Green Supply Chain Management in Malaysia Service Industry

Green Supply Chain Management in Malaysia Service Industry

Alia Nadhirah Ahmad Kamal (Graduate School of Business, Universiti Sains Malaysia, Malaysia) and Yudi Fernando (Graduate School of Business, Universiti Sains Malaysia, Malaysia)
DOI: 10.4018/978-1-4666-5888-2.ch500
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Introduction

Current capitalist economic system practised by the industry has caused numerous damages to the environment. Centralising solely on achieving highest return on investment has led corporations to contribute significantly to environmental degradation (Smith, 2010). As corporations compete for more gains and wealth, more and more resources are consumed globally. This has resulted to unsustainable consumption in which the planet earth is no longer capable of producing the resources at the same rate that they were utilised (Chapin, 2009). Improper waste management, overconsumption of natural resources, deforestation, and climate change are among the obvious reasons for current deterioration (Esty & Winston, 2009) and these problems are due to voracious human activities. Most worrying, some of these environmental impacts are notable beyond national and time boundaries (Hitchcock, 2012).

Commercial industries, as prominent forces controlling the world economy and resources, should highlight that it is of high importance that commercial industries be engaged in environmental stewardship (Seuring & Müller, 2008). The last few years have witnessed new policies being formulated and amended in line with Malaysia’s aspirations to be a sustainable country. Through the amended National Economic Model (NEM), it is observed that services sector, which contributed 55% to the country’s Gross Domestic Product (GDP) in 2013, is given special focus (MIDA, 2014). Growth in this sector is gaining momentum and needs to be sustained through synergistic collaboration arrangements and these include strengthening the supply chain.

Supply chain is an important element of operational strategy. As the market become more global with shorter life cycle of new product, topped with customers heightened expectations, companies are obliged to focus and improve on their supply chain. In conventional supply chain, raw materials are procured and items are produced at one or more factories, and then shipped to retailers or customers (Fawcett, Ellram & Ogden, 2007; Christopher, 2012). Moving forward, effective supply chain strategies should enable companies to not just reduce cost and increase service satisfaction levels, but also minimise environmental impacts, through interaction integration at various levels in the supply chain: upstream and downstream. Consequently, green supply chain management (GSCM) was introduced in the commercial industries and adopted by responsible companies. Nevertheless, GSCM implementation in the service industry is still ambiguous due to its intangible nature (Akkerman & Vos, 2003).

This chapter attempts to display the relevance of incorporating sustainability in the supply chain process of service industry. GSCM in the manufacturing industry has attracted widespread research interest over the past two decades, whereas studies of GSCM in service industry were very limited (Zhang, Song & Huang, 2008; Hong, Kwon & Roh, 2009). Currently, most researchers have focused on how the supply chain management could be altered to improve the manufacturing industry (Zhu, Geng, Fujita, & Hashimoto, 2010; Lee, Kim & Choi, 2012) and very few research was conducted on green supply chain contribution towards achieving better performance in the service industry. Thus, this study carries the aim to explore this issue from previous researches and case studies in the effort to establish a clear concept on green supply chain management (GSCM) in the service industry.

Key Terms in this Chapter

Green Supply Chain Management: Is concerned on ensuring all conventional supply chain deliveries while centralizing the environmental and social concern in every stage of supply chain to reduce product environmental footprint.

Sustainable Development: Is a key for any corporation to develop a sustained business operation as it suggest that businesses should grow and meet the needs of the present without compromising the ability of the future generations to meet their own needs.

Environmental Stewardship: Refers to human responsible consumption, protection of the natural environment or corrective activities that could be achieved through conservation efforts and sustainable practices.

Service Green Supply Chain: Is a set of approaches used to manage service supply chain (SSC) operations in order to meet end customers needs and accomplish business objectives while integrating the societal, economic and environmental interest.

Supply Chain Management: Is the system used by an organization to improve logistics and planning efficiency, as well as material and information control internally and externally among the upstream and downstream members.

Competitive advantage: Is the unique strength possessed by a particular company through continuous improvement, new innovation, value generation and also understanding on the market demand.

Operational Efficiency: Efficiency is achieved when green supply chain embedded with green technology enables an organization to utilize the least amount of resources, such as energy and raw material supply, to operate at its optimal.

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