FACTORS AFFECTING GREEN SUPPLY CHAIN PRACTICES IN AUTOMOTIVE INDUSTRY IN INDIA

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International Journal of Mechanical Engineering and Technology (IJMET)
Volume 9, Issue 11, November 2018, pp. 475–482, Article ID: IJMET_09_11_046
Available online at http://www.iaeme.com/ijmet/issues.asp?JType=IJMET&VType=9&IType=11
ISSN Print: 0976-6340 and ISSN Online: 0976-6359
© 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,
Rita Prusty
Assistant Professor, Faculty of Management Sciences,
Dr. Manoranjan Dash
Associate Professor, Faculty of Management Sciences,
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.

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. 475–482.
http://www.iaeme.com/IJMET/issues.asp?JType=IJMET&VType=9&IType=11
1. 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.

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 14001 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.

(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 14001 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

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 5 . 120 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 .870

4.1. Factor Analysis
Table 1 KMO and Bartlett’s Test
Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .835
Bartlett’s Test of Sphericity
Approx. Chi-Square 1544.438
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 Matrixa
Component
1 2 3 4 5
IG1 .769
IG2 .899
IG3 .876
CG1 .844
CG2 .924
CG3 .671
EG1 .685
EG2 .603
CI1 .544
CI2 . .860
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

. 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.
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