Barriers to Green Supply Chain Management in Indian Construction Industry: An Interpretive Structural Modelling Approach

Transcription

1 Barriers to Green Supply Chain Management in Indian Construction Industry: An Interpretive Structural Modelling Approach Abstract Adarsha Man Tamrakar Institute of Management Christ University, Bangalore S Sudhindra Institute of Management Christ University, Bangalore Purpose The aim of the paper is to create a hierarchical framework of barriers to Green Supply Chain Management in the Indian Construction Industry. Design/methodology/approach A qualitative study using the Delphi Technique, consisting of 10 experts from various backgrounds such as education, industry, entrepreneur, etc was carried out. Two rounds of opinions were taken to achieve a consensus among the experts. Thirteen barriers were recognized from intensive literature review. Interpretive Structural Modelling was used to analyze the barriers. The driving and dependence power were used to classify the barriers into four types, namely, (a) dependant drivers, (b) independent drivers, (c) linkage drivers and (d) autonomous drivers. Findings The thesis provides empirical insights about how supply chain barriers in construction industry are related to each other and which of these barriers lead to the other. It also provides insights on the driving and dependence power analysis of the barriers. The Final ISM indicates that awareness, training and development and Government support can be the keys to success of Green Supply Chain Management implementation in the organizations. Research limitations/implications The research may suffer from expert bias as much as any Delhpi survey may suffer. Practical implications The thesis provides a framework which can help decision makers, both internal and external to the organization in making good and well informed decisions regarding green initiatives in supply chains. Originality/value This thesis fulfils an identified need to study the relationships between the barriers. Keywords: Green Supply Chain Management, Interpretive Structural Modelling, Driving and Dependence Power Analysis 1. Introduction A green supply chain includes all the processes involved in delivering a productsuch as the product concept and design, raw material selection, supplieridentification and selection, manufacturing processes and operations, logistics involving distributers and retailers and even the disposal of the product after its full exploitation (Dashore, &Sohani, 2013). Adding around a 11.5 million homes per year, India is expected to be the 3 rd largest construction market by 2025 and a $1trillion per year market. Construction includes not only the new buildings and infrastructure but also the repair and maintenance of the existing ones. Cumulative FDI from April 2000 through February 2014 into the realty sector stood at USD 23.1 billionwhich is around 11% of GDP accounts for the construction sector. Currently, 100% FDI is permitted through the automatic route in this sector, which covers townships, housing, commercial premises, hotels, resorts, hospitals, educational institutions, recreational facilities, city and regional built- up infrastructure. The industry segments include real estate like residential houses, offices, commercial building and industrial structures; infrastructure like railway, roads, ports, airports, power and urban infrastructure and specialized activities such as painting, carpentry, electrical work and plumbing. > RJSSM: Volume: 04, Number: 04, August 2014 Page 129

2 The strengths of the Indian construction industry are availability of workforce and raw materials, growth of demand of infrastructure in private sector and boom in the economy and real estate. The weaknesses include lack of structured training, ageing and unskilled workers, high risk and investment and high attrition. 2. Motivation, Objective and Research Methodology There is not enough literature on the use of green supply chain management (GSCM) in the construction sector in India. Barriers to GSCM using Interpretive Structural Modelling (ISM) has been recognized in various other sectors in India such as an aluminium industry bydiabata, &Govindan (2010), automobile industry by Luthra, Kumar, Kumar, &Haleem(2011)and various others. There is a gap in recognition and understanding the various barriers to GSCM in the Indian construction sector. Being the 2 nd largest industry in the country, it is felt that research in this area is essential.the motivation of this article is to recognize these barriers and enhance management skills to motivate as well as to improve performance of the construction industry in India. The objective of this paper is to study the various barriers to a GSCM in India and specifically in the construction sector. A total 13 barriers, elicited from prior research in similar areas, have been considered in this paper. These barriers could be internal or external. Internal barriers are those which are within the organization and under its control, and those which as not in the control of the organization are the external barriers. Delphi technique was used for evaluation of these barriers. The Delphi Method is based on a structured process for collecting and distilling knowledge from a group of experts by means of a series of questionnaires interspersed with controlled opinion feedback (Adler &Ziglio, 1996).Ten experts consisting of industrialists, educationalists, people with experience in construction industry and researchers were chosenand were asked to fill out the questionnaire. The consensus obtained through such a processis called the Structural Self Interaction Matrix (SSIM). The steps for ISM Modelling (Warfield, 1974) are: 1. Identification of Barriers (both Internal and External) 2. Development of Structural Self Interaction Matrix (SSIM) which indicate the pair-wise relationship between the barriers under consideration. 3. Development of Reachability Matrix (RM) and the RM matrix is checked for transitivity. Transitivity is an assumption made in Interpretive Structural Modelling which says that if variable A is related to B and B is related to C then A must necessarily be related to C. 4. Level Partitioning of barriers 5. Development of Diagraph were the transitivity is removed 6. The Final ISM Model where the variables are replaced with statements 3. Literature Review According to Dheeraj and Vishal (2012), GSCM = Green purchasing + Green manufacturing/materials management + Green Distribution / marketing + Reverse logistics.the blueprint of the green supply chain should consist of five aspects according to Zhou(2009) i.e. material suppliers, manufacturers, operators,distributers and shopkeepers, consumers and reclaim disposal manufacturers. Some of the examples of green supply chain practices currently are accessing and choosing the suppliers based on environmental performance, reducing packaging and other wastes, reducing carbon emissions and footprint in logistics, use of more eco- friendly products (Walker, Sisto, &McBain, 2008). According to a research done bydiabata, &Govindan (2010) for an aluminium producingcompany in South India, integration of quality environmental management into planning and operations, green design, reduction in energy consumption, recycling and reusing and packing of materials are of the topmost concern in the ISM model.the barriers to GSCM were studied in the automobile industry in India and 11 barriers were finally recognised. The barriers were lack of IT Implementation, Market Competition and Uncertainty, Advancement Adoption, Lack of encouragement in the Organization, Resistance to Technology, Poor Quality of Human Resources, Lack of Top Management Commitment, Lack of Government Support System, Lack of Implementation of Green Practices,Implications relating to cost, Reluctance of Supplier inchanging their perspectives towards Green Supply Chain > RJSSM: Volume: 04, Number: 04, August 2014 Page 130

3 Management and Unawareness of customers (Luthra, Kumar, Kumar, &Haleem, 2011).A total of 32 barriers to green supply chain management in construction sector in U.A.E were recognised and this was grouped into 12 criteria s.ism has been used for identifying and analysing the barriers in implementing Total Productive Maintenance in India s cement industry (Saxena, Suhil, &Vrat, 1992). According to Muduli and Barve (2013), the barriers to GSCM in Indian mining industry were Information gap, lack of social concerns, poor legislation and capacity constraints.dashore and Sohani (2013) studied many industries and came up with 40 barriers and 30 drivers for GSCM but only 20 barriers and 16 common drivers were chosen for their research. Walker, Sisto&McBain (2008) divided the internal barriers under cost and lack of legitimacy and the external barriers under regulation, poor supplier commitment and barriers specfic to the industry. ISM has been used by many researchers to model GSCM(Warfield, 1974). ISM is a way of structured method for decision making in dealing with complex problems and situation. The methodology of ISM is to understand and identify the mutual influences between the barriers i.e. driving and independent drivers. Driving barriers are the ones who aggravate other barriers and the independent barriers, which are influenced by driving barriers (Ravi, & Shankar, 2005). Barriers identified through literature survey are tabulated in Table 1. S.N. Barrier to Implement GSCM Classification Reference 1 Lack of Organization Internal (Diabata, &Govindan, 2010) Encouragement 2 Lack of IT Implementation Internal (Luthra et.al, 2011) 3 Lack of Quality of Human Resources Internal (Luthra et.al, 2011), (Dashore, &Sohani, 2013) 4 Market Competition and Uncertainty External (Balasubramanian, 2012), (Luthra et.al, 2011), (Dashore, &Sohani, 2013), (Yu &Hui, 2008), (Cooper, Frank, & Kemp, 5 Lack of Government Support systems 6 Lack of Top Management Commitment Internal 7 Cost Implications Internal/ External 8 Supplier Reluctance to change towards GSCM 9 Unawareness and lack of demand among customers, suppliers, etc 2000) External (Diabata, &Govindan, 2010), (Balasubramanian, 2012), (Luthra et.al, 2011) External External (Balasubramanian, 2012), (Luthra et.al, 2011) (Balasubramanian, 2012), (Luthra et.al, 2011), (Orsato, 2006) (Diabata, &Govindan, 2010), (Luthra et.al, 2011) (Balasubramanian, 2012), (Luthra et.al, 2011), Zhu et al. (2008) 10 Lack of green initiatives Internal (Diabata, &Govindan, 2010), (Balasubramanian, 2012), (Luthra et.al, 2011) 11 Lack of Knowledge and experience Internal (Balasubramanian, 2012),(Dashore, &Sohani, 2013) 12 Poor Organization Culture Internal (Balasubramanian, 2012), (Dashore, &Sohani, 2013) 13 Shortage of Resources External (Balasubramanian, 2012), (Dashore, &Sohani, 2013) > RJSSM: Volume: 04, Number: 04, August 2014 Page 131

4 Table 1 Barriers to GSCM 4. Data Analysis and Interpretation The SSIM data obtained through the Delphi study was tabulated as a matrix as per Table 2. The following rules are used for developing the matrix (a) If barrier i needs to be resolved before j, the item is denoted by V. (b) If barrier j needs to be resolved before i, the item is denoted by A. (c) If both i and j need to be resolved simultaneously, then the item is denoted by X. (d) If i and j can be resolved independently, the item is denoted by O. j SI No. Barrier to Implement GSCM Lack of Organization V X V V O V A X A A V V X Encouragement 2 Lack of IT A A A O A O A A O O A X Implementation 3 Lack of Quality of V X A O O O X A O O X Human Resources 4 Market Competition and Uncertainty V O O O O X O O O X 5 Lack of Government V O O V O V V O X Support systems i 6 Lack of Top V V A V O V X X Management Commitment 7 Cost Implications V O A V X V X 8 Supplier Reluctance to A O A V A X change towards GSCM 9 Unawareness and lack of O O A V A demand among customers, suppliers, etc. 10 Lack of green initiatives A A A X 11 Lack of Knowledge and experience V V X 12 Poor Organization O X Culture 13 Shortage of Resources X Table 2 Final Self Structural Interaction Matrix (SSIM) The SSIM is converted into the Reachability Matrix (RM) using the following rules asshown in Table 3.The initial RM is shown in the Table 4. If the element (i,j) in the SSIM Element Then the element in the RM is (i,j) (j,i) V 1 0 A 0 1 X 1 1 O > RJSSM: Volume: 04, Number: 04, August 2014 Page 132

5 Table 3 Rules for developing the Reachability Matrix SI Barrier to Implement No. GSCM 1 Lack of Organization Encouragement 2 Lack of IT Implementation 3 Lack of Quality of Human Resources 4 Market Competition and Uncertainty Lack of Government Support systems 6 Lack of Top Management Commitment 7 Cost Implications Supplier Reluctance to change towards GSCM 9 Unawareness and lack of demand among customers, suppliers, etc. 10 Lack of green initiatives Lack of Knowledge and experience 12 Poor Organization Culture Shortage of Resources Table 4 Initial Reachability Matrix Transitivity was applied to the initial RM to obtain the final RM. The rules of transitivity says that if a is related to b (arb) and b is related to c (brc) then a must necessarily be related to c (arc). The final RM after applying transitivity is shown in Table 5. SI No. Barrier to Implement GSCM Driving Power 1 Lack of Organization Encouragement * 1* 1 1* 1 1* Lack of IT Implementation Lack of Quality of Human Resources 1* 1 1 1* 1* 1* 1 1* 1* 1* Market Competition and Uncertainty 1 1* 1* 1 1* 1* * 1* 1* Lack of Government Support systems 1 1* 1* 1* 1 1* 1 1 1* 1 1* 1* Lack of Top Management Commitment * 1* * 1 1* Cost Implications * 1* Supplier Reluctance to change towards GSCM 1* 1* 1* 1 1 1* 1* 1 1* 1 1 1* 1* 5 > RJSSM: Volume: 04, Number: 04, August 2014 Page 133

6 9 Unawareness and lack of demand among customers, suppliers, etc. 1* 1 1* 1* 1* 1* * 0 1* 5 10 Lack of green initiatives Lack of Knowledge and experience 1* 1 1 1* 1* 1 1 1* Poor Organization Culture * 1* 1* 0 1 1* 1 1* 5 13 Shortage of Resources * 1* * Dependence Power /74 Table 5 Final Reachability Matrix (* indicates the transitive links) Partitioning is done by deriving the Reachability Set (RS) and the Antecedent Set (AS). The RS is the list of the barrier itself and also those barriers which it may help achieve. The AS is the list of barriers which consists of the barrier itself along with the barriers which may help achieve it. The intersection is the common barriers in both the RS and well as the AS. Level partitioning is done by the following technique. The barrier which has the Intersection Set and the RS as the same is considered 1 st Level. The barrier is then removed and this procedure is done iteratively until all the levels are recognised. In the study there were 4 levels which was recognised by iterative process. The workings of the 1 st iteration is shown in Table 6. The final list of levels is shown in Table 7. SI No. Barrier to Implement GSCM RS AS Intersection Leve l 1 Lack of Organization Encourageme nt 2 Lack of IT Implementati on 3 Lack of Quality of Human Resources 4 Market Competition and Uncertainty 5 Lack of Government Support systems 6 Lack of Top Management Commitment 7 Cost Implications 8 Supplier Reluctance to change 1,3,4,5,6,7,8,9,11,12 1,3,4,5,6,7,8,9,11,12 2 1,2,3,4,5,6,7,8,9,11,12, 13 1,2,3,4,5,6,7,8,9,10,12, st 1,3,4,5,6,7,8,9,11,12 1,3,4,5,6,7,8,9,12 1,2,3,4,5,6,8,10,11,1 1,3,4,5,6,7,8,9,11,13 1,3,4,5,6,8,11,13 1,3,4,5,6,7,8,9,11,13 1,3,4,5,6,7,8,9,11,13 1,3,4,5,6,7,8,9,11,12 1,3,4,5,6,7,8,9,11,12 1,3,5,6,7,8,9,11,12 1,3,5,6,7,8,9,11,12 1,3,4,5,6,7,8,9,11,12,1 3 1,3,4,5,6,7,8,9,11,12,13 > RJSSM: Volume: 04, Number: 04, August 2014 Page 134

7 towards GSCM 9 Unawareness and lack of demand among customers, suppliers, etc. 10 Lack of green initiatives 11 Lack of Knowledge and experience 12 Poor Organization Culture 13 Shortage of Resources ,3,4,5,6,7,8,9,10,11,1 1,3,5,6,7,8,9,11 1,3,5,6,7,8,9, st 1,4,5,6,7,8,9,11,1 1,4,5,6,7,8,9,11,12,1 3 1,2,3,6,7,8,10,11,1 1,3,4,5,6,7,8,11,12 1,3,6,7,8,11,12 2,4,5,8,10,11,13 1,3,4,5,6,7,8,9,11,12,1 3 Table 6 1 st Iteration of the level partition 4,5,8,11,13 SI No. Barrier to Implement GSCM Level 1 Lack of Organization Encouragement 3 rd 2 Lack of IT Implementation 1 st 3 Lack of Quality of Human Resources 3rd 4 Market Competition and Uncertainty 4th 5 Lack of Government Support systems 4th 6 Lack of Top Management Commitment 3rd 7 Cost Implications 5th 8 Supplier Reluctance to change towards GSCM 2nd 9 Unawareness and lack of demand among customers, 5th suppliers, etc. 10 Lack of green initiatives 1st 11 Lack of Knowledge and experience 4th 12 Poor Organization Culture 3 rd 13 Shortage of Resources 2nd Table 7 Level Partitioning of barriers Directed graph or diagraph is generated from the final Reachability Matrix after removing all transitive links. The relationship is shown using an arrow. The levels are arranged from the level partition which was done earlier. The relationships are shown between the different barriers in a hierarchical framework. The higher levels are placed on the top and subsequently the lower ones below that. The diagraph after removing all transitive links is shown in Figure 1. > RJSSM: Volume: 04, Number: 04, August 2014 Page 135

8 Figure 1 Diagraph of the barriers A MICMAC analysis is done to classify the barriers into 4 types ie. dependent, independent, linkage and autonomous based of driving power and dependence power. The driving power is calculated from the Final Reachability Matrix by adding all the 1 s in each column from each barrier. The dependence power is calculated by adding the 1 s in each row from each barrier.the graph is shown in Figure 2. Figure 2 Classification of barriers by cluster adoption of GSCM Further for a more transparent view of the variables, a summary of classifications is shown in Table 8. S.N. Barrier to Implement GSCM Classification Quadrant Driving Power Dependence Power Net Dominant Nature Rank Level 1 Lack of Organization Encouragement Internal Independent Driver 3 2 Lack of IT Implementation Internal Dependent Dependent 1 3 Lack of Quality Internal Autonomous Dependent 3 > RJSSM: Volume: 04, Number: 04, August 2014 Page 136

9 of Human Resources 4 Market Competition and Uncertainty 5 Lack of Government Support systems 6 Lack of Top Management Commitment 7 Cost Implications 8 Supplier Reluctance to change towards GSCM 9 Unawareness and lack of demand among customers, suppliers, etc 10 Lack of green initiatives 11 Lack of Knowledge and experience 12 Poor Organization Culture 13 Shortage of Resources External Autonomous Driver 4 External Autonomous Driver 4 Internal Independent Driver 3 Internal/ Independent Driver 5 External External Dependent Dependent 2 External Autonomous Driver 5 Internal Dependent Dependent 1 Internal Independent Driver 4 Internal Autonomous Equal 3 External Dependent Dependent 2 Table 8 Summary of Classification > RJSSM: Volume: 04, Number: 04, August 2014 Page 137

10 The final ISM model is derived by replacing the numbers in the diagraph by statements or barriers. The final ISM model is shown in Figure 3. Figure 3 Final ISM Model 5. Findings and Conclusion 5.1 Brief Summary of Findings The findings from the Final ISM Model shown in Figure 3 can be interpreted as follows. 1. Unawareness among customers and suppliers lead to less demand among them to implement green concepts in the organization. This will lead to cost implication which acts as a barrier to the implementation of Green Supply Chain Management in the Indian Construction Industry. In an industry that has intense competition, cost is a major factor which prevents organizations from taking up GSCM for the fear of losing market share. Therefore cost implications acts as a major barrier due to competition in the market along with lack of support from the Government which leads to lack of encouragement in the organization and reluctance among suppliers towards GSCM due to unfavourable or absence of policies relating to green operations. This will eventually leads to lack of green initiatives. 2. High cost also leads to shortage in resources in the organization which can lead to lack of implementation of Information Technology in the organizations in the form of software such as Enterprise Resource Planning and other optimization software. This eventually acts as a prime barrier to Green Supply Chain Management. 3. Lack of Knowledge about GSCM leads to lack of top management commitment as the top management are not updated about the new techniques and technology and are hesitant due to the uncertainty. Lack of knowledge about GSCM also is a cause of lack of quality human resources and poor organization culture which leads to reluctance from suppliers towards GSCM as the organization themselves cannot convince the suppliers towards green operations. This eventually leads to lack of green initiatives and lack of IT implementation in the organization. 4. It can also be seen from the model that lack of knowledge, lack of encouragement in organization, lack of top management commitment and lack of quality human resources directly leads to poor organization culture. This is obvious as the organization without motivated, skilled and knowledgeable without full support and encouragement from the top management cannot achieve a healthy work culture to be successful. > RJSSM: Volume: 04, Number: 04, August 2014 Page 138

11 The findings from Driving and Dependence Power Analysis shown in Figure 2 are as follows. 1. It can be seen that barrier 3,4,5,9 and12 i.e. lack of quality of Human Resources, market competition and uncertainty, lack of government support systems, unawareness and lack of demand among customers, suppliers, etc. and poor organization culture are autonomous drivers. These drivers have low driving power and low dependence power. 2. The Dependent Drivers are 2,8,10 and 13 which are supplier reluctance to change towards GSCM, lack of IT implementation, lack of green initiatives and shortage of resources. These drivers have high dependence and low driving powers. 3. There are no Linkage Drivers. These have high dependence power and high driving power. The Independent Drivers are 1,6, 7 and 11 which are lack of organization encouragement, lack of top management commitment, cost implications and lack of knowledge and experience. These drivers have high driving power and low dependence power. These are the drivers which should be targeted by the management to solve which will lead to other barriers being minimized. 5.2 Limitations and scope for further research There are a few limitations with the study due to inherent subjectivity in the Delphi technique. The first is that the opinion of the experts may be subjected to a certain bias. The other limitation is the validity of the ISM approach. ISM approach is not validated numerically and a quantitative approach such as Structural Equation Modelling (SEM) is needed for validation. 5.3 Implications for practitioners and researchers It can be seen that awareness among suppliers and customers is a key point for success in implementing GSCM. Therefore campaigns could be run for awareness among customers which will lead to an increase in demand which will ultimately lead to decrease in cost. An organization having the bargaining power can pressure its suppliers to follow them in implementing GSCM. Employee training and knowledge also plays an important role in the culture in an organization and the commitment of the top management. All employees should have regular training to make them aware of GSCM and its advantages. The government can also play a key role in removing the barriers to GSCM by making favourable policies and encouraging green operations in the organization. Recognition of these barriers and, more importantly, their interplay, allow policy makers, both internal and external, to focus and thereby optimize their efforts. References 1. Attri, R., Dev, N., & Sharma, V. (2013).Interpretive Structural Modelling (ISM) approach: An Overview. Research Journal of Management Sciences, 2(2), Balasubramanian, S. (2012). A hierarchical framework of barriers to green supply chain management in the construction sector. Journal of Sustainable Development, 5(10), Retrieved from 3. Beamon. B.M. (2008). Sustainability and the Future of Supply Chain Management. Operations and Supply Chain Management, 1(1), Cooper, R., Frank, G., & Kemp, R. (2000). A multinational comparison of key ethical issues helps and challenges in the purchasing and supply management profession: the key implications for business and the professions. Journal of Business Ethics, 23(1), Dashore, K., & Sohani, N. (2013). Green Supply Chain Management - Barriers & Drivers: A Review. International Journal of Engineering Research & Technology (IJERT), 2(4), Dheeraj, N & Vishal, N. (2012). An Overview of Green Supply Chain Management in India. Research Journal of Recent Sciences, 1(6), > RJSSM: Volume: 04, Number: 04, August 2014 Page 139

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