Green Supply Chain Practices and Their Role in Enhancing Cost Efficiency and Competitiveness

Abstract

Supply chain management (SCM) has emerged as a crucial competitive strategy for organizations seeking to optimize their operations and improve market performance. Within this framework, the concept of green supply chain management (GSCM) has gained increasing importance, as it is seen as vital for fostering industrial ecosystems and promoting industrial ecology. By integrating environmentally sustainable practices into their supply chains, organizations not only comply with regulatory requirements but also pursue broader strategic objectives, such as enhancing their competitive advantage. There are several motivating factors behind the adoption of green supply chain policies. Some organizations implement these policies due to reactive regulatory pressures, ensuring compliance with environmental regulations and reducing their ecological footprint. However, others take a proactive approach, viewing GSCM as a key element in their long-term strategy to differentiate themselves from competitors, improve efficiency, and appeal to environmentally conscious consumers. By adopting GSCM, organizations can simultaneously meet sustainability goals and gain a competitive edge in an increasingly eco-conscious market. From both an environmental and organizational perspective, it is crucial to understand the complexities and challenges that exist in the field of green supply chain management (GSCM). Many organizations worldwide are facing increasing globalization and a shift towards competition among networks of companies, rather than just between individual firms. In this competitive landscape, multinational enterprises have established global supply networks, leveraging country- and industry-specific advantages to build and maintain their competitive edge. To successfully achieve this competitive advantage, logistics and supply chain managers must balance efforts to reduce costs and drive innovation while also ensuring strong environmental performance (Pagell et al., 2004). The growing importance of sustainability means that companies now compete not just through their own internal capabilities, but through the effectiveness of their supply chains. Managing a sustainable supply chain that meets environmental regulations and customer expectations, while simultaneously controlling costs, has become a key factor in maintaining competitive positioning. This study focuses on the relationship between Green Supply Chain Management (GSCM) practices and their impact on Transportation Cost Reduction (TCR). By examining how GSCM initiatives contribute to lowering transportation costs, the study sheds light on how sustainability efforts can support both environmental goals and cost efficiency, helping companies remain competitive in today's globalized market.