A REVIEW ON FACTORS AFFECTING GREEN SUPPLY CHAIN MANAGEMENT
Ho Le Thu Huong", Ho Nguyen Duy Nguyen’, Nguyen Dai Thang’, Duong Manh Cuong’ ABSTRACT
The pressure of environmental degradation due to industrial development has forced businesses to work towards a sustainable method of supply chain operation One of the most effective method is the practices of Green Supply Chain Management (GSCM), in which sustainable environmental processes are incorporated into the traditional supply chain management GSCM not only helps businesses create an eco-friendly image but also improve their economic benefits and competitiveness However, the implementation of GSCM initiatives is still a challenge due to the complexity of supply chain and the high requirements in both sustainability and economic benefits In recent years, there have been a number of studies reporting factors relating to the success of integrating GSCM into businesses This study sought to review the key Critical Success Factors (CSFs) for GSCM so that companies can apply GSCM effectively Particularly, the articles archived on the Science Direct website were searched by GSCM-related keywords,
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then CSFs for GSCM were extracted and generalized in groups Our results showed that there were twenty-six CSFs for CGSM, grouped into 6 main groups: Internal Management, Customer Management, Regulatory, Supplier Management, Social and Competitiveness In addition, there was also an emerging discussion in other 5 groups of internal CSFs, including Investment Recovery, Organizational Learning, Financial, Production and Operational factors These findings could help businesses to effectively manage the challenges to gain a competitive advantage in implementing CGSM practice This study also provides a new path for further research exploration in the field of green supply chain practices to improve environmental, economic and social activities in the supply chain
Keywords: Green Supply Chain Management (GSCM), environmental management, GSCM practices
1 INTRODUCTION
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performance for the essential competitive needs, lower costs, lead- time, and high quality (Kumar, 2018)
One of the most effective solutions for businesses to deal with environmental pollution issues is practices of Green Supply Chain Management (GSCM) The concept of GSCM is incorporating sustainable environmental processes into the key functional areas such as Supply Chain Management area to reduce the harmful effect of manufacturing activities on the environment (Kumar, 2018) These processes can be any of phases in industry such as product design, manufacturing, production, material sourcing, and end of life management (recycling or destroy) To make it “green”, GSCM focuses on the product life cycle, in which the functional efforts to produce and deliver the product depends on level of product life (Harleen Kaur, 2018)
GSCM plays an important role in sustainable development because most of the environment impact associated with the consumer sector is embedded in supply chain (Sarkis, 2012; Luthra et al., 2015) It was reported that 80 per cent of greenhouse-gas emissions and more than 90 per cent of the impact on water, land, air, biodiversity, and geological resources comes from the traditional consumer company’s supply chain, even more environmentally harmful than its own operations Therefore, when GSCM is applied, most of the environmental burden can be solved More importantly, GSCM not only helps businesses become more environmentally friendly, save costs and resources via recycle processes, but also meet customers’ green consumption needs, thereby increasing their
competitiveness (Sarkis, 2012; Luthra et al., 2015)
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trade-off costs between sustainability and economic benefits (Reddy, 2016) In general, sustainable supply chains have been considered as a measure to cover losses and profits as well as social and ecological aspects of business Organizations have multiple objectives such as optimal resource allocation, better customer service, improving
brand image, environmentally friendly image, and increased profit
Consequently, the vital concern of businesses is how to perform supply chain in “green” way but still earn the financial advantages
In order to address the challenges of GSCM practices and successfully implement and maintain Green Supply Chain, Critical Success Factors affecting these green initiatives should be determined Critical Success Factors (CSFs) are key factors/enablers/ activities needed to be done/happen to ensure the success of business/ phenomenon to achieve their goals (Haleem et al., 2012) In recent years, there have been a number of studies reporting CSFs relating to the success of integrating GSCM into businesses (Luthra et al., 2015) This paper sought to provide a brief theory about supply chain management (SCM) and GSCM, and more importantly to conduct a review to identify a number of CSFs affecting the success of GSCM practices in industries
2 LITERATURE REVIEW 2.1 Supply chain management
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For the purpose of this study, a definition by the Council of Supply Chain Management Professionals (CSCMP) was used to define the boundaries of SCM: “Supply chain management is to encompass the planning and management of all activities involved in sourcing and procurement, conversion, and all logistics management activities Importantly, it also includes coordination and collaboration with channel partners, which can be suppliers, intermediaries, third party service providers, and customers In essence, supply chain management integrates supply and demand management within and across companies” (Council of Supply Chain Management
Professionals, 2016)
2.2 Green supply chain management (GSCM)
GSCM studies were popular among researchers since the early 20th century and have grown significantly since 2010 The difference between SCM and GSCM is the difference in environmental concern The “green” concept is referred to as “doing actions while integrating environmental or ecological concern” Publications by year 160 140 120 100 Number of papers 1980 1995 we 2000 2005 2010 2015 2020 Year
Figure 1: Publications on GSCM by year
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In general, it can be said that the concept of GSCM is broad, and there is no clear, holistic definition available to describe it Since the
concept is defined differently by researchers, it is difficult to describe GSCM by a single definition (Ahi and Searcy, 2013) Although
there are diferences among the definitions, there is a commonly used
definition: The integration of environmental concerns into supply chain management practices is referred to as “green supply chain management” (Sarkis, 2012)
GSCM extends throughout the entire value chain from suppliers to buyers The overall aim of GSCM is to reduce the environmental impact that a business has on the environment and therefore consists of both direct and indirect impacts (Darnall, 2008) GSCM begins at the product design phase, to the end of the product life and finally at the product disposal or recycling phase, by taking environmental impact into consideration at each step of the supply chain (Dhull and Narwal, 2016)
3 METHODOLOGY
Within the scope of this study, authors identify factors affecting GSCM, through green practices Therefore, the collected data must meet this goal
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review and select the studies by published timeline, especially the most recent publication Accordingly, the authors chose 4 articles
(Luthra, 2015; Luthra, 2016; Reddy, 2016; Kumar, 2018)
4, RESULTS AND DISCUSSIONS
4.1 Luthra 2015
The literatures review was conducted through the search of keywords such as factors to implement GSCM; factors to adopt GSCM practices; and so on Google scholar and Google search databases have been used to collect literatures published in journals, conference proceedings and books
Twenty-six CSFs to implement GSCM in the literature have
been assembled as follows:
Table 1: Twenty-six CSFs affecting to GSCM (Luthra, 2015)
No | Critical Success Factors (CSFs) Freq
1 | Initiation and commitment of top management 7
2 | Central government legalizations
3 | State government legalizations 2
4 | Societal issues 6
5 | Support from international platforms 5
6 | Organization's policy supporting GSCM 3
7 | Strategic planning 4
8 | Encouragement from customers 4
9 | Support from customers 3
10 | Workplace management 3
Tl | Involvement of suppliers & vendors in green activities 3
12 | Motivation of suppliers & vendors towards green practices 2
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No | Critical Success Factors (CSFs) Freq
14 | Enhanced brand image 3
15 | Supply chain members’ awareness and literacy 3
16 | Awareness level of customers 3
17 | Information technology (IT) enabled systems support 3
18 | Human resources management practices 4
10 | Role of employees towards GSCM adoption 2
20 | Economic benefits 2
21 | Encouragement to technology advancement and adoption 3
22 | Firm's competitiveness 3
25 | Scarcity of natural resources 3
24 | Information quality and sharing 7
25 | High costs for disposal of hazardous materials/components/product 3
26 | Pressure from non-government organizations (NGOs) lobby 3
Source: Researched by the authors
4.2 Luthra 2016
Twenty-six factors to implement GSCM towards sustainability were recognized from an exhaustive literature review An Explanatory Factor Analysis (EFA) was conducted to find a reduced set of new dimensions with a least loss of information Six CSFs to implement GSCM were extracted by using EFA (Luthra et al., 2015)
from senior and middle managers
Internal Management: Including from dedication and support Customer Management: Developing countries have been under intense pressure to carry out green activities in the supply chain to
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Regulatory: Regulators have framed strong environmental
regulations to minimize environmental damage; and organizations
are required to reduce the negative impact of their supply chain on the environment to make it greener
Supplier Management: Strong partnerships with suppliers are underpinned by properly designed incentive systems that support the adoption and development of innovative environmentally friendly technologies
Social: With increasing concerns of public on environmental issues, organizations must disclose complete information about their
activities to public, to achieve societal benefits
Competitiveness Compared to the organization’s wish from saving planet, the application of GSCM practices can also be traced &P Pp P for competitive reasons
We recognized that these factors are grouped by previous twenty — six factors These extracted CSFs have been validated through literature support and detailed as Table 2
Table 2: Six CSFs affecting to GSCM (Luthra, 2016) Variables a Previous No Description eae Items Description factors CSFs to Implement GSCM towards Sustainability Human resources management practices Information quality & sharing
Supportive organization policies towards GSCM 18, 24, 6,
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Awareness level of customers State government legislations
3 | Regulatory Central government legislations 2,3, 5
International environment agreements
Motivation of suppliers & vendors in green practices
i Supplier Involvements of suppliers & vendors in green 1.12.8
Management _| practices ~
Technology transfer to suppliers & vendors High cost for disposal of hazardous materials/ components/products
5 | Social Scarcity of natural resources oe %
Societal issues
Pressure from Non govt organization (NGOs) lobby Enhanced brand image
Firms competitiveness
sas a 14, 22, 20,
6 | Competitiveness | Economic interests 117 0
Technology advancement & adaption Information technology enablement
Source: Researched by the authors 4,3 Reddy 2016
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Zhu, Sarkis and Geng (2005) v v v v Khiewnavawongsa and Schmidt (2013) v v v Walker et al (2008) v v v v Liu, Yang, Qu, Wang, Shishime v v and Bao (2012) Sari (2012) v 7 Lin (2013) v v Routroy (2009) v v Lee and Klassen (2008) v v Vachon (2008) Kumar and Chandrakar (2012) v v v v
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The collection of the data combined primary and secondary sources is carried as follows: The primary source of data is approaching with industry expert by questionnaires; while the secondary source of data is published in articles related to GSCM According to Kumar, he pointed out 5 groups of factors affecting GSCM such as Government policies and regulations (GPR), Customers (C), External factors (EF), Financial factors (FF), Production and operational factors (POF) with more details as below:
Table 5: Factors affecting implementation of GSCM
SINo | Factors affecting | Description Government policies and regulations(GPR)
1 Lack of government support Government instructions can debilitate the selection of activities, as they set the controls for the business
25 Local environmental regulations Local environmental regulations are important to promote environmental performance 3, Lack of moral standards and company social Many groups don’t have high moral values and accountability responsibility Customers(C) 4 Lack of awareness in the society Unawareness in society skill that clients are nevertheless unaware of inexperienced products Be Lack of demand and public awareness Lack of consciousness by customers about the advantages of green products, External factors(EF) 6 Lack of knowledge to implement green buying The business enterprise can’t put in force inexperienced shopping for due to lack of perception 1 Improper organization structure Organizations are unable to adopt GSCM due to their improper organizational shape 8 Transportation price Transportation price effects due to rising fuel prices Financial factors(FF)
9, Cost for disposal of hazardous materials Industry has responsibility in bringing down price for discarding waste and detrimental material
10 High costs Projects prices are high in the execution of inexperienced practises, for example, eco design, and green assembling
I1 Payment delays The payments may delay due to late customer billing Production and operational factors(POF)
12 Lack of administration commitment Lack of commitment is a key barrier affecting GSCM implementation 13 Lack of professional human sources in the GSCM can't be correctly applied until the industry has the knowledgeable
implementation of GSCM human resource for it
14 Unwilling to modify business strategies Industries are unwilling to change their old plans and data
15 Lack of information technology Lack of statistics technological know-how make it difficult to reap environment friendly GSCM
16 Lack of training Lack of training to staffs is a fundamental element affecting GSCM 17 Lack of maintenance and service A regular maintenance for machines is required
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5 CONCLUSIONS
In the era of globalization, industries are facing pressure to “green” their supply chains from international and domestic levels It is for this reason that environmental concerns have been getting more attention recently In our current work, we strive to identify the key CSFs that facilitate the successful implementation of GSCM practices towards sustainable industrial development CSFs identified in the current work will help achieve sustainable supply chain activities and effectively implement GSCM in a sustainable manner
This study conducted a review on literature of GSCM and more importantly identify a list of key CSFs affecting the success of implementing GSCM practices in companies across multiple sectors and geographies According to many authors discussed above, the factors affecting GSCM including 6 groups as Luthra 2016 pointed out as: Internal Management, Customer Management, Regulatory, Supplier Management, Social and Competitiveness However, the inner meaning of internal factors has slightly differences among authors Reddy 2016 also mentioned further as Investment Recovery, Organizational Learning, while Kumar 2018 had raised the Financial, Production and Operational factors
In short, this study lays the foundations for expanding research in the field of green supply chain practices to gain a competitive advantage as well as improve environmental, economic and social activities in the supply chain
Strengths, weaknesses and future work of study
The main strength of this study is that we have identified a list of
main CSFs for GSCM, providing a brief theoretical understanding
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accredited industries Moreover, the list of mentioned CSFs are
quite typical, which is suitable for applying in other industries such
as manufacturing, automotive, electronics and electricity, electrical
industry or any other industries Additionally, the proposed model can be applied to developing countries, especially in Vietnam
This study has some limitations First, we acknowledge that there is a lack of quantitative analysis on the association between each CSF and GSCM Furthermore, the research only considered articles available on the SD website, written in English only, which may not cover all studies worldwide Third, the list of CSFs is recognized to date, which means there might be more number of relevant CSFs in the future
In future research, we aware that the list of CSFs needs to
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