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Malaysia is a multi sector that contributor to economy growth. After the 1970s, manufacturing sector plays an important role to economic activity. In addition, manufacturing sector accounted for 33% of GDP in 1996 increase to 40% in 2001.
In the manufacturing industry, supply chain management is a major component of competitive strategy to enhance organization productivity and profitability. According to Lambert et al. (1998, p1) defines supply chain management as the integration of key business process from end-user through original suppliers that provide products, services and information that add value for customers and other stakeholder. So, supply chain management in manufacturing industry can help organization to implementation on their operations.
In addition, there have some problems faced by manufacturing industry such as escalating deterioration of the environment, waste of raw material resources, overflowing waste sites and increase levels of pollution. So, manufacturing industry has start to implementation of green supply chain management (GSCM) practices in manufacturing industry in order to minimize the environmental impacts.
According to Srivastara (2007), green supply chain management as integrating environment thinking into supply chain management, including product design, material sourcing and selection, manufacturing processes, delivery of the final product to the consumer and end-of-life management of the product after its useful life.
Lastly, there have some commercial firms that had early success using green supply chain management principles. For example, Texas Instruments saves $8 million each year by reducing its transit packaging budget for its semiconductor business through source reduction, recycling and use of reusable packaging systems (20% annual savings). Second firms is Pepsi-Cola saved $44 million by switching from corrugated to reusable plastic shipping containers for one liter and 20 ounce bottles, conserving 196 million pounds of corrugated material. Last is Dow Corning saved $2.3 million by using reconditioned steel drums in 1995, also conserved 7.8 million pounds of steel.
As a conclusion, implementation of green supply chain management in manufacturing industry can help organization to minimize waste, achieve cost savings and boost up the development of organization.
1.1 Problem Statement
Nowadays, green supply chain management can defined is an important ways that we can align it with business goal. Van Hoek (1999) reported that green supply chain management (GSCM) has emerged as an important new approach for industry to achieve profit and market share objectives by reducing environmental risk and impact.
Implementation of green supply chain management (GSCM) in manufacturing industry faced some problem because it integrate of many parties such as manufacturer, suppliers, distributors, logistics, retailers and customers. Firstly, the problem that faced by manufacturing industry to implementation of green supply chain management is collaborative relationships between manufacturers and suppliers. According to Holt et al. (2001) the involvement of suppliers is vitally important in achieving national or corporate environmental targets. For example, holding environmental awareness seminars, guiding to set up environmental programs, plan effective planning and solve problem together. Collaborative relationships between manufacturers and suppliers to enable each other improve overall environmental performance in the supply chain such as minimize waste, productivity improvement and achieve cost savings.
Second problem is environmental impacts. Healthy of workers and communities is very important because they are the most valuable assets. If manufacturing industry ignore healthy of worker, it may influence the operation of supply chain. So industry should provide a good working environment to worker. Besides that, there have some elements that will impact on environmental such as reuse, remanufacture and recycle. Although there can save many cost, resources and reduce waste to manufacturing industry but it may requires many process, technology and energy to complete it.
Lastly, the problem that faced by manufacturing industry is waste of production and environment of warehouse. Production is very vital because it will influence all the process. So manufacturing industry need to provide a best factory layout and efficient production planning to reduce waste and pollution in the supply chain. Warehouse is an important part to supply chain because it is used to storage of inventory such as raw material, semi-finished components and finished products, so warehouse should always be clean and tidy. In other words, poor warehouse planning and lack of equipment maintenance will creates waste and pollution.
1.2 Research Objective
At the end of the research, the general objective is to determine the implementation of green supply chain (GSCM) in manufacturing industry. The specific objectives of this research are:
To identify the problem of implementation of green supply chain management
To determine the factors influence of the operation of green supply chain management
To identify the benefits of green supply chain management
1.3 Scope of the Project
Green supply chain management defines as integrating environment thinking into supply chain management. It integrates raw materials, suppliers, manufacturing processes, planning, product design and delivery of the final product to the customers.
The scope of the project is focuses on implementation of green supply chain management (GSCM) in manufacturing industry. For this research, Thong Guan Industries Berhad are chooses as the study industry for this project. It is one of the beverages manufacturing industry which located in Sungai Petani, Kedah state. Thong Guan Industries Berhad is one of the largest processor and distributor of tea, coffee and other product in Malaysia. Hope that Thong Guan Industries Berhad can provide an objective and systematic result of this study.
1.4 Significant of the Project
Implementation of green supply chain management in Malaysia can increasing awareness of environmental protection worldwide and the pressure accompanying globalization has prompted manufacturing industry to improve environmental performance. Besides that, it also can measure that safety and health of worker is ensured.
It is believed that the research of the project would provide very useful information to implementation of green supply chain management in Thong Guan Industries Berhad. The purpose of the research is to enable Thong Guan Industries Berhad to implementation of green supply chain management in their organization and become a fundamental to be developing at the future. From this research, we can to identify the problem of green supply chain management, determine the factors influence of the operation and benefits of green supply chain management in Thong Guan Industries Berhad.
The result of this research study hopefully can provide information to other researcher and provide a best insight to student, worker and organization. In addition, the research of this project can help me learn and understanding about green supply chain management.