SUSTAINABILITY
AS A SUCCESS FACTOR IN GLOBAL OPERATIONS: A SURVEY OF CAR MANUFACTURING SUPPLY
CHAINS
Hamilton Pozo
Anhembi Morumbi University, Brazil.
E-mail: hprbrazil@hotmail.com,
hamilton.pozo@anhembimorumbi.edu.br
Getulio Kazue Akabane
Centro Estadual de Educação Tecnológica Paula Souza, Brazil.
E-mail: getulio@akabane.adm.br
Antonio Cesar Galhardi
Centro Estadual de Educação Tecnológica Paula Souza,
Brazil.
E-mail: prof.galhardi@fatecjd.edu.br
Helena Gemignani Peterossi
Centro Estadual de Educação Tecnológica Paula Souza,
Brazil.
E-mail: hgemig@bol.com.br
Submission: 16/01/2015
Revision: 29/01/2015
Accept: 01/02/2015
ABSTRACT
This paper analyses cases from the automotive
industry, mainly green supply chain management aspects of three case examples
of decisions in green practices in supply chain design in the automotive industry.
Since the 1990s, environmental issues have put companies under a growing
pressure to reduce their environmental impact, especially in logistics
operations. As a result, green supply chains have been gaining importance on
the agendas of business executives seeking to create competitive distinction.
Many companies have adopted a “green attitude,” seeking ways to integrate
environmental dimensions into their business. The methodology used was a Survey
with questions were based on patterns in green initiatives in the literature,
this study’s sample was three large assembly companies in the automotive
segment, with industrial plants located both in the southeast region of Brazil
and globally. The results show that the wave of sustainability is a result of
more than just the threat of negative publicity, and it is pushing enterprises
into the green zone. At the same time, economic instability with oscillating
growth is forcing enterprises to concentrate on improving efficiency to
compensate for unstable demand and the price volatility of commodities,
including water and energy.
Keywords: green logistics, sustainability, services
supply chain management, car manufacturing.
1. INTRODUCTION
Enterprises in the twenty-first
century face a world that is changing constantly. In this context, Mollenkopf,
Stolze, Tate, and Ueltschy (2010) observed three trends in supply chains that
converge to create more and more complex business environments: globalization
of operations, adoption of lean processes, and moves towards green operations.
They pointed out that globalization has made increased revenues possible, as
entry into new markets means access to new supplier channels to obtain raw materials
at competitive costs and more efficiently than from domestic sources. They also
pointed out the growing tendency of enterprises to move their operations from
their host countries to geographical regions that provide cost reduction,
especially in manufacturing.
Global supply chains introduce
additional dimensions such as production outsourcing, infrastructure,
inventories, suppliers, customers, cultures, regional economic differences,
currencies, and competitive environment policies (MANUJ; MENTZER, 2008; SCHMIDT;
WILHELM, 2000; CHRISTOPHER, 2005).
Currently, lean supply chain
strategies concentrate on waste reduction, supporting enterprises in
eliminating elements that do not add value, such as excessive time, tasks,
equipment, spaces, and inventories along supply chains (CORBETT; KLASSEN,
2006). These strategies allow enterprises to improve operational quality, as
well as reducing costs and improving their level of custom service—to minimize
traditional lot sizes and lines in mass production processes and consequently
transform supply chain structures (LARSON; GREENWOOD, 2004). Lean practices are
becoming more and more difficult to implement and support due to the growing
extent and complexity of supply chains.
Green supply chain (GSC) strategies
refer to enterprises’ efforts to minimize the negative impact of supply chains
on natural environments. Addressing questions of climatic changes, pollution,
and constraints such as non-renewable resources, enterprises are paying
attention to stakeholders’ demands for corporative citizenship behavior and
superior performance (SARKIS, 2001; DE BURGOS JIMENEZ; CESPEDES LORENTE, 2001).
The focus of green supply chains encourage working closely with suppliers and
clients, analyzing operations and internal processes, paying attention to
environmental issues during product development, and extending management of
products’ life cycles (CORBETT; KLASSEN, 2006; MOLLENKOPF, 2006).
While there are different research
groups related to green, lean, and global subjects, few authors pay attention
in the intersection of these strategic initiatives (see Figure 1). This
question identifies a gap in the literature because enterprises can lose their
synergies during the implementation of simultaneous improvements and they do not
get important information during incidents of incompatibility between these
strategic initiatives. For example, lean and green strategies quite often are
seen as compatible initiatives because of their joint focus on waste reduction.
Although recently there has been a substantial growth of academic articles that
explore practices of GSC management, these still require translation by
specialists into how, how many, and which companies can translate these
strategic intentions into GSCM practices.
Figure 1: Research domain of green, lean, and global
supply chains
Source:
Mollenkopf et al. (2010, p. 16)
2. LITERATURE REVIEW
The
questions that surround the future of humanity were clearly outlined in a
report published by the United Nations in 1987, in which the term
“sustainability” was defined. According to Ittmann (2010), it originates from
the Latin word sustenere (tenere: to maintain; sus: on top of). Dictionaries give other
meanings for “support,” principally “maintaining,” “supporting,” or “lasting.”
After the term sustainability was used in the United Nations’s report to
identify human sustainability on this planet, this definition was enlarged upon
by the Brundtland Commission (1987) of the United Nations to include that
“sustainable development is development that attends present necessities of the
without compromising the capacity of future generations in attending their own
necessities.”
Nevertheless,
from the 1990s onward, environmental issues put companies under growing
pressure to reduce their environmental impact, especially in logistics
operations. The negative effects of the distribution of goods can damage air
quality, generate noise and vibrations, because traffic jams and accidents, and
significantly contribute to global warming. The greenhouse effect provokes
climate change more strongly than was imagined in early researches (ITTMANN,
2010). It is predicted that transportation of goods in general contributes
approximately 8% of total CO2 (carbon dioxide) global emissions
(KAHN RIBEIRO; KOBAYASHI, 2007), so the long-term mission of “sustainable”
logistics is the effective reduction of carbon particle emissions in the
atmosphere.
For some time now, these effects
have been monitored, and new management standards have been introduced. For
example, the standards for emissions of stress-resistant diesel engines, known
as Euro standards of emission, were developed based on emission projections
determined for a calendar of introducing standards, as shown in the chart below
(see Table 1). These were to be followed by transport companies with heavy
vehicles that have a significant environmental impact (ITTMANN, 2010).
In fact, most global companies are
expanding their efforts to integrate environmental dimensions into their
business (CARBONE; MOATTI, 2008). Several studies in the literatures on GSC
examined the importance of working through the supply chain with customers and
suppliers through environmental initiatives that produce general performance
improvement in enterprises (VACHON; KLASSEN, 2006b). These initiatives develop
the capacity to share knowledge (VACHON; KLASSEN, 2008) and add resources to
obtain competitive sustainable advantages from environmental programs.
Table 1: Emission standards for stress-resistant diesel engines, in grams
per kilowatt-hour
Source: www.nao.org.uk (2010)[1]
Enterprises
are re-structuring their supply chains to operate on a global basis, obtaining
advantages through international products, in operational factors and capital
markets (MANUJ; MENTZER, 2008, p. 133). Nevertheless, the management of global
supply chains presents several challenges, including important aspects of
economic and cultural environments, as well as regulations. Global supply
chains accent the importance of managing risk (MANUJ; MENTZER, 2008).
In spite of these efforts to
increase sustainability, quite often companies suffer from a reduced and
fragmented vision based on an illusion of improvements in punctual practices in
each section of supply chains, which becomes an obstacle to understanding that
sustainable supply chains can add up to more than just meeting obligations,
reducing costs, or supporting charities. Therefore, specific sustainable
activities identified as having a better fit in different contexts (e.g., types
of products, demand characteristics, and social issues) can be beneficial if
companies recognize sustainable supply chains will become a source of
competitive advantage and leverage to reduce environmental effects.
In this way, GSC has assumed
increasing importance in business executives’ agendas. Many companies have
adopted a “green attitude,” claiming an interest in integrating environmental
dimensions in their business.
In terms of academic literature, the
number of publications on GSC has increased (SRIVASTARA, 2007), accompanied by
extensive literature reviews. Several articles (BEAMAN, 1999; HOFFMAN, 2007;
PARRY; MARTHA; GRENON, 2007) have discussed the importance of GSCs and the
urgent necessity of implementing these into business. In addition, many authors
have explored environmental initiatives in isolated formats within each link of
supply chains, focusing predominantly on one functional area (SARKIS, 1999).
The contributions of Rao and Holt
(2005) included entire supply chains, recognizing that critical steps of
sustainable principles of integration in operational contexts require
interaction between sustainability (or environmental principles) and supply
chains (LINTON; KLASSEN; JAYARAMAN, 2007) and, consequently, GSCs that permeate
each stage of manufacturing processes.
Therefore, the main logistics
objective is to coordinate activities in order to meet customers’ needs and
demands at a reduced cost. In the past, cost factors were defined in purely
monetary terms. With the growth of environmental issues, companies now pay
attention to logistics costs associated mainly with climatic change, air
pollution, noise levels, vibration, and accidents caused by movements of goods
and services.
In this way, green logistics are
defined as “efforts in reducing appearances and obtaining a more sustainable
balance between economic, environmental, and social objectives [. . .], where
all efforts in the field of ‘green’ logistics are focused on the contributions
that secure the sustainability of the planet” (ITTMANN, 2010).
2.1. Global Supply Chain
Researches in the academic and
applied literature on environmental management in supply chains indicate that
enterprises have included GSCs in operations. This is done especially in order
to deal with legal issues and regulations, stakeholders’ demands, the risk of
loss of reputation, the search for competitive advantage, customers’ demands,
and pressure from environmental groups (BOWEN et al., 2002; PREUSS, 2001; RAO,
2002; ROBERTS, 2003; SARKIS, 2001).
The GSC concept arose as green
purchasing was integrated into closed-loop supply chains (HERVANI; HELMS;
SARKIS, 2005), and, subsequently, it was enlarged to include green solutions
with the addition of green purchasing, green manufacturing, green marketing and
distribution, and reverse logistics (BACALLAN, 2000, p. 18).
Several authors published papers on
studies examining the proximity between practices of green and lean operations,
many ways to improve these, and possible performance measures (FLOWERY, 1996;
KLASSEN, 2001; BOWEN et al., 2002). These authors pointed out that lean
production successes in the field of sustainability emanate from three main
factors: the reduction to a minimum of activities that do not add value, the
adoption of efficient job systems, and best practices of human resources
management.
GSC management is best defined as
“environmental management alignment and integration inside of supply chain
management” (KLASSEN; JOHNSON, 2004). The research clearly recognizes that
enterprises’ environmental impact spreads outside their boundaries. In
addition, definitions include product design, all manufacturing steps,
distribution, and all aspects of reverse logistics (see Figure 2).
Figure 2: Characteristics of sustainable supply chains
Source: www.greenlogistics.org (2011)
Srivastara (2007) conceived of GSC
management (GSCM) as “integrated environmental thinking of supply chains
including product design, procurement and materials choice, manufacturing
processes, product delivery to the consumers and the end of product life cycle
after use.” Likewise, as argued in the literature on strategic management (PORTER;
KRAMER, 2006) and supply chains (BOWEN et al., 2002), the connection between
sustainable behavior and competitive advantage is important in different
contexts.
The growing phenomenon of the
reallocation of production plants to regions with lower costs in land and
labor, as well as other advantages given through incentives, has also become a
topic in the literature on outsourcing green manufacturing (TROWBRIDGE, 2003).
In GSCs’ upstream, green logistics includes all connections with suppliers and
manufacturers, all the way up to end users, including products, processes,
packaging, transport, and waste disposal at the consumption point (SKJOETT-LARSEN,
2000).
According to Murphy, Poist, and
Braunschweig (1996), green logistics principally investigates environmental
issues in logistics operations. Murphy and Poist (2000) further explained that
green logistics strategies include recycling processes and reuse of materials,
as well as reduction of consumption of raw materials in manufacture processes.
As a result of this perspective, closed-loop supply chains have received most
of the attention in specialized literature (ROGERS et al., 2002). Authors also
point out that pioneers concentrated their researches on reverse logistics.
Subsequently, they enlarged gradually into business processes with the
integration of all links, from procurement of finished goods up to remarketing
of refurbished products (GUIDE; VAN WASSENHOVE, 2001).
Furthermore, researchers have
shifted their focus from cost reduction in search of value creation to business
processes (KLEINDORFER; SYNGHAL; VAN WASSENHOVE, 2005). They have strengthened
their arguments for integrating sustainability factors in processes and flows
that place top priority on a core of supply chain management involving product
design and manufacture and product cycle extension, among others (LINTON et al.,
2007). The product design stage is more and more integrated into GSCs, since
around 80% of the environmental load and even product costs are structured
during this phase (REBITZER, 2002).
The life cycle concept is a dominant
instrument of project evaluation that appeared in the middle of the 1970s (HUNT;
FRANKLIN, 1996). The life cycle evaluation process includes investigation and
evaluation of the environmental impact of products and/or services, which are
caused by use or products’ entire life cycle. The process stretches out to
include all supply chain links and represents an evolution of environmental
issues concentrated overall on specific impact analyses of each enterprise
belonging to supply chains (BUSHES; HALL, 2007).
In upstream areas, green purchasing
can address issues such as production waste reduction, changes to alternative
materials with low environmental impact from raw material suppliers,
minimization of hazardous materials disposal, and reduction of pollutants
emissions. Supplier management is crucial to implementing a green acquisition
strategy (SIMPSON; POWER, 2005), and many world-class companies frequently
carry out initiatives in order to meet the demands of their socio-environmental
responsibilities (BACALLAN, 2000).
Suppliers’ integration into
environmental management processes continues to be a core issue in the
literature. Findings indicate the rise of three common practices: evaluating
suppliers for their environmental performance (NOCI, 2000; BOWEN et al., 2002),
mentoring through supporting and training suppliers (HINES; JOHNS, 2001; BOWEN et
al., 2002), and seeking ISO 14000 or similar certification (CHEN, 2005).
A production perspective has
characterized most of the literature surveyed, which includes environmental
issues in operations. Frosch and Gallopoulos (1989) explored the concept of
industrial ecology, suggesting clean production, projects focused on the
environment, lean production, and product remanufacture based on reverse
logistics.
Some scholars have sought to examine
other behavioral components in GSCs, in which more environmentally conscious
business performance empowers long-term inter-organizational collaboration (VACHON;
KLASSEN, 2008; YOUNG, 2000). They further find that, in addition to other
benefits discussed in the literature on GSCs, researches’ findings can be
classified into three broad groups: benefits to enterprises, processes that
involve supply chains, and societies’ perceptions regarding the gap between the
“high hopes” of green initiatives and, in practice, slow implementation of
green concepts in enterprises’ supply chains. The latter gap calls for
additional exploratory surveys of GSCs, redirecting efforts from theory to
commercial practices, since only businesses can undertake initiatives and results
can only appear with such practices.
Bowen et al. (2002) examined green
supply practices in the United Kingdom and identified three types of GSC
initiatives, which present different levels of practical results. They found a
connection between GSC patterns and corporate environmental objectives.
Rao (2002) showed through empirical
investigation carried out in southeast Asian that pressure from customers
constitutes the main factor that companies take into consideration when
implementing a GSC. De Brito, Carbone and Meunier (2008) discussed the impact
of sustainable supply chain initiatives in European textile clothing chains,
concluding that legislation is the biggest stimulus behind the implementation
of green concepts.
2.2. Environmental Impact Evaluation Model
Developed by Albino, Izzo, and Kuhtz
(2002), this model is a useful instrument for global enterprises to evaluate
the environmental impact of production processes in supply chains. The
measurement of performance in GSCM is discussed by Hervani et al. (2005) and
Clift (2003); nevertheless, there is little mention of measures that
enterprises could adopt to evaluate their carbon footprint in a global context.
One of the most common global
benchmarks for environmental initiatives is ISO 14000 certification from the
International Organization for Standardization, which requires a series of
proceedings to identify environmental aspects of onsite operations, safe
handling and procedures for hazardous waste material processing, and compliance
with relevant environmental legislation. The ISO 14000 certificate is most
commonly adopted by multinational enterprises, which stimulates their suppliers
to be certified. Quite often, ISO 14000 standards are also incorporated in
supplier selection processes (CHEN, 2005; MILES; MUNILLA; MCCLURG, 1999).
Lean processes create value by
eliminating waste in supply chains (DISNEY; NAIM; TOWILL, 1997), including
production of goods still not ordered, reduction of waiting time, error
correction, elimination of excess in processes and movements, and cutbacks in
unnecessary stock and transport (JONES; HINES, 1997). The literature on lean
supply chains emphasizes administrations’ application of lean practices (MANRODT;
VITAZEK; THOMPSON, 2008), the integration of lean and agile operations (MASON-JONES;
NAYLOR; TOWILL, 2000; GOLDSBY; GRIFFIS; ROATH, 2006), and concentration on the
specific functional areas of supply chains, including lean logistics (DISNEY;
NAIM; TOWILL, 1997). Due to the widespread acceptance of lean supply chain
practices and growing pressure for environmental management, enterprises have
begun to incorporate environmentally friendly practices in waste reduction
programs.
Other literature has examined the
environmental impact of commerce (FRANKEL; ROSE, 2005; ZENG; EASTIN, 2007) and
the connection between green and global supply chain practices and enterprise
performance (ZHU; SARKIS, 2004; RAO, 2002). Nevertheless, international
researches tend toward local environmental problems and neglect global supply
chains.
Several factors cause enterprises to
pursue GSC practices in a global context. These include global environmental
standards such as ISO 14000 (RAPPAPORT; FLAHERTY, 1992; RONDINELLI; BERRY,
2000; UNCTAD, 1993; EPSTEIN; ROY, 1998; MILES; RUSSELL, 1997), headquarter
policies (HANSEN; MELNYK; CALANTONE, 2004), effects of environmental
performance on enterprises’ global reputations (CHRISTMANN, 1998), reduction of
cost (ZHU; SARKIS; GENG, 2005; CRUSH et al., 2008; DOWELL; HART; YEUNG, 2000;
CHRISTMANN; TAYLOR, 2001), and pressures from stakeholders and competitors (ZHU
at al., 2008; CHRISTMANN; TAYLOR, 2001; MAXWELL et al., 1997; WALKER; DI SISTO;
MCBAIN, 2008).
The existing barriers include
suppliers’ resistance (Wycherley, 1999; Walker et al., 2008), lack of
benchmarks and data available with which to measure green practices along
global supply chains (VELEVA et al., 2003), and risk and opportunity costs
through the loss of key partners in GSCs (ZHU; CORRAL, 2004). These barriers
have been identified through case studies and interviews (WYCHERLEY, 1999; WALKER
et al., 2008), anecdotal evidence (VELEVA et al., 2003), and researches on a
wide range of Chinese manufacturing facilities’ managers (ZHU; SARKIS, 2004).
Paper seeks to determine “how
companies formulate their green initiatives and to analyze the logistical bases
and results connected with such decisions” but methodology used in this paper
is insufficient. It also does not point out the most important factors that
have been included in Survey.
3. RESEARCH METHODOLOGY
Along the same line of inquiry, the
present research sought to illustrate green practices in each section of supply
chains, to deepen the discernment of ways in which companies translate their
green directives and to analyze the logistical basis and connected results of
such decisions. To determine the nature of the above presented issues, an
initial bibliographical review (i.e., desk research) was carried out of
relevant sources found in books, theses, journals, and articles in specialized
magazines. The sample included three international companies in the automotive
segment, with industrial plants located in the southeast and south regions of
Brazil, in the state of Sao Paulo.
The companies were evaluated using a
questionnaire with 40 variables. Each variable came with five options; each
attributed a weight from one to five on a Likert scale, where one represented
precarious sustainability conditions and five, a maximum of sustainable
adaptation.
The criterion for choosing these
companies was non-probability sampling, which according to Mattar (1996, p.
132) is when the “selection of elements of the population to compose samples
depends at least in part on the researcher or interviewer’s judgment in the
field.” In other words, sampling was carried out in accordance with the
researchers’ judgment, so that specialized interviewees answered 40 items in
closed questionnaires and wrote remarks on items if necessary.
Kish
(1965), Aaker, Kumar, and Day (1995), and Kinnear and Taylor (1979) argued that
the choice of experts (i.e., specialized professionals) requires judgment or an
intentionally guided form of sampling used to choose “typical” and
“representative” samples, which can be useful when it includes a small number
of sampled units. In this case study, judgment-based sampling was more
trustworthy and representative than probability sampling.
The
survey was formulated to preserve a multinational perspective in terms of
geographical initiatives and diversified industrial installations. The questions
were based on patterns in green initiatives in the literature, as presented in
the previous section. The questionnaire included, on the one hand, the
motivations and results expected in the formation of GSCs and, on the other
hand, clarification of principal initiatives and green measures of each segment
of the companies’ supply chains.
4. SURVEY RESULTS
The
results permit a comparison of three large enterprises of the automotive sector
in terms of their sustainability efforts. The companies were evaluated using a
questionnaire with 40 variables. Each variable came with five options, each
attributed a weight from one to five on a Likert scale and the total points obtained by each company based on this e scale shown, with values
of 1 (strongly disagree) to 5 (strongly
agree). In Table 2 presents the scores for
each variable and the percentages obtained using these evaluation tools, in
which 100% means complete adaptation of the best sustainable practices. The source of the company are: Assembler 1 is Germany, Assembler
2 is Japanese and Supplier is American.
Table 2: Comparison of companies
|
INDICATORS AV |
|
Ts |
ASSEMBLER 1 |
SUPPLIER |
ASSEMBLER 2 |
AVRG |
|||
|
S |
% |
S |
% |
S |
% |
% |
|||
|
1.
GREEN PURCHASE |
10 |
50 |
41 |
82,0 |
28 |
56,0 |
45 |
90,0 |
76,0 |
|
2.
GREEN MANUFACTURE |
10 |
50 |
33 |
66.0 |
29 |
58.0 |
40 |
80.0 |
74,7 |
|
3.
GREEN PROJECT |
10 |
50 |
39 |
78,0 |
28 |
56,0 |
41 |
82,0 |
72,0 |
|
4.
REVERSE LOGISTICS |
10 |
50 |
31 |
62,0 |
34 |
68,0 |
38 |
76,0 |
68,7 |
|
AVERAGE
GSCM |
40 |
200 |
144 |
72,0 |
119 |
60,0 |
164 |
82,0 |
72,8 |
Source: Research data[2]
The
companies surveyed are major protagonists in their sector, proactive in respect
to the reduction of greenhouse gases and sustainability in a wide sense. The
relatively low performance in the economic measurement by the assembly plants
reflects the transition through which they are going and restricts, in part, their
ability to invest strongly in sustainability projects. It was also observed
that the supplier’s answers showed eight variables inapplicable to green
manufacturing, which inflated its score to 60%.
The samples confirm
that these enterprises have been implementing GSC strategies. The Japan-based
company is a few steps ahead than Germany company, for example, in its level of
consideration of different environmental factors. This Japanese company
considers a supply of green raw materials highly important when choosing its
partner companies.
Nevertheless, as expected, all three
companies are more interested in energy consumption and water processing than
in service sectors. Likewise, they put a greater emphasis on employees’ health
and have decentralized most of their production and distribution. They are
currently developing initiatives to reduce transport costs but maintaining
sustainability criteria, especially in CO2 emissions.
The data are compared in Figure 3,
which shows service percentages for each studied indicator. The level of involvement of
suppliers is not as high as expected in relations
to automakers and
also the level
of outsourced enterprises'
Involvement is not appropriate in the supply chain and the logistics providers,
including bonded warehouses with a more limited dedication to environmental
issues as compared to other respondents.
Figure 3:
Comparative data
Source: Research data
4.1. Green Logistics
The most common environmental
measure in the field of green logistics means restructuring logistics flow in
order to reduce the number of trips. Since road transport is a principal source
of greenhouse gas emissions, logistics planning and organization processes that
must change to optimize the transportation flow would appear to have high operating
leverage. Therefore, it is no surprise that the second most popular method of
reducing road transport emissions is to adopt less polluting forms of
transport, an approach used in the companies’ fleets for at least two years.
Most of the companies are
implementing GSC measures through modifications in transportation operations
and logistics, including fleet renovation. In terms of green logistics
implementation, the companies include logistics flow optimization and company
image improvement, as well as logistics cost reduction and landmark
regulations. The degree of complexity of such initiatives and high associated
costs are the main disincentives observed for environmental damage reduction.
4.2. Green Purchasing
Suppliers’ involvement is crucial
for green projects in which enterprises carry out auditing, as they identify
and put into practice key performance indicators to monitor suppliers’ green
performance. Three principal initiatives have been adopted in eco acquisition
strategies, that is, direct purchase of less polluting materials and products,
suggestions to suppliers in a continuous process of implementing environmental
management systems, and a change in suppliers in order to find those better
suited to green acquisitions. Acquisition and manufacturing strategies are
functions most affected by environmental issues. Initiatives in product logistics and design show the reverse
tendencies in that they receive a low degree of attention from the companies
surveyed.
4.3. Green Manufacturing
Two
main green initiatives in manufacturing refer to production processes’
modification, equipment utilization, and less polluting materials. Closely
related to these issues is the process of optimization and lean manufacturing
concepts of reducing waste during manufacturing operations.
Besides
purely environmental considerations, these processes reflect on issues such as
manufacturing cost optimization and operations themselves. Because they
undertake direct actions in terms of resources and other parts of production,
the companies investigated have secured greater efficiency, as opposed to if
they used more onerous methods at the end of the cycle of production. The
initial reasons for adopting green manufacturing is, on the one hand, improved
financial performance (i.e., cost reduction through optimization and
improvement in resource consumption) and, on the other hand, the ability to
follow regulations, including current laws. Only assembly plant 2 (see Figure
3) meets these requirements.
4.4. Green Projects
In the sample, the enterprises have
been implementing eco-design products and/or manufacturing processes. The
Japanese company is still some steps ahead in this area according to the data
on adopting a green attitude in the product design phase. The survey results show
that, in most cases, green design is applied to products or to their components
and packaging. In only a small percentage of cases, this approach has been
applied to manufacturing processes in order to reduce energy consumption and
waste production.
According to the principle of “from
cradle to grave,” most of the companies have adopted green projects to make
more easily recycled products. Based on the data, it can be estimated that most
of the enterprises have adopted green designs to improve their brand image, to
satisfy stakeholders’ demands and increase consumers’ confidence.
4.5. Reverse Logistics
Most of the companies have adopted
reverse logistics for product recovery and refurbishment. Half of the reverse
logistics operations involve finished products and packaging. Recovering
initiatives for both items refers respectively to refurbishing and recovering,
as well as recycling and reuse after cleaning or restoration.
The companies that have decided to
establish reverse logistics structures are motivated by the desire to “meet
consumer expectations,” a reason pointed out by most of the respondents.
Reverse logistics is a way for companies to acquire a certain dignity in their
market, showing corporative citizenship and reinforcing their positive image and
the loyalty of clients and society. The need to respect reverse policies is a
third direction that growing numbers of large industries appear to be adopting.
It is
interesting to note that a third of the companies surveyed that have adopted
sustainable supply chains believe that reverse logistics structures are not
that necessary in their market. The degree of complexity and associated
difficulties are the second major disincentives for companies that are using
reverse logistics. First, the companies think that reverse logistics is complex
because it involves a complete cycle structure from initial stimulations,
selective collection, sorting, storage, and recycling in order to send products
on to the next phase. The second reason is that several intermediaries are
integral to each stage of the cycle, increasing the difficulty to finalize such
operations.
5. FINAL CONSIDERATIONS
This paper was investigate how GSCM practices in three
automotive companies in relation to their practices are and
could guide and organize future
research in GSCM. First the concepts of GSCM
were reviewed by connecting them to the previous concepts of SCM. Subsequently, relevant
articles were reviewed which
aimed to propose organizations
for the theme. Based on the revised structures and keeping
in mind the future research possibilities,
after it was proposed a framework
that can be used as a reference for
future research.
Green supply chain decisions can be connected to
the performance analysis of supply chains. As multi-criteria decision making is already everyday balancing between cost,
lead-time, and on-time delivery, adding environmental sustainability related
measures is an obvious next step for companies. The cases presented show that
there are several layers of decisions, which can improve the operations, and
efficiency of supply chains management.
Structural level decisions may be related to products and production
The research showed that automakers have
studied a more accurate view of the importance of GSCM showing high factor
of performance with Green Purchase (86% of action);
Manufacture Green (74% of action); Green Project (80% of action) and Reverse
Logistics (69% of action). The supplier proved to be low of automakers with
an overall average of 60% against 78% of automakers.
So, the rated
supplier needs to improve their performance in GSCM.
The discussed
above justifies continuing present trends in researches, although it will be
necessary to enlarge the samples and include other economic segments in
addition to those discussed in this paper. On the one hand, there is a need to
understand the specific benefits of GSCM. On the other hand, the
institutionalization of a “green attitude” deserves renewed exploration.
The
planning and integrated management of supply chains recognizes that design must
begin with resource extraction and finish with product disposal or renovation.
Extensive supplier pre-qualification and evaluation is quite important in order
to assure the “right” suppliers are used. It also requires an extensive use of
auditing and standards of certification in all steps of supply chains (e.g.,
ISO 14000), as well as the introduction of return systems for products (i.e.,
reverse logistics) and sale of waste.
These initiatives reiterate green
logistics, where GSCs are sustainable and will become a pre-requisite in the
near future. Environmental pressures and debates on subjects such as climatic
change are growing, increasing the emphasis given by governments and consumers
to these issues and making them truly critical aspects in business management.
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