Home' MHD Supply Chain Solutions : MHD JULY-AUGUST Contents firms, they rarely receive requests to provide
environmental credentials. Suppliers asserted
that they are selected and assessed mainly on
price and quality of the supply. See Figure 5.
2. A majority of participants (9 out of 12, 75%)
stated that they have had no cooperation
on any type of environmental innovations
at all and only three participants (3 out
of 12, 25%) said that their firms have had
limited interaction over particular issues.
See Figure 6.
3. All participants (12 out of 12, 100%)
expressed that cost-saving opportunities are
one of the main motivations in developing
environmental innovations and investing in
GSCM. Building a positive image was also
mentioned by half of the participants (6 out
of 12, 50%). See Figure 7.
4. A large number of participants (9 out of 12,
75%) cited low importance of environmen-
tal innovations to buyers the main barrier
standing on the way of GSCM. The high
investment cost and long payback period of
environmental innovations as well as the lack
of resources required to implement environ-
mental initiatives were also mentioned by
some participants (8 out of 12, 67%) and
(7 out of 12, 58%) respectively. See Figure 8.
The findings revealed a gap between a growing
theoretical awareness of GSCM and the reality
that is a low implementation of GSCM. Buyers
mainly focused on quality, cost, and delivery
time. Environmental criteria deemed desirable
in some cases, but were not decisive factors.
Cooperation between buyers and suppliers for
environmental innovations was at a minimal
level. There were a few cases where buyers
had cooperated with their suppliers, mainly on
packaging and waste minimisation initiatives.
If there was a motivation to implement GSCM
it mainly reflected cost-saving opportunities for
both buyers and suppliers.
In a further examination of these findings on
the underlying reasons for the low implementa-
tion of GSCM, two primary and two secondary
factors were uncovered. The primary factors
1. The notions of senior managers that
implementing GSCM practices is costly.
2. Resources of suppliers are inadequate
to the task.
The secondary factors relate to the external
environment of firms. These include:
1. A lack of motivating policies.
2. Low customer and consumer demand.
The notion that implementing green supply
chain practices and adopting environmental
innovations are costly appears to be one of the
most serious constraints on greening supply
chains. The economic advantages of green
initiatives were still unclear for many of the
Participants’ concerns about the high cost of
addressing the environment could be attribut-
ed to the fact that some of these initiatives
(especially cooperative practices) are not still
prevalent and are expensive. Therefore, with
a majority of the participants concerned about
their cost management, it is likely that they
avoid a pioneering approach.
Instead, they seem to like to take advantage
of the innovation results of others rather than
incurring all the costs by themselves. A lot of
the financial concerns seem to relate to start-up
costs of environmental initiatives. When firms
have other priorities than the environment, they
are less willing to invest in joint environmental
projects that often payback in long-terms. When
businesses talk about an investment, they often
look for a return of investment over a period less
than three to five years.
The benefits of environmental initiatives,
however, may accrue long after they are intro-
duced, and with firms interested in short-term
achievement, this could be a challenge for their
adoption. In particular, when the economic
climate of the country is fragile (e.g. in the
2008 financial crisis and the unsteady con-
ditions afterward), the priorities of firms shift
towards more urgent investments that help their
presence in the market.
The willingness and involvement of suppliers
in green initiatives is a significant factor that
determines the success of GSCM. The findings,
however, indicate that many suppliers, especial-
ly smaller firms, are unable/struggle to acquire
resources they need for implementing GSCM.
The main resources required as mentioned
by some participants include financial and
human resources. With regards to human
resources, large buying firms were in a better
position. In some cases, the company had an
environmental (or sustainability) manager who
had regular contacts with procurement and
supply chain managers vis-à -vis environmental
The large number of employees enables
buyers to train some people specifically in
environmental skills, although it has to be said
that not all buyers had taken advantage of this
opportunity. In contrast, suppliers — especially
small ones — had no defined position as envi-
ronmental or sustainability manager, nor had
they trained their current staff on environmental
skills. Even with the few more proactive suppli-
ers, they had to add the environmental tasks to
the current staff’s responsibilities.
However, such a staffing approach is not
capable of meeting all environmental demands.
Engaging with supply chain partners requires
expertise and time. If the cooperation between
buyers and suppliers is focused on more
technical environmental solutions, then high-
ly-skilled employees may be required. This may
act as a barrier to those with limited expertise.
Fig 4. Barriers to investing GSCM
69% High cost and long payback period
50% The low importance of EIs for suppliers
31% Suppliers being overseas makes it
hard to monitor
25% Few EI ideas
19% Many green proposals do not have
19% Low consumer demand
Fig 6. Cooperation with buyers
75% No cooperation
25% Limited interaction over particular issues
0% Joint planning and decision making
Fig 5. Environmental factors in selection
and assessment criteria of suppliers
0% Enviromental factors are mandatory
25% Enviromental factors are preferential
75% Enviromental factors are rarely mentioned
MHD SUPPLY CHAIN SOLUTIONS — JULY / AUGUST 2014
SUPPLY CHAIN 53
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