Impact of sustainable supply chain management on cost performance: empirical evidence from manufacturing companies of Bangladesh

Abstract

PurposeThe aim of the study has been performed to investigate the relationship between sustainable supply chain management (SSCM) practices and the cost performance of manufacturing firms in Bangladesh. Moreover, this paper highlights the key environment-friendly approaches and their association with financial performance in Bangladesh.Design/methodology/approachThe paper empirically assesses sustainable supply chain performance using four major supply chain practices, including sustainable procurement, sustainable production, sustainable distribution and investment recovery, and compares it with the cost performance. Twenty-four variables were identified through different literature and distributed as a structured questionnaire among the managers appointed in different manufacturing firms in Bangladesh. An empirical study was conducted using the Partial Least Square-Structural Equation Modeling (PLS-SEM) technique to examine the hypothesized relationships.FindingsThe results find a positive relationship in two variables of sustainable supply chain practices, including sustainable procurement and investment recovery, while sustainable distribution negatively impacted cost performance. In addition, sustainable production found no effect on cost performance.Research limitations/implicationsThe paper emphasizes the financial perspective of a sustainable supply chain without explicit consideration of sustainability's environmental and social dimensions.Practical implicationsThis study has implications for the literature on the SSCM approaches of manufacturing firms in the least developed economies. In addition, this study could work as a guideline for some manufacturing industries that prefer a policy or standard to alter their traditional supply chain management system to a sustainable supply chain.Originality/valueThe paper provides a comprehensive framework for evaluating the coordinated effect of SSCM practices on cost performance where variables of four specific activities of SSCM and cost performance are adopted from different studies. Further studies could be initiated, including some other eco-friendly supply chain variables, and the effect could be evaluated from an environmental perspective.