FACTORS AFFECTING GREEN SUPPLY CHAIN PRACTICES IN AUTOMOTIVE INDUSTRY IN INDIA

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1 International Journal of Mechanical Engineering and Technology (IJMET) Volume 9, Issue 11, November 2018, pp , Article ID: IJMET_09_11_046 Available online at ISSN Print: and ISSN Online: IAEME Publication Scopus Indexed FACTORS AFFECTING GREEN SUPPLY CHAIN PRACTICES IN AUTOMOTIVE INDUSTRY IN INDIA Dhruti Sundar Sahoo Assistant Professor, Faculty of Management Sciences, Siksha O Anusandhan (Deemed to be University), Bhubaneswar, India Dr. Ayasakanta Mohanty Professor, Faculty of Management Sciences, Siksha O Anusandhan (Deemed to be University), Bhubaneswar, India Rita Prusty Assistant Professor, Faculty of Management Sciences, Siksha O Anusandhan (Deemed to be University), Bhubaneswar, India Dr. Manoranjan Dash Associate Professor, Faculty of Management Sciences, Siksha O Anusandhan (Deemed to be University), Bhubaneswar, India ABSTRACT Green Supply Chain Management (GSCM) has emerged as new management strategy for automobile organizations to become more environmental friendly, cost effective and competitive. The study focuses on green supply chain management practices in Automotive Industry in India. Globally business environment is very volatile in nature and is featured by uncertainties. Due to rising environmental issues, awareness on environmental pollution issues combined with industrial development should be addressed by supply chain management. Therefore Green Supply Chain Management (GSCM) is an emerging agenda for the industrial organization to improve their performance on different dimensions such as economic and environment. GSCM has a parallel development to push green products in context to the ever growing environmental concerns among the organizations.the objective of the paper is to explore the factors affecting the Green supply Chain Management in Automotive Industry in India. Key words: GSCM, Green Business, Global Business Environment, Environmental Issues editor@iaeme.com

2 Factors Affecting Green Supply Chain Practices in Automotive Industry in India Cite this Article: Dhruti Sundar Sahoo, Dr. Ayasakanta Mohanty, Rita Prusty and Dr. Manoranjan Dash, Factors Affecting Green Supply Chain Practices in Automotive Industry in India, International Journal of Mechanical Engineering and Technology 9(11), 2018, pp INTRODUCTION Due to depletion of natural resources, increasing environmental pollution, enhancing consumer awareness, Expansion in social media and other media, stringent rule and regulation relation to environment, green supply chain management is consider as an emerging issue among the academia. A supply chain is consisting of facilities and distribution network that includes procurement, production, assembly and delivery of products or service to the consumer ( Borade at el. 2008).The focus of supply chain management goes beyond the individual organization and it includes network of supplier and customer. The supply chain encompasses all activities associated with the flow and transformation of goods from raw materials (extraction), through the end user, as well as associated information flows. Material and information flow both up and down the supply chain.(handfield and Nichols 1999, p. 2). Green supply chain management integrates the environmental concern into traditional supply chain management (Gilbert, 2000). Godfrey (1998) mentioned It is the practices of improving environmental performance throughout the supply chain management. According to Hsu at el. (2008) green supply chain management is a proactive approach for enhancing environmental performance by improving the production process and product as per the requirement of environmental regulation. Srivastava,( 2007). Define GSCM as incorporating environmental concern into SCM, including product design, material sourcing and selection, manufacturing practices, delivery of the final products to consumers, and end-of-life management of the product after its useful life. GSCM is an organizational philosophy which integrates environmental dimensions with the traditional supply chain network, which includes procurement, logistics, manufacturing, distribution and disposal or reuse/recycling. Dubey and Gunasekaran (2017) propose a operational definition The green supply chain management (GSCM) is an organization philosophy which can provide competitive advantage to the organization in terms of high product quality, high service quality, minimum wastes, zero pollution, better image, and high return on investment. As one of the largest manufacturing sectors, the automotive industry has a deep impact on the society and environment. Automotive products provide mobility to millions and create jobs, but also threaten the environment. Consumer pressure, government regulations, and stakeholder demands for a competitive edge have forced the automotive industry to consider their environmental and social impacts in addition to their economic status. The burden on automotive companies to embrace green processes has increased significantly in recent years. A review of the existing literature has highlighted a need to understand how green supply chain management (GSCM) practices can contribute to improving company performance from environmental, economic and operational. This research aims to test the relationship between GSCM practices and performance for those companies adopted or planning to adopt GSCM in an emerging economy such as India. Outcome of the testing shows GSCM practices varies against companies' performance. It implies that companies appear to be unsuccessful in understanding the link between GSCM practices and performance editor@iaeme.com

3 Dhruti Sundar Sahoo, Dr. Ayasakanta Mohanty, Rita Prusty and Dr. Manoranjan Dash 2. LITERATURE REVIEW Mitra et al. (2014) conducted a survey on GSCM practices in Indian manufacturing firm and found adoption of GSCM practices by Indian corporations become nevertheless in its infancy stage, attention of environmental sustainability become pretty low amongst customers, and the regulatory framework also lacking in terms of promoting environmental sustainability. Environmental sustainable product design and logistic requires to collaborate with suppliers which in terms helps to achieve economic performance and improve the competiveness of the firm. Mohanty et al. (2014) empirically study green supply chain management (GSCM) practices in the Micro, small and medium enterprises (MSMEs) in India emphasized external and internal pressures. Among internal pressures, on-the-job training forces MSMEs in India to adopt GSCM practices. It has been also established that outside pressures and adoption of GSCM are completely mediated by using internal pressures. Mohanty et al. (2014) Studied the green supply chain management (GSCM) practices relating to Micro Small Medium Enterprises (MSME) in India by using Structural Equation Modelling (SEM) and try to find out whether or not the greening rankings measure a commonplace assemble called GSCM and whether or not external and internal pressures because of stakeholders have any impact on GSCM practices whilst variations are managed for different varieties of MSME and nature of industries of MSME in India. Luthra et al. (2015) studied to find out the key success factor which is responsible for achieving environmental sustainability in Indian automobile supply chain. Six CSFs to enforce GSCM for attaining sustainability and 4 predicted overall performance measures of GSCM practices implementation had been extracted by factor analysis. Interpretive ranking manner (IRP) modelling method is employed to take a look at the contextual relationships amongst CSFs and to rank them with recognize to overall performance measures. Mathiyazhagan et al. (2014) in his paper try to find out pressures for implementation of GSCM. Through the detailed literature review, initially they found out 65 pressure which then categorized into six categories like Government Policies and Regulations (GPR), Global Competitiveness (GC), Customer (C), External Factors (EFs), Financial Factors (FFs) and Production and Operational Factors (POF) by using AHP. Implementation of GSCM in industries is a crucial process and needs coordination from all levels of the workforce, from employees to top management. Geng et al. (2017) conducted a study in the manufacturing sector of Asian Emerging Economies (AEE) like China, Taiwan, India, Malaysia, Indonesia, Thailand, and South Korea to find out the relationship between green supply chain management and firm performance based on empirical evidence collected through systematic literature review. Their findings revealed that the GSCM practices result in better performance in 4 aspects like economic, environmental, operational, and social performance. Several GSCM practice performance relationship are moderated by industry type, firm size, ISO certification, and export orientation. Laosirihongthong et al. (2013) examined the adaptation of pro-active and re-active practices implementation of green supply chain management (GSCM) and analyze their impact on environmental, economic, and intangible performance by considering business strategy as organizational focus. They conducted their study by collecting data from 190 nos of ISO firm in Thailand. They found that re-active practices like threat of legislation and regulation is taken considerably by the companies in enhancing their environmental, economic, and intangible performance. In pro-active practices like reverse logistics have low level of adaptation and do not have significance impact on GSCM performance. Mangla et al. (2015) mention in their paper that Green Supply Chain Management (GSCM) can help the industry to improve environmental performance in terms of reducing resource consumption and confirm sustainable production. Because of risk involve in managing green supply chain, effectiveness of GSCM is comparatively low. In this paper they have identified and prioritize the risk in GSC so that the industry will focus on the high risk and formulate their strategy accordingly. Singh at el editor@iaeme.com

4 Factors Affecting Green Supply Chain Practices in Automotive Industry in India (2014) identify the factors responsible for implementation of green management practices in MSME sector in India and use AHP to validate multiple item scale for determining the factors and variables. They establish a relationship that green management relates to the product design, design the process, technology, packing material and packing design. Vijayvargy at el. (2017) investigated how organization size affecting in implementing Green Supply Chain Management practices for Indian industry and also evaluated its impact on organizational performance. They have compared the GSCM practice implementations among small-sized, medium-sized and large-sized organizations by using a pre-tested structured questionnaire. Their study reveals that except ISO and Tier II supplier evaluation, majority of environmental practices were adopted successfully in Indian organization. Apart from 21 practices medium size organization have adopted most of the practices similar to large size organization except environmental management systems, support from mid-level and top management and supplier evaluation for environmental practice. Yu at el. (2017) develops a conceptual model linking green supply chain management and performance and empirically test and found that both people involve in green purchasing and green supplier selections have significant positive impact on green supplier collaboration which is significantly and positively relates to environmental and operational performance. Muduli at el (2016) investigated on green practices adopted by three of the mining sector and found that green supply chain management successfully implemented by large scale industry where as small scale industry faces some challenges. They also suggest some recommendation to change in policy to validate the barriers of green supply chain management and improve the performance of mining industry particularly the smaller one. Green at el. (2012) empirically Investigated to find out the impact of GSCM practices on organizational performance. They also develops a model that incorporate GSCM practices that links manufacturer with supplier and customer. They collected the data from 159 manufacturing managers that reflect the degree to which their organization works with supplier and customer to improve sustainability in supply chain and analyze it by using SEM model. They found that when manufacturing firms adopt GSCM practices it helps to improve their economic and environmental performance that positively impact operational performance. Ambekar at el. (2018) propose a model for adopting low carbon culture to get justified carbon capabilities by integrating the dimensions like flexibility or control and external or internal of competing values framework (CVF) along with level of carbon emission (LCE). From the review of literature they propose this model. Their new category of carbon culture are Red, Antagonist, Obligatory, Early Adopter, Follower, Transitive, Pragmatist and Green which helps to select the most appropriate practices for low carbon emission. Choi at el. (2015) investigate the effect of GSCM practices on the firms performance moderating through the collaborative capability. Their study analyses the data from 230 south Korean manufacturing unit using hierarchical regression and found that both financial and environmental performance of the firm can be improve by using GSCM practices. Firm can also expect improved financial performance by involving their partners in GSCM implantation process. Srivastava (2007) responding to the needs of the regulatory bodies, academicians, researchers and practitioners for a broad frame of reference of green supply chain management, had developed classification of GSCM on the basis of problem context, methodology and approach adopted in green supply chain primarily focusing on reverse logistics angle. It also shows a timeline of relevant research papers. Luthra at el. (2011) develops a structural model of the barriers to implement green supply chain management in Indian automobile industry. They have use MICMAC analysis for classification and ISM technique use to find contextual relationships among various barriers to implement GSCM in Indian automobile industry.. From the literature review and subsequent discussion with the industry and academic experts they have identified 11 different barriers, out of which 5 are dependent variable (Market Competition editor@iaeme.com

5 Dhruti Sundar Sahoo, Dr. Ayasakanta Mohanty, Rita Prusty and Dr. Manoranjan Dash and Uncertainty; Lack of Implementing Green Practices; Cost Implications; Unawareness of Customers and Supplier Reluctance to Change Towards GSCM), 3 are driver variable (Lack of Government Support Systems; Lack of Top Management Commitment and Lack of IT Implementation) and 3 are linkages variable (Resistance to Technology Advancement Adoption; Lack of Organization Encouragement and Poor Quality of Human Resources). No autonomous variable present. 4 barriers are identified as top and one bottom level barrier with discussion on how to remove these barriers. Four top level barriers are :- (1)Market Competition and Uncertainty; (2)Lack of Implementing Green Practices; (3)Cost Implications; (4)Unawareness of Customers have been identified as top level barriers and Lack of Government Support Systems as most important bottom level barrier. Removal of these barriers will be help in implementing GSCM in Indian automobile industry. Kumar at el. (2012) Have studied the relationship between GSCM practices and environmental performance in electrical and electronics products manufacturing industry in India by using literature review, in depth interviews and questionnaire survey. They found that eco procurement, eco accounting, eco logistics design, eco product design, eco manufacturing are practices in the industry. Sen (2009) responding to the global warming and its adverse effect, review some paper and identifies that GSCM is the most effective ways to reduce the pollution and waste which is created due to incomplete and ineffective utilization of resource and inefficient production process. Corporate in emerging market like India have great concern how to reduce excess consumption of the resources and eliminate adverse environmental impact of their product and process throughout the life cycle. Their study supports that GSCM and corporate performance are not mutually exclusive. GSCM helps to generate exceptional value for the share holder along with positively contribute to Corporate Social Responsibility (CSR). Kushwaha (2010) discusses the key drivers for green initiatives like government compliance, ROI, reverse logistics, supply chain efficiency and wider corporate responsibility which helps to take strategic decision to go green. During design operations and supply chain management Indian companies are lacking in these issues. Wang (2014) mention that successful implementation of GSCM depends on partnership. Due to lack of corporate social responsibility (CSR) partnership in the green supply chain is going to be worse. In order to enhance the partnership in GSCM they have focus on partner selection from the corporate social responsibility perspective. They found that selection of the right partner depends on the levels of fulfillment of CSR. Companies with high degree of responsibility in green supply chain are likely to be preferred by leading companies. Successful collaboration leads the companies to fulfill their social responsibility. It helps in establishing harmonious relationship, partner selection and fulfilling social responsibility. 3. RESEARCH OBJECTIVES 1.To identify the factors affecting green supply chain management initiatives In India 4. RESEARCH METHODOLOGY A survey questionnaire for measurement of greening of the supply chain was used which was pilot tested with 50 respondents working in different automotive industry having knowledge of SCM practices. Data were collected from questionnaires for identifying factors of GSCM. The respondents had to agree on a scale ranging from 1 to questionnaires were collected from respondents and factor analysis was carried out and we found 5 factors explaining 87.22% variance. Cronbach s Alpha was found to be editor@iaeme.com

6 4.1. Factor Analysis Factors Affecting Green Supply Chain Practices in Automotive Industry in India Table 1 KMO and Bartlett s Test Kaiser-Meyer-Olkin Measure of Sampling Adequacy..835 Approx. Chi-Square Bartlett s Test of Sphericity df 78 Sig..000 The KMO and Bartlett s Test sampling adequacy was found to be.835 and which is close to 1 and it is significant.factor analysis is found to be valid because the p is found to be significant and shows statistically there is enough relationship between the variables. Factors analysis is appropriate for the data The Eigen values are greater than 1 and the 5 factors are able to explain 87.22% of variance. Table 2 Rotated Component Matrix a Component IG1.769 IG2.899 IG3.876 CG1.844 CG2.924 CG3.671 EG1.685 EG2.603 CI1.544 CI RL1.961 RL2.741 RL3.919 Extraction Method: Principal Component Analysis. Rotation Method: Varimax with Kaiser Normalization. a. Rotation converged in 8 iterations. The above table represents the correlation among the variables and the extracted factors. Five factors have been identified after the rotation matrix. The 5 factors being named as reverse logistics, inbound greening, compliance greening, ecological greening and outbound greening. Outbound greening as identified focus on recycling of waste material internal to the company and informing consumers on environmentally friendly products by considering different aspects of sales and marketing. Compliance greening includes practices to reduce noise and to comply with emission standards by means of environmentally raw materials. Inboud greening specifies choosing suppliers by environmental criteria in order to use the waste of other companies Reverse logistics greening includes using remanufacturing and recovery of end life products in cost effective manner. 5. CONCLUSIIONS Greening has been understood to be linked with environmental activities and now recently green means a market tool for businesses. It is becoming increasingly important to be green applying the greening principles to all facets of the supply chain sourcing, purchasing, manufacturing and reaching the customer with green products and using the green technology editor@iaeme.com

7 Dhruti Sundar Sahoo, Dr. Ayasakanta Mohanty, Rita Prusty and Dr. Manoranjan Dash. Five crucial factors have been identified in the study which includes reverse logistics, inbound greening, outbound greening ecological greening and compliance greening. GSCM practices in organization are trying to efficiently use the resources and strategy of GSCM is to increase the efficiency and is an integrated approach for providing both economic as well as environmental efficiency. REFERENCES [1] Mitra, S., & Datta, P. P. (2014). Adoption of green supply chain management practices and their impact on performance: an exploratory study of Indian manufacturing firms. International Journal of Production Research, 52(7), [2] Mohanty, R. P., & Prakash, A. (2014). Green supply chain management practices in India: an empirical study. Production Planning & Control, 25(16), [3] Mohanty, R. P., & Prakash, A. (2014). Green supply chain management practices in India: A confirmatory empirical study. Production & Manufacturing Research, 2(1), [4] Luthra, S., Garg, D., & Haleem, A. (2015). Critical success factors of green supply chain management for achieving sustainability in Indian automobile industry. Production Planning & Control, 26(5), [5] Mathiyazhagan, K., Govindan, K., & Noorul Haq, A. (2014). Pressure analysis for green supply chain management implementation in Indian industries using analytic hierarchy process. International Journal of Production Research, 52(1), [6] Geng, R., Mansouri, S. A., & Aktas, E. (2017). The relationship between green supply chain management and performance: A meta-analysis of empirical evidences in Asian emerging economies. International Journal of Production Economics, 183, [7] Laosirihongthong, T., Adebanjo, D., & Choon Tan, K. (2013). Green supply chain management practices and performance. Industrial Management & Data Systems, 113(8), [8] Mangla, S. K., Kumar, P., & Barua, M. K. (2015). Prioritizing the responses to manage risks in green supply chain: An Indian plastic manufacturer perspective. Sustainable Production and Consumption, 1, [9] Singh, A. K., Jha, S. K., & Prakash, A. (2014). Green manufacturing (GM) performance measures: An empirical investigation from Indian MSMEs. International Journal of Research in Advent Technology, 2(4), [10] Vijayvargy, L., Thakkar, J., & Agarwal, G. (2017). Green supply chain management practices and performance: The role of firm-size for emerging economies. Journal of Manufacturing Technology Management, 28(3), [11] Yu, W., Chavez, R., & Feng, M. (2017). Green supply management and performance: a resource-based view. Production Planning & Control, 28(6-8), [12] Muduli, K., Barve, A., Tripathy, S., & Biswal, J. N. (2016). Green practices adopted by the mining supply chains in India: a case study. International Journal of Environment and Sustainable Development, 15(2), [13] Green Jr, K. W., Zelbst, P. J., Meacham, J., & Bhadauria, V. S. (2012). Green supply chain management practices: impact on performance. Supply Chain Management: An International Journal, 17(3), [14] Ambekar, S., Prakash, A., & Patyal, V. S. (2018). Role of culture in low carbon supply chain capabilities. Journal of Manufacturing Technology Management. [15] Choi, D., & Hwang, T. (2015). The impact of green supply chain management practices on firm performance: the role of collaborative capability. Operations Management Research, 8(3-4), [16] Srivastava, S. K. (2007). Green supply chain management: a state of the art literature review. International journal of management reviews, 9(1), editor@iaeme.com

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