Green Supply Chain Management and Organizational Performance
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Green Supply Chain Management and Organizational Performance
Iswanto and Theresa (2020) explore how technologies in supply chain management influence the performance of organizations in their article “The Moderating Effect of Green Supply Chain Management on the Relationship of Supply Chain Management Practices and Firm Performance of Pharmaceutical Industry in Indonesia.” Iswanto works at Indonesia’s University of Pembangunan Nasional Veteran Jakarta while Theresa is employed at the university’s faculty of medicine. Their insight into Indonesia’s Pharmaceutical Industry supply chain management technologies and how the current climate of environmental consciousness has impacted them is critical to the paper’s perspective on supply chain management and firm performance.
The document examines the moderating effect of green supply chain management (GSCM) on the liaison between Indonesia’s pharmaceutical firms and their supply chain management practices. The used data was collected from managers in the industry’s supply chain. The research approach was qualitative with a cross-sectional research design among 500 supply chain managers. The run structural model occurred in two phases that examined the direct and indirect effects of GSCM in the industry. The primary hypothesis is that as globalization and competitiveness increase, organizations have had to elevate their supply chains to meet consumer expectations of not only quality goods but also corporate social responsibility (CSR). The expectations led to green supply chain management technologies that have had a significant effect in many industries, including the Pharmaceutical sector.
The study found that GSCM has a positive and substantial direct effect on firm productivity. The results suggest excellent supply chain management through GSCM technologies result in better company performance. The different questioned managers agreed that better packaging and disposal of products during manufacture and supply resulted in better branding and environmental sustainability for their firms. For those who disagreed, their main concerns were associated with the cost-effectiveness of adopting GSCM technologies. However, they too agreed in the long run; the technologies influenced better firm performance in the market either through better market positioning or limited production costs (Iswanto & Theresa, 2020).
Adjacently, the second structural process found that GSCM as a supply chain practice significantly elevates firm performances indirectly through the moderating variable. Product designs that follow the green concept (environmental consciousness) have interlinked the supply chain with marketing. Therefore, employing GSCM elevates the competitiveness of firms through CSR marketing, which indirectly enhances company profitability. The article also denotes that excellent associations with clients get maintained by adopting an environment-oriented production, supply, and marketing process. For instance, the study mentions resources that achieved cost reductions and improved profits due to subsidizing environmentally unfriendly procedures and materials with more friendly ones (Iswanto & Theresa, 2020, p. 1330). As such, while the aim was not to elevate performance, firms can attain better market and profitability through GSCM.
Summing up, the article examines the moderating effect of GSCM on firm productivity effectively. However, it has limitations of geography as the investigation only occurred in particular sections of Indonesia. Furthermore, the qualitative approach employed does not cater for quantitative data of the firms such as the percentage profits and reduced costs. Finally, the paper does not consider the adverse effects the approach may have on firm performance. Therefore, there is a warrant for additional research to supplement the findings.
References
Iswanto, A. H., & Theresa, R. M. (2020). The Moderating Effect of Green Supply Chain Management on the Relationship of Supply Chain Management Practices and Firm Performance of Pharmaceutical Industry in Indonesia. Talent Development and Excellence, 12(1), 1327–1328. Retrieved from http://web.a.ebscohost.com.ezproxy.aut.ac.nz/ehost/pdfviewer/pdfviewer?vid=1&sid=de339131-0978-4412-b184-2eb5a2baf728%40sessionmgr4006