Impact of greening the supply chain on economic performance and competitiveness of manufacturing companies in Sri Lanka

Abstract

The main objective of this research is to find out the economic impact of adopting green practices to the supply chains of manufacturing companies in Sri Lanka and the competitiveness gained through it. Greening the supply chain is looked at from three perspectives in this research namely, greening the inbound function, greening the production function and greening the outbound function where the final outcome presents the correlation between each of these with the improvement of economic performance and competitiveness when it comes to the manufacturing companies of Sri Lanka. The population of the research is the ISO 14001 (Environmental Management System) certified manufacturing companies in Sri Lanka. Data was collected through a survey done involving all the ISO 14001 certified manufacturing companies where environment management representatives of the firms were targeted through online questionnaires. A four point likert scale was used to obtain responses. Exploratory factor analysis and structural equation modeling (SEM) was used to analyze data regarding the five variables. The research concludes with a statistically proven result that greening the inbound, production and outbound functions of a supply chain individually as well as collectively leads to improved economic performance while competitiveness can be improved by greening the inbound function of a supply chain.