BUS606: Operations and Supply Chain Management

Green supply chain management is "delivering products and services from suppliers, manufacturers to end customers through material flow, information flow, and cash flow in the context of the environment". Srivastava referred the GSCM as "integrating environmental thinking into supply-chain management, including product design, material sourcing, and selection, manufacturing processes, delivery of the final product to the consumers as well as end-of-life management of the product after its useful life". Due to the regulatory requirements and customers pressures, the scope of GSCM ranges from reactive monitoring of the general environmental management to more proactive practices implemented through various reverse activities such as recycle, refurbish, reuse, remanufacture, and rework.

The GSCM has gained increasing interest among researchers and practitioners of operations and supply chain management. The growing importance of GSCM is driven mainly by the escalating deterioration of the environment, such as increasing levels of pollution, overflowing waste sites, and diminishing raw material resources. However, it is not just about being environmentally friendly; it is about good business sense and higher profits. In fact, it is a business value driver and not a cost center. Since manufacturing companies have often been charged with the environmental liabilities of their suppliers, there has been an urgency to integrate environmental initiatives, not only within the walls of the company but across the entire supply chain involving all supply chain partners to ensure the company's sustainable.

Coordination of environmental management among supply chain partners is also called as environmental collaboration. This collaboration with supply chain partners can be impaired by the lack of supply chain integration. The integration within a supply chain can be expected to positively influence cooperative activities related to environmental. Therefore, the GSCI can be considered as "a novel concept when firms develop an approach to strategically integrate with suppliers, customers, internal, logistics, and technology to reduce environmental impacts". Successful GSCI practices would contribute to the reduction of environmental impacts of the supply chain.

Supplier refers to a party that provides materials, parts, services, and goods directly to a manufacturer. The definition of supplier integration is "an environmental collaboration between a firm and its suppliers in implementing environmental management practices". It is a phase where an upstream segment of a company's supply chain and product are focused. Suppliers should be involved in the implementation of environmental practices in terms of material management procedures and purchasing processes. The supplier's environmental performance is increasingly monitored by manufacturing organizations to ensure that the equipment or materials supplied have gone through environmental-friendly processes. According to GEMI, the main players in automobile industries like Toyota and Ford have required their suppliers to obtain ISO 14001 certifications in supporting the environmental initiatives. This is due to the reason that suppliers are important partners as they can be in a position to provide assistance to improve the environmental performance of the supply chain.

Previous studies have proved that supplier integration is positively related to organizational sustainable performance. Vachon & Klassen have found that collaboration with suppliers could improve the sustainable performance of one organization economically and environmentally. Developing a collaborative relationship with suppliers is also favorable for an effective adoption, development, and implementation of the GSCM toward social contributions. Zhu et al. emphasized the significance of supplier integration and sustainable performance by stating that the lack of supplier collaboration would weaken sustainable performance improvements among 18 manufacturing firms.