The Development of a Strategic Prioritisation Method for Green Supply Chain Initiatives.

Abstract

To maintain a competitive position, companies are increasingly required to integrate their proactive environmental strategies into their business strategies. The shift from reactive and compliance-based to proactive and strategic environmental management has driven companies to consider the strategic factors while identifying the areas in which they should focus their green initiatives. In previous studies little attention was given to providing the managers with a basis from which they could strategically prioritise these green initiatives across their companies' supply chains. Considering this lacuna in the literature, we present a decision-making method for prioritising green supply chain initiatives aligned with the preferred green strategies alternatives for the manufacturing companies. To develop this method, the study considered a position between determinism and the voluntarism orientation of environmental management involving both external pressures and internal competitive drivers and key resources as decision factors. This decision-making method was developed using the analytic network process (ANP) technique. The elements of the decision model were derived from the literature. The causal relationships among the multiple decision variables were validated based on the results of structural equation modelling (SEM) using a dataset collected from a survey of the ISO 14001-certified manufacturers in Malaysia. A portion of the relative weights required for computation in ANP was also calculated using the SEM results. A case study is presented to demonstrate the applicability of the method.