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,

It’s Not Easy Being Green!

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.

Regression Analysis Part A

Green Drivers and Green supply chain practices

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.

Regression Equation

Green marketing = 0.972 +.409 (Regulatory) - .418 (Economic) + .675 (Market)

Regression Analysis Part B

Green supply chain practices and firm performance

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

Questions?

Dr. Mohammed Arif

mohamma2@erau.edu

66

Master of Science

in

LOGISTICS AND SUPPLY CHAIN

MANAGEMENTDr. Aman Gupta

67

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.

71

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

mohamma2@erau.edu

~~~For questions about the webinar series:

Bill Gibbs, Webinar Series Coordinator

bill.gibbs@erau.edu