The Effect Of Internal Environmental Management On The Performance Of Cement Companies In Indonesia With Mediation Green Supply Chain Management Practices
Keywords:
Green Supply Chain Management, Internal Environmental Management, Corporate Performance, Partial Least Square, Cement Industry
Abstract
The global challenge of preserving the environment, meeting demand, and ensuring corporate sustainability drives the cement industry to implement strategies in its supply chain. The practice of green supply chain management is one of the strategies that are well applied in the face of the challenges to the cement industry. Through the GSCM practical dimension consisting of green manufacturing, green purchasing, green transportation, and green facilities, this research will test the impact of the application of GSCM on the performance of cement companies in Indonesia. The thesis used primary data and obtained 224 respondents from 13 groups of cement companies that are part of the Indonesian Cement Association (ASI). The data were analyzed through descriptive statistics and partial least squares (PLS) techniques using smartPLS software version 3.2.9. Research results show that internal environmental management influences GSCM practices and influences the performance of cement companies in Indonesia. Green purchasing only has a positive impact on operational performance and has no impact on the environmental, economic, or social performance of the company. Green transportation is positive for the economic, operational, and social performances of the enterprise but does not have an impact on environmental performance. The study also found that green supply chain management practices strengthen the relationship between internal environmental management and the performance of cement companies in Indonesia.
References
International Energy Agency, I. (n.d.). Technology Roadmap - Low-Carbon Transition in the Cement Industry. www.wbcsdcement.org.
Aaltonen, A., Määttänen, E., Kyrö, R., & Sarasoja, A. L. (2013). Facilities management driving green building certification: A case from Finland. Facilities, 31(7), 328–342. https://doi.org/10.1108/02632771311317475
Agyabeng-Mensah, Y., Ahenkorah, E., Afum, E., Nana Agyemang, A., Agnikpe, C., & Rogers, F. (2020). Examining the influence of internal green supply chain practices, green human resource management and supply chain environmental cooperation on firm performance. Supply Chain Management, 25(5), 585–599. https://doi.org/10.1108/SCM-11-2019-0405
BOWEN, F. E., COUSINS, P. D., LAMMING, R. C., & FARUKT, A. C. (2001). THE ROLE OF SUPPLY MANAGEMENT CAPABILITIES IN GREEN SUPPLY. Production and Operations Management, 10(2), 174–189. https://doi.org/10.1111/j.1937-5956.2001.tb00077.x
Chiarini, A. (2014). Sustainable manufacturing-greening processes using specific Lean Production tools: An empirical observation from European motorcycle component manufacturers. Journal of Cleaner Production, 85, 226–233. https://doi.org/10.1016/j.jclepro.2014.07.080
Chien, M. K., Shih, L.-H., & Shih, ; L H. (2007). The user has requested enhancement of the downloaded file. An empirical study of the implementation of green supply chain management practices in the electrical and electronic industry and their relation to organizational performances. Int. J. Environ. Sci. Tech, 4(3), 383–394. https://www.researchgate.net/publication/26483201
Czigler, T., Raiter, S., Schulze, P., & Somers, K. (2020). Laying the foundation for zero-carbon cement.
Dubey, R., Singh, T., & Tiwari, S. (2012). Supply Chain Innovation is a Key to Superior Firm Performance an Insight from Indian Cement Manufacturing (Vol. 4).
Flynn, B., Huo, B., & Zhao, X. (2010). The Impact of Supply Chain Integration on Performance: A Contingency and Configuration Approach. Journal of Operations Management - J OPER MANAG, 28, 58–71. https://doi.org/10.1016/j.jom.2009.06.001
Fore, S., & Mbohwa, C. (2015). Greening manufacturing practices in a continuous process industry: Case study of a cement manufacturing company. Journal of Engineering, Design and Technology, 13(1), 94–122. https://doi.org/10.1108/JEDT-04-2014-0019
Gelderman, C. J., Semeijn, J., & Bouma, F. (2015). Implementing sustainability in public procurement: The limited role of procurement managers and party-political executives. Journal of Public Procurement, 15(1), 66–92. https://doi.org/10.1108/JOPP-15-01-2015-B003
Govindan, K., Khodaverdi, R., & Jafarian, A. (2013). A fuzzy multi criteria approach for measuring sustainability performance of a supplier based on triple bottom line approach. Journal of Cleaner Production, 47, 345–354. https://doi.org/10.1016/j.jclepro.2012.04.014
Green, K. W., Zelbst, P. J., Meacham, J., & Bhadauria, V. S. (2012). Green supply chain management practices: Impact on performance. Supply Chain Management, 17(3), 290–305. https://doi.org/10.1108/13598541211227126
Habib, M. A., Balasubramanian, S., Shukla, V., Chitakunye, D., & Chanchaichujit, J. (2022). Practices and performance outcomes of green supply chain management initiatives in the garment industry. Management of Environmental Quality: An International Journal, 33(4), 882–912. https://doi.org/10.1108/MEQ-08-2021-0189
Hejazi, M. T., Al Batati, B., & Bahurmuz, A. (2023). The Influence of Green Supply Chain Management Practices on Corporate Sustainability Performance. Sustainability, 15(6), 5459. https://doi.org/10.3390/su15065459
Hopkin, P. (2014). Achieving enhanced organisational resilience by improved management of risk: Summary of research into the principles of resilience and the practices of resilient organisations. Journal of Business Continuity & Emergency Planning, 8, 252–262.
Huma, S., Ahmed Siddiqui, D., & Ahmed, W. (2023). Understanding the impact of Green supply chain management practices on operational competitive capabilities. TQM Journal, 35(3), 796–815. https://doi.org/10.1108/TQM-08-2021-0246
Junianto, I., Sunardi, & Sumiarsa, D. (2023). The Possibility of Achieving Zero CO2 Emission in the Indonesian Cement Industry by 2050: A Stakeholder System Dynamic Perspective. Sustainability (Switzerland), 15(7). https://doi.org/10.3390/su15076085
Khan, M. T., Idrees, M. D., & Haider, Y. (2023). Industry 4.0 impacts on operational and green innovation performances with the mediation of green practices. International Journal of Productivity and Performance Management. https://doi.org/10.1108/IJPPM-06-2022-0277
Kumar, R., & Chandrakar, R. (2012). Overview of Green Supply Chain Management: Operation and Environmental Impact at Different Stages of the Supply Chain. In International Journal of Engineering and Advanced Technology (IJEAT) (Issue 3). www.ijeat.org
Li, L., & Li, W. (2022). The Promoting Effect of Green Technology Innovations on Sustainable Supply Chain Development: Evidence from China’s Transport Sector. Sustainability (Switzerland), 14(8). https://doi.org/10.3390/su14084673
Muhammad, I., & Hidayatno, A. (2021). Exploring the Variables Interactions for Cement Industry Policies to Support Sustainable Development Aspect in Indonesia through Green Manufacturing. 4th Asia Pacific Conference on Research in Industrial and Systems Engineering 2021, 295–300. https://doi.org/10.1145/3468013.3468349
Park, S. R., Kim, S. T., & Lee, H. H. (2022). Green Supply Chain Management Efforts of First-Tier Suppliers on Economic and Business Performances in the Electronics Industry. Sustainability (Switzerland), 14(3). https://doi.org/10.3390/su14031836
Rehman Khan, S. A., Yu, Z., Sarwat, S., Godil, D. I., Amin, S., & Shujaat, S. (2022). The role of block chain technology in circular economy practices to improve organisational performance. International Journal of Logistics Research and Applications, 25(4–5), 605–622. https://doi.org/10.1080/13675567.2021.1872512
Sahoo, S., & Vijayvargy, L. (2020). Green supply chain management practices and its impact on organizational performance: evidence from Indian manufacturers. Journal of Manufacturing Technology Management, 32(4), 862–886. https://doi.org/10.1108/JMTM-04-2020-0173
SROUFE, R. (2003). EFFECTS OF ENVIRONMENTAL MANAGEMENT SYSTEMS ON ENVIRONMENTAL MANAGEMENT PRACTICES AND OPERATIONS. Production and Operations Management, 12(3), 416–431. https://doi.org/10.1111/j.1937-5956.2003.tb00212.x
Teixeira, A. A., Moraes, T. E. C., Teixeira, T. B., Battistelle, R. A. G., Araújo, E. G., & de Seabra, Q. A. C. (2023). The Role of Green Supply Chain Management Practices on Environmental Performance of Firms: An Exploratory Survey in Brazil. Sustainability (Switzerland), 15(15). https://doi.org/10.3390/su151511843
Yang, C.-S., Lu, C.-S., Haider, J. J., & Marlow, P. B. (2013). The effect of green supply chain management on green performance and firm competitiveness in the context of container shipping in Taiwan. Transportation Research Part E: Logistics and Transportation Review, 55, 55–73. https://doi.org/10.1016/j.tre.2013.03.005
Yildiz Çankaya, S., & Sezen, B. (2019). Effects of green supply chain management practices on sustainability performance. Journal of Manufacturing Technology Management, 30(1), 98–121. https://doi.org/10.1108/JMTM-03-2018-0099
Younis, H., Sundarakani, B., & Vel, P. (2016). The impact of implementing green supply chain management practices on corporate performance. Competitiveness Review, 26(3), 216–245. https://doi.org/10.1108/CR-04-2015-0024
Yu, K., Luo, B. N., Feng, X., & Liu, J. (2018). Supply chain information integration, flexibility, and operational performance. The International Journal of Logistics Management, 29(1), 340–364. https://doi.org/10.1108/IJLM-08-2016-0185
Yu, W., Chavez, R., Feng, M., & Wiengarten, F. (2014). Integrated green supply chain management and operational performance. Supply Chain Management, 19, 683–696. https://doi.org/10.1108/SCM-07-2013-0225
Zeb, K., Ali, Y., & Khan, M. W. (2019). Factors influencing environment and human health by cement industry. Management of Environmental Quality: An International Journal, 30(4), 751–767. https://doi.org/10.1108/MEQ-06-2018-0112
Zhu, Q., & Sarkis, J. (2006). An inter-sectoral comparison of green supply chain management in China: Drivers and practices. Journal of Cleaner Production, 14(5), 472–486. https://doi.org/10.1016/j.jclepro.2005.01.003
Zhu, Q., & Sarkis, J. (2007). The moderating effects of institutional pressures on emergent green supply chain practices and performance. International Journal of Production Research, 45(18–19), 4333–4355. https://doi.org/10.1080/00207540701440345
Zhu, Q., Sarkis, J., & Geng, Y. (2005). Green supply chain management in China: pressures, practices and performance. International Journal of Operations & Production Management, 25(5), 449–468. https://doi.org/10.1108/01443570510593148
Zhu, Q., Sarkis, J., & Lai, K. (2007). Initiatives and outcomes of green supply chain management implementation by Chinese manufacturers. Journal of Environmental Management, 85(1), 179–189. https://doi.org/10.1016/j.jenvman.2006.09.003
Zhu, Q., Sarkis, J., & Lai, K. (2013). Institutional-based antecedents and performance outcomes of internal and external green supply chain management practices. Journal of Purchasing and Supply Management, 19(2), 106–117. https://doi.org/10.1016/j.pursup.2012.12.001
Aaltonen, A., Määttänen, E., Kyrö, R., & Sarasoja, A. L. (2013). Facilities management driving green building certification: A case from Finland. Facilities, 31(7), 328–342. https://doi.org/10.1108/02632771311317475
Agyabeng-Mensah, Y., Ahenkorah, E., Afum, E., Nana Agyemang, A., Agnikpe, C., & Rogers, F. (2020). Examining the influence of internal green supply chain practices, green human resource management and supply chain environmental cooperation on firm performance. Supply Chain Management, 25(5), 585–599. https://doi.org/10.1108/SCM-11-2019-0405
BOWEN, F. E., COUSINS, P. D., LAMMING, R. C., & FARUKT, A. C. (2001). THE ROLE OF SUPPLY MANAGEMENT CAPABILITIES IN GREEN SUPPLY. Production and Operations Management, 10(2), 174–189. https://doi.org/10.1111/j.1937-5956.2001.tb00077.x
Chiarini, A. (2014). Sustainable manufacturing-greening processes using specific Lean Production tools: An empirical observation from European motorcycle component manufacturers. Journal of Cleaner Production, 85, 226–233. https://doi.org/10.1016/j.jclepro.2014.07.080
Chien, M. K., Shih, L.-H., & Shih, ; L H. (2007). The user has requested enhancement of the downloaded file. An empirical study of the implementation of green supply chain management practices in the electrical and electronic industry and their relation to organizational performances. Int. J. Environ. Sci. Tech, 4(3), 383–394. https://www.researchgate.net/publication/26483201
Czigler, T., Raiter, S., Schulze, P., & Somers, K. (2020). Laying the foundation for zero-carbon cement.
Dubey, R., Singh, T., & Tiwari, S. (2012). Supply Chain Innovation is a Key to Superior Firm Performance an Insight from Indian Cement Manufacturing (Vol. 4).
Flynn, B., Huo, B., & Zhao, X. (2010). The Impact of Supply Chain Integration on Performance: A Contingency and Configuration Approach. Journal of Operations Management - J OPER MANAG, 28, 58–71. https://doi.org/10.1016/j.jom.2009.06.001
Fore, S., & Mbohwa, C. (2015). Greening manufacturing practices in a continuous process industry: Case study of a cement manufacturing company. Journal of Engineering, Design and Technology, 13(1), 94–122. https://doi.org/10.1108/JEDT-04-2014-0019
Gelderman, C. J., Semeijn, J., & Bouma, F. (2015). Implementing sustainability in public procurement: The limited role of procurement managers and party-political executives. Journal of Public Procurement, 15(1), 66–92. https://doi.org/10.1108/JOPP-15-01-2015-B003
Govindan, K., Khodaverdi, R., & Jafarian, A. (2013). A fuzzy multi criteria approach for measuring sustainability performance of a supplier based on triple bottom line approach. Journal of Cleaner Production, 47, 345–354. https://doi.org/10.1016/j.jclepro.2012.04.014
Green, K. W., Zelbst, P. J., Meacham, J., & Bhadauria, V. S. (2012). Green supply chain management practices: Impact on performance. Supply Chain Management, 17(3), 290–305. https://doi.org/10.1108/13598541211227126
Habib, M. A., Balasubramanian, S., Shukla, V., Chitakunye, D., & Chanchaichujit, J. (2022). Practices and performance outcomes of green supply chain management initiatives in the garment industry. Management of Environmental Quality: An International Journal, 33(4), 882–912. https://doi.org/10.1108/MEQ-08-2021-0189
Hejazi, M. T., Al Batati, B., & Bahurmuz, A. (2023). The Influence of Green Supply Chain Management Practices on Corporate Sustainability Performance. Sustainability, 15(6), 5459. https://doi.org/10.3390/su15065459
Hopkin, P. (2014). Achieving enhanced organisational resilience by improved management of risk: Summary of research into the principles of resilience and the practices of resilient organisations. Journal of Business Continuity & Emergency Planning, 8, 252–262.
Huma, S., Ahmed Siddiqui, D., & Ahmed, W. (2023). Understanding the impact of Green supply chain management practices on operational competitive capabilities. TQM Journal, 35(3), 796–815. https://doi.org/10.1108/TQM-08-2021-0246
Junianto, I., Sunardi, & Sumiarsa, D. (2023). The Possibility of Achieving Zero CO2 Emission in the Indonesian Cement Industry by 2050: A Stakeholder System Dynamic Perspective. Sustainability (Switzerland), 15(7). https://doi.org/10.3390/su15076085
Khan, M. T., Idrees, M. D., & Haider, Y. (2023). Industry 4.0 impacts on operational and green innovation performances with the mediation of green practices. International Journal of Productivity and Performance Management. https://doi.org/10.1108/IJPPM-06-2022-0277
Kumar, R., & Chandrakar, R. (2012). Overview of Green Supply Chain Management: Operation and Environmental Impact at Different Stages of the Supply Chain. In International Journal of Engineering and Advanced Technology (IJEAT) (Issue 3). www.ijeat.org
Li, L., & Li, W. (2022). The Promoting Effect of Green Technology Innovations on Sustainable Supply Chain Development: Evidence from China’s Transport Sector. Sustainability (Switzerland), 14(8). https://doi.org/10.3390/su14084673
Muhammad, I., & Hidayatno, A. (2021). Exploring the Variables Interactions for Cement Industry Policies to Support Sustainable Development Aspect in Indonesia through Green Manufacturing. 4th Asia Pacific Conference on Research in Industrial and Systems Engineering 2021, 295–300. https://doi.org/10.1145/3468013.3468349
Park, S. R., Kim, S. T., & Lee, H. H. (2022). Green Supply Chain Management Efforts of First-Tier Suppliers on Economic and Business Performances in the Electronics Industry. Sustainability (Switzerland), 14(3). https://doi.org/10.3390/su14031836
Rehman Khan, S. A., Yu, Z., Sarwat, S., Godil, D. I., Amin, S., & Shujaat, S. (2022). The role of block chain technology in circular economy practices to improve organisational performance. International Journal of Logistics Research and Applications, 25(4–5), 605–622. https://doi.org/10.1080/13675567.2021.1872512
Sahoo, S., & Vijayvargy, L. (2020). Green supply chain management practices and its impact on organizational performance: evidence from Indian manufacturers. Journal of Manufacturing Technology Management, 32(4), 862–886. https://doi.org/10.1108/JMTM-04-2020-0173
SROUFE, R. (2003). EFFECTS OF ENVIRONMENTAL MANAGEMENT SYSTEMS ON ENVIRONMENTAL MANAGEMENT PRACTICES AND OPERATIONS. Production and Operations Management, 12(3), 416–431. https://doi.org/10.1111/j.1937-5956.2003.tb00212.x
Teixeira, A. A., Moraes, T. E. C., Teixeira, T. B., Battistelle, R. A. G., Araújo, E. G., & de Seabra, Q. A. C. (2023). The Role of Green Supply Chain Management Practices on Environmental Performance of Firms: An Exploratory Survey in Brazil. Sustainability (Switzerland), 15(15). https://doi.org/10.3390/su151511843
Yang, C.-S., Lu, C.-S., Haider, J. J., & Marlow, P. B. (2013). The effect of green supply chain management on green performance and firm competitiveness in the context of container shipping in Taiwan. Transportation Research Part E: Logistics and Transportation Review, 55, 55–73. https://doi.org/10.1016/j.tre.2013.03.005
Yildiz Çankaya, S., & Sezen, B. (2019). Effects of green supply chain management practices on sustainability performance. Journal of Manufacturing Technology Management, 30(1), 98–121. https://doi.org/10.1108/JMTM-03-2018-0099
Younis, H., Sundarakani, B., & Vel, P. (2016). The impact of implementing green supply chain management practices on corporate performance. Competitiveness Review, 26(3), 216–245. https://doi.org/10.1108/CR-04-2015-0024
Yu, K., Luo, B. N., Feng, X., & Liu, J. (2018). Supply chain information integration, flexibility, and operational performance. The International Journal of Logistics Management, 29(1), 340–364. https://doi.org/10.1108/IJLM-08-2016-0185
Yu, W., Chavez, R., Feng, M., & Wiengarten, F. (2014). Integrated green supply chain management and operational performance. Supply Chain Management, 19, 683–696. https://doi.org/10.1108/SCM-07-2013-0225
Zeb, K., Ali, Y., & Khan, M. W. (2019). Factors influencing environment and human health by cement industry. Management of Environmental Quality: An International Journal, 30(4), 751–767. https://doi.org/10.1108/MEQ-06-2018-0112
Zhu, Q., & Sarkis, J. (2006). An inter-sectoral comparison of green supply chain management in China: Drivers and practices. Journal of Cleaner Production, 14(5), 472–486. https://doi.org/10.1016/j.jclepro.2005.01.003
Zhu, Q., & Sarkis, J. (2007). The moderating effects of institutional pressures on emergent green supply chain practices and performance. International Journal of Production Research, 45(18–19), 4333–4355. https://doi.org/10.1080/00207540701440345
Zhu, Q., Sarkis, J., & Geng, Y. (2005). Green supply chain management in China: pressures, practices and performance. International Journal of Operations & Production Management, 25(5), 449–468. https://doi.org/10.1108/01443570510593148
Zhu, Q., Sarkis, J., & Lai, K. (2007). Initiatives and outcomes of green supply chain management implementation by Chinese manufacturers. Journal of Environmental Management, 85(1), 179–189. https://doi.org/10.1016/j.jenvman.2006.09.003
Zhu, Q., Sarkis, J., & Lai, K. (2013). Institutional-based antecedents and performance outcomes of internal and external green supply chain management practices. Journal of Purchasing and Supply Management, 19(2), 106–117. https://doi.org/10.1016/j.pursup.2012.12.001
Published
2024-08-02
Section
Articles
Copyright (c) 2024 Wayan Rendy Armilando, Iveline Anne Marie, Wahyuningsih Santoso
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.
