Green Purchasing: Benefits and Strategies

This literature review discusses the concept of green purchasing and its benefits for businesses. It explores the processes involved in green supply chain management and highlights the financial, environmental, and social benefits of implementing green practices. The review also discusses the importance of green purchasing in firms and how it can help improve risk management, supplier relationships, and environmental performance. Examples of successful green purchasing initiatives are provided.

Running head: GREEN PURCHASING
Green Purchasing
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1.Literature Review
This section shall elaborate on discussing among Green Supply Chain Management,
the processes it involves as well as the various benefits that it possess for a better and
sustained future.
1.1. Green Supply chain management
As the people all across the world are becoming more aware of the environmental
issues as well as the global warming, the customers world-wide are asking more and more
questions regarding the products that they are purchasing on a daily basis. The modern
companies are likely to asked about the questions regarding how green are their processes of
manufacturing and the supply chain and how big is their carbon-footprint. As per Fahimnia,
Sarkis and Davarzani(2015), there is a significant difference in between supply chain
management (SCM) and green supply chain management (GSCM). It is to note that “SCM is
the oversight of the information, finances and the material as they move in the process from
the suppliers to the manufacturers to the wholesalers to the retailers and then to the
consumers” (Agi and Nishant 2017). On the other hand, as opined by Ahi and Searcy (2013),
Green Supply Chain Management (GSCM) refers to the process of “integrating environment
thinking into the supply chain management, including the product design, the material
sourcing and selection, the manufacturing processes, the delivery of the final product to the
consumers and the end-of-life management of the product after its useful life”. There are
certain companies that have seen the interests of their customers in the environment as a plus
point and in this way, they have even been potent enough of converting the interest of the
public in all the things that are green and environment friendly into the increased profits
(Zhu, Sarkis and Lai 2013). According to Swami and Shah (2013), “there are large number of
companies that have shown that there is proof of the link between improved environmental

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performance and financial gains.” The firms have taken into consideration their respective
supply chain and have seen the different areas where making improvements in the manner
they are operating could produce high profits. Furthermore, Laosirihongthong, Adebanjo and
Choon(2013) in this context have claimed that the GSCM is all about “delivering products
and services from suppliers, manufacturers to end customers through material flow,
information flow and cash flow in the context of environment.” The traditional supply chain
management used to focus on the optimum cost, the best service and on the total quality that
in some way or the other aid to the environment (Xu et al. 2013). The modern GSCM has
made it a necessary requirement to include the environmental idea in every stage of service
and product in Supply chain (Chin, Tat and Sulaiman 2015). This is why the Supply Chain
managers all around the world have a significant role to play in the process of development of
the innovative environmental technologies for tackling the issues that are been facing by the
economy on the environment related issues and at the same time, communicate this to each
and every stakeholder in the supply chain.
Business worldwide who wants to ensure better tomorrow and to improve their brand
image among its customers are working on encouraging their suppliers for reducing their
environmental impacts and for sending that message up their supply chain. As claimed by
Mirhedayatian, Azadi and Saen(2014), there are certain benefits of Green Supply Chain
Management and they include in terms of financial benefits, the social benefits as well as the
environmental benefits. In terms of financial benefits, GSCM helps in increasing the revenue,
reducing the costs, increasing the utilisation of the asset and enhancing the customer service.
Furthermore, in terms of environmental benefits, the GSCM helps in reducing the waste,
increasing the energy efficient, reducing the emissions of air into the atmosphere, reducing
the emissions of water into the land and reducing consumption of fuel (Brandenburg et al.
2014). Lastly, in terms of social benefits, it is to note that GSCM helps in reducing the level

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of community impacts, reduction of noise, avoidance of traffic congestion while improving
safety, health and security of the human beings. Jabbour and de Sousa Jabbour(2016) in this
context have opined that Green SCM helps in improving the operations of the companies by
means of employing environmental solution and at the same time, aids in improving agility.
Xu et al. (2013) Green Supply Chain management helps in mitigating the risks as well as the
speed related innovations. Furthermore, it further helps in increasing adaptability (Joshi and
Rahman 2015). It is to mention that the GSCM analysis often helps in the process of
innovation as well, which further leads to continuous improvements. Seuring(2013) also
hasclaimed that GSCM helps in promoting alignment while involving the negotiating policies
with the customers and the suppliers that led to better alignment of the business principles
and processes. The various different activities that in the process of green supply
management are presented in the below mentioned figure (fig 1).
a) Green procurement or purchasing- Green purchasing or procurement is all about
the environmental purchasing that consists of the involvement in the activities that
comprise of the reuse, reduction and the recycle of the products in the purchasing

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process. With the same, it is also to mention that green purchasing is considered to be
solution for the economically conservative and environmentally concerned business
(Goh and Balaji 2016). At the same time, they also consider green purchasing as a
concept of attaining choice of services and products that can help in minimising the
environmental impacts.
b) Green manufacturing- The process of green manufacturing can be defined as the
production process that makes use of the inputs with comparatively less
environmental impacts that are increasingly efficient and that generate very little or
negligible pollution and waste (Schmuck et al. 2018). It could result in lower costs of
raw materials and reduction of the occupational and environmental safety expenses.
c) Green Distribution- It is to mention that green distribution comprise of green
logistics and green packaging, The characteristics of packaging like the shape,
materials and the size have notable influence on the process of distributing as of the
impact on the products’ transportation characteristics (Piecyk et al. 2015). A better
packaging, along with a rearranged patterns of loading could help in reducing of the
usage of materials and at the same time, can help in increasing some space utilisation
in the warehouse.
Furthermore, it is to note that the main idea of GSCM is to eliminate and decrease the
waste along with the supply chain. The various types of environmental issues under the
directives and the legislations from the customers, particularly in the United States, Australia,
Japan and the European Countries has become a significant concern for the manufacturers
(Xu et al. 2013). As a much more efficient, integrated and systematic strategy, Green Supply
Chain Management has recently developed as a crucial new innovation that helps the
companies in developing a “win-win” strategy that could attain the profit as well as the
market share objectives by means of decreasing down their environmental risks and the

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influences, while raising their ecological efficiency (Schmuck et al. 2018). It is to mention
that the very recent study on the Green Supply Chain Management have claimed that GSCM
can be distinguishedinto two different ways and they are- the performance management and
the framework of GSCM (Brandenburg et al. 2014). There are some frameworks that have
proposed the way of improving the collaborative relationship in between the suppliers and the
manufacturers for exploring the gaps in between the framework and the current state for
aiding to the managerial decision making process and for developing some general processes
towards attaining and maintenance of the green supply chain (Yu et al. 2014). Different sets
of performance measures are used for determining the effectiveness or efficiency of the
prevailing system and for comparing the competing alternative systems as well as to design
the proposed systems by means of determination of the values of the decision variable that
yield the most desirable performance levels (Ling Guo, Qu and Tseng 2017).
1.2. Green purchasing in firms
Figure 2: Green Purchasing in Firms and its importance
It is to mention that over the past two decades, increasing concerns regarding the
decreasing quality of ecosystem have resulted in a renewed interest in the process of
environmentalism (Teixeira et al. 2016). This concerns have compelled the purchasing

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professions to assess their present purchasing strategy. Green purchasing is all about
“adoption of ecologically responsible practices in business activities used to meet needs for
materials, goods, utilities and services” (Piecyk et al. 2015). It allows the organisations to
offset the environmental and financial risks, instead of inheriting it from their suppliers. This
approach is one of the several components of sustainable purchasing, along with a high
dedication to the social responsibility as well as good corporate citizenship. According to
Laari et al. (2016), green purchasing could bring important benefits for its practitioners or the
firm that practices it. The significant benefits to consider in this regard are in terms or risk
management, stronger supplier relationships, eco-efficiency and the improvements in the
environmental performance (Xu et al. 2013). Sometimes the companies make some
individual decision on purchasing with an eye to its ecological impact, realising the
productive and positive benefits of public relations that actions might bring in. However,
Wong, Wong and Boon-Itt(2015) have claimed that green purchasing “is a continuous
commitment to start-to-finish process management with consideration for environmental
impact”. The firms have looked to their respective supply chain and have seen the different
areas where making improvements in the manner they are operating could produce high
profits. Laosirihongthong, Adebanjo and Choon (2013) in this context have opined that the
GSCM is all about “delivering products and services from suppliers, manufacturers to end
customers through material flow, information flow and cash flow in the context of
environment.”It benefits the environment by means of reduction of emissions of greenhouse
gas, the usage of the toxic and hazardous substances and the pollution, including the wastage
from plastics. With the same, it also supports the economy of the nations by means of
creation of new markets for the innovative services and products.
. Jabbour and de Sousa Jabbour (2016) in this context have opined that Green SCM
helps in improving the operations of the companies by means of employing environmental

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solution and at the same time, aids in improving agility. Green Supply Chain management
helps in mitigating the risks as well as the speed related innovations. Furthermore, it further
helps in increasing adaptability. It is to mention that before a company can go green, it first
needs to want the same (going green). There are certain advantages of going green including
positive brand image, reducing the risk, reduction of cost, customer satisfaction and increased
shareholder value. These are some of the key advantages that no company that is planning for
long term development and growth can ignore. A company that has gone green is likely to be
considered as a good corporate citizen and this further helps in increasing its brand image in
the eyes of the customers (Lo 2014). Furthermore, a company that goes green in response to
the concerns of the customers, increases its customer satisfaction levels and this a key point
in the customer retention process. It is also to mention that not only is any firm that does not
go green risk a run with the law to fail in complying with the green regulations that are highly
increasing the the rate of Fibonacci’s rabbits all around the world, it is also maintaining more
level of liability than it actually requires to (Suki 2016). It is also to mention that the
hazardous chemicals are just the lawsuits and the accidents that are waiting to take place.
With the help of green purchasing, one could offset the environment and the financial risk,
instead of just inheriting it from their suppliers. Furthermore, Dubey et al. (2013) in this
context have highlight one more benefit of green purchasing for the firms. They have claimed
that going green does not cost much. Majority of the time it actually helps in the firm in
saving their money, particularly when the new services and products use less amount of
energy and generate less amount of wastage and last for longer period of time. With the same,
they have also opined that often the green products work much better as compared to the
other toxic counterparts. Hence, going green can actually help in reducing the costs of
operations, the repairing and replacement costs, the hazardous material management costs,
the costs of health and safety of the consumers and the costs of disposal as well (Lee 2015).

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Lastly, it is to mention that a better brand that have some happy customers who keep on
coming back and driving up the company sales while the costs keep falling can result in some
notable EPS and ROI and this makes the investors giddy, which is actually the number one
goal of each and every firm, whether they admit it or not.
One example of company to consider in this context is Coca Cola. It have saved about 44
million dollars by means of switching to the reusable plastic shipping containers from the
corrugated one for the one litre and the 20 ounce bottles and conserving about 196 million
pounds of the corrugated materials. Coca Cola recently in the year 2017 have launched the
first ever advertising campaign made out of 100% recyclable packaging called “Love Story.
It made use of a tale of two star crossed plastic bottles for encouraging the consumers of the
company to recycle in this “Bottle Love Story” campaign (Moser 2015). In a spot, two plastic
bottles fall in love with each other as they meet again and again, which is due to the chance of
getting recycled (Tachizawa and Wong 2015). The campaign has recycling at its heart as the
whole set was made out of all the recyclable materials, especially the Coca Cola packaging.
The campaign was created by Lacy Barry and CrisWiegandt who used about 1500
smartWater. Honest Tea bottles, Sprite, Coca Cola, Fanta bottles and cans at the time of
production. Through making a recycling focused consumer communication campaign and
promoting recycling messaging to its customers world-wide, Coca Cola is focused on
creating its positive brand image among the minds of its consumers as consumers today are
highly conscious about environment and sustainability (Gertner, David and Rifkin 2018). The
main message of this campaign is to let its consumer know that the packaging of Coke is
valuable and it needs to be disposed of in proper way so that it could be recycled. The
company aims to collect and recycle the equivalent of all its packaging by the year 2030
(Marshall et al. 2015). Use of Plastics, its disadvantages to health and environment are now a
trending topics. The governments all around the world are taking initiatives to lessen the use

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of plastics and plastic made materials in order to improve the living condition in the near
future (Lee 2015). Even the sea or marine animals are being effected for the human use of
plastics. Such initiates of Coca-Cola has let the current consumers to know that they need to
know about in order to make a better tomorrow.
1.3. Green purchasing effect on environmental performance
Figure 3: Green Purchasing: outcomes and advantages
According to what opined bySuki (2013), green purchasing is all about the purchasing
of services and goods with significantly environmental impact. It is to note that the
environmental performance is taken into consideration along with many other priorities like
price, performance, quality and availability (Dangelico and Vocalelli 2017). People all
around the world are becoming more aware of the environmental issues as well as the global
warming, the customers world-wide are asking more and more questions regarding the
products that they are purchasing on a daily basis (de Sousa Jabbour, de OliveriraFrascareli
and Jabbour 2015). The modern companies are likely to expect the questions regarding how

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green are their processes of manufacturing and the supply chain and how big is their carbon
footprint. The benefits of green purchasing upon environment and surrounding is notable
(Newton et al. 2015). It benefits the environment by means of reduction of emissions of
greenhouse gas, the usage of the toxic and hazardous substances and the pollution, including
the wastage from plastics. With the same, it also supports the economy of the nations by
means of creation of new markets for the innovative services and products (Chekima et al.
2016). The government world-wide strives for buying the environmentally preferable and
favourable services and goods. They take into consideration the environmental performance
over its whole life cycle while deciding whether or not one should buy a specific product or
service (Jayaram and Avittathur 2015). It is to mention that the main aim of green purchasing
is integrating the environmental considerations into the purchasing activities like the buying
and planning process (Tachizawa, Gimenez and Sierra 2015). Canadian government has also
introduced a Policy on Green Procurement that it introduced in the year 2006 and very
recently, they updated the same in the year 2018 (Hsu and Zomer 2014). The government has
integrated green practices in each and every field of businesses right from planning, buying,
using, maintenance and the disposal for reducing the environmental impact and to make sure
that best value is delivered. Even Chen and Chang (2013) have defined green purchasing as
“environmental purchasing consisting of involvement in activities that include the reduction,
reuse and recycling of materials in the process of purchasing”. They too consider green
purchasing as something that can be a solution for the economically conservative and
environmentally concerned business (Goh and Balaji 2016). At the same time, they also
consider green purchasing as a concept of attaining choice of services and products that can
help in minimising the environmental impacts. It helps in controlling the hazardous substance
and using the energy efficient technology.

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According to Blome, Hollos and Paulraj(2014), green purchasing can help in
conserving the natural resources of the environment that are likely to come to an end if no
steps are taken. It helps in minimising the pollution of the environment while reducing the
usage of energy and water and avoiding the environmental health hazards. Furthermore, it
also helps in diverting the materials from the landfills and in improving the availability and
usage of the environmentally preferable and adaptable products (Dobey, Gunasekaran and Ali
2015). Business worldwide who wants to ensure better tomorrow and to improve their brand
image among its customers are working on encouraging their suppliers for reducing their
environmental impacts and for sending that message up their supply chain. With the same,
they help in supporting the locally produced services and goods (Dangelico and Pontrandolfo
2015). The practice of green purchasing helps in promoting less use of toxic products and in
helping to protect the health of the consumers (Ling Guo, Qu and Tseng 2017). The
significant benefits to consider in this regard are in terms or risk management, stronger
supplier relationships, eco-efficiency and the improvements in the environmental
performance. Sometimes the companies make some individual decision on purchasing with
an eye to its ecological impact, realising the productive and positive benefits of public
relations that actions might bring in. With the help of green purchasing, one could offset the
environment and the financial risk, instead of just inheriting it from their suppliers. Again, as
per Dangelico and Pontrandolfo 2015, going green does not cost much. Majority of the time
it actually helps in the firm in saving their money, particularly when the new services and
products use less amount of energy and generate less amount of wastage and last for longer
period of time. It helps in minimising the pollution of the environment while reducing the
usage of energy and water and avoiding the environmental health hazards.
1.4. Gap in the research

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However, it is to note that the literature review is not free from any limitations. This
literature review has not focused on the negatives of the Green Supply chain Management. It
has went on describing and analysing the positive factors only. With the same, there are also
other factors that affect the business operations apart from the green supply chain
management and they are not taken into consideration. This is why, it is very important for
this research to put more emphasis on some specific negative affect of the green supply chain
management and try to figure out the role of organisational managers and employees on the
overall success of the green supply chain management in an organisation.

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environmental management, 188, pp.351-363.
Ahi, P. and Searcy, C., 2013. A comparative literature analysis of definitions for green and
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Blome, C., Hollos, D. and Paulraj, A., 2014. Green procurement and green supplier
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Brandenburg, M., Govindan, K., Sarkis, J. and Seuring, S., 2014. Quantitative models for
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Chin, T.A., Tat, H.H. and Sulaiman, Z., 2015. Green supply chain management,
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