Green Supply Chain

Effects of Green Supply Chain
Management Practices on
Organizational Performance:
A Study on the Indian
Manufacturing Industry
DHAR ROHAN, BISWAS MUKESH AND ANBANANDAM RAMESH
INDIAN INSTITUTE OF TECHNOLOGY (IIT), ROORKEE
Introduction-Why Green SCM
Today, the world is moving towards greater environmental

concern and awareness. The anti -environmental policies
followed in the early stages of industrialization is no longer a
viable option.
Modern thinking is that environment and industrialization must

go hand in hand. Hence, the notion of todays world is
sustainable development, and it is an integral part of it is
Green Supply Chain Management or Sustainable Supply Chain
Management.
Nowadays companies sole aim cannot only be improvement of

its performance but its policies must be environment friendly
as well.
Literature Review
Green Supply Chain Management: A number of terms are used

for green supply chain management, including environmental
supply chain management and eco supply chain management,
depending on the researchers point of view.
Specifically, Narasimhan & Carter (1998) defined green supply

chain management as involving the purchase of methods that
reduced the use of materials in addition to recycling and reuse.
Godfrey (1998) defined green supply chain management as

company practices that continuously monitor the environmental
impact of a supply chain and improve its results.
On the other hand, Beamon (1999) emphasized the importance of

cooperation with a company and defined green supply chain
management as utilizing the supply chain between a central company
and a cooperating company, to support the organization of eco
management know-how in the central company and the development
of clean manufacturing techniques
Sarkis (2003) also defined green supply chain management as a

combination of the activities of an environmental company and
reverse logistics, and emphasized the latters importance.
Johny (2009) defined it as a process that added the green element to

existing supply chain management, and showed how a reverse supply
chain, an organization, and innovative activity reconstruct a system.
This goes beyond the pursuit of efficiency to include the pursuit of
innovation in the supply chain with regard to expenses, profits, and
the environment. The
GSCM v/s Conventional SCM
Green SCM
Conventional SCM
Objective
Economic & Ecological
Economic
Ecological Impact
Integrated approach, Low
High
Costing & Pricing
High
Low
Speed & Flexibility
Low
High
Supplier Selection
Criteria
Long term relation
Short term relation
Consumers selection
Criteria
Less preferable due to high

pricing
More preferable due to low

pricing
Research Methodology
1.
Development of concepts on the effects of GSCM practices

implementation on the performance of an organization
2.
Development of measurement items for evaluating GSCM

practices implementation and Organizational Performance
3.
Data Collection
4.
Model Testing
Validity and reliability test of factors
CFA test for measurement models
Comparison of measurement models
SEM model
Objective
Objective To propose a model to measure the effect Green

Supply Chain Management (GSCM) on the performance of an
organization.
In this study, the Indian industries have been taken under

consideration, which included several large as well as small and
medium industries, covering a variety of sectors, like
manufactures in automobiles, steel, chemical, electronics.
Research Methodology
Two constructs:
GSCM practices and implementation
Organizational Performance, which are followed by a path analysis

exhibiting the dependence of OP on GSCM implementation and
practices.
We have utilized exploratory results from Zhu and Sarkis, 2004,

from which we have taken the measurement items in the scale for
evaluating GSCM practices, which are IEM, GP, CC, ECO and IR.
We have also included GM and EA, which are found to be

significant in the Indian scenario. The construct of GSCM practices
implementation as well as that of OP, in the Indian context,
appears to adequately fit the data collected.
Data Collection
To collect data for the purpose of the study, a detailed questionnaire

was prepared investigating about the organization profile, GSCM
practices and its impacts on organizational performance.
The questionnaire was developed with an aim to bring out to light in

what the factors influence the green supply chain management
practice. The questionnaire comprises five questions on the profile of
the respondent and 41 questions to confirm the significance of the
parameters in the context of this research.
A 5-point Likert scale has been adopted for the purpose of the
questionnaire. The survey for this study was done in three stages
through Pilot testing, convenience sampling and random Sampling.
In pilot testing, the questionnaire prepared was verified by experts and

their valuable suggestions and advice was taken to refine the same.
We conducted the survey by administering the questionnaire amongst

the attendants of training workshops at a premiere academic institution
as well as personally visiting and interviewing several respondents in the
northern and eastern parts of India. We explained the purpose of our
study to the respondents and collected 167 valuable and usable
questionnaires. Convenience sampling helped us to build a framework
for our study as they were well informed about the concepts of GSCM.
We followed this up by random sampling in which we mailed the

questionnaire to around 1000 manufacturing companies, explaining the
purpose of our study and received 134 responses, several days later.
This was done to avoid potential bias from convenience sampling as well
as to obtain a more generalized data. The employee size, category of
respondents, annual turnover (in Cr Rs.) and sector wise distribution are
shown in fig. 2, fig.3,fig.4 and fig.5 respectively
Model
Chisquare:49.87
GFI: .97
CFI: .94
Conclusion
Its is an attempt to analyse the effect of implementation of GSCM on organizational

performance and its implications on the various parameters deciding the organizational
performance. This study adopted eight parameters namely IEM,GP, ECO, CC, IR, GM, GRM
and EA as measurement parameters for GSCM.
Also, four parameters namely FP, BI, EV and MS have been adopted to measure the
organizational performance.
We have proposed a model and we found that OP has a statistically significant

relationship with the adoption of GSCM practices.
Hence, GSCM and OP are correlated and the implementation of GSCM has a positive
impact on OP.
This gives the managers an insight into the relationships between GSCM and OP and
leaves them with an opportunity to create a sustainable business environment and model,
which can yield progressive economic benefits and can be mutually beneficial for the
environment as well.
It also helps the managers to assess the effect of GSCM practices implementation on the
OP and the direction in which it affects it.
Findings
Findings The model results confirmed the validity of the

proposed correlation of GSCM and Organizational Performance.
The findings also show that the implementation of GSCM is
positively associated with the performance of the organization

Green Supply Chain

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Effects of Green Supply Chain

Introduction-Why Green SCM

Today, the world is moving towards greater environmental

Modern thinking is that environment and industrialization must

Nowadays companies sole aim cannot only be improvement of

Green Supply Chain Management: A number of terms are used

Specifically, Narasimhan & Carter (1998) defined green supply

Godfrey (1998) defined green supply chain management as

On the other hand, Beamon (1999) emphasized the importance of

Sarkis (2003) also defined green supply chain management as a

Johny (2009) defined it as a process that added the green element to

GSCM v/s Conventional SCM

Economic & Ecological

Integrated approach, Low

Costing & Pricing

Speed & Flexibility

Long term relation

Short term relation

Less preferable due to high

More preferable due to low

Development of concepts on the effects of GSCM practices

Development of measurement items for evaluating GSCM

Validity and reliability test of factors

CFA test for measurement models

Comparison of measurement models

Objective To propose a model to measure the effect Green

In this study, the Indian industries have been taken under

GSCM practices and implementation

Organizational Performance, which are followed by a path analysis

We have utilized exploratory results from Zhu and Sarkis, 2004,

We have also included GM and EA, which are found to be

To collect data for the purpose of the study, a detailed questionnaire

The questionnaire was developed with an aim to bring out to light in

In pilot testing, the questionnaire prepared was verified by experts and

We conducted the survey by administering the questionnaire amongst

We followed this up by random sampling in which we mailed the

Its is an attempt to analyse the effect of implementation of GSCM on organizational

We have proposed a model and we found that OP has a statistically significant

Findings The model results confirmed the validity of the

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