Impact of Green Supply Chain Management on Competitive Advantage of Business Organizations in Sri Lanka

Background

According to Martin Christopher (2011), to gain a competitive advantage the organization should have value advantage and cost advantage.

Figure 1.

Gaining competitive advantage

Source: Logistic and supply chain management, 4th edition by Martin Christopher

Further, as per Porter’s theory, an organization’s competitive advantage hinges on its capability to be a low-cost producer in its industry or to be unique in its industry in those features that are popularly valued by consumers (Porter, 1991). Most executives agree that cost and value will determine the strength of a firm’s competitive advantage (D’ Souza & Williams, 2000).

The important competitive capabilities have been identified as price or cost, quality, supply chain management, and time (Vokurka et al., 2002). Supply chain management (SCM) plays an important role in helping firms to gain competitive advantage (Mentzer et al., 2001). SCM starts with the purchase of raw materials, and applied consistently to the many production activities that change raw materials into the finished product and until it is finally delivered to consumers through a distribution system (Lee & Billington, 1995). The actual competition will not be among business organizations but among supply chains. An organization’s competitive advantage is dependent on its overall production system and that includes decisions it makes about activities in its value chain (Haytko & Kent, 2007; Porter, 1990).