Purpose - Green supply chain management is a concept that is gaining popularity in the South East Asian region. For many organizations in this region it is a way to demonstrate their sincere commitment to sustainability. However, if green supply chain management practices are to be fully adopted by all organizations in South East Asia, a demonstrable link between such measures and improving economic performance and competitiveness is necessary. This paper endeavors to identify potential linkages between green supply chain management, as an initiative for environmental enhancement, economic performance and competitiveness amongst a sample of companies in South East Asia.
Design/methodology/approach - For this purpose a conceptual model was developed from literature sources and data collected using a structured questionnaire mailed to a sample of leading edge ISO14001 certified companies in South East Asia followed by structural equation modelling.
Findings - The analysis identified that greening the different phases of the supply chain leads to an integrated green supply chain, which ultimately leads to competitiveness and economic performance. Future research should empirically test the relationships suggested in this paper in different countries, to enable comparative studies. A larger sample would also allow detailed cross-sectoral comparisons which are not possible in the context of this study.
Originality/value - This paper presents the first empirical evaluation of the link between green supply chain management practices and increased competitiveness and improved economic performance amongst a sample of organizations in South East Asia.
Keywords Supply chain management, Linear structure equation modelling, Economic performance, South East Asia
Paper type Research paper
Introduction
Organizations worldwide are continuously trying to develop new and innovative ways to enhance their competitiveness. Bacallan (2000) suggests that some of these organizations are enhancing their competitiveness through improvements in their environmental performance to comply with mounting environmental regulations, to address the environmental concerns of their customers, and to mitigate the environmental impact of their production and service activities. Green supply chain management as a form of environmental improvement is an operational initiative that many organizations are adopting to address such environmental issues, including corporations in the South East Asian region.
In this paper, the concept of green supply chain management encompasses environmental initiatives in:
(1) inbound logistics;
(2) production or the internal supply chain;
(3) outbound logistics; and in some cases
(4) reverse logistics, including and involving materials suppliers, service contractors, vendors, distributors and end users working together to reduce or eliminate adverse environmental impacts of their activities.
Green supply chain management is a concept that is gaining popularity in the South East Asian region. For many organizations in this region it is a way to demonstrate their sincere commitment to sustainability (Bacallan, 2000). Furthermore, many realize that customers and other stakeholders do not always distinguish between a company and its suppliers. If an organization has environmental liabilities, stakeholders may often hold the lead company in a particular supply chain responsible for the adverse environmental impacts of all organizations within a specific supply chain for a particular product.
Many authors are exploring environmental initiatives within each of the major phases of the supply chain. However, much of this research, as observed by Sarkis (1999), is focused predominantly on only one functional area. Yet, Handfield and Nichols (1999) define supply chain management as all the activities associated with the flow and transformation of materials from raw extraction phase through to the consumption of goods and services by an end user, along with associated information flows, both up and down the supply chain. Thus, there is arguably a need to focus green supply chain management research on the totality of the supply chain in both an upstream and downstream direction.
It is generally perceived that green supply chain management promotes efficiency and synergy among business partners and their lead corporations, and helps to enhance environmental performance, minimize waste and achieve cost savings. This synergy is expected to enhance the corporate image, competitive advantage and marketing exposure. However, if green supply chain management practices are to be fully adopted by all organizations in South East Asia, a demonstrable link between such measures and improving economic performance and competitiveness is necessary. Bowen et al. (2001) state that organizations will adopt green supply chain management practices if they identify that this will result in specific financial and operational benefits. Thus, there is a clear research need to establish the potential link between green supply chain initiatives and increased competitiveness and enhanced economic performance, to provide an impetus for organizations to green their supply chains.
In the South East Asian region there are many organizations that have undertaken significant efforts towards establishing green supply chain management initiatives. Whilst the motivation and driving forces for these initiatives have been examined for organizations in this region (Bacallan, 2000; Rao, 2004), no previous research has tested an empirical link between such efforts and subsequent improvements in competitiveness and economic performance. Therefore, this paper presents the results of a survey of organizations in the South East Asian region to investigate the proposition that there is a significant correlation between greening certain phases of the supply chain and the competitiveness and economic performance of the organizations involved.
This paper begins by exploring previous "functional" specific research on aspects of green supply chain management, to develop a conceptual model of green supply chain management, competitiveness and economic performance. This paper then outlines the specific methodology employed in this study to test this conceptual model. The conceptual model is then tested using structural equation modeling (SEM) techniques based on the findings from a study of South East Asian organizations to establish any causal links between the constructs within this model. The paper concludes with an examination of the significant relationships identified in this model to examine the link between green supply chain management, economic performance and competitiveness.
Developing the conceptual model
The conceptual model examined in this paper and tested through SEM techniques, has been developed through an examination of literature on all aspects of the totality of the supply chain. This "totality" is encapsulated using five latent constructs, measured using indicator variables developed from the responses obtained from the survey of organizations in the South East Asia region. These constructs are: greening the inbound function of the supply chain; greening production; greening the outbound function; competitiveness; and economic performance.
Inbound function
From the "inbound" perspective of the supply chain it is argued that greening the supply chain has numerous benefits to an organization, ranging from cost reduction, to integrating suppliers in a participative decision-making process that promotes environmental innovation (Bowen et al., 2001; Hall, 1993; Rao, 2002). A large part of the inbound function essentially comprises of green purchasing strategies adopted by organizations in response to the increasing global concerns of environmental sustainability. Green purchasing can address issues such as reduction of waste produced, material substitution through environmental sourcing of raw materials, and waste minimization of hazardous materials. The involvement and support of suppliers' is crucial to achieving such goals. Therefore, companies are increasingly managing their suppliers' environmental performance to ensure that the materials and equipments supplied by them are environmentally-friendly in nature and are produced using environmentally-friendly processes.
Min and Galle (1997) explore "green purchasing" to determine the key factors affecting a buying firm's choice of suppliers, the key barriers and the obstacles to green purchasing initiatives. They also investigated the impact of green purchasing on a corporation's environmental goals. Sroufe (2003) presents a framework involving performance indicators and supplier assessment metrics that argues that environmental initiatives such as strategic environmental sourcing improve an organization's competitive position and reduce risks.
In exploring green purchasing strategies as part of greening the inbound phase, Min and Galle (1997) consider selected industry groups (heavy producers of scrap and waste materials) and identify that green purchasing contributes significantly towards source reduction of pollution in terms of recycling, re-use and low-density packaging, and towards waste elimination in terms of scrapping or dumping, recycling and sorting for non-toxic incineration and bio-degradable packaging. They also identify that the high cost of environmental programs, uneconomical recycling and uneconomical re-use are the three most important barriers and obstacles to green purchasing. Lack of management commitment, lack of buyer awareness, lack of supplier awareness, deficient company-wide environmental standards or auditing programs and lack of state and federal regulations are also important issues.
Walton et al (1998) examine the integration of suppliers into environmental management processes, and observe two evolving trends. They firstly suggest that environmental issues
วัตถุประสงค์ - บริหารห่วงโซ่อุปทานสีเขียวคือ แนวคิดที่กำลังได้รับความนิยมในภูมิภาคเอเชียตะวันออกเฉียงใต้ สำหรับองค์กรจำนวนมากในภูมิภาคนี้ ก็แสดงให้เห็นถึงความทุ่มเทจริงใจเพื่อความยั่งยืน อย่างไรก็ตาม ถ้าเขียว วิธีการบริหารจัดการห่วงโซ่จะถูกนำมาใช้ โดยองค์กรทั้งหมดใน South East Asia แสดงให้เห็นถึงการเชื่อมโยงระหว่างมาตรการดังกล่าวเต็ม และปรับปรุงประสิทธิภาพทางเศรษฐกิจและการแข่งขันเป็นสิ่งจำเป็น กระดาษนี้ความพยายามที่ระบุการเชื่อมโยงอาจเกิดขึ้นระหว่างการบริหารห่วงโซ่อุปทานสีเขียว เป็นความคิดริเริ่มในการปรับปรุงสิ่งแวดล้อม ประสิทธิภาพทางเศรษฐกิจ และการแข่งขันแห่งตัวอย่างของบริษัทในเอเชียตะวันออกเฉียงใต้ออกแบบ/วิธีการ/แนวทาง - สำหรับวัตถุประสงค์นี้เป็นแบบจำลองความคิดได้รับการพัฒนาจากแหล่งประกอบการและข้อมูลถูกรวบรวมโดยใช้แบบสอบถามที่มีโครงสร้างที่ส่งไปเป็นตัวอย่างชั้นนำบริษัทใน South East Asia ตามแบบจำลองสมการโครงสร้างได้รับการรับรอง ISO14001 นั้นค้นพบ - การวิเคราะห์ระบุว่า greening ขั้นตอนต่าง ๆ ของห่วงโซ่อุปทานนำไปสู่การรวมสีเขียวโซ่ ซึ่งในที่สุด นำไปสู่การแข่งขันและประสิทธิภาพทางเศรษฐกิจ งานวิจัยในอนาคตควร empirically ทดสอบความสัมพันธ์ที่แนะนำในเอกสารนี้ในต่างประเทศ การศึกษาเปรียบเทียบการเปิดใช้งาน ตัวอย่างขนาดใหญ่จะให้รายละเอียดเปรียบเทียบระหว่างรายสาขาซึ่งไม่เป็นไปได้ในบริบทของการศึกษานี้Originality/value - This paper presents the first empirical evaluation of the link between green supply chain management practices and increased competitiveness and improved economic performance amongst a sample of organizations in South East Asia.Keywords Supply chain management, Linear structure equation modelling, Economic performance, South East AsiaPaper type Research paperIntroductionOrganizations worldwide are continuously trying to develop new and innovative ways to enhance their competitiveness. Bacallan (2000) suggests that some of these organizations are enhancing their competitiveness through improvements in their environmental performance to comply with mounting environmental regulations, to address the environmental concerns of their customers, and to mitigate the environmental impact of their production and service activities. Green supply chain management as a form of environmental improvement is an operational initiative that many organizations are adopting to address such environmental issues, including corporations in the South East Asian region.In this paper, the concept of green supply chain management encompasses environmental initiatives in:(1) inbound logistics;(2) production or the internal supply chain;(3) outbound logistics; and in some cases(4) reverse logistics, including and involving materials suppliers, service contractors, vendors, distributors and end users working together to reduce or eliminate adverse environmental impacts of their activities.Green supply chain management is a concept that is gaining popularity in the South East Asian region. For many organizations in this region it is a way to demonstrate their sincere commitment to sustainability (Bacallan, 2000). Furthermore, many realize that customers and other stakeholders do not always distinguish between a company and its suppliers. If an organization has environmental liabilities, stakeholders may often hold the lead company in a particular supply chain responsible for the adverse environmental impacts of all organizations within a specific supply chain for a particular product.Many authors are exploring environmental initiatives within each of the major phases of the supply chain. However, much of this research, as observed by Sarkis (1999), is focused predominantly on only one functional area. Yet, Handfield and Nichols (1999) define supply chain management as all the activities associated with the flow and transformation of materials from raw extraction phase through to the consumption of goods and services by an end user, along with associated information flows, both up and down the supply chain. Thus, there is arguably a need to focus green supply chain management research on the totality of the supply chain in both an upstream and downstream direction.It is generally perceived that green supply chain management promotes efficiency and synergy among business partners and their lead corporations, and helps to enhance environmental performance, minimize waste and achieve cost savings. This synergy is expected to enhance the corporate image, competitive advantage and marketing exposure. However, if green supply chain management practices are to be fully adopted by all organizations in South East Asia, a demonstrable link between such measures and improving economic performance and competitiveness is necessary. Bowen et al. (2001) state that organizations will adopt green supply chain management practices if they identify that this will result in specific financial and operational benefits. Thus, there is a clear research need to establish the potential link between green supply chain initiatives and increased competitiveness and enhanced economic performance, to provide an impetus for organizations to green their supply chains.In the South East Asian region there are many organizations that have undertaken significant efforts towards establishing green supply chain management initiatives. Whilst the motivation and driving forces for these initiatives have been examined for organizations in this region (Bacallan, 2000; Rao, 2004), no previous research has tested an empirical link between such efforts and subsequent improvements in competitiveness and economic performance. Therefore, this paper presents the results of a survey of organizations in the South East Asian region to investigate the proposition that there is a significant correlation between greening certain phases of the supply chain and the competitiveness and economic performance of the organizations involved.This paper begins by exploring previous "functional" specific research on aspects of green supply chain management, to develop a conceptual model of green supply chain management, competitiveness and economic performance. This paper then outlines the specific methodology employed in this study to test this conceptual model. The conceptual model is then tested using structural equation modeling (SEM) techniques based on the findings from a study of South East Asian organizations to establish any causal links between the constructs within this model. The paper concludes with an examination of the significant relationships identified in this model to examine the link between green supply chain management, economic performance and competitiveness.พัฒนารูปแบบแนวคิดได้รับการพัฒนารูปแบบแนวคิดในเอกสารนี้ และทดสอบผ่านเทคนิค SEM ผ่านการตรวจสอบเอกสารประกอบการในทุกแง่มุมของผลของห่วงโซ่อุปทาน "ผล" นี้เป็นนึ้ใช้ห้าแฝงอยู่โครงสร้าง วัดโดยใช้ตัวแปรบ่งชี้ที่พัฒนาจากการตอบสนองที่ได้รับจากการสำรวจขององค์กรในภูมิภาคเอเชียตะวันออกเฉียงใต้ โครงสร้างเหล่านี้คือ: greening ทำงานขาเข้าของโซ่ greening การผลิต greening ฟังก์ชันขา แข่งขัน และประสิทธิภาพทางเศรษฐกิจขาเข้าฟังก์ชันFrom the "inbound" perspective of the supply chain it is argued that greening the supply chain has numerous benefits to an organization, ranging from cost reduction, to integrating suppliers in a participative decision-making process that promotes environmental innovation (Bowen et al., 2001; Hall, 1993; Rao, 2002). A large part of the inbound function essentially comprises of green purchasing strategies adopted by organizations in response to the increasing global concerns of environmental sustainability. Green purchasing can address issues such as reduction of waste produced, material substitution through environmental sourcing of raw materials, and waste minimization of hazardous materials. The involvement and support of suppliers' is crucial to achieving such goals. Therefore, companies are increasingly managing their suppliers' environmental performance to ensure that the materials and equipments supplied by them are environmentally-friendly in nature and are produced using environmentally-friendly processes.Min and Galle (1997) explore "green purchasing" to determine the key factors affecting a buying firm's choice of suppliers, the key barriers and the obstacles to green purchasing initiatives. They also investigated the impact of green purchasing on a corporation's environmental goals. Sroufe (2003) presents a framework involving performance indicators and supplier assessment metrics that argues that environmental initiatives such as strategic environmental sourcing improve an organization's competitive position and reduce risks.In exploring green purchasing strategies as part of greening the inbound phase, Min and Galle (1997) consider selected industry groups (heavy producers of scrap and waste materials) and identify that green purchasing contributes significantly towards source reduction of pollution in terms of recycling, re-use and low-density packaging, and towards waste elimination in terms of scrapping or dumping, recycling and sorting for non-toxic incineration and bio-degradable packaging. They also identify that the high cost of environmental programs, uneconomical recycling and uneconomical re-use are the three most important barriers and obstacles to green purchasing. Lack of management commitment, lack of buyer awareness, lack of supplier awareness, deficient company-wide environmental standards or auditing programs and lack of state and federal regulations are also important issues.Walton et al (1998) examine the integration of suppliers into environmental management processes, and observe two evolving trends. They firstly suggest that environmental issues
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