Green and Sustainable Supply Chain Management

Green Supply Chain Management Practices in Automobile Industry: Maintain Sustainability Amidst Rapid Globalization in Asia Pacific Region

1. Introduction

               In recent years, the Asia Pacific region has seen a rapid and robust growth in the automobile manufacturing sector as the demand for automobiles is increasing every year. New vehicle sales in the Asia-Pacific region, including passenger vehicles, trucks and buses, are forecast to increase by 4% to 43.9 million units in 2017, according to AsiaMotorBusiness.com based on data from 11 key markets in the region (Pugliese, 2017). With the ever-increasing demand, the automobile manufacturers are forced to come up with innovative ideas to improve efficiency, decrease costs, and effective procurement and supply chain practices. This rapid manufacturing of automobiles comes with negative impacts on environment and society. The Asia Pacific region is consuming natural resources at a much quicker rate than the regions ecosystems can replenish. The emission of large amounts of waste and greenhouse gases impact the self-sustainability of the region. The manufacturing operations impact on the environment may be categorized as waste (all forms), energy use, and resource use (material consumption). Green Supply Chain Management focusses on minimizing or eliminating such wastages. There is an increasing need for manufacturing organizations to develop procedures that focus on environmental friendly operations analysis, continuous improvement, measurement, and objectives, which lead towards green supply chain. The term "green supply" indicates green (chain) management activities that are attempts to improve the environmental performance of purchased inputs, or of the suppliers who provide them (Bowen, 2001).

               Sustainable supply chain management (SSCM) is defined as “the management of material and information flows as well as cooperation among companies along the supply chain while taking goals from all three dimensions of sustainable development” (Seuring & Muller, 2008). In the global market, competitive advantage and environmental sustainability are believed to co-exist (Beamon, 1999). Today, the environmental issues are increasingly integrated into international trade and market; also, customers/consumers are becoming aware of the negative impacts on the environment that arise from the mass manufacturing processes (Anbumozhi & Kanada, 2005). Therefore, to gain customers trust and competitive advantage, industries should adopt practicing green supply chain management techniques. Green supply chain management is defined as the integration of environmental thinking into the supply chain management (SCM), including product design, material sourcing and selection, manufacturing processes and the delivery of final product (Srivastava, 2007).

1. Hypothesis

1. Implementation of GSCM increases economic performance of manufacturing industries.
2. GSCM has positive effects on environmental performance in manufacturing industries.
3. GSCM has positive effects on operational planning, procurement and supply chain management.
4. GSCM brings competitive advantage to the company’s brand image.

1. Areas of Green Supply Chain Management

3.1 Green Procurement

Green procurement is a practice where the purchasing of raw materials is done keeping in mind the reusability, recycling and minimal usage of the raw materials. Procuring raw materials is an important factor as this will have a huge impact in the green supply chain management practice. The environmental impacts should be considered while purchasing materials and services that can minimize environmental impact and either reduce or eliminate waste. Manufacturing industries should purchase materials from ISO 14000 and OHAS 18000 certifies suppliers.