Impact of Green Supply Chain on Supply Chain Performance
GHUFRAN SAED HIJJAWI
Business and Finance Faculty
The World Islamic Science and Education University (WISE)
P.O Box 1101, Postal Code 11947, Amman, Jordan
JORDAN
https://orcid.org/0000-0002-3875-2289
Abstract: The purpose of this paper is empirically assessment of the impact of the green supply chain on supply
chain performance in terms of social, operational, and environmental, for Jordanian chemical industries. In this
paper, the proposed model was developed based on literature review and previous exploratory studies related to
GSC and different kinds of SC performance. Tested on sample equal 150 managers of Jordanian detergent
manufacturing factories and the returned ones that applicable for analysis were 120 questionnaires, which
analyzed using AMOS 27. The results were as follows: there is no impact of green purchase, green production,
and green distribution on supply chain performance. While there is an impact of green supply and green design
on SC performance, taking into consideration the community and region of study
Key- words: green supply chain, green supply, green design, green purchasing, green manufacturing, green
distribution, supply chain performance, environmental performance, operational performance, social
performance.
Received: August 13, 2021. Revised: December 28, 2021. Accepted: January 17, 2022. Published: January 18, 2022.
1 Introduction
As supply chains compete instead of organizations
with the spread of globalization and increasing
demanding customers; evaluating and measuring
the supply chain performance can be considered an
indicator for the degree of SC sustainable success,
but the issue is that there are many measures for
performance (social, environmental, and
operational). This comprehensive view of
performance is great because it deals with all
activities in SC, and trends behind these activities.
In addition; it can be configured, and adapted to
different industries.
On another side, performance excellence needs
special practices in supply chain management; like
focus on quality management, customer, and
supplier. The term “supply chain management” is
used widely to include every effort involved in
producing and delivering a final product and
service [1]
The green supply chain which saw as an
environmentally – friendly/ green movement was
triggered by the appeared consequences of
environmental debilitation, such as; global
warming,, water, and air pollution, acid rain,
desertification, and noise [2] [3]. Accordingly, the
concept of GSC appeared in the 1990s [4]. GSC is
a managerial strategy, which uses for
environmental business mentoring through
planning, purchasing, producing, and delivering the
product to the end customers. Effective and
efficient management of these supply chains point
out the capabilities that have [5].
Thus, this research will focus on filling the gap
regarding the impact of GSCM practices on supply
chain performance (Social, environmental,
Operational) In the Jordanian chemical industry
sector. This sector is selected because globally, the
chemical industry is the third-largest industrial
sector, yields a lot of money for shareholders and
for governments as tax revenue, and employs more
than 10 million people [6]. In addition, according to
study of performance, this paper focus that
comprehensive view of supply chain performance
rather than organizational performance become
critical, and focus on all views of performance is
urgent rather than just focus on economic
performance.
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2 Literature Review
2.1 Green Supply Chain
Green supply chain became globally mandatory not
optional; not only for organizations but also for
countries. The main reason for that is high
efficiency and ecology. Despite increasing
awareness, not all organizations have fully adopted
green supply chain management (GSCM) due to a
number of factors [7]. The major factors will be the
scarcity of knowledge and techniques in their
operation needed to implement GSCM practices, as
well as a lack of government initiatives, high costs
so others are slow on the uptake, upgrading the
employees' expertise, and building new customer
perception of products [8].
Ambiguities about GSCM still existed because
there are no tangible and short-term benefits for
organizations, therefore; legitimate and official
support from top management becomes essential to
convince of credibility and competence of GSC,
and to raise the necessity for the introduction of
environmental concerns into the managerial field
[9]. GSC is a value chain that integrates
environmental activities into supply chain
practices; like reducing pollution and wastes,
reducing consumption of resources and energy
used, and finally extend the life of products through
recycling or remanufacturing [8]. And according to
this, the concept of GSCM is broad since there are
differences among the definitions, there are clear
and common usage of several common terms [10]
such as; 'supply chain environmental management'
[11], 'green purchasing and procurement' [12],
'green logistics, and environmental logistics' [13],
and 'sustainable supply network management [14].
Management for GSC is not easy because these
chains are more complex than traditional ones. In
GSC pollution is prevent instead of just focus on
pollution control, energy management is in
considerations, and products must be recyclable
and reusable. From here and according to [15]
GSCM is introducing innovative technical
processes into materials supplying and selection,
delivery of the final product to consumers, and
end–of–life product management. GSCM is
management toward green productivity with least
harmful to the environment [16].
About drivers and forces toward adopting GSCM,
there are many, which are: regulations, consumer
demands and awareness, limited resources
availability, and global warming according to
increased pollution.
Consumer demand and increased environmental
awareness; make market pressure on organizations
and supply chains to pierce environmental
attributes and responsibility through their practices.
While local and global regulations are other forces
for GSCM to be able to enter new markets. On
another side; limited resources availability was a
great force especially for unrenewable resources
and decreasing in them made unbalance in the
environment.
Main GSC practices are: green purchasing or
consumption, green manufacturing and products’
end of life management, green logistics (
distribution, warehousing, and green transportation
with usage of biofuels); while [17] see that GSC
practices consist of (green procurement,
environmental management of manufacturing
materials, environmental circulation, marketing,
and reverse logistics) and according to [18], it is
defined as a combination of the activities that
categorizes as (product design, all stages of
manufacturing and distribution and all aspects of
reverse logistics).
Consequently, the practices for GSC adopted in this
paper are green design, green purchasing, green
manufacturing, and green distribution (logistics);
2.1.1 Green Design
[19] Defined (GSCM) main practices through the
product life cycle model and found that eco-design
term was used to refer to green design. Moreover,
confirm eco-design importance in the GSCM, as it
requires extended cooperation among designers,
suppliers, and customers to achieve cleaner
production. On another side, [20] explained that
GD mainly aimed at reducing the negative impact
on the environment all over the life cycle of the
product, this is achieved through resource-saving,
pollution avoidance, waste management, and
designing products for reuse and recycling.
2.1.2 Green Purchasing/ Consumption
Before defining green purchasing or consumption,
it is essential to know in advance, what the
meaning of a green product is. In general, there are
several attributes to distinguish a green product.
For example; it is an ecologically friendly product,
not harmful to human or animal health, does not
consume excessive amounts of energy during
manufacturing, and does not produce unnecessary
waste. In addition, a green product uses contents
that can be recycled [21].
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Volume 19, 2022
On the other hand, [21] defined green consumption,
which is also called Environmentally Preferable
Purchasing (EPP); as a kind of responsible
consumption, in which consumers consider the
environmental impact of buying, using, and
discarding of different items, or using various
sustainable and green services.
For green purchasing, [22] illustrate from their
studies that there are several intentions: some of
these are personal factors such as (trust, habit,
emotions, personal norms, and values), and others
are situational factors like (product, price,
availability, social norm /subjective norm and
reference groups, eco-labeling and certification).
While [23] made their studies on Turkish
consumers seen GP behavior related to consumers’
demographic attributes. Furthermore [24], added
according to his research on youth people's
behavior in Pakistan that GP intentions are strongly
related to the role and support of the government
for environmental purchasing. From other studies
like [25] study, which performed an empirical
study on Lebanese consumers. They examined
four factors that might affect GP behavior,
which are perceived seriousness of
environmental problems, perceived
environmental behavior effectiveness,
perceived environmental responsibility, and
concern for self-image in environmental
protection.
Green purchasing is a complicated practice that
must consider not only traditional factors, such as a
supplier’s cost, lead-time, quality, and flexibility
but also environmental responsibility [26].
Furthermore, green purchasing may require
extensive suppliers, educated coaching, and
mentoring [27], so building certain capabilities in
an organization is essential before adopting green
purchasing practices.
2.1.3 Green Manufacturing (GM)
Being ecologically responsible, through the
different phases of the manufacturing process, is
the definition of green manufacturing. Applying
GM practices has several advantages over
traditional manufacturing methods, such as
pollution control, energy conservation, and waste
reduction [28].
[29] inferred their own definition for GM, which is
based on the concept of being alert to
environmental impact at all manufacturing stages
from input until output. In addition, the main
practices that can be applied according to their
research are; minimizing raw materials, decreasing
cost and energy consumed, and reducing waste and
pollution.
[30] Discussed different ways to achieve GM, for
example; applying Just-in-time in lean
manufacturing and the 5S methodology. Moreover,
they confirmed that using renewable resources like
water, wind, tidal, and biodiesel in generating
energy is essential for energy conversion, which is
one of the main practices in GM.
2.1.4 Green Distribution.
Green distribution is essential in enhancing the
environmental performance of industrial firms; this
is achieved through the efficient use of fuel and
optimization of the distribution network (route
planning). And this is what , [31] discussed
according to GD that can be achieved by using
greener vehicles in distribution networks, such as
electric vehicles, which in turn reduces greenhouse
gas emissions and therefore decreases air pollution.
According to [32] green distribution includes
environmentally friendly packaging and
transportation. However, [33] study green
distribution main practices, where; eco-labeling,
green packaging, green shipping or transportation,
and green storage.
2.2 Supply Chain Performance
Performance measurement methods were evolved
to indicate monitoring and retaining organizational
control. SC performance measurement is the
process to ensure that SC aims at strategies that
lead to the achievement of its overall goals [34].
The Performance Attributes are characteristics of
the supply chain that allow it to be analyzed, and
evaluated against other supply chains with
competing strategies. Members of the supply chain
may have different organizational missions, and
goals, so the existence of performance metrics and
the exact way for measurement across the chain can
help align organizations, promote the redesigning
of business goals, and reform processes to meet
supply-chain demands [35]. Therefore, the choice
of performance measure is one of the most critical
challenges facing organizations [36]. Wrong
measures give wrong signals for managers and
consequently wrong decisions.
Recent studies established that sustainable
performance including environmental, economic,
and social performance [37], so; in this paper, the
focus was on these three kinds of performance.
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2.2.1 Operational Performance
Operational performance is the most famous and
critical measure of performance especially for
stockholders; it refers to the measurable aspects of
the outcomes of SCM practices, such as reliability,
production cycle time, and inventory turns. [38],
[39] define operational performance to be a feasible
critical clear option when one intends to inspect the
direct effects of organizational activities such as
workforce development. Thus, for a supply chain
that seeks high-quality products and customer
satisfaction, focus on operational performance
becomes essential [40].
Typical measures of operational performance can
be efficiency, effectiveness, service quality,
production quality, sales, and innovation [41].
These operational measures can be obtained
through both subjective estimates, and objective
measures.
2.2.2 Environmental Performance
Research suggests that a firm’s environmental
strategy has wide ranges expand from being
proactive to reactive [42]. One study suggests that
the relationship between its corporate social
responsibility and environmental performance can
be mediated by firm’s environmental strategy [43],
with the findings indicating that a firm’s
environmental strategy is an important variable that
can influence the effect of GI on its environmental
performance.
2.2.3 Social Performance
Social performance refers to “improvement of
stakeholder welfare, community health and safety,
employee’s health and safety, and reduction of risk
on the public” [35].
2.3 Green Supply Chain and Supply
Chain Performance
According to the literature review, “impact of GSC
with different types of performance” was a wide
focus field for many academics, and the results
were different.
The first view was implementing green supply
chain management practices can be a burden, and
just a cost on organization and entails huge upfront
investments thus negatively affects financial or
operational performance especially in the short
term [44], [45]. Others like [46] and [47]. [48]
investigated the relations among economic
performance, environmental performance, and
GSC. The author found that there is a positive
relationship between economic performance and
environmental performance and that of GSC.
While recent findings of different studies of the
green supply chain were opposite of past studies,
most of the studies motivate and support adopting
GSC practices in their industries to improve
organizational and SC performance. [49] Illustrate
that adoption of GSC practices by manufacturing
organizations leads to improved environmental
performance and economic performance, which, in
turn, positively affect operational performance.
[50] found after analysis that GSC with TQM and
JIT practices have a great effect on environmental
performance.
3 Study hypotheses and Model
Based on the above literature the study hypotheses
can be formulated as follow:
H0.1: There is no effect of green supply chain at a
significance level (α ≤ 0.05) on supply chain
performance in Jordanian manufacturing factories.
H0.1.1: There is no effect of green supply at a
significance level (α ≤ 0.05) on supply chain
performance in Jordanian manufacturing factories.
H0.1.2: There is no effect of green purchasing at a
significance level (α ≤ 0.05) on supply chain
performance in Jordanian manufacturing factories.
H0.1.3: There is no effect of green (production)
manufacturing at a significance level (α ≤ 0.05) on
supply chain performance in Jordanian
manufacturing factories.
H0.1.4: There is no effect of green design at a
significance level (α ≤ 0.05) on supply chain
performance in Jordanian manufacturing factories.
H0.1.5: There is no effect of green distribution at a
significance level (α ≤ 0.05) on supply chain
performance in Jordanian manufacturing factories.
The following theoretical framework, shown in Fig.
1, may support the hypotheses of the study
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Fig. 1: Research proposed model
3.1 Methodology
In this study, data is collected based on both
primary and secondary data, therefore; a
questionnaire designed based on the proposed
model, which developed based on literary reviews
that serve as primary data source for research
variables.
3.1.1 Sample of the Study
A sample of 150 has been randomly taken from the
population of chemical detergent manufacturing
companies in Jordan. In this study, the unit of
analysis was employees at different managerial
levels. This manufacturing sector was selected
because it is one of the dominant mature industries
in Jordan that has huge numbers of Jordanian
workers with huge interest especially in Covid-19
period. The questionnaires were distributed to 150
employees with managerial and technical
experience, out of which 120 were returned and
suitable for statistical analysis. Subjects were asked
to assess their perceptions about different
constructs. Assessments were based on a five-point
Likert scale ranging from “strongly disagree (1) to
“strongly agree (5) in order to measure the 39
items.
3.1.2 Reliability and Validity Test
In order to test validity, the survey instrument was
distributed to a number of professionals and
academics to determine whether the survey was
comprehensive, understandable, and measured
appropriate content. Their feedback was considered
before forming the final copy of the questionnaire.
Scale reliability was measured using Cronbach’s
alpha (α) and. All the values of Cronbach’s for
each of the constructs of (GSC, supply chain
performance) ranged from 0.835 to 0.960, which
consequently exceeding the suggested threshold of
0.70 [51]. This, in turn, is an indicator of suitable
internal consistency. These findings have been
presented in Table. 1.
Table 1. Reliability (Cronbach Alpha (α))
Construct
Measurement
item
Cronbach
Alpha
GSC
Green Supply
0.871
Green Purchasing
0.892
Green Production
0.835
Green Design
0.845
Green
Distribution
0.862
SCP
Operational
Performance
0.901
Environmental
Performance
0.913
Social
Performance
0.917
3.1.3 Discriminant Validity Test
Variable correlation of the constructs used to
evaluate the discriminant validity of the overall
measurement model. According to [52]
discriminant validity is acceptable when the value
of the correlation between the constructs lower than
its value of AVE. Therefore, none of the correlation
coefficients was greater than 1.00, which indicates
that the findings have acceptable discriminant
validity.
Table 2. Discriminate Validity
design
supply
prod
purch
distr
SCP
design
1.000
supply
.220
1.000
prod
.272
.129
1.000
purch
.267
.166
.085
1.000
distr
.081
.121
.058
.104
1.000
SCP
.530
.389
.266
.293
.207
1.00
3.1.4 Normality Test
A normality test is used to check whether the data
is normally distributed or skewed either to the right
side or to the left side [52]. These values are
referred to as Kurtosis variables, which can
influence the relationship examination as well, the
significance test. The normality test performed in
this study used two common measures namely
Skewness and Kurtosis with values not exceeds 2
and 7, which are considered sufficient normally
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distributed data [53]. Table.3 presents the values of
both skewness and kurtosis of the studied
indicators which indicated that the skewness of the
indicators ranged from -0.003to 0.267while the
kurtosis values were between -0.320 and 0.868.
Thus, all of the measurements had skewness and
kurtosis values ranked within ± 2 and ±7,
respectively. Therefore, it indicates that the dataset
has a normal distribution.
Table 3. Assessment of normality
Variable
Min
Max
Ske
w
c.r.
kurtosi
s
c.r.
Design
.277
7.27
9
0.26
7
1.19
4
0.820
1.83
3
Supply
0.79
4
6.56
3
0.18
9
0.84
7
-0.320
-
0.71
5
Purchase
0.87
0
6.41
2
0.19
5
0.87
1
-0.165
-
0.36
8
Production
0.69
1
7.34
7
0.17
9
0801
0.304
0.68
0
Distributio
n
-
0.75
0
6.81
8
-
0.00
3
-
0.01
5
0.868
1.94
2
SCP
2.00
0
5.00
0
0.24
0
1.07
4
0.411
0.91
9
Multivariat
e
3.878
2.16
8
3.1.5 Hypotheses Test
Table 4. Maximum Likelihood Estimates (MLE)
and Regression Weights (hypothesis testing):
Path
Estimate
(beta)
Standard
error
S.E.
C.R.
regression
weight
estimate
above
zero
Estimate/
S.E
P
sig
SCP
<-
GSC
0.352
0.04
Sig
SCP
<-
distr
.061
.035
1.753
.080
Not sig
SCP
<-
purch
.065
.039
1.650
.099
Not sig
SCP
<-
prod
.058
.040
1.440
.150
Not sig
SCP
<-
supply
.124
.036
3.401
0.000
sig
SCP
<-
design
.209
.040
5.236
0.000
sig
R2
0.125
From the previous table, it is obvious that there is
no significant effect of green purchase, green
production, and green distribution on supply chain
performance, where all of these impacts have
significance more than 0.05. However, on another
side; green supply and green design have
significant effects on supply chain performance
with significance less than 0.05. While, the overall
impact of GSC on performance is significant with
(R2=0.125) which indicates that the relation is
medium according to [54]. This relation is medium
because GSC needs moderators such as TQM and
JIT practices to improve its effect, while JIT
practices did not practice in the Jordanian
manufacturing sector.
Table 5. Coheen measurement of R2
Fig. 2: Hypotheses Test
effect
Range of R2
weak
Less than 0.13
medium
0.13-0.26
strong
Greater than 0.26
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Table 6. Model identification and Model Fit
Summary in AMOS
The results relating to fit models generally support
a good fit and can be observed in Table supporting
a good fit, because the ratio of chi-square and
degree freedom has a value of 0.744 (CMIN/DF), is
less than 2.0 [55]. In addition, the root means a
square error of approximation (RMSEA=0.00 is
below 0.08. The goodness of fit index (GFI) for
this model is an acceptable value because it is more
than 0.80, the minimum limit. The comparative fit
index (CFI) was also positioned within the
acceptable rates considered for small sample sizes
[56]
4 Discussion and Conclusion
The research aims to examine if there is any impact
of different green supply chain practices (green
supply, green purchase, green design, green
production, and green distribution) in Jordanian
chemical industries, on supply chain performance
dimensions.
This sector was specifically selected because the
chemical manufacturing industry in any country
accounts for a large proportion of environmental
impact. Moreover; manufacturing is also
responsible for the depletion and consumption of
natural resources in any region and, consequently,
it produces large harmful wastes to the
environment.
In this study; the result was there is a significant
impact of GSC on SC performance with
significance equal to (0.04), but as an individual
effect of substructures of GSC, there is no
significant effect of (green purchase, green
production, and green distribution) on SC
performance, while there is a significant effect of
(green supply and green design) on SC
performance. These SC practices and SC
performance were studied by different researchers
in different communities. However, the results
were conflicting. For [57] study on manufacturing
industries in UEA, gives that there is a positive
relationship between different GSCs on different
aspects of corporate performance (economic,
social, operational, and environmental). While [58]
made on manufacturing companies in Ghana. , it
gives that there is no positive effect of green
warehousing and distribution on economic
performance. Moreover, [59] found that GSC in the
USA manufacturing sector has a great impact on
environmental performance and this impact will be
more and more if TQM and JIT practices combined
into GSC. Another study for [60] discovered that
the adoption of GSCM practices by manufacturing
Model identification
Number of distinct
sample moments:
21
Number of distinct
parameters to be
estimated:
18
Degrees of freedom
(21 - 18)
3
Model Fit Summary(Mueller & Hancock,
2019)
Chi-
square
=
CMIN
DF
P <
0.05
Model
fit
CMIN/DF
Less than
2
Default
model
2.231
3
.526
.744
Saturated
model
.000
0
Independence
model
90.035
15
.000
6.002
RMR
GFI <
=0.9
AGFI <
=0.9
PGFI
Default
model
.045
.994
.958
.142
Saturated
model
.000
1.000
Independence
model
.192
.767
.673
.548
NFI
<=
0.90
Default
model
.975
Saturated
model
.975
Independence
model
1.000
RMSEA must be less than 0.08
model
.000
Decision
Fitness model for non-
significance of chi-square
(Azlina & Jamaluddin, 2010)
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organizations leads to positively affect operational
performance, which, in turn, enhances
organizational performance.
As a result, it is obvious that the maturity degree of
governmental regulations regarding eco-friendly
industries affects the impact of GSC on
performance; because the same practices at
different regions give different results. On another
side, a particular green supply chain practice should
be supported by specific organizational capabilities
to achieve the intended performance which means;
when choosing a green supply chain, firms should
select practices that “fit” with their existing
resources and capabilities [61], [62] thus in
Jordanian Chemical industries, firms still need to
build and construct competitive capabilities and
have distinguished and sustainable resources in
logistics and supply to have an impact on
performance.
The researcher concludes that management support,
governmental regulations, and social perception of
environmental products are critical to getting the
real and strong effect of GSC on performance.
Table 7. Results of hypotheses and its implications
Hypothesis
Result
Implications
H0.1.2
Not
sig
Jordanian chemical industries may
need to successfully adopt green
purchasing; the development of their
supplier appraisal, SCM
skills/knowledge, better external
integration capabilities, and other
resources.
H0.1.3
Not
sig
Jordanian chemical industries may
need SCM skills/knowledge, foster
internal integration, and supply chain
flexibility capabilities to successfully
adopt their green manufacturing
strategies
H0.1.5
Not
sig
Jordanian chemical industries may
need advanced IT systems to assure
internal and external integration, more
capabilities in logistics.
5 Limitations of Study
The limitations of this study are several; which
need to be discussed in future studies. First, it only
considered GSC practices without any mediator or
moderator variables (company size, strategy,
company age, industry sector) between it and
supply chain performance. Second, the findings of
the study suffer from limited generalization. This is
because the study was only limited to Jordanian
chemical industries and this was because the
purpose of the study was how to improve
manufacturing practices in Jordan, in particular;
does going green and consider implementing green
supply chain management practices led to improve
different kinds of performance. Third, it measures
SC performance as a whole; further studies could
assess specific kinds of performance (operational,
economic, social, and environmental).
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