, motivations,
advantages. supplier selection, supplier integration , inter or intra
organizational capabilities or integration of suppliers etc. in entire supply
chain. During literature review, it was observed that the words like Green
supply chain management (GSCM) or sustainable supply chain management (SSCM) or
sustainable green supply chain management (SGSCM) has been interchangeably
used.

Recently
discussions have started about performance measurement of Sustainable supply
chain.

This
paper focuses on identifying the performance parameters for SSCM.

 

Literature
review

The
organizations are still in very nascent stage of establishing the links between
GSCM or SSCM and their impact on overall performance management. The companies
need to develop the capabilities to measure the performance of their
Sustainable operations. The environmental criteria’s in SCM are increasingly
becoming important for competitive advantage and for business performance. The
main questions for researchers and organizations are 1) which criteria’s to be
measured, 2) do the organizations have capabilities to measure, 3) to establish
linkages between environmental criteria’s and business performance. 

During
the literature review, literature was selected based on various regions

1.      Mexico:  The free trade agreement between North American
countries (USA, Canada, and Mexico) came into existence in January 1994. Wisner
et al, (2005) conducted study on the impact of NAFTA (North American Free Trade
Agreement) on environmental responsiveness and performance by Mexican industry.
They conducted structured in-depth interview with 236 Mexican companies and
then applied Log logit method modelling. They concluded that the regulatory
influence and market pressure have positive impact on environmental performance
of Mexican Industry.

2.      Canada:
Moralli et al (2013) conducted the study on extent of integration of
Sustainability principles into Supply Chain management and evaluation of
supplier performance. They used content analysis for 100 Canadian companies and
in-depth interviews with 18 experts. They concluded that integration of
sustainability principles on supply chain management is increasing. Tajbakhsh et
al (2014) conducted the study on KPI for entire sustainable supply chain and
concluded performance of SSCM should be evaluated across the chain and
suggested the comprehensive framework.

3.      USA: Beamon,(1999)
conducted a study to analyse the current state of environment in USA and
integration of environment into traditional supply chain management. He
suggested new performance parameters for SSCM and concluded that profitability
can be increased by reducing the liability risks due to environment hazards.

4.      Germany:
Julia Wolf, (2011) conducted a study on to provide a coherent and testable
model of sustainable supply chain management integration (SSCMI).

5.       Taiwan:
Lo,(2013) conducted the study to establish the relationship between
uncertainties and the motivations for implementing GSCM depending upon the
position in supply chain. They conducted the in-depth interviews with 12
Taiwanese companies and secondary data was used from various sources (e.g.
company’s website). They developed the single cases and then made cross case
analysis.

6.      South East Asia (SEA)-Rao
et all (2005) conducted the study on establishing link between Greening of
supply chain and their impact on environmental and economic performance. They
conducted in-depth interviews and then use the Linear SEM approach.They
concluded that greening of supply chain has positive impact on economic
performance and competitiveness and proposed a theoretical framework.

7.      Varsei,
(2014) conducted a study in identifying and analyzing drivers and barriers for
SSCM. They suggested a theoretical / conceptual framework sustainable supply
chain development and KPI for performance management of SSCM. Their approach
was based on literature review and four organization theories (e.g. RBV,
Institutional, Stakeholder and Social network)

8.      Iran:
Govindan et l (2015) conducted a study on establishing interrelationship and
interdependence between GSCM drivers and performance indicators. They used the
integrated intuitionistic DEMATEL approach to develop a comprehensive list,
followed by a case study in automobile company located in Iran. They concluded
that internal management support, green purchasing and ISO 14001 Certification
are the most important criteria’s for GSCM.

9.      India:
Mitra, (2013) conducted a study on implementation of GSCM in India. They
conducted questionnaire based survey and in-depth interview with 232 Indian
manufacturing companies and then analyzed the data with SEM approach. They
concluded that pro-active collaboration with suppliers supports environmentally
sustainable product design and logistics which improves the economic
performance and competitiveness. Dubey et al (2017) conducted the study or
understanding the impact of institutional pressures on sustainable performance
management and the role of organization culture on Institutional pressure. They
conducted questionnaire based survey of 277 respondents from Indian industries
and concluded that there is positive relation between them. Mani.V et al (2015)
conducted a study on understanding the different dimensions of “Social”
sustainability in Indian Manufacturing companies. This study is based on
comparative case and they concluded that the majority of social dimension in
Indian Manufacturing companies revolve around equity, child labour, bonded
labour, education, wages, ethics and philanthropy despite of many similarities or/
and differences. Mani et al(2017) conducted a study to identify the dimensions
of social sustainability. This study is based on in-depth interviews with 27 Indian
manufacturing companies and hypotheses testing with SEM model. They concluded
that 18 measures categorized under five dimensions namely Labor rights, safety
and health, societal responsibility, diversity and product responsibility are
playing vital role and have positive relation to sustainability performance.

 

Gap
Analysis:

Based on the literature
review, it was identified that various conceptual and theoretical models have
been proposed in many studies. It has been mentioned that

–         
Organizational performance (economic
performance, sustainability performance, social performance) is improved or
directly related with implementation of practices of Green Supply Chain, using
various statistical techniques (e.g. questionnaire based, SEM or Fuzzy DEMAETEL
or Grounded theory etc.

–         
There are mediation effects of enablers of
GSCM on organizational performance.

–         
Pull effect is more effective than push
effect

–         
There is no single study has been
conducted which shows that Profitability or market share of organization has actually
been impacted (increased) through product innovation e.g. Electric vehicle,
light weight vehicle or there are gains in terms of benefit of corporate image.
Therefore future studies should be done to develop to establish the impact of
adoption of GSCM or SSCM practices on profitability of organization.

 

 

References

1.     
Beamon, B. M.
(1999). Designing the green supply chain. Logistics information
management, 12(4), 332-342.

2.     
Dubey, R.,
Gunasekaran, A., Childe, S. J., Papadopoulos, T., Hazen, B., Giannakis, M.,
& Roubaud, D. (2017). Examining the effect of external pressures and
organizational culture on shaping performance measurement systems (PMS) for
sustainability benchmarking: Some empirical findings. International
Journal of Production Economics, 193, 63-76.

3.     
Geng, R., Mansouri, S. A., & Aktas, E. (2017). The relationship between green supply chain
management and performance: A meta-analysis of empirical evidences in Asian
emerging economies. International Journal of Production Economics, 183,
245-258.

4.     Govindan, K.,
Khodaverdi, R., & Vafadarnikjoo, A. (2015). Intuitionistic
fuzzy based DEMATEL method for developing green practices and performances in a
green supply chain. Expert Systems
with Applications, 42(20), 7207-7220.

5.     
Katiyar, R.,
Meena, P. L., Barua, M., Tibrewala, R., & Kumar, G. (2017). Impact of
sustainability and manufacturing practices on supply chain performance:
Findings from an emerging economy. International Journal of Production
Economics.

6.     
M. Lo, S.
(2013). Effects of supply chain position on the motivation and practices of
firms going green. International Journal of Operations & Production
Management, 34(1), 93-114.

7.     
Mani, V.,
Agrawal, R., & Sharma, V. (2015). Supply chain social sustainability: A
comparative case analysis in indian manufacturing industries. Procedia-Social
and Behavioral Sciences, 189, 234-251.

8.     
Mani, V., Gunasekaran, A., & Delgado, C. (2018). Enhancing supply chain performance through
supplier social sustainability: An emerging economy perspective. International
Journal of Production Economics, 195, 259-272.

9.     
Mani, V., Gunasekaran, A., & Delgado, C. (2018). Enhancing supply chain performance through
supplier social sustainability: An emerging economy perspective. International
Journal of Production Economics, 195, 259-272.

10. 
Mitra, S., & Datta, P. P. (2014). Adoption of green supply chain management
practices and their impact on performance: an exploratory study of Indian
manufacturing firms. International Journal of Production Research, 52(7),
2085-2107.

11. 
Rao, P., &
Holt, D. (2005). Do green supply chains lead to competitiveness and economic
performance?. International journal of operations & production
management, 25(9), 898-916.

12. 
Tajbakhsh, A.,
& Hassini, E. (2015). Performance measurement of sustainable supply chains:
a review and research questions. International Journal of Productivity
and Performance Management, 64(6), 744-783.

13. 
Varsei, M.,
Soosay, C., Fahimnia, B., & Sarkis, J. (2014). Framing sustainability
performance of supply chains with multidimensional indicators. Supply
Chain Management: An International Journal, 19(3), 242-257.

14. 
Wolf, J. (2011).
Sustainable supply chain management integration: a qualitative analysis of the
German manufacturing industry. Journal of Business Ethics, 102(2),
221-235.

15. 
Yu, W., Chavez, R., Feng, M., & Wiengarten, F.
(2014). Integrated green supply chain management and
operational performance. Supply Chain Management: An International
Journal, 19(5/6), 683-696.

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