SOME STUDIES ON GREEN LOGISTICS PRACTICES AND PERFORMANCE ISSUES IN SELECT INDIAN MANUFACTURING INDUSTRY

Abstract

In today’s era, environmental issues are critical concerns for all countries all over the world. Therefore, organizations need to deal with these issues as they are continuously under pressure to perform environmentally responsible activities. Logistics is one domain that leads to a negative effect on the environment. Due to globalization, logistics activities have increased enormously. On the global platform, the logistics market will reach a value of USD 6,300 billion by 2024, with a CAGR (compound annual growth rate) of 4.9% during 2019-2024. As a result, the manufacturing enterprises are incorporating new strategies and green policies in their businesses for a better environment and fewer carbon emissions. In developed countries, Green Logistics has become popular in recent times. Although in developing countries, it is still in a preliminary stage and needs more attention. It had been discussed that the developing countries are still lacking in promoting and implementing green practices in logistics. The current study focuses on Green Logistics drivers, barriers, practices, and performance parameters for the Indian manufacturing industry (especially in the Oil and Gas sector). The Oil and Gas industry is chosen for the research study as this is one of the prominent industry and produces very high carbon emissions. The downward vertical of this industry involves the major logistics activities like marketing, wholesaling, etc., and have never been focussed on green logistics. The four major logistics activities are chosen for the study namely green transportation, green warehousing, green packaging, and green value-added services. The Green Logistics Practices are governed by various drivers and barriers, which help in enabling the implementation and might also act as hindrances in the implementation of these practices. These drivers and barriers are the crucial factors thus need to be studied in detail. The application of green logistics practices will also have an impact on the performance both in terms of environmental as well as economic. The primary objective xii of this study is to develop a conceptual framework of Green Logistics for the logistics activities involved in the Indian Manufacturing Industry (Oil and Gas) and its effect on Environmental and Economic Performance The flow of this research goes as follows. Initially, there is a need to justify the Green Logistics over non-Green Logistics which has been done in the study using Analytical Hierarchy Process. In the study, it was justified that Green Logistics is better as compared to non-Green Logistics. Then, the identification and ranking of the crucial barriers have been done using as they are important to be evaluated as the ranking will enable the practitioners to be aware of the major hindrances in the implementation of Green Logistics Practices in the context of the Indian manufacturing industry. This was done using the DEMATEL technique. In the results, the non-interest of the top management came out to be the most important barrier in the implementation of these practices. The significant Green Logistics Drivers which might enhance the implementation of Green Logistics Practices have been studied extensively in the context of the Oil and Gas industry. This study is further extended by listing out the best possible Green Logistics practices and drivers that need to be considered by the industry. The research instrument used for the study is the survey questionnaire and the officials/managers who are working for the downward logistics of the Oil and Gas industry were chosen from. The drivers and practices have been ranked by descriptive analysis using SPSS 25.0. The ranking displayed the most important green logistics drivers are the Government policies as these would motivate the industry officials to implement the Green Logistics Practices. The most important logistics practices for Green Transportation is Standardization, for Green Warehousing is low carbon storage, for Green Packaging it is the use of ecological material, and for Green value-added Practices, it is Environmental reports. The information of the most important practices would enable the management and policymakers of the manufacturing industry to focus xiii more on these areas to achieve better sustainability in the logistics activities. Instead of spending resources on the least important drivers and practices, the most important ones should be implemented. .Eventually, the impact of these Green Logistics Practices on the Economic and Environmental Performances has also been studied and analyzed using Structural equation modeling (SEM). In the study total of seven constructs have been analyzed namely GLTP, GLWP, GLPP, GLVP, EP, EcP, and GEP. The first four constructs represent the Green Logistics practices, the next two represent the Performance Parameters. The last construct is Government and environment policies which were chosen from the items of drivers and in the analysis act as a moderator. This is important to analyze the impact on both the performances as the industry sometimes feels that the green practices would have no economic benefits. The Exploratory Factor analysis. Confirmatory Factor Analysis and the Structure Equation Modelling for hypotheses testing were done during the study The twenty hypotheses have been framed during the study which included the moderation and mediation analysis. Environmental performance has been used as the mediator between Green Logistics Practices and Economic Performance. The analysis shows the effect on the Economic Performance via Environmental Performance for all the four logistics constructs. The next four hypotheses included mediation via Environmental Performance. The next set of eight hypotheses were carried out to find out the effect of practices on both the performances under the moderator impact. Out of all of the twenty hypotheses, only four hypotheses H7, H11, H18, and H19 were rejected, the rest all were significant. Such extensive research studies could help the select Indian manufacturing industry (Oil and Gas) in making strategic decisions about implementing Green Logistics Practices for achieving the environmental goals along with having an idea of the impact of these practices on the economic performances and thus to achieve long term sustainability. The study would motivate the top management to focus on xiv green practices like Staff Training and Environmental reports for developing the habit of Green Logistics. This study is important for the Government while framing various policies and incentives for the Indian Manufacturing industry to promote the implementation of Green Logistics Practices. The findings of this study for different activities of Green Logistics may be linked to developing a long-term strategy for the manufacturing industry. Keeping the Indian Manufacturing Industry understudy, practicing managers, governmental agencies and academia and future researchers will be benefited from the research.