Recent Developments in Green Supply Chain Management: Sourcing and Logistics

Introduction

Since the 1970s, there was an evolution of paradigms for improving the productivity and profitability of integrated manufacturing and distribution systems. These paradigms included the Just-In-Time (JIT) production philosophy, Lean and Agile Manufacturing, Six-Sigma, Mass Customization, and Supply Chain Management (SCM). Organizations embraced these paradigms as a means to improve their competitiveness in response to heightened levels of global competition and demands by customers for low-cost, customized products with short delivery lead times. In these paradigms, sourcing and logistics have always played an important role in ensuring that customer demands for products were met in a timely manner. As organizations recognized the strategic implications of partnering with suppliers, the traditionally functional roles of sourcing and logistics were elevated to a more strategic level. As a result, sourcing and logistics have become the cornerstones of today’s widely adopted SCM philosophy. The SCM philosophy, which advocates integrating value-adding activities such as production planning and inventory control, sourcing, logistics, and customer relationship management, has been shown to improve financial performance and competitive advantage. For a detailed review of the literature on the financial impact of SCM on firm performance, the reader is directed to Shi &Yu (2013).

Today, there is heightened interest in how business practices make an impact on the environment. Concerns over resource usage, energy consumption, and waste have prompted organizations to consider green and sustainable practices in the operation of their supply chains. As a result of the adoption of green and sustainable practices into supply chain operations, the SCM philosophy has further evolved and, to reflect these adopted practices, is now commonly referred to as either the Green Supply Chain Management (GSCM) or Sustainable Supply Chain Management (SSCM). As noted by Ahi & Searcy (2013), there are numerous definitions for these terms (22 for GSCM and 12 for SSCM), and the literature suggests that SSCM is essentially an extension of GSCM. For the convenience of the reader, Table 1 contains a list of definitions of key terms that are used in this chapter.