How Companies Can Improve Their Green Supply Chain Management - Literature review Example

Green Supply Chain Management Table of Contents Table of Contents 2 Introduction 4 Green Supply Chain Management (GSCM) 5 List of Tables Number Page 1. Comparison of Literature 6-7 2. Green Supply Chain Management Tools 7-10 List of Figures Number Name Page 1. Green Supply Chain Management 11 Introduction Although the concept of green supply chain is one of the most argued topics among industrial experts and research scholars but surprisingly very few researchers have tried to explore the topic seriously. To understand the core concepts of green supply chain management, one has to define supply chain management. Green et al (2008) have described supply chain management as integration and coordination of strategy alignments such as responsiveness, customer focus, quality, efficiency etc and business processes such as purchasing raw material, manufacturing product, logistics, marketing and (IS) or information system in the supply chain with an intention of satisfying purpose of end users. Zelbst et al (2010) have found that, activities throughout the supply chain causes environment pollution but if organizations manage its supply chain activities then it will not only decrease environmental pollution but also help the organization to decrease costs related to fuel fed transportation system which is an integrated part of supply chain management. Vachon and Klassen (2007) have found that environment sustainability is more of supply chain imperative in contrast to organizational imperative. Green et al (2008) have raised question over the holistic nature of the term “sustainable supply chain management” and stated that, it is necessary for every supply chain partner to act responsively otherwise it is not possible to design a sustainable supply chain framework. In such context, Vasileiou and Morris (2006) have stated that green supply chain or sustainable supply is the environment friendly version of supply chain activities, for example, in the green supply chain; products are manufactured through environment friendly manner, transported through environment friendly vehicles and stored in environment friendly manner. Research scholars have argued that, manufacturing companies were forced to think about a greener supply chain management due to increasing pressure of governmental environmental regulations. It is evident from the above discussion that green supply chain is highly debatable topic among research scholars; hence study will dig deep on the topic by reviewing the existing literature on green supply chain and find how companies can improve their green supply chain management. Any discussion on green supply chain will be incomplete without defining or understanding core elements of green supply chain management, hence in the next section the study will try define the concept of green supply chain management. Green Supply Chain Management (GSCM) According to Handfield and Nichols (2002, p.8), “Supply chain management is an integrated management system of supply chain organisations and activities through cooperative organisational relationships, business processes, and high levels of information sharing systems that provide member organisations a sustainable competitive advantage.” In such context, Van Hoek (2002) has pointed out that organizations need to work on improving social and environmental benefits for its value chain partners, which means organizations, need to implement greener technology in order to decrease carbon emission in the value chain. Organizations need to think about environmental impact of the supply chain on consumers, for example, fuel fed transportation between supplier and the consumer not only creates negative impact on the environment but also increases cost for customers. Zhu et al. (2008, p. 262) have given a holistic definition of GSCM by taking account the concept of value chain, “green purchasing to integrated life-cycle management of supply chains flowing from supplier, through to manufacturer, customer, and closing the loop with reverse logistics.” The definition of green supply chain has been further elongated by Zsidisin and Siferd’s (2001, p. 69). They defined green supply chain management as, “set of supply chain management policies held, actions taken and relationships formed in response to concerns related to the natural environment with regard to the design, acquisition, production, distribution, use, reuse and disposal of the firm’s goods and services.” Green supply chain management is a comparatively new topic hence literature background of the study is still in the developing phase. Modern researchers are working on understanding how green supply chain ensures environment sustainability but very few researchers have tried to investigate strategic dimension of green supply chain management. According to Carter and Easton (2011), sustainability factor of green supply chain should be measured in terms of environmental, economic and social performances. Seuring (2004) has stated that, purpose of the green supply chain or environmental supply chain is to ensure information and material flow throughout every stages of supply chain by using managerial integration for satisfying demand for green products produced through green process among customers and stakeholders. Vachon (2007) has revealed an interesting fact that, most of the organizations are aware with the fact that green house gas emission due to various activities throughout the supply chain negatively affects the environment but very few of them show the intention to decrease the green house gas emission or carbon emission in the supply chain in order to make it more greener. According to Sen (2009), organizations can achieve competitive advantage by using the green supply chain management concept. The scholar has emphasized on “boundary-spanning” role of supply chain management in order to incorporate environment sustainability strategy throughout its upstream and downstream activities. Collaboration supply chain partners who are actually concerned about environmental issues can facilitate the possibility for “green multiplier effect” which can ensure sustainability of all the pertinent activities in the supply chain. The study will now compare theoretical arguments of various research scholars on the topic of green supply chain management. Table 1: Comparison of Literature Year Researchers Critical Analysis (Strength & Weakness) 2001 Zsidisin and Siferd The researcher duos have successfully connected various activities in supply chain management to environmental aspects but they fail to define how supply chain management can help an organization. 2004 Seuring The scholar has successfully linked macro environmental factors with green supply chain management but failed to explain how improving these factors can benefit other value chain partners. 2008 Green, Whitten and Inman These scholars have successfully linked various value chain activities with the concept of GSCM but their study was plagued by lack of evidences regarding role of green supply chain in improving overall performance of the value chain. 2009 Sen The scholar was successful in defining benefits of GSCM in terms of upstream and downstream activities but over dependency on probability factor was major weakness in the study. Tools for Green Supply Chain Management Various research scholars have emphasized on different tools while defining how companies can improve their green supply chain management. These tools can be summarized and compared in tabular format. Table 2: Green Supply Chain Management Tools Name of the Tools Research Scholars Characteristics Internal Environmental Management (IEM) Zhu et al (2008) According to this tool, delivering product to customers through green supply chain management should be strategic decision for an organization. Senior and mid level managers should actively support and monitor the green initiatives in the supply chain management. Green Information Systems (GIS) Esty and Winston (2006) According to this tool, organizations should use its information system to reduce green house gas emissions in the supply chain such as reduction in use of paper throughout the supply chain or eliminating any kind of activity which can damage the environment. Green Purchasing (GP) Zhu et al (2008) According to this tool, organizations should co-operate with its value chain partners in order to develop products and merchandises that are environmentally sustainable. Cooperation with Customer (CWC) Zhu et al (2008) According to this tool, organizations should work closely with its customers in order reduce carbon emission in the production process and eliminate the use paper in packaging of the product or fillip the concept of green packaging. Eco-Design (ED) Zhu et al (2008) According to this tool, manufacturers need work on issues like, 1- reduction in consumption of energy and natural resources while manufacturing products, 2- develop products which are recyclable in nature and 3- avoid using harmful chemicals which can perturb the balance of eco-system. Investment Recovery (IR) Zhu et al (2008) According to this model, organizations need to sale excessive stocks which are environmentally hazardous in nature in order to recover the monetary amount that was invested in various green activities in the supply chain. Environmental Performance (ENP) Green and Inman (2005) According to this tool, manufacturing plants need to reduce green house activities such as, 1- emission of air that is polluted by chemicals like H2S,Phenol, Carbon Isocyanides etc, 2- disposal of non-recyclable and non-degradable wastes in water and 3- consumption of toxic organic and inorganic material while manufacturing products. Economic Performance (ECP) Zhu et al (2008) According to this tool, organizations need to work on reducing overall cost related to green activities such as controlling energy consumption, waste treatment, fines related to hazardous environmental accidents, waste discharge etc. Operational Performance (OPP) Sen (2009) According to this tool, organizations should improve its upstream and downstream supply chain activities in order to deliver green products to customers more efficiently. Organizational Performance (ORP) Vachon (2007) According to this tool, organizations using green supply chain management should measure its financial and marketing performances in comparison to performance of other organizations which are not using green supply chain management. (Source: Green et al, 2012) The study has taken help of the seminal research work of Green et al (2012) in order to describe a how organization can improve their green supply chain management. The following model can be used by organizations to develop a green supply chain management model which is not only profitable but sustainable also. Figure 1: Green Supply Chain Management (Source: Green et al, 2012) According to the above green supply chain management model, organizations need to take internal initiatives such as developing information system which will ensure sustainability of supply chain management and creating a organizational culture by involving both mid-level and top-level managers which supports the green activities in the value chain activities. Both of these activities can facilitate other four verticals of green supply chain management such as cooperation with customers in order to gather their feedback and designing green products by using their feedback, green purchasing initiatives, designing products in eco-friendly manner and recovering investment. Economic design of the product, green purchasing, cooperation with customers and reverse selling activities will improve economic and environmental performance of the supply chain of the organization. Conjoint result of economic and environmental performance will improve operational performance of the green supply chain and finally, improved operational performance of the green supply chain will improve overall organizational performance. Conclusion It is evident from the above discussion that organizations need to involve both internal and external stakeholders to improve the performance of the green supply chain management. An integrated network should be created by linking all the members of the value chain in order to make the green supply chain management not only sustainable but profitable also. Reference Carter, C. R. and Easton, P. L., 2011. Sustainable supply chain management: evolution and future directions. International Journal of Physical Distribution & Logistics Management, 41(1), pp. 46-62. Green, K. W. Jr, Whitten, D. and Inman, R.A., 2008. The impact of logistics performance on organizational performance in a supply chain context. Supply Chain Management: An International Journal, 13(4), pp. 317-27. Green, K. W. Jr. and Inman, R. A., 2005. Using a just-intime selling strategy to strengthen supply chain linkages. International Journal of Production Research, 43(16), pp. 3437-53. Green, K. W., Zelbst., P. J., Meacham, J. and Bhadauria, V. S., 2012. Green supply chain management practices: Impact on performance. Supply Chain Management: An International Journal, 17(3), pp. 290–305. Handfield, R. B. and Nichols, E. L., 2002. Supply Chain Redesign: Transforming Supply Chains into Integrated Value Systems. Upper Saddle River, NJ: Financial Times Prentice Hall. Sen, S., 2009. Linking green supply chain management and shareholder value creation. The IUP Journal of Supply Chain Management, 7(3,4), pp. 95-109. Seuring, S., 2004. Industrial ecology, life cycles, supply chains: Differences and interrelations. Business Strategy & The Environment. 13(5), pp. 306-19. Vachon, S., 2007. Green supply chain practices and the selection of environmental technologies. International Journal of Production Research, 45(18, 19), pp. 4357-79. Vachon, S. and Klassen, R., 2007. Supply chain management and environmental technologies: the role of integration. International Journal of Production Research, 45(2), pp. 401-23. Van Hoek, R. I., 2002. Case studies of greening the automotive supply chain through technology and operations. International Journal of Technology Management, 23(1), pp. 89-112. Vasileiou, K. and Morris, J., 2006. The sustainability of the supply chain for fresh potatoes in Britain. Supply Chain Management: An International Journal, 11(4), pp. 317-27. Zelbst, P., Green, K. Jr, Sower, V. and Abshire, R., 2010. Relationships among market orientation, JIT, TQM, and agility. Industrial Management & Data Systems, 110(5), pp. 637-58. Zhu, Q. H., Sarkis, J. and Lai, K. H., 2008. Confirmation of a measurement model for green supply chain management practices implementation. International Journal of Production Economics, 111(2), pp. 261-73. Zsidisin, G. A. and Siferd, S. P., 2001. Environmental purchasing: A framework for theory development. European Journal of Purchasing & Supply Management, 7(1), pp. 61-73. Read More