Impact of Green Supply Chain Management Practices on Organizational Performance of the Manufacturing Sector in Sri Lanka

Abstract

The present study explores the impact of implementing Green Supply Chain Management Practices on Organizational performance, in terms of environmental, operational and financial performance among manufacturing firms in Sri Lanka. 150 no of firms (n = 150) which have already implemented GSCM practices in the Sri Lankan manufacturing industry were selected covering a variety of sectors including automobile (29), garments (36) , food and beverage (13), electronics (20), chemicals (20) and other (32) as the sample size of this study. Structural Equation Modeling (SEM) was used to analyze the relationship between variables. The empirical evidence verifies that, a significant positive relationship between GSCM practices and organizational performance exists. It can be concluded that higher the adaptation of GSCM practices, higher will be the organizational performance in Sri Lankan Context. Further, it is also concluded that higher the adaptation of GSCM practices, higher will be the environmental, operational and financial performance. This suggests, that the impact of GSCM practices lead to reduce air emission, wastage of water and solid wastages and decrease the consumption of hazardous materials, frequency of environmental accidents under the environmental performance. When considering operational performance, the impact of GSCM practices lead to increase amount of goods delivered on time, decrease inventory levels and scrap rate, promote products quality, reducing and eliminating waste, increased product line and finally improved capacity utilization. Decrease of cost for energy consumption, cost for environmental accidents, and decrease in level of production costs, decrease in packing costs can be considered under the financial performance. This study will play an important role for managers and firms, also this study is contributing in increasing the sales through understanding the benefits of practices of the green supply chain management and got the highest benefits from it.