THE IMPLEMENTATION OF GREEN SUPPLY CHAIN MANAGEMENT PRACTICES: A CONCEPTUAL FRAMEWORK

Transcription

1 THE IMPLEMENTATION OF GREEN SUPPLY CHAIN MANAGEMENT PRACTICES: A CONCEPTUAL FRAMEWORK Tarig Eltayeb and Suhaiza Zailani School of Management Universiti Sains Malaysia 11800, Penang, Malaysia Tel: ext 3952 Fax: tarig65@hotmail.com ABSTRACT Green supply chain management (GSCM) emerges as a new approach to organizational environmental management that enables organizations to perform collaborative greening activities within the firm and between firms in a supply chain. This represents advancement to isolated efforts whereby each unit or a firm conduct greening practices separately. Despite the importance of such green collaboration, previous studies show that GSCM practices are not widespread particularly in the Malaysian context. This paper is a conceptual paper in which a conceptual framework is proposed that tries to identify internal and external drivers that motivate firms to implement GSCM practices. In addition, the study proposes supply chain capabilities as enablers that facilitate the successful implementation of GSCM practices. The study also identifies possible tangible and intangible outcomes that are expected to result from GSCM practices. The proposed framework tries to clarify the mechanism for GSCM implementation and how and why firms implement GSCM practices. Results from interviews in Malaysia provide some support to study relationships. However, the framework is expected to be subject to further testing using survey data from the electrical and electronics industry in Malaysia. KEY WORDS Green Supply Chain Management, Supply Chain Management, Environmental Management, and Conceptual Paper 1. Introduction In recent years, the environmental has become a critical issue of concern at different levels of the economy. The world witnesses several environmental changes and problems at global and local levels. The most serious problems are global warming, ozone depletion, waste disposal, and air pollution. Besides these problems, there is a problem of rapid consumption of natural resources, especially the nonrenewable ones, that posits serious questions about the future of the earth for the coming generations [1]. Business organizations are believed to contribute too much to these problems through their business practices [1]. Therefore, these practices are subject to scrutiny from various stakeholders inside and outside organization. Firms face a great deal of pressures and scrutiny from many and diverse stakeholder groups, including government agencies, workers, neighbors, and not-forprofit groups. This is over and above growing demands from at least some customer segments to perform more environmentally friendly practices. As a result, business organizations start to set environmentally conscious business practices. This led to the emergence of green movement and the adoption of green practices in business organizations including green production, green purchasing, green transportation, green packaging, and so on. Green becomes a common practice to portray the environmentally-friendly image of products, processes, systems and technologies, and the way business is conducted [2]. However, the weakness with these practices is that each focuses only on the internal functions of an organization [3]. In recent years, a more externally oriented approach involving the application of environmental management principles to the supply chain has emerged as a new way to exert more control to environmental issues and realize gains to all supply chain members. These activities occur across multiple organizations, upstream and downstream the supply chain, and take different names including product stewardship, closed-loop supply chain management, and green supply chain management (GSCM). This represents a shift of focus from isolated or internal solutions to joint activities where different parties in a supply chain collaborate together to reduce sources of waste and pollution and produce more environmentally friendly products. Despite the

2 importance of such collaboration, the adoption of these practices in real life is not wide-spread. OECD survey of 1509 enterprises worldwide [4] reports that a relatively limited 14 percent of the companies that have implemented EMSs engage in environmental supply chain audits. Of these companies, only 1 percent in the Asia- Pacific region. There is also a lack of research in the area, Vachon and Klassen pointed out that very little research has focused on the management of green supply chain interactions and their potential impact on an organization s environmental management [2, p.796]. The purpose of this paper is to provide a conceptual framework for the identification of what drive companies to implement GSCM practices, the facilitators of implementation, and possible outcomes of successful implementation. The paper begins with clarifying the concept of green supply chain management and clarifies its elements, objectives, and importance. In section 2.2, the paper presents detailed literature reviews of GSCM practices as related to suppliers, customers, and internal supply chain of organization. Section 2.3 explores the internal and external drivers of GSCM practices. Section 2.4 analyses the role of supply chain capabilities as facilitators for GSCM implementation. Section 2.5 identifies tangible and intangible outcomes of GSCM implementation. In section 3.0 we propose the conceptual framework of the study, main propositions, and empirical study to test the framework. The final section presents the conclusions and insights from the study. 2. Literature Review 2.1 The Concept of Green Supply Chain Management The concept of GSCM can be defined by adding the green component to supply chain management practices [6]. GSCM extends traditional supply chain processes to include after use processes, e.g. recycling and disposal, and assume responsibility of product from cradle to grave. Christopher [5] introduced the concept of extended supply chain to include after consumption activities. Writers use a variety of names and definitions to describe these activities; e.g., closed-loop supply chain [2], green purchasing [7], and green value chain [8]. This involves addressing the influence and relationships of SCM to the natural environment. The idea is to close the loop of a typical forward supply chain by including reuse, remanufacturing, and/or recycling of materials into new materials or other products with value in the marketplace [6]. The objective of GSCM is to eliminate or minimize waste (energy, emissions, chemical/hazardous, solid wastes) in the supply chain and produce more environmentally friendly products (see Figure 1). Information exchange, collaboration, coordination Green design, waste & energy reduction, product stewardship Suppliers New, reused, recycled materials and components Internal supply chain Material procurement Fabrication Assembly Distribution Customers - Use - Disposal Reverse logistics Reusable, remanufacturable, and recyclable products and materials Figure 1: The Concept of GSCM

3 GSCM receives considerable attention in recent years due to globalization and intensive competition. This require firms to establish collaborative activities to find competitive position in the international markets. Such collaboration is also needed to maintain consistent and efficient implementation of green practices among supply chain members. Walton, Handfield, and Melnyk [3] argue that companies wanting to reap the greatest benefits from their environmental management processes must integrate other members of the supply chain into these processes. Klassen and Vachon [9] conducted a study on Canadian manufacturing plants and found that supply chain collaboration significantly impact both the level and form of investment in environmental technologies and programs. 2.2 GSCM Practices A number of environmentally conscious practices are evident throughout the supply chain. Among these practices, greater attention focused on environmental audits and certification (e.g. ISO 14001) for the firm and its supply chain members, and collaboration with suppliers and customers in various forward and backward activities [10]. Based on their orientation or targeted parties, these activities are categorized into three main types; supplier-oriented, internal supply chain, and customer oriented practices (see Table 1) Supplier-oriented practices Suppliers play critical role in the development and maintenance of green activities in supply chains. Geffen and Rothenberg [11] found that strong partnerships with suppliers, supported by appropriate incentive systems, were a significant element of the successful application of innovative environmental practices. This suggests that organizations need to cooperate with their suppliers and monitor their performance to ensure that the materials and components supplied by them are environmentally friendly in nature and are produced using environmentally friendly processes [12]. Green purchasing is the most commonly implemented green supply chain practice [13]. Min and Galle define green purchasing as an environmentally-conscious purchasing practice that reduces sources of waste and promotes recycling and reclamation of purchased materials without adversely affecting performance requirements of such materials [7, p.1223]. Several activities are performed by the buying company to monitor and control environmental performance of suppliers such as gathering and processing supplier information through publicly disclosed environmental records, company-specific questionnaires, environmental audits performed by either the buyer or an independent third party, using environmental criteria in evaluating suppliers, and demanding certified EMS from them [7; 13]. To upgrade the performance of suppliers and promote more collaborative relationship between the customer and supplier, organizations may perform mentoring activities towards their suppliers. These mentoring activities go beyond monitoring and evaluation to include guiding and supporting suppliers to implement green practices. Specific mentoring activities might include holding environmental awareness seminars for suppliers and vendors, undertaking educational program to explain the benefits and relevance of GSCM initiatives, setting up environmental teams to guide suppliers in their development of environmental programs, visiting suppliers premises to provide on-site recommendations and assisting in the set up of their environmental programs [14]. Since suppliers are easily influenced by buying firms and their practices directly affect product quality and cost, supplier-oriented practices are highly significant to firms [13]. Therefore, we assume in this study that, when firms are faced with pressures to establish collaborative green activities, they first go towards suppliers and try to make sure that these suppliers implement environmentally friendly practices. Table 1: GSCM practices Supplier-oriented practices Green purchasing. Providing green design specifications to suppliers. Help suppliers to develop their EMSs. Environmental audit for suppliers. Mentoring activities for suppliers. Internal supply chain practices Cross-functional cooperation for environmental management. Design for the environment. Standard environmental management system exist Total quality environmental management. Life cycle assessment. Customer-oriented practices Cooperation with customers for green packaging. Cooperation with customers for green distribution. Cooperation with customers for green reverse logistics.

4 2.2.2 Internal supply chain practices In the operation or internal supply chain processes of organization, a number of green practices can be identified such as cross-functional cooperation for environmental management, design for the environment, total quality environmental management, and life cycle assessment. These practices aim at establishing collaboration among various departments and units inside organization for implementing green initiatives. Such collaboration involves sharing of resources, setting of common plans and procedures, and establishing teamwork and communication networks [15] Design for environment address three main issues; design for reusing, recycling and remanufacturing. Design for reuse focuses on the design of product that facilitate onsite or off-site reuse of a product or part of it with no or minimal treatment of a waste product [16]. Design for recycling focuses on product design that facilitates disassembly of the waste product, separation of parts according to material, and reprocessing of the material [17]. Design for manufacturing focuses on design of a product that facilitates repair, rework, and refurbishment activities aiming at returning product to new or better than new condition [18]. Design for environment also addresses the transportation requirements of the materials, the product biodegradability and toxicity [17]. Total quality environmental management is a subcomponent of standard TQM. TQEM integrates TQM activities with environmental management practices. This integration enables organizations to identify sources of pollution and improve environmental performance [16]. Examples of such activities are; environmental strategies and support by upper management, environmental training and empowerment of employees, design environmental quality management information systems, strategic environmental quality planning, environmental quality assurance, and environmental measurements [16]. Life cycle assessment involves evaluating the environmental impacts over the entire product life cycle, from extraction and procurement of raw materials through to manufacturing, distribution, use and disposal [17]. Life cycle assessment examines the potential environmental aspects associated with product inputs and outputs. The core activities of life cycle assessment include life cycle costing, inventory analysis, impact analysis, and environmental auditing or improvement analysis [16] Customer-oriented practices Customer directed environmental practices constitute the outbound side of the green supply chain. These practices aim at management of wastes in the outbound function, minimize negative environmental impacts of these functions, and realize gains in the form of cost savings and revenue generation to supply chain members [12]. The main green outbound activities are green packaging, green distribution, and green reverse logistics. These activities usually need collaboration with the main customers of organization such as wholesalers, retailers, dealers, and final consumers. The use of packaging materials contribute heavily to pollution and waste streams in the environment. Green packaging practices aims at reducing negative impacts and costs of these packages [12]. Green packaging practices include reducing materials use in packaging, avoiding hazardous packaging materials, and using reusable and recyclable packages. Many of these activities require strong customer supplier relationship [19]. Green distribution aims at reducing waste and emissions during distribution. Examples of specific activities include selecting appropriate type of transportation, reduction of fuel consumption during transportation, and selecting appropriate locations for warehouses and outlets [19]. Green reverse logistics practices focuses primarily on the return of reusable, remanufacturable, and recyclable products and materials into the forward supply chain. Pohlen and Farris [20] identify these practices as; collection, separation, densification, transitional processing, delivery, and integration. These practices deal with different types of products and performed at different stages of the product life cycle; during use, at end-of-use, and at end of product life. Therefore, a number of systems and processes have to be coordinated at each stage of the green logistics channel. Due to the difficulty of implementing customer-oriented practices and their indirect and less obvious connection to product cost and quality, these practices are of lower level of implementation compared with supplier-oriented practices [2]. Accordingly, in this study, we assume that firms need strong motivation and capabilities in order to implement customer-oriented green practices. 2.3 Drivers for Implementation After identifying GSCM practices, then a question arises, why firms implement GSCM practices. Many drivers are found to have significant contribution to the implementation of GSCM practices. The identification of these drivers is of crucial importance as it allows the identification of the true underlying sources of competitive advantages to the firm [21]. These drivers can

5 be broadly divided into external and internal drivers to the organization as follows External drivers External drivers stem from the external environment or stakeholders that posit pressures and motivators for organizations to implement GSCM practices. Government bodies set variety of regulations that press or motivate organizations to adopt environmentally friendly practices. Customers may exert pressures on organizations to produce green products especially among companies selling to international markets. Organizations may also implement green practices to meet competition from rivals and gain more market share. Suppliers that have already implemented green practices may also exert pressures on the buying organizations to implement similar practices. Besides, various pressure groups such as NGOs and environmental societies and media posit pressures on organizations to comply with environmental regulations and perform environmentally friendly practices [22]. External drivers are considered to posit pressures and threats, as well as opportunities to realize gains in a form of cost minimization or revenue maximization [23]. Firms may try to respond to these pressures and opportunities by implementing appropriate green practices internally or in collaboration with supply chain partners Internal drivers Internal drivers emanate mainly from intrinsic belief or awareness of organization and prevailing culture that green practices are of value and benefits to the organization. Examples of these benefits include cost savings from waste minimization, use of reused or recycled materials, lower energy consumption, and efficient resource use [23]. Beside cost savings, organizations can gain additional revenue from selling of scrap, excess inventory, and used materials. Green practices may enable firms also to produce differentiated products and services from rivals, this differentiation may constitute a source of revenue and market expansion to firms [23]. In addition, the reputation and image of organization may be enhanced by green practices which may generate good publicity, encourage customer loyalty, and enable the organization to attract qualified staff. Poksinska et al. [24] found that Swedish companies seek ISO certification for public image-building, especially among stakeholders and to gain marketing advantages. Social responsibility towards the environment may constitute another driver that induces organizations to reduce damage and pollution to the natural environment. Such sense of responsibility emanates mainly from prevalent green culture and awareness in the organization and its supply chain members. This lead these organizations to assume responsibility over product reuse and recycling as an element of environmental management [25]. The availability of knowledge and skills of green practices as well as existence of similar practices such as TQM may encourage firms to implement GSCM practices [6]. Since internal drivers emanate from inside organizations, such drivers are assumed to induce firms to act proactively and integrate environmental activities into business objectives and strategies and operate the firm to reduce its impact on the environment as strategic initiative [3]. 2.4 The Role of Supply Chain Capabilities Since implementation of GSCM practices requires establishing collaborative relationships with supply chain partners, drivers alone are not enough for GSCM implementation. Drivers need to be supported by capabilities that enable firms to overcome obstacles and facilitate effective and efficient implementation of green practices. Dyer [26] found that strong customer-supplier ties and interfirm information sharing enable Japanese firms to achieve lower transaction costs although these firms made greater asset-specific investments than their US counterparts. A number of capabilities such as quality management and JIT are found to be of significant effect in generating effective GSCM implementation [27]. However, since GSCM depends mainly on supply chain relationships, supply chain capabilities of a firm are assumed to be of crucial importance for GSCM implementation. Bowen et al. [28] found that supply management capabilities facilitate the implementation of products-based green supply, but not greening the supply process. Hence, in this study, supply chain capabilities are assumed to play significant role that facilitate GSCM implementation. Supply chain capabilities are made up of complex bundles of skills and accumulated knowledge, exercised through supply chain processes that enable firms to identify, utilize, and assimilate both internal and external resources/information to facilitate the entire supply chain activities [29]. Supply chain capabilities are conceptualized in this study to encompass five dimensions: 1. Information exchange: Refers to the ability of a firm to exchange knowledge with its supply chain partners in an effective and efficient manner. 2. Activity integration: Refers to the ability of a firm to align its processes and technology with supply chain partners.

6 3. Coordination: Refers to the ability of a firm coordinate transaction-related resources and activities with supply chain partners. 4. Responsiveness: Refers to the ability of a firm to respond collaboratively and in a timely manner to environmental changes. 5. Measurement: Refers to the ability of a firm to monitor and evaluate performance in collaboration with supply chain partners. These five capabilities are selected because they assumed to represent all the important activities involved in the supply chain process. Each of these capabilities represents an ability to perform cross-functional as well as interorganizational activities which are required in GSCM. 2.5 Outcomes of Implementation Successful implementation of GSCM practices is assumed in this study to result in positive outcomes to organizations. The available empirical evidence suggests that environmental outcomes in the form of waste reduction and pollution prevention are the most common direct outcomes of green practices [12; 13; 30]. These outcomes lead in turn to operational and economic benefits to the implementing firms such as cost reductions, improved resource utilization, and even to competitive advantages [12; 13]. There are also a number of publicized success stories for green practices. For example, Commonwealth Edison produced $50 million in financial benefits from managing materials and equipment with a life-cycle management approach. Texas Instruments saves $8 million each year by reducing its transit packaging budget for its semiconductor business through source reduction, recycling, and use of reusable packaging systems (20% annual savings) [31]. In this study we identify two types of outcomes of GSCM practices; tangible outcomes and intangible outcomes. Tangible outcomes represent measurable results or consequences of GSCM implementation. Three types of tangible outcomes are identified in the previous literature, namely, environmental outcomes, operational outcomes, and economic outcomes [12;30]. Environmental outcomes represent effects of GSCM practices on the natural environment such as reduction of wastes and emissions, decrease of consumption of hazardous and toxic materials, and decrease of frequency of environmental accidents. Operational outcomes reflect the effect of GSCM practices on the efficiency and effectiveness of firm s operations such as on-time delivery, decrease in inventory levels, improve of product quality, expansion of product line, and improve in capacity utilization. Economic outcomes represent direct financial outcomes from GSCM implementation such as cost savings and revenues from green operations. Intangible outcomes, on the other hand, represent non-physical, difficult to quantify, and intellectual outcomes embedded in the minds of stakeholders and general public. Several intangible outcomes are identified in the previous literature to result from GSCM practices including; organizational image, customer satisfaction, employee satisfaction, community satisfaction, and environmental sustainability [6;23]. 3. Resarch Desing 3.1 Conceptual Framework The relationship between drivers, supply chain capabilities, GSCM practices, and outcomes can be conceptualized based on Porter s theory of competitive advantage, resource-based view of the firm (RBV), and transaction cost theory (TCT). Porter s theory highlights the importance of external drivers as structural determinants of differences in the cost or buyer value of activities or group of activities [21]. These activities are arrayed in a form of unique value chain (green supply chain) that gives a firm superior performance and competitive advantages [21]. RBV emphasizes the role of internal resources or drivers in the implementation and success of green practices. This theory assumes that these resources should be valuable, rare, nonsubstitutable, tacit, and socially complex in order to enable firms to obtain capabilities (green practices) and competitive advantages [32]. However, establishment of green supply chain activities is not an easy or cost-free task, the TCT postulates that transaction costs, in a form of opportunism and uncertainty, increase as supply chain partners invest in more asset-specific (green) activities. To decrease such transaction costs it is important to promote capabilities, such as information sharing, with supply chain members [26]. Accordingly, we expect GSCM practices to vary according to the level and type of drivers, external or internal, as well as supply chain capabilities developed by a firm. Table 2 below shows four levels of GSCM practices proposed to result from different combinations of drivers and supply chain capabilities. In level 1, a firm is motivated mainly by external drivers and possesses low supply chain capabilities, in this case we expect internal (mainly manufacturing), reactive or end-of-pipe green practices where a firm try only to clean negative environmental impacts with minimum implementation of proactive practices. In level 2, a firm is motivated by internal drivers and possesses low supply chain capabilities, the firm is expected to develop the internal

7 green supply practices mentioned in section , these practices are proactive in nature. In level 3, a firm is motivated by external drivers and possesses high supply chain capabilities, the firm is expected to implement the supplier-oriented practices mentioned in section , the purpose of these practices to ensure that suppliers practices and products meet green requirements. In level 4, the firm is motivated by internal drivers and possesses high supply chain capabilities, the firm is expected to implement the customer-oriented practices mentioned in section This level is assumed to possess the highest transaction costs and the least affected by external drivers. Therefore, it is expected to be implemented only when a firm has strong internal drivers and supply chain capabilities. Consistent with Porter s theory and RBV, if a firm mange to implement the unique (green) activities this give the firm superior performance and competitive advantage. Hence, we assume in this study that as the level of implementation of GSCM increases, the amount of tangible and intangible outcomes will increase accordingly. External drivers Internal drivers Table 2: Levels of GSCM practices Supply chain capabilities Low High Level 1: Internal Level 3: Supplieroriented cleaning practices practices Level 2: Internal Level 4: Customeroriented supply chain practices practices External drivers: Regulations. Customer pressures. Competition. Supplier pressures. Pressure groups Internal drivers: Perceived green value. Green culture. Env. responsibility. Green knowledge & skills. Similar practices. Supply chain capabilities: Information exchange. Coordination. Activity integration Responsiveness. Measurement. GSCM practices: Internal cleaning practices Internal supply chain practices. Supplier-oriented practices. Customer-oriented practices. Figure 2: Conceptual Framework of the Study Tangible outcomes: Environmental outcomes. Operational outcomes. Economic outcomes. Intangible outcomes: Organizational image Employee satisfaction. Env. sustainability. Community satisfaction. Customer satisfaction

8 3.2. Main Propositions The proposed framework suggests that firms are exposed to external drivers that act as primary motivators for action, however, internal drivers are assumed to posit stronger motivation for GSCM implantation. Supply chain capabilities are assumed to act as catalysts that facilitate higher levels of GSCM implementation that lead to the realization of higher levels of tangible and intangible outcomes. The relationships between these constructs are depicted in Figure 2 above. The figure also shows specific variables, based on the literature review, within each construct. Based on the conceptual framework, the study deduces the following propositions: Proposition 1: The more external drivers and low supply chain capabilities a firm possesses, the more likely the firm will implement the cleaning practices. Proposition 2: The more internal drivers and low supply chain capabilities a firm possesses, the more likely the firm will implement the internal supply chain practices. Proposition 3: The more external drivers and high supply chain capabilities a firm possesses, the more likely the firm will implement the supplier-oriented practices. Proposition 4: The more internal drivers and high supply chain capabilities a firm possesses, the more likely the firm will implement the customer-oriented practices. Proposition 5: The higher level of GSCM practices implemented in a firm, the more tangible and intangible outcomes the firm realizes. 3.3 Empirical Study The empirical part of the study will be conducted using data from the electrical and electronics (E/E) sector in Malaysia. This sector is expected to have relatively higher levels of GSCM implementation compared to other sectors [30]; this may give enriched data for the study. The unit of analysis is a firm. Since GSCM is considered new area of practice and research, the study conducted preliminary interviews with selected companies in the E/E sector to assess the level of implementation of GSCM practices in addition to drivers, enablers, and outcomes of implementation. Based on experience with GSCM practices and willingness to participate, three companies are selected for the interviews. The companies include suppliers of components and manufacturers of final products, most of their products are exported to international markets. Beside the three companies, an interview is conducted with ISO certification company. Since this company has wide experience of green practices in large number of companies, an interview with it may give vital information for the study. The respondents are quality managers and logistics managers. Each interview lasts between hours, the questions are of the open-ended type and the respondents are asked to explain their views as well as the actual situation of GSCM practices in their companies. The results of the interviews show that most green practices are done mainly in response to pressures from international markets, especially from European, American, and Japanese customers. These customers exert pressures on a company to comply with certain green specifications. Other external pressures like government regulations, competition and pressure groups are found of less effect. A company tries to respond only when there is an environmental problem raised by government agencies or media towards the company. The companies show high concern for their images and reputation. Regarding internal drivers, most companies realize that there are cost savings from green practices but see green practices as costly in terms of initial investments. Social responsibility is found to be an important driver in some companies. Most companies consider good relations and incentives to suppliers as the main enablers of green practices implementation, green relationships are found to be stronger with suppliers than with customers. However, the only supply chain capabilities that found to be commonly used in conjunction with green activities are information exchange and coordination, other capabilities such as activity integration, responsiveness, and measurement are found of little use in the interviewed companies. Regarding types of GSCM practices, the interviews show that most companies implement internal cleaning practices, internal supply chain practices, and supplieroriented practices. Only one company is found to have customer-oriented practices. Most companies perceive cost savings and environmental sustainability as the direct outcomes of green practices. These outcomes are perceived to have contribution to the enhancement of organizational image as well as employee and community satisfaction. Product green quality is also found to be of crucial importance especially when a firm exports its products to international markets. These preliminary results indicate that companies implement green practices mainly in response to external pressures, utilize low level of supply chain capabilities in implementation, and higher GSCM practices, of customer-oriented type, are rarely implemented. The results also highlight that there are some positive outcomes of green activities implementation. However, no evidence was found from the interviews of the relationship between GSCM implementation level and outcomes type or level, this needs further investigation.

9 The results of the interviews give some support to the proposition that development of internal drivers and supply chain capabilities may enable firms to implement GSCM practices. However, these results may lack reliability and validity. Therefore, a quantitative study using large scale survey data is needed to test the model. Based on previous studies and interview findings, a questionnaire will be designed and tested. The questionnaire includes four main sections; GSCM practices, drivers for implementation, supply chain capabilities, and outcomes of implementation. The questionnaire will be distributed via mail to the E/E companies listed in the 2006 FMM directory of Malaysian manufacturers. The targeted respondents are supply chain managers, logistics managers, or purchasing managers. Data from the questionnaire survey will be verified, validated, and analyzed using various statistical techniques such as regression and correlation analysis. 4. Conclusion In response to environmental problems and quest for efficiency in consumption of natural resources green initiatives become vital practices. GSCM practices emerge as a new approach that involves supply chain partners and relationships in the greening process. The idea is to establish collaboration among supply chain members to reduce wastes, material and energy consumption, and produce more environmentally friendly products. However, the implementation of GSCM is not widespread compared with individual organizational greening efforts. Therefore, it is important to find out why and how firms implement GSCM practices and the actual outcomes of implementation. This study try to answer these questions by conducting literature review and developing a conceptual framework that links drivers, supply chain capabilities, GSCM practices, and outcomes. The framework is based mainly on Porter s theory, RBV, and TCT and postulates that the type and level of GSCM practices depends on the type of driver, external or external, and supply chain capabilities developed by a firm. Accordingly four levels of GSCM practices are identified. The study further proposes that the level and type of outcome depends on the level of GSCM practice implemented in the firm. The empirical findings from interviews show that customer-oriented practices are not widely implemented by the interviewed companies. External drivers are found to be the dominant drivers for green practices in the interviewed companies. Most companies are convinced of the importance of supply chain relationships in GSCM implementation but developed few supply chain capabilities. These findings suggest that if companies realize the importance of internal drivers and develop more supply chain capabilities, they may implement more collaborative GSCM practices, and consequently, realize more tangible and intangible positive outcomes. The proposed framework needs further empirical testing and this constitutes exactly the next step of the study. The results of the study are expected to be of value to researchers in enhancing knowledge and theory of strategy selection and implementation. The results may be of value also to practitioners in enhancing their understanding of the mechanism, requirements, and effects of GSCM implementation. Manager can utilize the study in designing and managing supply chains based on focusing on responding to external threats and opportunities and developing appropriate types of internal drivers coupled with supply chain capabilities in order to implement successful green practices based on collaborative efforts rather than relying only on individual organizational efforts. References [1] R.A. Buchholz, Principles of Environmental Management: The Greening of Business (2 nd ed., Prentice Hall, Upper Saddle River, New Jersey, 1998). [2] S. Vachon, and R.D. Klassen, Extending green practices across the supply chain: the impact of upstream and downstream integration, International Journal of Operations & production Management, 26(7), 2006, [3] S.V. Walton, R.B. Handfield, and S.A. Melnyk, The green supply chain: integrating suppliers into environmental management process, International Journal of Purchasing and Materials Management, 34(2), 1998, [4] OECD (Organization for Economic Co-operation and Development), An Overview of Corporate Environmental Management Practices, (available online: last access: January 2007) [5] M. Christopher, Logistics and Supply Chain Management: Strategies for Reducing Cost and Improving Service (Second ed., Financial Times/Prentice Hall, London, 1998). [6] A.A. Hervani, M.M. Helms, and J. Sarkis, Performance measurement for green supply chain management, Benchmarking: An International Journal, 12(4), 2005, [7] H. Min and W.P. Galle, Green purchasing practices of US firms, International Journal of Production and Operations Management, 12(9), 2001,

10 [8] R.B. Handfield, S.V. Walton, L.K. Seagers, and S.A. Melnyk,, Green value chain: practices in the furniture industry, Journal of Operations Management, 15(4), 1997, [9] R.D. Klassen and S. Vachon, Collaboration and evaluation in the supply chain: the impact on plant level environmental investment, Production and Operations Management, 12(3), 2003, [10] S. Lippmann, Supply Chain Environmental Management: Elements for Success, Environmental Management, 6(2), 1999, [11] C.A. Geffen and S. Rothenberg, Suppliers and environmental innovation: the automotive paint process, International Journal of Operations and Production Management, 20(2), 2000, [12] P. Rao and D. Holt, Do green supply chains lead to competitiveness and economic performance? International Journal of Operations and Production Management, 25(9), 2005, [13] P. Rao, Greening the supply chain: a new initiative in South East Asia, International Journal of Operations and Production Management, 22(6), 2002, [14] F. Hines and R. Jones, Environmental supply chain management: evaluating the use of environmental mentoring through supply chain, Proc. Greening of Industry Network Conf., Bangkok, [15] M.A. Seitz and K. Peatty, Meeting the closed-loop challenge: the case of manufacturing, California Management Review, 46(2), 2004, [16] J. Sarkis, Evaluating environmentally conscious business practices, European Journal of Operational Research, 107(1), 1998, [17] B. Lin, C.A. Jones, and C. Hsieh, Environmental practices and assessment: a process perspective, Industrial Management & Data Systems, 101(2), 2001, [18] B.M. Beamon, Designing the green supply chain, Logistics Information Management, 12(4), 1999, [19] J. Sarkis, A strategic decision framework for green supply chain management, Journal of Cleaner Production, 11(4), 2003, [20] T.L. Pohlen and M.T. Farris, Reverse logistics in plastics recycling, International Journal of Physical Distribution and Logistics Management, 22(7), 1992, [21] M.E. Porter, Towards a dynamic theory of strategy, Strategic Management Journal, 12, 1991, [22] I. Henriques and P. Sadorsky, The determinants of an environmentally responsive firm: an empirical approach, Journal of Environmental Economics and Management, 30(3), 1996, [23] M.E. Porter and C. van der Linde, Green and competitive: ending the stalemate, Harvard Business Review, 73(5), 1995, [24] B. Poksinska, J.J. Dahlgaard, and J.A.E. Eklund, Implementing ISO in Sweden: motives, benefits, and comparison with ISO 9000, International Journal of Quality and Reliability Management, 20(5), 2003, [25] R.I. van Hoek, From reversed logistics to green supply chains, Supply Chain Management, 4(3), 1999, [26] J.H. Dyer, Effective interfirm collaboration: how firms minimize transaction costs and maximize transaction value, Strategic Management Journal, 18(7), 1997, [27] Q. Zhu and J. Sarkis, Relationships between operational practices and performance among early adopters of green supply chain management practices in Chinese manufacturing enterprises, Journal of Operations Management, 22(3), 2004, [28] F.E. Bowen, P.D. Cousins, R.C. Lamming, and A.C. Faruk, The role of supply management capabilities in green supply,. Production and Operations Management, 9(2), 2001, [29] G.S. Day, The capabilities of market-driven organizations, Journal of Marketing, 58(4), 1994, [30] Q. Zhu, J. Sarkis, and K. Lai, Initiatives and outcomes of green supply chain implementation by Chinese manufacturers, Journal of Environmental Management, Article in press. [31] LMI, Best Practices in Implementing Green Supply Chains, available online: last access: January [32] Hart, S.L., A natural-resource-based view of the firm, Academy of Management Review, 20(4), 1995,