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 degradat
Trang 1A 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,
1 School of Economics and Management, Hanoi University of Science & Technology, Vietnam
2 Faculty of Business Administration, Ho Chi Minh City College of Economics, Vietnam
*Corresponding author: lethuhuong.ho@gmail.com
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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
The pressure from social environmental awareness, severer environmental regulations, and shortage of natural resources has forced businesses to work towards a sustainable method of operation It can be seen that different activities of the supply chain have been generating
a huge amount of wastes and emissions to the environment, seriously affecting human lives and health According to the latest figures from the World Health Organization (WHO), about 7 million people die each year from respiratory diseases caused by air pollution (WHO, 2018: internet) In addition, the annual losses due to higher food costs caused by deteriorating shortage of water and worsening agricultural productivity is estimated at €300 million (Unilever, 2014: internet) Therefore, it is crucial for social and businesses to take action on supply chain to protect the environment and ensure that the world’s natural resources are sustained for the future In fact, various industries having high ecological impact such as automotive, plastic, and chemical have been gradually considering on improvement of environmental
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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)
Regardless superior advantages, the implementation of GSCM initiatives is a challenge due to the complexity of supply chain and
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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
Supply chain management (SCM) is a word that has been used and defined by various academic texts The reason for this is because the description and scope of SCM varies between businesses and evolves with the changing economic climate Some definitions focus
on supply activities whilst others emphasize the flow of materials and inter-organizational relationships
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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
1980 1995 we 2000 2005 2010 2015 2020
Year
Figure 1: Publications on GSCM by year
Source: Tseng et al., 2019.
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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
The study adopted a three-step method including identifying the data, screening initial data and selecting data for analysis Firstly, the study collected data from the Web of Science (https://www sciencedirect.com) The data used keywords like “factors to implement GSCM” “factors affect to green supply chain management” and
“factors of green supply chain management” Secondly, the search
is limited to the articles relevant to the scope of the study with full keywords; and finally, prioritize to select the posts that are literature
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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)
2 | Central government legalizations
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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
meet the needs of their customers
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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)
CSFs to Implement GSCM towards Sustainability
Human resources management practices
Information quality & sharing
Supply chain members’ awareness & literacy
Role of employees towards GSCM adoption
Top management initiation & commitment
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Encouragement from customers Customer
Management
Awareness level of customers State government legislations
International environment agreements Motivation of suppliers & vendors in green practices
Technology transfer to suppliers & vendors High cost for disposal of hazardous materials/
components/products
Societal issues Pressure from Non govt organization (NGOs) lobby Enhanced brand image
Firms competitiveness
Technology advancement & adaption Information technology enablement
Source: Researched by the authors 4,3 Reddy 2016
‘The secondary data was gathered from various sources such as journals, text books and articles According to Reddy, there are total seventeen (17) factors affecting GSCM splitting into external and internal groups These factors are shown in Tables 3 and 4