Thank you for joining the Embry-Riddle Aeronautical University Webinar!
“Green Supply Chain and Its Impact”
The Webinar will begin at 12:15 p.m. Pacific Time
(2:15 Central/3:15 p.m. Eastern)
• Introductions
• Presentation by Dr. Mohammed Arif
• Questions and Answers
• Embry-Riddle MS Logistics & Supply Chain Management (Dr. Aman Gupta)
Today’s Agenda
Dr. Mohammed Arif
• Adjunct Professor in Department of Management Sciences, College of Business, Embry-Riddle Aeronautical University Worldwide
• Earned a Ph.D. in Industrial Engineering from University of Central Florida
• Noted expert who lives in Great Britain but works closely with industry worldwide on sustainability and green supply chains
• Author of more than 80 scholarly articles and a book.
What is the “Green
Supply Chain” and what is its impact?
• Prof. Mohammed Arif
• Adjunct Professor in the Department of Management Sciences
• College of Business
• Embry-Riddle Aeronautical University Worldwide,
Food For Thought!
If Environment Was A Bank,
Governments Would Have Bailed it
Out Long Time Ago
Unknown
CONTENT
• Background
• Purpose of research
• Definition of GSCM
• Green Practices
• Green Performance
• Relationships
• Conclusions
BACKGROUND
• Restricted natural resources, tighter environmental legislation, changing customer demands, competitive pressures and growing ethical responsibility.
Since the Rio Summit in 1992, the corporate response toenvironmental issues has consistently extended beyondreactive in the form of complying with increasingly stringentenvironmental regulations to proactive initiatives by someworld class companies (Sarkis, 2006).
Current research indicates that the business and financialperformance of companies may depend directly on sociallyand environmentally responsible business practices.
Thus, companies are under increasing competitive and otherpressures to continuously search for new ideas and methodsallowing them to achieve and/or maintain environmentalsustainability.
Greening the supply chain is one such innovative idea that isfast gaining attention in the industry.
DEVELOPMENT OF GREEN SUPPLY CHAIN
Organizations have responded to these challenge by implementing a number of programs (Humphreys et al. 2006).
First, introduction of end-of-pipe initiatives aimed at reducing emissions, waste and energy consumption (Hunt and Auster 1990).
Second, Introduction of clean technologies along with programs for reducing the environmental impact of key steps in the production process (Welford and Gouldson 1993).
At the beginning of the 1990s, enterprises changed their operating procedures and introduced eco-auditing frameworks for modifying products and services (Franke 1995).
Organizations are facing a fourth phase in which environmentally conscious firms, mainly large companies, are developing environmental programs aimed at organizing their supply chains (Gupta 1995; Sarkis 2003).
Fourth PhaseIntroduction of Green supply chain
Third PhaseIntroduction of Eco auditing framework
First PhaseIntroduction of end of pipe solutions
Second PhaseIntroduction of clean technologies
• Green supply chain management (GSCM) has become a focus of research over the last decade.
• The research in green supply chain management addresses a variety of issues ranging from organizational research and practice in green supply chain management to prescriptive models for evaluation of green supply chain management practices and technology. Yet, the corporate and environmental manufacturing issues in developing countries have not been as well investigated (Zhu and Sarkis, 2006).
DEFINITION OF GREEN SUPPLY CHAIN MANAGEMENT
According to Handfield and Nicholas (2005), supply chain encompasses all activities associated with the flow and transformation of goods from raw material stage (extraction), through to the end user, as well as the associated information flows. Material and information flow both up and down the supply chain.
Srivastava, (2007) define GSCM as “integrating environmental thinking into supply-chain management, including product design, material sourcing and selection, manufacturing processes, delivery of the final product to the consumers as well as end-of-life management of the product after its useful life.”
Main Drivers Behind Greening of the Supply Chain (1)
1. Regulatory pressure
2. Competitive advantage
3. Enhanced brand image
4. Cost reduction / Profit
5. Push from the top management
6. Customer Pressure
7. Improve firm performance
8. Scarcity of natural resources
9. High energy costs
Main Drivers Behind Greening of the Supply Chain (2)
1. Consumers’ environmental awareness
2. Environmental partnership with suppliers leads to
innovations
3. Global concern for environment
4. Pressure of lobby group
5. Incentives from Customers and Governments
6. Quality improvement
7. Export countries’ environmental regulations
8. Firm’s environmental mission
9. High cost for disposal of hazardous materials
10.Social commitment
Main Barriers toGreening of the Supply Chain
1. Lack of information / Lack of training
2. Too complex to implement
3. Low return on investment
4. Not our responsibility to deal with environmental issues (attitude)
5. High costs of Environmental Programs
6. Poor supplier commitment
7. Industry specific barriers
8. Pressure for lower price due to increased competition
9. Lack of management commitment
10.Lack of buyer awareness
11.Lack of supplier awareness
12.Lack of company-wide environmental standards or auditing
programs
13.Environmental regulation
14.Corruption/Bureaucracy
Green Supply Chain Practices• Green Purchasing
• Green Design
• Green Production
• Green Management
• Green Logistics
• Green Marketing
Green Purchasing Practices (1) 1. Work with suppliers to establish their own EMS (Environmental Management
System)
2. Purchase products that have environmentally friendly attribute (recyclable
content, non toxic etc.)
3. Working with suppliers to reduce environmental impacts through changes in
product design and material use
4. Auditing suppliers to evaluate their environmental performance
5. Encouraging suppliers to have ISO14000 certification
6. Evaluating suppliers’ supplier environment friendly practice7. Organizing workshop/ seminars for suppliers on environmental awareness
8. Bringing together suppliers in the same industry to share their expertise and
problems
Green Purchasing Practices (2)
1. Choice of suppliers by environment criteria
2. Sharing technical expertise with suppliers on pollution
prevention
3. Participating in the design of products for disassembly
4. Participating in the design of products for recycling or reuse
5. Ensuring supplier to commit to waste reduction goal
6. Use of lifecycle analysis to evaluate the environmental
friendliness of products and packaging
7. Recognition and awards for environment friendly suppliers
Green Design Practices
1. Substitution of environmentally questionable
materials
2. Design of products to reduce consumption of
energy
3. Design of products to reduce emission
4. Design of products for reuse, recycle, recovery of
material, and disassembly of component parts
5. Using life cycle analysis
6. Design for reduced waste generation / material
consumption
Green Production Practices 1. Modify processes to reduce solid waste
2. Modify processes to reduce liquid waste
3. Modify processes to reduce emission
4. Use of cleaner technology to save energy, waste
etc.
5. Recycling of your waste
6. Inter departmental cooperation for environmental
improvements
7. Production planning and control focused on
reducing waste and optimizing materials
exploitation
Green Management Practices 1. ISO 14000 certification
2. Inter departmental cooperation for environmental
improvements
3. Environmental compliance and auditing programs
4. Environmental policy
5. Environmental training and awareness program for
employees
6. Public disclosure of environmental record
7. Reward and incentives for environmental initiatives
taken by employees
8. Commitment from top management
Green Logistics Practices
1.Use of reverse logistics
2.Use of environment friendly
transportation
3.Shipments consolidation
4.Using nearby supply source
5.Use of standardized reusable
container / packaging
Green Marketing Practices
1. Using environmental friendly packaging
2. Taking back packaging
3. Purchase recycled packaging
4. Recovery of the company’s end-of-life products
5. Eco-Labeling of products
Firm performance
1. Environmental compliance improvement
2. Reduce environmental discharge (pollution, emission)
3. Decrease in consumption of hazardous material
4. Reduction in waste
5. Improved Recycling
6. Reduction in frequency of environmental accidents
7. Improvement in environmental quality of products / processes
8. Productivity improvement
9. Cost savings
10. Increased energy efficiency
11. Investment recovery (sale) of excess inventories/materials
12. Increased Market share
13. Increased Profit margin
14. Improve brand image
Inte
rnal driver
Improve firm performance
Environmental partnership with suppliers leads to innovations
Firm’s environmental missionQuality improvement
Push from the top management
Mark
et
Competitors’ action
Enhanced brand image
Customer pressure
Consumers’ environmental awareness
Factor Analysis-Green Drivers
Socia
l
Scarcity of natural resources
Social commitment
Global concern for environment
Econom
ic
High energy costs
Cost of environmental friendly packaging and goods
High cost for disposal of hazardous materials
Incentives from Customers and Governments
Regula
tory
Regulatory pressure
Export countries’ environmental regulations
Pressure of lobby group
Factor Analysis-Green Drivers Contd.
Inte
rnal
Lack of information / Lack of training
Not our responsibility to deal with environmental issues (attitude)
Lack of company-wide environmental standards or auditing programs
Low return on investment
Lack of management commitment
High costs of Environmental Programs
Factor Analysis- Green Barriers
Exte
rnal
Lack of supplier awareness
Industry specific barriers
Pressure for lower price due to increased competition
Lack of buyer awareness
Poor supplier commitment (unwilling to exchange information)
Regula
tory
Too complex to implement
Loose Central environmental regulation
Loose state environmental regulation
Corruption/Bureaucracy
Factor Analysis- Green Barriers Contd.
Monitoring o
f supplier
Choice of suppliers by environment criteria
Evaluating suppliers’ supplier environment friendly practice
Purchase products that have environmentally friendly attribute (recyclable content, non toxic etc.)
Auditing suppliers to evaluate their environmental performance
Recognition and awards for environment friendly suppliers
Encouraging suppliers to have ISO14000 certification
Factor Analysis- Green Purchasing
Collabora
tion w
ith s
upplier
Bringing together suppliers in the same industry to share theirexpertise and problems
Sharing technical expertise with suppliers on pollutionprevention
Work with suppliers to establish their own EMS (EnvironmentalManagement System)
Ensuring supplier to commit to waste reduction goal
Organizing workshop/ seminars for suppliers on environmentalawareness
Factor Analysis- Green Purchasing Contd.
Part
icip
ation in d
esig
nWorking with suppliers to reduce environmental impactsthrough changes in product design and material use
Participating in the design of products for reuse andrecycle
Participating in the design of products for disassembly
Use of lifecycle analysis to evaluate the environmentalfriendliness of products and packaging
Factor Analysis- Green Purchasing Contd.
Desig
n f
or
environm
ent
Design of products to reduce consumption of energy
Substitution of environmentally questionable materials
Design for reduced waste generation / material consumption
Design of products to reduce emission
Desig
n f
or
end
of life
Design of products for reuse, recycle, recovery of material, and disassembly of component parts
Using life cycle analysis
Factor Analysis- Green Design
Pro
duction p
lannin
g Inter departmental cooperation for environmental improvements
Production planning and control focused on reducing waste and optimizing materials exploitation
Recycling of your waste
Use of cleaner technology to save energy, waste etc.
Pro
duction
pro
cesses Modify processes to reduce liquid waste
Modify processes to reduce solid waste
Modify processes to reduce emission
Factor Analysis- Green Production
Managem
ent
com
mitm
ent
tow
ard
s e
nvironm
ent
Reward and incentives for employees
Public disclosure of environmental record
Inter departmental cooperation for environmental improvements
Environmental training and awareness program for employees
Commitment from top management
Environm
enta
l
managem
ent
syste
m
ISO 14000 certification
Environmental compliance and auditing programs
Factor Analysis- Green Management
Use of standardize reusable container / packaging
Shipments consolidation
Use of environmental friendly transportation
Using nearby supply source
Use of reverse logistics
Factor Analysis- Green Logistics
Purchase recycled packaging
Taking back packaging
Recovery of the company’s end-of-life products
Using environmental friendly packaging
Eco-Labeling of products
Factor Analysis Green Marketing
Envir
onm
enta
l perf
orm
ance
Decrease in consumption of hazardous material
Reduction in waste
Reduce environmental discharge(pollution, emission)
Environmental compliance improvement
Reduction in frequency of environmental accidents
Improved Recycling
Improvement in environmental quality of products / processes
Factor Analysis- Green Performance
Com
petitive
perf
orm
ance
Increased energy efficiency
Cost savings (Reduce manufacturing cost)
Improve brand image (Satisfy customer requirement)
Productivity improvement
Econom
ic
perf
orm
ance Increased Profit margin (Product price increase)
Increased Market share (Improve Sales)
Investment recovery (sale) of excess inventories/materials
Factor Analysis- Green Performance Contd.
Impact of Green Drivers on Green purchasing practices
H 1: green drivers positively affect green purchasing practices.
H1a: green drivers positively affect monitoring of supplierpractices.
H1b: green drivers positively affect collaboration with supplierpractices.
H1c: green drivers positively affect participation with supplier fordesign practices.
Regression Equations
Monitoring of supplier = 1.427 + .284(regulation) + .189(Market)
Collaboration with supplier = 1.233 + .333(Internal) + .303(Social)
Participation with supplier in design = 1.070 + .354 (Market) +.354 (Economic)
Impact of Green Drivers on Green design practices
H2: green drivers positively affect green designpractices.
H 2a: green drivers positively affect design forenvironment practices.
H2b: green drivers positively affect design for end oflife practices.
Regression Equations
Design for environment = -.258 + .659 (Regulatory) -.310 (Economic) + .793 (Market)
Design for end of life =.420 -.275 (Economic) +.442 (Internal) + .697 (Market)
Impact of Green Drivers on Green production practices
H3: green drivers positively affect green productionpractices.
H 3a: green drivers positively affect production planningpractices.
H3b: green drivers positively affect production processespractices.
Regression Equations
Production planning = -1.334 + .192 (Regulatory) + .685 (Economic)+ .435 (Internal)
Production process = .127 + .444 (Social) + .009 (Economic) + .430 (internal)
Impact of Green Drivers on Green management practices
H4: green drivers positively affect green managementpractices.
H4a: green drivers positively affect managementcommitment towards environment practices.
H4b: green drivers positively affect environmentalmanagement system practices.
Regression Equations
Management commitment towards environment = -0.583 + .456 (Regulatory) - .340 (Economic) +.190 (Internal) + .788 (Market)
Environmental management system = 1.057 + .095 (Regulatory) + .121 (Internal) + .477 (Market)
Impact of Green Drivers on Green logistics practices
H5: green drivers positively affect green logistics practices.
Regression Equation
Green logistics = -1.428 + .345(Social) + .343(Regulatory)+ .288(Internal) + .308 (Market)
Impact of Green Drivers on Green marketing practices
H5: green drivers positively affect green marketing practices.
Impact of green purchasing practiceson green performance
H7: green purchasing practices positively affect firm performance.
H7a: green purchasing practices positively affect environmental performance.
H7b: green purchasing practices positively affect competitive performance.
H7c: green purchasing practices positively affect economic performance.
Regression Equation
Environmental performance = -0.452 + .367 (Monitoring of supplier)+ .331 (Collaboration with supplier) + .343 (Participation in design)
Competitive performance = 0.437 + .246 (Monitoring of supplier) + .138 (Collaboration with supplier) + .257 (Participation in design)
Economic performance = 1.111 + .649 (Collaboration with supplier)
Impact of green design practiceson green performance
H8: green design practices positively affect firm performance.
H8a: green design practices positively affect environmental performance.
H8b: green design practices positively affect competitive performance.
H8c: green design practices positively affect economic performance.
Regression Equation
Environmental performance = 1.084 +.158 (design for environment) + .766 (design for end of life)
Competitive performance = 0.825 + .221 ( design for environment) + .329 ( design for end of life)
Economic performance = 2.098 -.181 (design for environment) + .685 (design for end of life)
Impact of green production practiceson green performance
H9: green production practices positively affect firm performance.
H9a: green production practices positively affect environmental performance.
H9b: green production practices positively affect competitive performance.
H9c: green production practices positively affect economic performance.
Regression Equation
Environmental performance = 0.398 + .159 (Production planning) +.705 (Production processes)
Competitive performance = 0.860 + .571(Production processes)
Economic performance = 2.323 + .519 (Production processes)
Impact of green management practiceson green performance
H10: green management practices positively affect firm performance.
H10a: green management practices positively affect environmental performance
H10b: green management practices positively affect competitive performance.
H10c: green management practices positively affect economic performance.
Regression Equation
Environmental performance = -0.544 + .233 (Management commitment towards environment) + .843 (Environmental management system)
Competitive performance = -0.423 + .374 (Management commitment towards environment) + .528 (Environmental management system)
Economic performance 1.584 + .263 (Management commitment towards environment) + .384 (Environmental management system)
Impact of green logistics practiceson green performance
H11: green logistics practices positively affect firm performance
Impact of green marketing practiceson green performance
H12: green marketing practices positively affect firm performance
CONCLUSIONThrough this research green drivers, barriers, green supply chain practices and firm performance measures are identified and their interaction is examined.
Since most of the small and medium size firms are reactive in their approach towards greening of their supply chain except for the large firms who have resources to take proactive green measures.
Understanding the influence of these drivers on green supply chain practices will be promoted through out the organisation and will help in the development of more environment friendly practices in other functions.
The identified green drivers are applicable to all types of organizations, irrespective of the size, sector or ownership. Following of these factors will make the green supply chain implementation process faster, smoother, effective and sustainable in organizations by reducing the number of impediments expected or experienced by them
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MS in Logistics and Supply Chain Management
The Master of Science in Logistics and Supply Chain Management is a 36 or 39 credit hour program that has been designed for the students who are interested in the fields of logistics and supply chain management.
Developed to provide students with the knowledge they need
to be competitive in both the public and private sector.
Addresses the full spectrum of global logistics and supply
chain management knowledge needs.
Includes a mandatory graduate capstone portfolio course.
68
Curriculum (Core and Elective Courses), Effective January 1, 2013
Note: Description of the above courses can be found in the ERAU – WW course
catalog available at:
http://worldwide.erau.edu/degrees/catalog/index.html
Core Course Title General Track CTL Track
1 LGMT 536 Purchasing for Logistics and Supply Chain Managers Core Core
2 MGMT 524 Management Science Core Core
3 LGMT 636 Transportation Management Core Core
4 LGMT 682 Integrated Logistics Management Core Core
5 LGMT 685 Global Logistics and Supply Chain Management Core Core
6 LGMT 683 Supply Chain Management Core Core
7 LGMT 691 Logistics and Supply Chain Management Capstone Core Core
8 MGMT 651 Production and Procurement in the Aviation and Aerospace Industry Core Core
Elective Course Title
1 MBAA 517 Managerial Accounting for Decision Making Elective Core
2 MGMT 533 Federal Regulations, Ethics and the Legal System Elective NA
3 MBAA 522 Business Research Methods Elective NA
4 MGMT 535 Theory and Application of Managerial Communications Elective NA
5 TMGT 605 Organizational Theory in a Technical Environment Elective NA
6 MBAA 518 Managerial Finance Elective Core
7 MGMT 671 Entrepreneurship and Leadership Elective NA
8 MGMT 672 Planning and Execution of Strategy Elective NA
9 MBAA 604 International Business Administration Elective Core
10 MBAA 523 Advanced Aviation Economics Elective Core
11 MGMT 673 Global Economic Analysis Elective Core
12 MGMT 642 Air Carrier, Passenger and Cargo Management Elective NA
13 MGMT 643 Labor Issues in Air Transportation Elective NA
14 MBAA 521 Global Information and Technology Management Elective NA
15 MBAA 514 Strategic Marketing Management in Aviation Elective NA
16 MGMT 532 Philosophy, Principles and Practices in Management of Quality Elective NA
17 TMGT 555 Applied Regression Analysis Elective NA
18 MGMT 652 Concepts and Practices of Project Management Elective NA
24 39
12 0
36 39Total Degree Requirements
Core Credits
Elective Credits
69
Electives include:
• Finance
• Accounting
• Project Management
• Economics
• International Business
• Leadership
• Organizational Theory
• Quality
• Research Methods
• More……
70
Curriculum (Cont.) – CTL Track
The MSLSCM program is an approved blanket waiver program by the
American Society of Transportation and Logistics (AST&L). Total of
28 schools are approved blanket waiver schools.
Certified in Transportation and Logistics (CTL) professional
certification.
Upcoming Fall 2013 Webinars
• Oct. 8, Daniel Benny: “General Aviation Security”
• Oct. 22, Ed Knab: “Supply Chain Trends for 2014”
• Nov. 12, Scott Burgess: “Alpha and Omega: Program Outcomes to the Capstone”
• Nov. 26, Constantine Koursaris: “Promoting U.S. Exports and Commercial Involvement”
Todays Presentation:
Dr. Mohammed Arif
~~~For questions about the webinar series:
Bill Gibbs, Webinar Series Coordinator