Green Supply Chain - Malaysian Practice

Topics: Supply chain management, Logistics, Supply chain Pages: 9 (3288 words) Published: May 1, 2013
With the increasing awareness of the consumers about environmental issues, businesses, households and governments increasingly want to buy green products. Therefore, firms need to implement strategies to reduce environmental impacts of their products and services (Lewis and Gretsakis, 2001; Sarkis, 1995; Sarkis and Cordeiro, 2001). According to Hansmann and Claudia (2001), success in addressing environmental items may provide new opportunity for competition and new ways to add value to core business programs. Therefore, market leaders in various industries have taken a step ahead to green their internal operation through ISO14000 certification. According to Handfield et al. (2005), the ISO 14000 principle provides framework, which guiding firms to implement EMS to improve environment performance only within the firm’s operation boundaries instead of through the supply chain. Therefore, by getting its own internal operation to be certified ISO14000 is only the first step but it does not ensure the whole supply chain is participating in green supply chain initiative. That shows that there are still a big gap between ISO14000 and green supply chain initiative. Who should take the responsibility and initiative to ensure the whole industry is practicing green initiative to reduce environmental impact? Is that the market leader, government or consumers’ responsibility? Hence, this study will look into the barriers that affecting SMEs to participate in green supply chain initiative in the local context. As the global climate has changed rapidly due to global warming, manufacturing and production process are viewed as the culprits in harming the environment, in the form of waste generation, ecosystem disruption and depletion of natural resources (Fiksel, 1996). It is necessary for the industry to react and transform the way production systems operate towards sustainability. It can be achieved by extending the structure of the current one way supply chain to a closed loop, including supply chain operation designed for end of life products and packaging recovery, collection and reused in the form of recycling and remanufacturing (Beamon, 1999). Companies do not often change their businesses processes and it is this attitude allows inefficient processes to continue unabated causing unnecessary waste and pollution. For example, ineffective processes in the US automotive industry allowed the innovative Japanese automakers to become market leaders. Businesses that want to transition to a green supply chain should take the opportunity to review all their business processes to identify areas, where adopting a greener outlook can actually improve their business. Firms should review each process along the supply chain to identify if a more environmentally sound approach will help cure the inefficiencies that occur. Many companies in developed countries that have been through this exercise have identified processes, where raw materials were wasted, resources underutilized and unnecessary energy used due to inefficient equipment. But there are still a lot of companies in Malaysia still behind and yet to adopt the green supply chain concept in their business strategy. According to Eltayeb and Zailani (2009), Malaysian fully owned firms have the lowest level participation of green supply chain initiatives compare to foreign based companies. One of the reasons that Malaysian owned firm having lowest participation of green supply chain is the green purchasing is still a very new concept in Malaysia. Other than that, Lee (2008) found that firm size is also an influence factor for firm to practice green supply chain, bigger size firm tend to be more willing to participate in green supply chain initiative. According to Lee (2008), SMEs usually lack of the information resources or expertise to deal with environmental issue. Therefore, SMEs can be a source of environmental risk and bottleneck in pursuing the goal of greener supply chain. With increased...
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