Green supply chain management as a competitive tool in the fast-moving consumer goods manufacturing industry

Global competitiveness and the adoption of new business strategies have placed most manufacturing industries under pressure, and this has led organisations to adopt different strategies in their supply chain (SC) processes to enhance their competitiveness. Included in these are green manufacturing, business process re-engineering, and total quality management. The implementation and adoption of green supply chain management (GSCM) remains a problem in developing countries, including Nigeria’s FastMoving Consumer Goods (FMCG) manufacturing industry. An exploratory study was therefore conducted on green SC initiatives within the FMCG manufacturing industry in Nigeria to establish how this has affected both its performance and competitive advantage. Primary data were collected from 41 selected respondents at a FMCG manufacturing industry based in Lagos, Nigeria using quantitative methodology through the distribution of a questionnaire. A significant number of respondents (32 of 41; 77.54 percent) agreed that the implementation and adoption of green SC initiatives would enhance organisational performance, and the proper integration of all processes used for GSCM, which practice can lead to enhanced competitive advantage. The results furthermore indicate that the success of GSCM in the FMCG manufacturing industry requires a collaborative approach which differs from those traditionally used for SCs. Corresponding author: Gabriel Oyebanjo Ogunlela Email addresses for corresponding author: ogunlela.gabriel@mut.ac. za; bogunlela@yahoo.com First submission received: 7th November 2017 Revised submission received: 2nd January 2018 Accepted: 19th March 2018 1.0 Introduction Sustainability is a major cause of concern for the various stakeholders in supply chain management (SCM), because of its critical significance to the success of businesses in all areas of the world. Customers and non-governmental organisations (NGOs), for example, believe sustainability has an environmental effect on products available in the market. The advantages of applying GSCM in the manufacturing industry are therefore considerable, and highly relevant for enhancing competitiveness. It is apparent that most managers in organisations are aware of the impact on their SC processes, and the threat its endangerment could pose to their operations (Beamon 1999). Organisations are thus under intense pressure regarding how to manage the impact of their operations on the environment; as pointed out, for example by Zhu and Sarkis (2004); Vachon and Klassen (2006); Poirier et al. (2008); Boyer et al. (2009); and Sarkis et al. (2011). These authors highlight that factors driving the adoption and implementation of GSCM by organisations is attributable to the intense motivations of the various stakeholders, primarily those of government, consumers and non-profit organisations. Furthermore, findings from their studies point to the fact that proper collaboration amongst stakeholders involved in GSCM, and consideration for the environmental impact of manufacturing processes, will enhance organisational performance and lead to improved competitive advantage. To minimise the impact of their activities on the environment, organisations have therefore been putting policies in place that will reduce the effects of environmental impact throughout the lifecycles of their products (Zsidisin & Siferd 2001). The main motive of GSCM is to ensure that all the processes involved in product manufacture are not harmful to the environment, and that materials can be re-used, recycled, and are non-toxic (Min and Galle 2001) This paper undertakes an analysis of critical factors affecting the implementation and adoption of a GSCM strategy in FMCG manufacturing industry production processes in Nigeria, and how this can assist in lessening environmental pollution, and in waste reduction and enhancing competitive advantage. Journal of Business and Retail Management Research (JBRMR), Vol. 12 Issue 4 July 2018 www.jbrmr. com A Journal of the Academy of Business and Retail Management (ABRM) 168 Sarkis (2006) argues that many of the measures being adopted are focused on managing environmental impact, rather than being strategies that will help to reduce pollution. In addition, due consideration should be shown for the inability of this conservation method to reduce or eliminate pollution without merely transforming pollutants into other forms. In view of this, organisations are now beginning to consider their external environments, with the aim of enabling waste reduction and pollution, for propagating a green SC to all stakeholders (Canning & Hanmer-Lloyd 2001; Vachon & Klassen 2006). As a result, organisations in developing countries are implementing environmental policies which align more closely with those of their clients and rivals in other developed countries, due largely to the pressures exerted by the phenomenon of globalisation (Christmann &Taylor 2001). Green SC strategies are considered of extreme importance for organisational effectiveness, since they involve the coordination of all processes to assist in winning competitive advantage over rival companies (Pamela & Pietro 2011). Wyatt (2013) states that SC strategies alone are not adequate for organisations to attain competitive advantage, and it is therefore also important for manufacturers, shipping partners and customers to consider and make use of these strategies to remain competitive. This paper is divided into the following sections: firstly, the literature review, followed by forces driving GSCM implementation in the manufacturing industry, then the research methodology, the research findings, managerial interpretation and theoretical implications, and finally, the study’s recommendations and conclusions. 2.0 Literature review GSCM, as defined by Kumar and Chandrakar (2012), is the use by organisations of environmentally friendly materials for production, and the reuse of waste materials after consumption, which thereby fosters sustainable SCs. Moreover, Srivastava (2007) mentions that GSCM has to do with consideration for the environment during product design, the procurement of materials, the production process, the delivery of products to customers, and product recycling. The literature further reveals that GSCM will assist in enhancing the profitability of organisations (Kumar et al. 2012; Rao &Holt 2005; Green et al. 2012). Production has a substantial impact on the environment, which results in explicit expectations from various stakeholders (Heidrinch &Tiwary 2013; Kumar et al. 2012). Increased societal awareness has, in addition, raised expectations of production needing to be environmentally sustainable; as a result, organisations are now beginning to develop strategies that make use of environmentally friendly materials for their production and recycling (Heidrich &Tiwary 2013). The European Union (EU) has instituted legislation on environmental pollution and the emission of hazardous substances by both industries and consumers and is committed to the full implementation of these guidelines by 2020 (Europa 2015). The aim of these initiatives is to ensure environmentally friendly production, use and disposal of goods, and the promotion of competitiveness among organisations. According to Cosimato and Troisi (2015), the term “green” is used as an adjective to describe environmentally friendly initiatives adopted for production. Vijayvargy and Agarwal (2014) point out that for GSCM to succeed, there must be buy-in by top management of organisations to drive such initiatives. There are many reasons why organisations embark on GSCM; for example, government policies, the requirements of various stakeholders, both internal and external to organisation (Delmans &Toffel 2004), and organisational ethics (Carter &Jennings 2002). The following factors influence the implementation of GSCM by organisations: regulatory measures (Hall 2000); competition (Zhu &Sarkis, 2004); customer expectations (Tate et al. 2010); and corporate social responsibility (Murphy &Poist 2003). Rules and regulations, in the form of standard policies, procedures and protocols set in place by government and other regulatory bodies, serve as catalysts which compel organisations to consider their impact on the environment (Hall 2000). Measures instituted by governments to guide against unethical behaviour that could affect the environment may range from fines levied for infractions to the complete closure of organisations (Riverta et al. 2006). Due to the enforcement of laws, rules and regulations, there has been an increased awareness of environmental issues amongst organisations globally, which has brought into being improved environmental management practices (Sarkis et al. 2011). As a result, such awareness and practices have spread to organisations in developing countries, with the level of awareness having increased to a point where organisations are pressed to surpass the expectations of regulatory bodies (Clemens &Douglas 2006). Zhu and Sarkis (2004) confirm how developing countries have implemented regulations which have enabled organisations to exceed local and global standards and that, in turn, have encouraged manufacturers to adopt GSCM, which has impacted positively on their performance. Journal of Business and Retail Management Research (JBRMR), Vol. 12 Issue 4 July 2018 www.jbrmr. com A Journal of the Academy of Business and Retail Management (ABRM) 169 Organisations constantly contend with the various challenges caused by competition, including those posed by environmental professionals (Zhu &and Sarkis 2004). As a result, operations are carried out in such a manner that their consciousness of the environment allows them to draw ahead of competitors and remain competitive (Carter & Ellram 1998; Canning & Hanmer-Lloyd 2001). Some of the concerns raised by customers question the environmental impact of goods produced by manufacturing compani