1. Introduction
This chapter is based on information associated with the introduction of this study, problem statement, research questions, research objectives and significance of this study.
1.2 Research background
Environmental and social concerns are becoming more considerable in managing business along with the accelerated global manufacturing industry. According to the requirement of the environmental regulations (Hsu & Hu 2008), green chain is an approach to advance the fulfillment of the process.
1.2.1History of Food and beverage in Malaysia
The food industry plays an essential role in Malaysia’s economy. Malaysia is regarded as an upper middle income group as per the Malaysian Investment Development Authority (MIDA).The retail industry of Malaysian food and beverage forecast sales to reach US $ 15.69 billion in 2011 and are predicted to growth to US $ 21.17 by 2015.Food industry is branched into multiple sub sectors in Malaysia and mainly, it is controlled by small and medium scale companies.
According to the Malaysian Investment Development Authority (MIDA), Fruits, vegetables livestock, livestock products, fish products and Coco are the major sub sectors. In the Asia pacific region, the third most poultry meat producer is Malaysia. Dairy products that produce in Malaysia are milk powder, ice cream, pasteurized or sterilized liquid milk sweetened condensed milk, yoghurt and other fermented milk products. In addition to that various food products are importing from different countries.
Malaysia continued a net importer of foods in 2013 about RM 15.6 billion as per Malaysian Investment Development Authority. Dairy products at the value of RM 3.2 billion, RM 1.2 billion of cereal and cereal preparations, RM 1.5 billion of sugar and sugar confectionery and RM 1.0 billion of cocoa and cocoa preparations are the major imports. Other than that raw materials like cereal and dairy products are also imported for further processing.
As per the statistics, that the amount of RM 14.2 billion contributed to the area of processed food in 2013.According to that, the main food were cereal and cereal preparations at the amount of RM 1.8 billion, RM 3.2 billion for cocoa and coca preparations, About RM 893.8 million for sugar and sugar confectionery, dairy products at the value of RM 957.4 million. Various food products were exported to more than 200 countries. Indonesia, Thailand, USA and China were the major export destinations.
1.2.2 Environmental Sustainability
According to Van Hoes and Erasmus 2000, Environmental sustainable (green) supply chain management has an important organizational philosophy to make profit and market share goals by reducing environmental risk and effect while humanizing ecological efficiency of these organizations and followers. Malaysia is also having several environmental problems like other countries over the global.
Malaysian government is implementing different mechanisms to protect their environment, yet it is facing environmental degradations problems. In accordance with (Sarkis, 2003), the manufacturing industry in Malaysia is not exempt from contributing to the deterioration of environmental sustainability. Nowadays there is an increase in customers demand on green products and services. Many organizations have been urged by their stakeholders to adopt sustainable development and corporate environmental responsibility within their business activities. This has gradually and consistently extended far beyond merely complying with environmental regulations to proactive initiatives by a few global leading companies. Thus, organizations are continuously trying to come up with initiatives that can help them to achieve environmental sustainability. Success in handling of environmental management issues may provide new opportunities to increase competitiveness and new ways to add value to core business programs (Hansman and Claudia 2001).
Sustainable development means including the process of manufacturing human needs and the same time preserving the environment for future generations. It also means we must use the available resources efficiently, that they will be available for many years to come. Sustainable development practices are crucial to enable Malaysia in becoming a leading nation in the 21st century. One way to achieve sustainable development is through green technology. The Malaysian governments realize that in the 21st century, renewable and sustainable energy as well as green technology will be the core economic growth for all countries. This, in turn, minimizes degradation to the environment and promoted health and improve environment for all living things.
1.2.1 The concept of green supply chain
There are several benefits that organization can enjoy through green supply chain practices. This process can assist to boost the celerity of work by promoting innovations and alleviating danger. Green supply chain practices increase adaptability through innovative processes and continues improvements. According to Srivastava 2007, Green supply chain management is integrating environmental concerns into supply management, which is including material sourcing, and selection, manufacturing process, product design, and delivery of final product to the consumers.
Green supply chain involves not only in integrating the manufacturing process but also distribution of customers, it involves in the beginning of the product design to the product is disposed. That shows that it requires a full integration and collaboration of the players along the product life cycle. According to Beamon 1999, in order to achieve the green supply chain manufacturing, organizations must follow the basic principles established by ISO 14000.The ISO 14000 principle provides framework, to guide firms to improve environment performance.
1.3Problem statement
Environmental sustainability is the ability to sustain the qualities that are appreciated in the physical environment. Various actions are taken for environmental sustainability, such as reducing the use of physical resources, use of renewable rather than depleted resources, in addition the redesign of production process and products to eliminate the production of toxic materials. There are ranges of issues in environmental pollution with development as the rapid growth of global economy.
According to Fiksel 1996, that global climate has changed rapidly due to global warming, manufacturing and production process are viewed as the culprits in harming the environment in the form of waste generation, ecosystem disruption and depletion of natural resources. Industries have to react and transform the way of production system towards sustainability. As stated by Beamon, 1999, sustainability can be achieved by extending the structure of the current one way supply chain to a closed loop, including supply chain operations designed for end of life products and packaging, recovery, collection and reused in the form of recycling and manufacturing.
Manufacturing industry is one of the prominent creations of human wealth, playing a significant role in promoting the development in human society, but which is a major source of environmental pollution. As increasing food manufacturing industry all over the world, green practice is a concept that can be used to minimize wastage of supply chain. Wastage and increasing cost are a major constraint on food manufacturing industry and degradation of environmental problem. Green manufacturing is a strategy of sustainable development in human society in the modern manufacturing. Green manufacturing is the method of production process which use inputs with relatively low environmental adverse effects, creates no waste pollution or produce precise amount of waste and is remarkably productive. In addition, it reduces the cost of raw materials, minimizes environmental vulnerability and cut down occupational safety expenditure, boosts productivity and improves corporate image, Ninlawan el. Al (2010).
According to Johansson and Winroth (2009) that the main aim of green manufacturing is to continues improvements of industrial process and products to reduce or to prevent air, water and land pollution. In addition, He mentioned that with these improvements, there is a possibility of minimizing risks of humans and other species. With the increasing awareness of the consumers about environmental issues, business, households and governments increasingly want to buy green products. Environmental impacts on their products and services (Lewis and Gretsakis, 2001) A green supply chain practice is one with minimal environmental impact. It encourages reducing carbon emission, distributing, delivery and finally whole end of life recycling. According to Murray 2012, evaluating companies supply chain processes which start from planning, purchasing and managing the use of materials to shipping and distributing final products.
With the increasing awareness on environmental sustainability issues, manufacturing firms started to think and act green. Food industry in Malaysia plays vital role in countries economy and whole manufacturing sector has remains to an importance contributor to economy. Green supply chain initiatives are classified into five main categories. Eco-friendly, design for the environment, green purchasing, supplier environmental collaboration, customer environmental collaboration and reverse logistics. Currently some organizations of Malaysia also have green practices in manufacturing industry but still few in food manufacturing sectors.
In food manufacturing industry, green practice is important, as food industry produces lots of wastes and along with that it increases cost of production. Green production is one of the best solution that reduce waste production and as well as a better system for the environmental issues. Operating green supply chain in food manufacturers is a good decision that they are taking to prevent environmental problems and to reduce wastage. However, it is not much practiced in Malaysian food industry. This might be due to lack of awareness about green supply chain practices, difficulties sustainability program implementation, Unawareness of customers, etc.
1.4Research question
1. What are the levels of awareness in green supply chain practices among food manufacturers in Klang Valley?
2. What are the challenges facing to implement green practices among food manufacturers in Klang Valley?
3. What are the benefits of green supply chain that towards to the supply chain process
1.5 Research objectives
1. To investigate the level of awareness in green supply chain among food manufacturers in Klang Valley.
2. To determine the barriers/challenges faced by the food manufacturers to implement green supply chain practices.
3. To identify the benefits of green supply chain that towards supply chain.
1.6 Significance of study
Green Supply chain has become a very significant concept in supply chain management. The main purpose of this study is to identify the level of awareness about green practice in food manufacturing industry in Klang valley. This study will encourage the organization to consider this concept. This study will also assist food manufacturing firms to understand the challenges they meet during implementation of green supply chain concept. Other than that this study will also get to understand the possible benefits of implementing green supply chain concept in the organization.
1.7Operational definition
1.7.1 Going Green
Going green means making more environmental friendly decisions such as reduce, reuse and recycle. Green can reduce concerns of investors as well as environmentalists towards an industry that has one of the biggest carbon print/effect on environment due to its operations.
1.7.2 Supply chain
According to the Beamon 1999, Supply chain is an integrated manufacturing process wherein raw materials are manufactured into final products, then delivered to customers via distribution, retails or both.
1.7.3 Green Supply chain management (GSCM)
According to Hsu & Hu, 2008, Green supply Chain Management (GSCM) is an approach to improve performance of the process and products according to the requirements of the environmental regulations.
1.7.4 Green manufacturing
According to Ninlawan el.al 2010, Green manufacturing is a processes that produce extremely less environmental impacts and generate little or no waste or pollution. Green manufacturing leads to lower raw materials costs, production efficiency gains and occupational safety expenses and improve corporate image.