Driving Green Practice Adoption in the Logistics Industry

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Much research has focused on green technologies and management practices in the manufacturing industry. But how do companies in other parts of the supply chain “go green”?

Logistics companies provide services such as warehousing, transportation, inventory management, order processing and packaging, implying they can have a substantial environmental footprint. As many are also small businesses (82 percent of firms surveyed had fewer than 300 employees), logistics firms can be dogged by resource and knowledge constraints.

Chieh-Yu Lin and Yi-Hui Ho (both of Chang Jung Christian University, Taiwan), using regression analysis, analysed the factors that influence the adoption of green practices within the logistics industry using a survey of 322 logistics firms in the Shanghai and Shenzhen areas of China. Green practices investigated include the adoption of fuel efficient vehicles, electricity management systems and solar energy systems.

The role of organizational factors (firm size and quality of HR systems, for example), the business context (pressure from customers or government and uncertainty in the business setting) and technological factors are investigated. Technological factors, such as the relative benefits of new technologies and innovations, how well suited they are to a firm’s needs and how easy they are to understand and use, are a relatively new focus for research.

“Green practices were ... more likely to be adopted if firms provided organizational support, such as extra resources and training, increasing employee
motivation for adoption ...”

The results show that technological factors can impact green technology adoption: firms were more likely to adopt green technology and practices when they offered an advantage and were well suited to a business. Complex practices were less likely to be adopted by firms.

Green practices were also more likely to be adopted if firms provided organizational support, such as extra resources and training, increasing employee motivation for adoption and when they were subjected to regulatory pressures and/or received government support.

Uncertainty in the business setting, in the form of frequent and unpredictable changes to technology or customer preferences, inhibited firms from adopting green practices.

Customer pressure is not as significant a factor in the adoption of green practices for logistics firms as it is for manufacturing firms. This is likely because they are further down the supply chain and seen as “removed” from the manufacturing process.

Practical implications for managers:

  • Businesses and their managers should be aware of the environmental impact of logistics activities; those wanting to green their supply chain should engage with logistics providers and ensure they understand the importance of their environmental performance.
  • The providers of fuel-efficient vehicles, electricity management systems or other green practices and technologies should ensure that the benefits of their services, such as reduced energy bills, are clearly stated and easy to understand. They should also ensure they are well suited to current logistics practices, such as making sure fuel-efficient vehicles have the same capabilities, such as load space, as older models.
  • Logistics managers can support green practices adoption through top management commitment and enhanced human resource efforts including staff training and awareness-raising programs.

Research conducted in different jurisdictions and service industry sectors would help researchers and managers understand when and if the findings of this study can be generalized.

Source

Lin, C.Y., & Ho, Y.H., (2010). Determinants of Green Practice Adoption for Logistics Companies in China. Journal of Business Ethics. 98:67-83.