TABLE OF CONTENTS

1. EXECUTIVE SUMMARY12. INTRODUCTION23. INTRODUCTION34. GREEN SUPPLY CHAIN MGT IN MALAYSIA55. ADVANTAGES AND DISADVANTAGES76. BENEFITS OF GSCM137. IMPROVEMENT POTENTIAL188. REFFERENCES19

EXECUTIVE SUMMARY

It has been increasing in consciousness of the environment in the last few decades. More people are aware of the worlds environmental problems such as global warming, toxic substance usage, and decreasing in non-replenish resources. The Government has released campaigns to promote this problem to people. Several organizations responded to this by applying green principles to their company, such as using environmental friendly raw material, reducing the usage of petroleum power, and using the recycle papers for packaging. The green principles were expanded to many departments within organization, including supply chain. Green supply chain management (GSCM) was emerging in the last few years. This idea covers every stage in manufacturing from the first to the last stage of life cycle, i.e. from product design to recycle. Not only manufacturing, but GSCM can also be used to other business sectors such as government, education and services.The purpose of this paper was to describe the impact of green to the supply chain management. It started with the importance of GSCM to the company in different levels or what factors that influence the company to adopt the GSCM. These factors can be categorized by different drives such as government, whole market, industry, competitors, and within the company. Since GSCM can be applied to various areas within the company, this report also discussed the implementation of GSCM to several areas. Furthermore, some examples of GSCM application were demonstrated to support the concept.

INTRODUCTIONThe objective of the assignment is to clarify the advantages both economic and environmental that companies in Malaysia can draw from managing their supply chain and adding green aspect to it. (Green Supply Chain management). Environmental awareness among the public is low and the lack of demand for green products result in few drivers for companies to become green.One definition of green supply chain management (GSCM) is from (Srivastara, 2007). His study collected and classified previous literatures relating to green supply chain management. He defined GSCM as integrating environment thinking into supply chain management, including product design, material sourcing and selection, manufacturing processes, delivery of the final product to the consumers, and end-of-life management of the product after its useful life. According to this definition, GSCM relates to a wide-range of production from product design to recycle or destroy, or from cradle to grave. This principal is similar to lifecycle of product. Product lifecycle is an idea that products pass through a cycle of life, similar to human, birth, maturity, death. The product lifecycle provides a degree of structure to the life of products and thereby provides direction for the diverse functional efforts required to produce and deliver product/service offerings(Birou, Fawcett, & Magnon, 1998). Many studies addressed product lifecycle along with supply chain or GSCM, for example, (Stonebraker & Liao, 2006) discussed that the stage of lifecycle variables is associated with the various dimensions of supply chain integration.Since GSCM normally involved the inverse of the product flow, reverse logistics are automatically included in the study. There were numerous researches about this. (Sheu, Chou, & Hu, 2005) proposed a linear multi-objective programming model optimizing the operations of both integrated logistics and used product reverse logistics in green supply chain. Results from their study showed that the proposed model improved net profits by 21.1%. In terms of both government and non-government organizations in the U.S., they were aware of the environmental changes, especially from gas price. In (Trunick, 2006) article, he discussed why the logistics companies should be more concerned on the GSCM. He described some regulations released by either federal or local organizations such as U.S. Department of Transportation (DOT) or California Air Resources Board (CARB), that affects to the logistics and how they According to (Boks & Stevels, 2007), they categorized green into 3 types depended on the different perceptions of the environment among different stakeholders involved: scientific green, government green, and customer green. In scientific green, life cycle assessment (LCA) was used to determine the environmental impact of products, processes, and systems. However, it concerned only the emissions, not other aspects. In government green, several factors were involved such as population density, geographical position, and the availability of energy sources. These factors affected the government agenda to maintain or improve quality of life. For customer green, the perceptions of green were strongly linked to emotions that were directly impacted to people, especially health and safety, than resources or emissions.Although GSCM was introduced not too long ago, there have been a number of studies about it. These studies were differently in detail. There are a few papers that collect studies, categorize them and conclude the trend of research. An example of a paper related to previous GSCM studies is (Kleindorfer, Singhal, & Van Wassenhove, 2005). They collected research from the first 50 issues published in The Production and Operations Management Society (POMS) and found that there were substantial number of research related to sustainability, including integrating environmental, environmental management, green-product design, and closed-loop supply chains. Another example is (Srivastara, 2007), he gathered numerous article and study related to the green and sustainability supply chain, and classified based on problems context into 3 types: importance of GSCM, green design, and green operation. He also classified based on methodology into 3 types: empirical studies and mathematical modeling.

GREEN SUPPLY CHAIN MANAGEMENT IN MALAYSIA.

As the global climate has changed rapidly due to global warming, manufacturing and production process are viewed as the culprits in harming the environment, in the form of waste generation, ecosystem disruption and depletion of natural resources (Fiksel, 1996). It is necessary for the industry to react and transform the way production systems operate towards sustainability. It can be achieved by extending the structure of the current one way supply chain to a closed loop, including supply chain operation designed for end of life products and packaging recovery, collection and reused in the form of recycling and remanufacturing (Beamon, 1999). Companies do not often change their businesses processes and it is this attitude allows inefficient processes to continue unabated causing unnecessary waste and pollution. For example, ineffective processes in the US automotive industry allowed the innovative Japanese automakers to become market leaders. Businesses that want to transition to a green supply chain should take the opportunity to review all their business processes to identify areas, where adopting a greener outlook can actually improve their business. Firms should review each process along the supply chain to identify if a more environmentally sound approach will help cure the inefficiencies that occur. Many companies in developed countries that have been through this exercise have identified processes, where raw materials were wasted, resources underutilized and unnecessary energy used due to inefficient equipment.But there are still a lot of companies in Malaysia still behind and yet to adopt the green supply chain concept in their business strategy. According toEltayeb and Zailani (2009), Malaysian fully owned firms have the lowest level participation of green supply chain initiatives compare to foreign based companies. One of the reasons that Malaysian owned firm having lowest participation of green supply chain is the green purchasing is still a very new concept in Malaysia. Other than that,Lee (2008)found that firm size is also an influence factor for firm to practice green supply chain, bigger size firm tend to be more willing to participate in green supply chain initiative. According toLee (2008), SMEs usually lack of the information resources or expertise to deal with environmental issue. Therefore, SMEs can be a source of environmental risk and bottleneck in pursuing the goal of greener supply chain.With increased pressures for environmental sustainability, it is expected that firms will need to implement strategies to reduce the environmental impacts of their products and services (Lewis and Gretsakis, 2001;Sarkis, 1995;Sarkis and Cordeiro, 2001). Otherwise, firms will loose its competitiveness in the market. Environmental impacts occur at all stages of a product production processes and supply chain. Therefore, in order to reduce environmental impacts of a product, firms have to ensure its own production process and supply chain practicing green initiative. According toRao and Holt (2005), greening supply chain not only allow firms to achieve substantial cost saving, it would also enhance sales, market share, exploit new market opportunities, which lead to greater profit margins. All these benefits lead contribute to economic performance of the firm. On the other hand, the main focus for firm is to be profitable and sustainable in the competitive market. Under the pressure of global economy crisis, firms are struggling to fight for survival.Therefore, cost reduction program has become a key agenda especially for SMEs instead of green initiative. According toRao and Holt (2005), greening supply chain not only allow firms to achieve substantial cost saving, it would also enhance sales, market share, exploit new market opportunities, which lead to greater profit margins. By adopting green supply chain initiative would allow firms to enjoy all these benefits lead contribute to economic performance of the firm. But there are still a lot of firms in Malaysia still have low involvement in the green initiatives. According toEltayeb and Zailani (2009), local firms in Malaysia have very low involvement in green initiatives compare to MNC (Multinational Company). According toWycherley (1999), small firms have difficulty to drive its supplier or suppliers supplier to involve in the green initiatives. That showed that small firms are facing various difficulties and barriers to adopt green supply chain initiatives. Therefore, this study will find out the barriers that impede SMEs in Malaysia to adopt green supply chain initiative. Base on the statistics from Malaysias Productivity report 2008, SMEs contribute 30.8% RM100,299 million or 30.9% of total manufacturing output in year 2008. Therefore, the success of SMEs is critical to economic growth of Malaysia in the future. With the increasing trend of global environmental protection awareness, SMEs in Malaysia will be out of the competition if green initiatives still not adopted as part of their business strategy. Therefore, this study will focus on the barriers which impede firms in SMEs context in Malaysia to adopt green supply chain initiative.

ADVANTAGES AND DISADVANTAGES OF IMPLEMENTING SUPPLY CHAIN MANAGEMENT IN MALAYSIAN COMPANIES

EXAMPLES OF ONE MALAYSIAN COMPANIES:-

Our Strengths in ZECIn recent years, we have been promoting globalization and responding to rapidly expanding internationalization and effort to protect the global environment through the development of next-generation circuit breaker and earth leakage circuit breaker.

We are pioneering a new feature of circuit breakers, working to realize market globalization by responding to international needs with products that offer enhanced ease of operation and high performance, are developed with consideration for the environment in mind, that comply with Sirim, ISO 14001 UKAS, JIS, IEC, EN, GB, and UL/CSA standards.

Z & Z Electical Company will continue its efforts to pioneer the future of circuit breakers based on the theme Wide Selection & Better Performance We will utilize our innovative technologies and accumulated know-how to introduce uniquely advanced products to the market.

Weaknesses

Base from the interview and also our customer comments were find out that our main weaknesses is in expanding the marketing area because of lack of our owned staff doing the marketing in ZEC. For the time being we get the support from our channel distributors and also our authorized resellers besides that we also utilized the advertisement inside the Yellow pages and Local Radio public for awareness.

Secondly, we are confronting with others cheaper product that made in China using lower grade material that flooding the market. Of course the price is very low distributed from others competitors. This scenario will affected our market and sales target of the years.

Globalization always demanding a new technology and design, therefore we always try to cope with the customers satisfaction. To do this there will lot of investment in our R&D department to get the blend in the market segments.

Green supply chain:The traditional supply chain is defined as an integrated manufacturing process wherein raw materials are manufactured into final products, then delivered to customers via distribution, retail, or both (Beamon, 1999). Green Supply Chain Managements definition has ranged from green purchasing to integrated supply chains flowing from supplier, to manufacturer, to customer and reverse logistics, which is closing the loop as defined by supply chain management literature (Zhu and Sarkis, 2004). Comparing the definitions of SCM and GSCM, it is clearly shown that green supply chain involved not only integrating the manufacturing processes and distribution to customers. It also covers from the very beginning stage when the product is designed until the product is disposed. That shows that it requires a full integration and collaboration of the players along the product life cycle.In order to achieve the green supply chain, manufacturing organizations must follow the basic principles established by ISO 14000 (Beamon, 1999). The ISO 14000 principle provides framework, which guiding firms to implement EMS to improve environment performance only within the firms operation boundaries instead of through the supply chain (Bansal and Clelland, 2004;Handfieldet al., 2005).Eltayeb and Zailani (2009)reviewed twenty one literatures on green supply chain initiatives and concluded that the green supply chain initiatives can be generally classified into three major elements:Eco-design or design for environment

Green purchasing

Reverse logistics

These three elements were selected as independent variables to measure the level of adoption among ISO 14001 certified manufacturing firms in Malaysia. Firms are require to incorporate these three elements into their corporate culture and formulate a strategy and practices in order to allow firm to be the driver and initiator in green supply chain. On the other hand,Eltayeb and Zailani (2009)found that green purchasing and reverse logistic have lower adoption compare to eco-design. That showed that green supply chain initiatives that involve external relationship with suppliers and customers have lower adoption compare to internal focus. This indicated that firms in Malaysia are facing internal and external barriers to adopt the three elements of green supply chain initiative. Hence, to incorporate these three elements into SMEs corporate culture and business strategy is not an easy task.

Design for environment:Design For Environment (DFE) is a concept which reduces the impact to environment of products or services across its life cycle. Design for environment gives guideline for the design engineer to examine the environmental soundness of a product over its entire life cycle (De-Mendonca and Baxter, 2001). The impact of product life cycle is evaluated against other alternative for reducing waste and energy, recycling or elimination of product waste during manufacturing.De-Mendonca and Baxter (2001)made a comparison of the objectives between DFE and ISO 14000. They conclude that DFE is more comprehensive than ISO 14000. That also aligns with the finding fromBansal and Clelland (2004)andHandfieldet al. (2005)that ISO 14000 standard does not provide sufficient components to support green supply chain approach.

Green purchasing:Green purchasing means that purchasing or supply chain managers consider the issue of sustainability in their purchasing of inputs in addition to the traditional purchasing criteria of cost, quality and delivery (Lambert and Cooper, 2000).Hamner (2006)suggested seven basic elements for green purchasing element, which are product content requirements, product content restrictions, product content labeling or disclosure, supplier questionnaires, supplier EMSs, supplier certification and supplier compliance audit. By having all these elements in the SMEs firm require additional effort and resources. According toLee (2008), buyer is the most important influential stakeholder to for the supplier to participate in green supply chain initiative. That showed that green purchasing is one of the key elements for firms to participate in green supply chain initiative. However,Zsidisin and Hendrick (1998)concluded that purchasing managers are not the only driver to promote and influence the environmental supply chain involvement, it is top managements responsibility to prioritize the environmental concerns and cascade through the entire organization which involve procurement, logistics, warehousing practices, operations, marketing and governmental agencies. Therefore, the green purchasing initiative can be viewed in two perspectives which are internal and external. In term of internal perspective, top management is the key driver to drive its firm to take part in green supply chain initiative by putting priority to drive all levels in the organization. On the other hand, in external perspective, purchasing managers are the driver to drive its supplier along the supply chain to participate in green supply chain initiative.Reverse logistic:Reverse logistic is defined as returning the end of life product or packaging from end user back to the supplier. The supplier can recycle, refill, remanufacture, refurbish, repair, repackaging or reclaim the material. A well managed reverse logistics program can result in savings in inventory carrying transportation and waste disposal costs as well as improving customer service (Rogers and Tibben-Lembke, 1999). According toWu and Cheng (2006), reverse logistic programs can result in significant saving. Taking HPs laser jet toner cartridge recycling program as example, HP has recycling programs throughout the world and claims that since 1990, HP was able to divert over 18 million pounds of material from landfills by recycling every toner cartridge received by providing consumers with pre-paid UPS label to send the used toner cartridge back to HP. However, remanufacture the returned products is limited to certain product or models due to its design, technology and functionality because some returned product might be in poor condition where it cannot be remanufacture (Klausner and Hendrickson, 2000). Therefore, firms need to understand the cost structure and the feasibility of reverse logistic in its organization.Barriers for SMEs to adopt green supply chain initiative:Simpsonet al. (2004)concluded that most of the SMEs in UK were unaware of the environmental legislation and the requirements. That also correlate to the finding byLee (2008)that government playing an important role to boost the awareness and knowhow about environmental improvement. Therefore, government involvement and support through funding, taxation policy, import duty, business training to promote SMEs to make their move to involve in green supply chain initiative. According toMin and Galle (2001), adopting green supply chain initiative requires additional effort and also higher cost and it is less visible economic benefits from these initiatives.Base on the study conducted bySimpsonet al. (2004), most of the SMEs think that adopting good environmental practice unable to gain competitive advantage and improvements in their business and it was a financial cost added to the business which not possible to pass on to customers.Min and Galle (2001)also found that cost concern is the most serious obstacle for taking environmental factor into account in purchasing process. Therefore, SMEs had poor perception that there is a need for environmental improvement. Another barrier which highlighted byWycherley (1999)in the case study of Body Shop International, existing investments, information system and habits are costly and difficult to change. That happened to Body Shop Internal whereby the volume of Body Shop International is too small to influence its suppliers suppliers. That show that even Body Shop International, which an international level corporation facing this problem. SMEs will face a tougher challenge to influence its suppliers due to the size of the business is not big enough to influence its suppliers or suppliers suppliers to change.Perron (2005)summarized that there are 4 barriers found to impede the adoption of green initiatives in SMEs, which are:Attitudinal and perceptions barriers:Resistance to change is one of the common attitudes observed in top management, particularly among SMEs. Fear of the unknown and fear of failure are the primary reasons for such an attitude.Information related barriers:SMEs are often lack of awareness and information, the management may not be aware of what is going wrong in the organization. They may not understand the environmental impacts of activities of the organization. Also, internal communication in the organization may be weak. Other than that, lack of exposure is another common problems faced by SMEs. Management does not have information on what initiatives have been taken by other organizations and how successful they have been. Benefits of a system based and business-environment integrated approach are often not known to the top management.Technical barriers:State-of-the-art information on new technologies, materials, operations and industrial processes is often not available to the top management particularly in SMEs and technical support is not updated within the industry. Lack of technical expertise is also a major barrier.Resources barriers:Resource barriers can be further breakdown into financial barriers and human resource barriers. The issues for financial barriers include lack of funding for environmental projects or ROI period is too long. Lacking of human resource in term of quantity and quality can be the barrier for SMEs to pursue environmental management.Another finding fromVan Hemel and Cramer (2002)that the barriers for SMEs to green their products is the SMEs do not perceive greening the environment is their responsibility that is actually align with the finding fromPerron (2005)in term of attitudinal and perception barrier. Other than that,Van Hemel and Cramer (2002)also mentioned that there was no clear information regarding environmental benefit in greening their products. That shows that SMEs do not have a clear understanding and information regarding the benefits of green initiative. That also aligns with the finding fromPerron (2005)in term of information related barrier.Van Hemel and Cramer (2002)also found that SMEs not able to find alternative solution in designing their products to fulfill the design for environment requirements. That is another form of technical barrier as described byPerron (2005). According toWalkeret al. (2008), there are more external barriers than internal barriers. The external barrier that described byWalkeret al. (2008)was regulation, poor supplier commitment and industry specific barriers, whereas the internal barriers are cost and lack of legitimacy. Base on the literatures, there are more internal barriers than external barriers which claimed byWalkeret al. (2008).Business strategic orientation:According to the study fromWang and Ahmed (2009)on the moderating effect of business strategic orientation on e-Commerce adoption from UK family run SMEs, family run business can be classified into three clusters:Family oriented:The focus is on family side where decisions in relation to the family like keeping ownership within the family, generating income to dependent families and maintaining family reputation are the major concern.Business oriented:The focus is on business side where strategic issues such as adoption of new technology, growth strategy of business and involvement of new investors may often appear on the boards agenda.Balanced oriented:Do not express clear preference of either family or business oriented, but concerned to arrive at appropriate balance between family and business issue.

ecologyCOMPANY

NEEDS ECOP PRODUCTS

economy

BENEFITS OF GSCMSpeaking of greening the supply chain, one might think only banning toxic chemical substance usages or reducing emission or waste to the environment. However, it is much more than just a mere reducing usage and pollution. Consequently, the benefits are not limited only less toxic consuming or less waste. The GSCM principle can be applied to all departments in the organization. The effects of GSCM expand to all area, both tangibly and intangibly.Some studies mentioned benefits of adopting GSCM, such as (Stevels, 2002). He demonstrated the benefits of GSCM to different roles of supply chain including environment and society in terms of different categories: material, immaterial, and emotion. For material, GSCM helps lower environmental load for environment, lower cost prices for supplier, lower cost for producer, lower cost of ownership for customer, and less consumption of resources for society. In terms of immaterial, GSCM helps overcoming prejudice and cynicism for environment, less rejects for supplier, easier to manufacture for producer, convenience and fun for customer, and better compliance for society. For emotion, GSCM helps motivation of stakeholder for environment, better image for supplier and producer, feel good and quality of life for customer, and make industry on the right track for society. He also provided examples of company that were successfully adopted GSCM.In (Duber-Smith, 2005), he identified ten reasons that the company should adopt the green: target marketing, sustainability of resources, lowered costs/increased efficiency, product differentiation and competitive advantage, competitive and supply chain pressures, adapting to regulation and reducing risk, brand reputation, return on investment, employee morale, and the ethical imperative.WHAT DRIVE COMPANY TO ADOPT GSCMGovernmentIn the United States, there are a large number of government agencies controlling guide line, regulation and law. Some agencies are federal by the government while some manage only in the local area. These agencies and organizations are responsible for either similar or different issues such as pollution, product material, and chemical waste. Different industries may be controlled by different regulation depended on the industry characteristics and resources needed. One example of the government agency is Environmental Protection Agency. Environmental Protection Agency (EPA) is a government organization established to protect human health and the environment. One of their responsibilities is to develop and enforce regulations that implement environmental laws enacted by Congress (U.S. Environmental Protection Agency, 2007). EPA was a main agency referred in most study related to environment.An example of environmental guide line is ISO 1400 series. ISO 14000 was formally adopted in 1996 by the International Organization for Standardization (ISO). It represents a new standard and approach to improved environmental performance (Montabon, Melnyk, Sroufe, & Calantone, 2000). Results from their study showed that the ISO 14000 series can positively impact both performance of the environmental management system and overall corporate performance. It ensures that the company is well organized in the environmental field. However, ISO 14000certification is no guarantee that such improvements are really delivered (Stevels, 2002)For companies dealing with company in Europe, they got a huge impact from a new regulation released last year. The Restriction of Hazardous Substances (RoHS) limits the amount of lead and five other substances that may be contained in products sold to Europe after July 1, 2006 (Jorgensen, 2005). Not only manufacturers who produce products, but suppliers, distributors or even customers do get great impact from this new regulation. One example of changes was that suppliers need to assign new part numbers to all lead free components.Market and CompetitorIn todays business world, the competitive among company is very high. To make customer impress, the company needs to make themselves standing out from others. Being environmental friendly is one way to differentiate them from the competitors. Furthermore, when competitors already adopted GSCM, the company gets a pressure instead. Therefore, it is a good idea to implement GSCM no matter the competitors have adopted it or not. Not only competitors, but do customers affect to the companys decision to adopt the GSCM. In many cases, customers were the one who require special treatment or special products. Therefore, the company needs to make changes to make them satisfy and stay with them. Some papers studied about the relationship between applying GSCM with customers requirement such as (Simpson, Power, & Samson, 2007). In this study, they explored the moderating impact of relationship between a customer and its suppliers and effectiveness of customers environmental performance requirements. CompanyTwo drivers mentioned earlier are from external factor. Sometimes a driver is from the company itself. Numerous studies support that adopting GSCM can reduce the cost (Duber-Smith, 2005), (Stevels, 2002), and (Gunther, 2006). There also are other reasons such as increase efficiency, eliminate waste and pollution, and generate brand reputation. In terms of human resources, in (Duber-Smith, 2005), he mentioned that more sustainability enhances employee morale from some green programs such as wellness programs, ergonomic work environment.There are several studies about the factors or benefits that make the company apply GSCM. In Chinese industry, (Zhu & Sarkis, The Moderating Effects of Institutional Pressures on Emergent Green Suply Chain Practices anad Performance, 2007) developed a survey to 341 Chinese manufacturers to examine the relationships between GSCM practice, environmental and economic performance, incorporating 3 moderating factors market, regulatory, and competitive institutional pressures. Results showed that they experienced increasing environmental pressure to implement GSCM practices. Market and government pressures through regulation influenced them to improve environmental performance. Another study of this kind of study is (Hu & Hsu, 2006). They develop a set of critical factors of GSCM practices that could be used by managers. They surveyed in the electrical and electronics industries in Taiwan. Results showed that there were four critical factors: supplier management, product recycling, organization and involvement and life cycle management. Factors and drivers to adopt GSCM in different industries were differently. In a study of (Zhu, Sarkis, & Lai, Green Supply Chain Management Implications for "Closing The Loop", 2008), they developed a survey to 4 industries in Chinese to evaluate their perceived GSCM practices and relate them to closing the supply chain loop. Results showed that automobile industry lagged behind the other industries, power generating, chemical/petroleum and electrical and electronic. They assumed that the reason may result from a high level of complexity in the adoption of GSCM practices.

IMPLEMENTATION OF GREENFrom product lifecycle concept, the cycle starts at the designing of product. According to (Srivastara, 2007), literatures related to green design emphasize both environmentally conscious design and life cycle assessment/analysis. In designing a product, the designing team can change the raw materials or substances used during the manufacturing to be less toxic, more environmental friendly. Some terminologies are related to design for green such as design for environment or EcoDesign. An example of green product is hybrid car. Due to the increasing demand and decreasing amount of petroleum, automobile manufacturers needed to redesign the engine that consumes no or less gas. Hybrid car has been developing from day to day. One article about automobile design is (McAuley, 2003), he discussed the green design of automobile, which tend to change to advanced lightweight materials and fewer materials in vehicle design. In designing a product, the manufacturing company needs a high level of cooperation with their suppliers. An example for the research on supplier-manufacturer cooperation in EcoDesign is (Stevels, 2002). He also presented two examples of successful green supply agenda between manufacturer and suppliers.In manufacturing process, the company can apply green by several methods to reduce the energy and resource consumption. This is where reuse and recycling are referred. Several papers provided green practices such as (Duber-Smith, 2005). He suggested some practices including reducing energy consumption, recycle and reuse, using biodegradable and non-toxic materials, minimize harmful emissions, and minimize or eliminate waste. In a Chinese sugar manufacturer, Guitang Group can reduce the wastes and improve their financial performance by using waste from the upstream as raw materials for downstream production (Zhu & Cote, Integrating Green Supply Chain into An Embryonic Eco-Industril Development: A Case Study of the Guitang Group, 2004).Further than design and manufacturing, other departments in an organization are involved with the green. Purchasing could become an important agent for change regarding environmental initiatives in the supply chain (Preuss, 2001). In (Walton, 1998) article, he conducted a qualitative study to explore the primary areas for change to increase purchasings impact on environment. As mentioned earlier, not only manufacturer, other supply chain roles got impact from GSCM also. For a largest retailer in the U.S., Wal-Mart has an interesting story of adopting GSCM to their organization. In October 2005, Wal-Mart CEO committed the company to 3 goals: to be supplied 100% by renewable energy; to create zero waste; and to sell products that sustain Wal-Marts resources and the environment, and Wal-Mart was launching a business sustainability strategy to dramatically reduce the company's impact on the global environment and become "the most competitive and innovative company in the world (Plambeck, 2007). In this study, she provided 8 practices engaged with 14 network partners.

BENEFIT OF GREEN SUPPLY CHAIN MANAGEMENTPositive impact on financial performanceDespite ample evidence to the contrary, there persists a myth that going green costs additional expense. Some of the factors responsible for persistence of this myth are inertia, the lack of a systematic approach and an unwillingness to engage in sustained and changed thinking that is necessary to create a green supply chain.However, the most fundamental benefit of Green Supply Chains is a positive long term net impact on the financial performance of the organization. This has been proven by both analysis and empirical evidence.

Sustainability of ResourcesGreen Supply Chains sponsor the effective utilization of all of the available productive resources of organizations. By incorporating Green Supply Chain Management thinking through their entire business decision making process, organizations may now purchase green input resources that will flow through environmental friendly production process to produce the desired green outputs.Lowered Costs/Increased EfficiencyAt the core of Green Supply Chain Management is the principle of reducing waste by increasing efficiencies. Effective management of resources and suppliers, can reduce production costs, promote recycling and also, the reuse of raw materials. Also, the production of hazardous substances can be reduced, thereby preventing organizations from being fined as a result of violating environmental regulations.

Overall, the green supply chain industry sector has a number of challenges. However, it is first important to note that when we look at supply chain, we start with product innovation and the marketing impact. We also end at the supply chain with consumer products and product recall. Sales planning are a second function. The third function would be manufacturing planning and manufacturing operations. Here are few challenges of green supply chain management.

StandardsStandards are the most confusing aspect the challenge is that each organization may have to comply with all of these different standards. They may comply with only part, and the issue faced by manufacturers, retailers and supply chain professionals is that the awareness or knowing what to go after is a challenge.

The first step for someone new to the sector is to understand what standard they need to comply with and understand what direction to go. This needs to be done first.Business Case DevelopmentSocial responsibility, competitive pressures, as well as lot of others issues out there are hard to measure. Business case development is one of those things that organizations are fighting through.

Communications PlanningThe environmental sustainability green space is very broad. It encompasses everything from renewables to various definitions and terms. Organizations have to get the communication strategy under control pretty quick as they start to go out and implement new programs.

Malaysias new inter-ministerial green technology council has promised to galvanize efforts to form an integrated national greenstrategy. The key challenge faced by the Malaysian government in going green has been the absence of an institution tasked solely to drive green technology. Green technology efforts have always been fragmented with different ministries and agencies running their own projects. Environmental initiatives often involve several parties across the government, so we need to first strengthen the institution. The council will take a consolidated approach, providing a national strategic focus and plan. According to Prime Minister Razak (pictured), the government will lead by example by adopting green technology in governmentfacilities. The Ministry of Energy, Green Technology and Water which the Green Technology Division falls under will be the key coordinator and facilitator for the green technology roadmap. It has already taken a lead in going green. Its building is the first to be rated a Low Energy Office in Malaysia and reported energy savings of more than 50 per cent compared to new officebuildings.

Findings from the past survey by Insight (2008) showed that 52% of companies received benefits in terms of reducing logistics cost and have reduction in manufacturing costs when the companies practice green supply chain in their business activities. Logistics activities are one of the major and important parts along the supply chain. Besides that, the results revealed that 47% of companies benefited from green supply chain by giving them a competitive advantage in order to compete with other companies. While survey from Aberdeen Group (2008) found that by practicing green supply chain it can help to reduce emissions, reduce waste and improve disposal. Green logistics practices by switching into alternative fuel such as biodiesel and bioethanol can help to give efficient fuel consumption because of this characteristic of alternative fuel. Beside that this fuel is very cheap compared with the other development of other renewable fuel alternative such as hydrogen (McKinnon, 2010). Green logistics practices such as true recycling or re-use of plastic products can significantly reduce the energy required across the life cycle because the high energy inputs needed to process the requisite virgin materials greatly exceeds the energy needs of the recycling or re-use process steps (Arvanitoyannis, 2007). Ubeda (2010) found that green logistics practices such as of choice to reduce number of routes, introducing backhauling in logistics activities and design the shortest routes can control the emissions of carbon dioxide emission. This can be very beneficial to the environment and to the society because reduction in this type of gases can help to reduce environmental impact such global warming and at the same time improve the society health status. According to Rodrigue (2001) if the company less practice just-in-time (JIT) in logistics activities it can help to reduce traffic congestion, reduce more energy consumption and reduce from producing more emissions CO2, particulates, NOx, etIn order to satisfy todays customer demands, it is not enough to offer cheap and good product, the consumer today, also draws much attention to whether was manufactured and delivered in a manner which does not adversely affect the protection of the environment.

In conclusion customers coming from poor countries, pay no attention to either the quality of our products are environmentally nature this type of customer is only interested in the offered price of the product. However, despite the global trend is just so environmental awareness and firms seeking to meet the demand of customers are forced to introduce measures to protect the environment. However in addition to improving economic performance and build a positive corporate image among consumers, green supply chain allows the realization of goals such as reduction or complete elimination of hazardous materials that are used both in industry agriculture, improvement and implementation of ecology behavior, systems design, equipment, machinery and long term relationships, which in time will bring environmental and economic benefits.

BARRIERS OF APPLYING GSCMIn (Zhu & Cote, Integrating Green Supply Chain into An Embryonic Eco-Industril Development: A Case Study of the Guitang Group, 2004), they studied the integration of green supply in sugar industry. They mentioned three barriers: maintaining close relationships with their main suppliers, obtaining a larger market share through competition with other market share through competition with other domestic sugar refineries by improving product quality and reducing costs, and ensuring the sustainability of their operations including reducing the environmental impacts. At the same times, there are some research studied barriers of applying GSCM from suppliers perspective. An example of suppliers barrier is (Wycherley, 1999), he conducted a qualitative study on the suppliers barriers of GSCM implementation for an environmental-friendly image products like the Body Shop.

IMPROVEMENT POTENTIALSeveral studies were exploratory study about a company succeed in applying GSCM, various in different industry such as electronics, automobile, furniture, and packaging. An example of Electronics Company is Advanced Micro Devices. Advanced Micro Devices (AMD ) wanted to be recognized as a sustainable organization. They wanted to better mage the risk of a potential supply chain and work together with suppliers to identify alternative materials an equipment to minimize environmental impacts. Moreover, they were drove by their customers, investors, and non-governmental organization groups externally (Trowbridge, 2001). In packaging Industry, results from survey showed that green supply chain practices were positively linked to operational performance. Also, the green supply chain practices were affecting the allocation of resources among 3 types of environmental technologies: pollution prevention, pollution control, and management systems (Vachon, 2003).

REFFERENCES

1. Mind the Chain:Lessons for Firms in distressed markets, Igor Zax, Private Equity News, May 25, 2009-Issue 2822. Baziotopoulos, 20043. MacDuffie and Helper, 1997; Monden, 1993; Womack and Jones, 1996; Gunasekaran, 19994. Drucker, 1998; Tapscott, 1996; Dilts, 19995. Lambert, Douglas M.Supply Chain Management: Processes, Partnerships, Performance, 3rd edition, 2008.6. http://en.wikipedia.org/wiki/Supply_Chain_Management7. http://en.wikipedia.org/wiki/Inventory_control_system8. http://lcm.csa.iisc.ernet.in/scm/supply_chain_intro.html9. http://www.medwelljournals.com/fulltext/?doi=ibm.2010.20.2710. http://bestsupplychainmanagement.com/advantages-and-disadvantages-of-supply-chain-management/

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