Impact of Green Supply Chain Management Practices on Business Performance: Evidence from Indian Manufacturing SMEs

Abstract

This study investigates the implementation of Green Supply Chain Management (GSCM) practices and assesses their effects on the environmental, financial, and operational performance of manufacturing Small and Medium Enterprises (SMEs) in India, specifically focusing on the Chemical, Textile and Rubber/Plastic industries.  A quantitative research approach was employed, utilizing a structured questionnaire to gather primary data from 123 valid SME responses. Statistical techniques, such as Pearson’s correlation, multiple regression, and one-way ANOVA, were applied to test the hypotheses. A purposive sampling method was used to obtain responses from key decision-makers in these industrial clusters.
The findings revealed that GSCM practices significantly and positively impact environmental and operational performance, leading to improved resource utilization and process efficiency. Nonetheless, the effect on financial performance is not immediately significant because of the high initial investment costs and delayed financial returns. Additionally, environmental performance is a crucial mediating factor in achieving financial and operational success.
This study highlights the need for a long-term strategic approach and emphasizes the role of government support, such as financial incentives and regulatory support, in overcoming the challenges faced by SMEs during the early stages of implementation. Future studies should expand this analysis to other sectors, such as electronics and automotive, to enhance the generalizability of the findings. Additionally, incorporating qualitative methods and exploring the role of emerging digital technologies, such as the Internet of Things (IoT) and AI, can enhance GSCM effectiveness.