Green Supply Chain Management: A Review and Research Direction
Green Supply Chain Management: A Review and Research Direction
Green Supply Chain Management: A Review and Research Direction
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Noor Aslinda Abu Seman1, Norhayati Zakuan1, Ahmad Jusoh1 and Mohd Shoki
Md Arif
1
Faculty of Management and Human Resource Development, Universiti Teknologi
Malaysia, 81310, UTM Skudai Malaysia
[email protected]
ABSTRACT
Green Supply Chain Management (GSCM) has appeared as an environmental innovation which
integrates environmental concerns into supply chain management. GSCM has gained popularity with
both academic and practitioners. The purpose of the paper is to briefly review the recent literatures of the
GSCM and also determine the new direction area of this emerging field. A detailed review is used to sort
out the literature and develop the research direction of the study. The review is focused on development
of GSCM in a developed and developing countries including all those researchers which is relevant to
environmental and social sustainability towards operation management and the supply chain. It shows
that lack researches to examine the adoption and implementation of GSCM practices especially in
developing countries such as Malaysia. Thus, the authors bring forward a proposed research direction on
GSCM adoption and implementation in Malaysia’s manufacturing industries.
KEYWORDS
Supply Chain Management, Green Supply Chain Management, Environmental Management, ISO 14001
Certified Manufacturing Firms
1. INTRODUCTION
The economic growth increases the level of energy and material consumption, which contribute
to the environmental issues and resource depletion problems. It has become increasingly
significant for organizations facing competitive, regulatory, and community pressures to balance
economic and environmental performance [1]. Nowadays, most organizations are starting to go
green in their business as concern to environmental sustainability. They have realized the
greater benefit of the green technology adoption in business operation, which also affected
suppliers and customers. Environmental issues under legislation and directives from customer
especially in the US, the European Union (EU), and Japan become an important concern for
manufacturers [2]. As a result, Green Supply Chain Management (GSCM) emerges as a new
systematic environmental approach in supply chain management and has been increasingly
accepted and practices by forward-thinking organization [3].
The current changing in environmental requirements that influenced manufacturing activities
had increased attention in developing environmental management (EM) strategies for the supply
chain [4]. Thus, the concept of GSCM arises as a new systematic approach and becoming an
important factor for business activities today. Zhu et al. [5] also claimed GSCM can be regarded
as an environmental innovation. By integrating the ‘green concept to the supply chain’ concept,
it has created a new research agenda where the supply chain will have a direct relation to the
DOI: 10.5121/ijmvsc.2012.3101 01
International Journal of Managing Value and Supply Chains (IJMVSC) Vol. 3, No. 1, March 2012
environment [6]. Thus, it becomes interesting issue because the past literatures showed these
two paradigms were related each other [7].
The purpose of this paper is to discuss an overview of the development of GSCM literature in a
developed countries and developing countries. This study also is performed to determine the
new research area of issues related GSCM’s implementation. This paper will then provide a
thorough review from previous studies. At the end, this paper will propose the research
direction framework for the study.
2. LITERATURE REVIEW
2.1. Green Supply Chain Management
It is important to integrate environmental management practices into the whole supply chain
management in order to achieve a greener supply chain and maintain competitive advantage [8]
and also increase business profit and market share objectives. Various definition of GSCM exist
in the literature. Accordingly, Zhu and Sarkis [3] defines GSCM as has ranged from green
purchasing to integrated supply chains starting from supplier, to manufacturer, to customer and
reverse logistics, which is “closing the loop”. According to Srivastava [7], GSCM can be
defined as “integrating environmental thinking into supply chain management, including
product design, material sourcing and selection, manufacturing process, delivery of the final
product to the consumers as well as end-of-life management of the product after its useful life”.
The quality revolution of the 1980s and the supply chain revolution of the 1990s extend the
green supply chain literature with the beginning of corporate environmental management,
environmentally conscious manufacturing strategy, and supply chain management literature [9].
It has become clear that the best practices call for integration of environmental management
with ongoing operations [7]. Green supply-chain management (GSCM) is gaining increasing
interest among researchers and practitioners of operations and supply chain management. The
past literature also shows that most researchers have studied the GSCM adoption and
implementation on developed countries such as Japan, Germany, Portuguese, UK and Taiwan
and so on. Still limited studies have examined the GSCM practices in developing countries.
practices have positive effects on quality, customer satisfaction and efficiency also negative
effects on supply chain performance.
In the study of Chiou et al. [12] in Taiwan has explored the correlation between greening the
supplier and green innovation in Taiwan industry by using Structural Equation Modeling. They
concluded that greening the supplier through green innovation leads to significant benefits to the
environmental performance and competitive advantage of the firm. Through a study in Italy by
Cagno et al. [13] examined the GSCP adopted by Third Party Logistics (3PLs) service providers
such as specific practices implemented and level of adoption of each practices and also
examined the relationship of various GSCP implementation and company performance. In this
study, the work offers a depth understanding of potential effects of GSCP on company
performance.
The study from Japan conducted by Arimura et al. [14] determined the influence of ISO 14001
certification on the green supply chain management (GSCM) by using Japanese facility level-
data. The study proved that ISO 14001 and also voluntary EMS government program are
significantly influence GSCM practices. These programs highly perhaps the facilities will
evaluate their suppliers’ environmental performance and ask suppliers to undertake specific
environmental practices. Another study from Japan by Zhu et al. [5] sought to introduce
environmental, green supply chain management experiences of large Japanese manufactures.
This work shows that the large companies can green their supply chain by creating win-win
relationships with their partners, and hence realize the sustainable growth for the entire supply
chains. Besides, it also indicates that suitable regulations and policies set by government can
help GSCM circulation from larger leading companies to smaller companies.
Hsu and Hu [15] investigated the consistency approaches by factor analysis that determines the
adoption and implementation of GSCM in Taiwanese electronic industry. The fuzzy analytic
hierarchy process method was applied to prioritize the relative importance of four dimensions
and 20 approaches among nine firms in electronic industry. Meanwhile, Shang et al. [16]
explored key green supply chain management (GSCM) capability dimensions and firm
performance based on electronics-related manufacturing firms in Taiwan. On the basis of a
factor analysis, six green supply chain management dimensions were identified: green
manufacturing and packaging, environmental participation, green marketing, green suppliers,
green stock, and green eco-design.
Holt and Ghobadian [17] investigated the level and nature of greening the supply chain in the
UK manufacturing sector. In this study, the work explores the driving forces behind
environmental, the specific management practices that result, and the relationship between
them. The study by Nawrocka et al. [18] in Sweden, has concentrated on the role of ISO 14001
in environmental supply management practices in Swedish companies. The study described the
existing and potential role of ISO 14001 for three key operational tasks of environmental supply
chain management: to communicate the requirements to the supplier, to motivate and enable the
supplier, and to verify that the supplier follows the requirements.
Moreover, the study from South Korea carried out by Lee [19] has identified the drivers of
participation in green supply chain initiatives by considering small and medium-sized suppliers
and their most important stakeholders, including buyers and the government. Raymond et al.
[20] examined the relationship between supply chains and environmental performance of SMEs
in Canada. This study proved that time and financial resources to deal with solid waste and
energy issues are the most limiting factors.
In addition, Chen [21] looked into the relationship between green innovation and green image of
companies in Taiwan. The study proposed a new concept of green core competence. Chien and
Shih [22] examined the adoption of GSCM practices among the electrical and electronic
industry in Taiwan. The relationship between green supply chain management practices and
environmental performance, as well as financial performance has been studied.
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International Journal of Managing Value and Supply Chains (IJMVSC) Vol. 3, No. 1, March 2012
One study from Australia, conducted by Simpson et al. [23] explored the moderating impact of
relationship conditions existing between a customer and its suppliers and effectiveness of the
customer’s environmental performance requirements (otherwise known as “green-supply”).
Practically no research exists on the actual effectiveness of green supply requirements when
placed in context with the realities of inter-organizational dynamics.
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International Journal of Managing Value and Supply Chains (IJMVSC) Vol. 3, No. 1, March 2012
Chinese enterprise has not contributed into strong or higher GSCM practice adoption, let alone
to improvements expected in some areas of performance.
Concern about the environmental issue has also rise the interest of researchers to investigate the
adoption and implementation of GSCM practices in another Asian Countries such as Thailand,
India and Malaysia. A study of Ninlawan et al. [2] in Thailand analyzed the recent green
activities in computer parts’ manufacturers and also measured the level of green supply chain
management. The in-depth interview regarding green procurement, green manufacturing, green
distribution, and reverse logistic has been conducted. The study conducted in India by Diabat
and Govindan [32] identified the drivers influencing the implementation of GSCM using an
Interpretive Structural Modeling (ISM) methodology and extracted 11 drivers collected through
past literature: Certification of suppliers’ environmental management system; environmental
collaboration with suppliers; collaboration between product designers and suppliers to reduce
and eliminate product environmental impacts; government regulation and legislation; green
design; ISO 14001 certification; integrating quality environmental management into planning
and operation process; reducing energy consumption; reusing and recycling materials and
packaging, environmental collaboration with customers; and reverse logistics.
The concept of GSCM is relatively newer in Malaysia. Recent literature found that still lack of
researchers study on GSCM adoption and implementation based on Malaysian context as a
developing country. One study from Malaysia that has been carried out by Eltayeb and Zailani
[33] has identified the four key drivers or motivators to green supply chain initiatives:
Regulations, customer requirements, expected business gains, and social responsibility. Eltayeb
et al. [34] analyzed the relationship between green supply chain initiatives and performance
outcomes and identified the key initiatives (eco-design) that have positive effect on the four
types of outcomes (environmental, economic, cost reductions, and intangible outcomes).
manufacturing process.
Meanwhile, Table 2 also presents the previous studies of GSCM among manufacturing industry
but it only study certain industries from the various type of industries. These researchers had
focused to specific industry in order to get depth understanding of GSCM practices without
comparing to different industries.
Chien, M. K. and
Shih, L. H.
2007 Greening the • Traditional operations • Customer Australia;
automotive supply theory on inter- environmental Automotive
chain: a organizational performance industry
relationship performance requirements
perspective improvement is just as • Supplier
relevant to the use of environmental
Simpson et al. environmental commitment
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International Journal of Managing Value and Supply Chains (IJMVSC) Vol. 3, No. 1, March 2012
performance
requirements.
• Suppliers were found to
be more responsive to
their customers’
environmental
performance requirements
where increasing levels of
relationship-specific
investment occurred.
Based on Table 3, the previous studies of GSCM in Malaysia are presented. From the table
below, it shows clearly how many researchers were attempt to promoting this relatively new
concept in Malaysia. As a matter of fact, Malaysia is moving forward to be an industrialized
economy. Malaysia shifted from material production to manufacturing. The manufacturing
industry remained to be an important contributor to Malaysian’s economy in recent years. But,
the rapid industrialization had caused negative impact on the environment because of the
increase in the pollution, waste, and rapid consumption of natural resources [35]. It is clearly
showed that manufacturing industry is the most contributors to the environmental problem.
Environmental issues have become very important issues of concern for the Malaysian
government and the public [34]. With regards to environmental concern into manufacturing
industry, it is necessary for the study to investigate the level of adoption and implementation
GSCM among certified companies in Malaysia.
However, the studies in Malaysia are still lacking and the findings are also not conclusive. Most
researchers conducted study on GSCM practices in several Asian countries such as China may
have similar market and social-cultural situation with Malaysia. However, as stressed by
Christmann and Taylor [36], different industries sectors of different countries are facing
different pressures. It is also supported by Rao [26] stated the level and mode of implementation
of GSCM practices vary significantly in different countries. It means manufacturing industry in
Malaysia is differed to other countries due to different background or culture.
In addition, a lot of companies in Malaysia are still behind and yet to adopt the green supply
chain concept in their business operation [37]. According to Eltayeb and Zailani [35], Malaysian
fully owned companies have lower level of adoption and participation in green supply chain
practices compare to foreign based companies and MNC (Multinational Company). The barriers
in the adoption of GSCM in Malaysia depend on the companies’ size [19] and high cost of
adopting green supply chain practice [25]. Other than that, the establishment of the Ministry of
Energy, Green Technology and Water on April, 9 2009 by the Prime Minister, Y.A.B Datuk Sri
Najib Tun Razak has pushed business organization to adopt a green culture in their business
operation. However, the level of readiness to adopt green technology among Malaysian
manufacturing companies is still unclear. Therefore, given of these above issues, the future
study is required to investigate in more depth the adoption and implementation of GSCM in
Malaysia and also other variables that relevant to the field.
Based on these tables, the authors can see that most studies were explored on developed
countries and more focus to the manufacturing area. It can be concluded that most developed
countries are chosen because they were facing a lot of environmental problems due to the
greater economic consumption. Then, the manufacturing industry can be seen as the major
contributor to the environmental problems [34].
3. RESEARCH DIRECTION
Green supply chain management continues to be an important research agenda among the
researchers. However, there is still limited of studies to investigate GSCM adoption and
implementation in developing countries. Therefore, our research direction will be focus on ISO
14001 certified manufacturing firms in Malaysia context in order to extend the study about
GSCM in more depth. ISO 14001 certified firms will be focused because they are expected to
be involved in the adoption of GSCM practices. This is supported by the studies of Darnall et al.
[38] and Zhu et al. [30b]. The research direction of this paper is showed in Figure 1.
14
International Journal of Managing Value and Supply Chains (IJMVSC) Vol. 3, No. 1, March 2012
Developed Countries
Developing Countries
Malaysia
Manufacturing
4. CONCLUSIONS
The purpose of this paper is to discuss an overview of the development of GSCM literature in a
developed countries and developing countries. Although some studies in the literature discussed
the GSCM implementation includes drivers, practices, and performance over the world, but
there has still little research about the GSCM implementation and adoption in developing
countries especially Malaysia. Further study still required for more understanding toward the
adoption and implementation of GSCM and also the organization awareness level on
environmental problems that caused by their business operation.
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International Journal of Managing Value and Supply Chains (IJMVSC) Vol. 3, No. 1, March 2012
ACKNOWLEDGEMENTS
The authors would like to thank to the Faculty of Management and Human Resource
Development, GUP research grant Vot.Q.J130000.7129.03J72 (MOHE) and UTM Johor Bahru.
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