Environmental Engineering Reference
In-Depth Information
this philosophy has become an important aspect of
an organisation's strategic plan, but has also had
a direct effect on the procurement department or
even the whole organisation. Furthermore, there
are a growing number of large and multinational
organisations which have been developing envi-
ronmental programs and have been focusing on
innovating green products in order to achieve
sustainable competitive advantage. IBM, for ex-
ample, has a reuse and recycling programme for
its products in 35 different countries and has not
only reduced waste, but also saved US$2.9 mil-
lion after implementing the programme (Teague,
2005). Other leading electronic companies, in-
cluding HP, Dell, Motorola, Sony, NEC, Fujitsu,
Panasonic and Toshiba have adopted GSCM as
a proactive strategy after EU environmental di-
rectives were enacted (Zhu and Sarkis, 2006). In
contrast, small and medium enterprises (SMEs)
have faced difficulties in implementing GSCM
as most of these companies are lacking technical
and financial incentives (Sarkis 2001; Noci and
Verganti, 1999).
There are many driving forces for GSCM.
For example, Rao (2006) proposed 14 motivators
and driving forces for GSCM, namely, customer
pressure, avoid potential export limitations, en-
vironmental improvement, reduced operating
costs, increased productivity and quality, captur-
ing workers' knowledge, improved relations with
authorities, improved relations with communities,
enhanced brand image and reputation, competi-
tiveness, Corporate Social and Environmental
Responsibility, access to capital, financial per-
formance, improvement and increase in market
share. One narrow definition of GSCM can be
given as green purchasing across the whole supply
chain from upstream suppliers, manufacturers,
to downstream customers and reverse logistic
(Zhu and Sarkis, 2004). Those green purchasing
activities include strategic environmental sourc-
ing, supplier development programs, supplier
selection for environmental sourcing and sup-
plier assessment metrics (Sroufe, 2006). Zhu and
Geng (2006) estimated that purchased inputs for
a manufacturer account for an overall value of
60% in all product costs and 50% of the quality
problems. Consequently, green purchasing plays
an important role for reducing environmental
impacts across the whole product life cycle.
As discussed in the preceding section, GSCM
comprises of internal and external environmental
management (Rao and Holt 2005). In terms of
external environmental management, it includes
green purchasing and cooperation with customers,
environmental requirements, investment recov-
ery, and eco-design practices. These approaches
include some of the main internal and external
activities and functions in a company's supply
chain management. There is a consensus that in-
ternal environmental management is a key factor
to improve organisational performance (Carter
et al., 1998). The interpretation of GSCM from
different authors discussed so far is summarised
in Table 1. In this article, internal environmental
management is referred to as green innovation
which will be discussed later, and external envi-
ronmental management is defined as the greening
of suppliers, which will be discussed in the next
sub-section.
Table 1. Interpretation of GSCM
Author
Years
Interpretation
Carter et al.
1998
GSCM is a key factor to improve organisational performance
GSCM can be classified as green purchasing to integrate the whole supply chain flowing from
upstream and downstream suppliers, manufacturers, customers and reverse logistics
Zhu & Sarkis
2004
