Effects of Green Supply Chain Management Practices on the Performances of the Ethiopian Pharmaceutical Industry

Abstract

Introduction: The pharmaceutical industry is characterized by a high research and development, high quality constraints and higher margins for sales. Its focus is on conveying effective and safe products at sufficient quantities for the global demands. But it is also a significant contributor to generate substantial amount of waste by-products. These are conflicting objectives requiring alternative solutions like greening. The relationship between green supply chain initiatives and performance outcomes has been subject to numerous studies but the results are not conclusive. Ethiopia has a strong policy; however, there is limited research on the effects of green supply chain management practices for pharmaceutical industry performances. Objective: The aim of this study was to investigate effects of green supply chain management practices on the performances of the Ethiopian pharmaceutical industry. Method: The study employed mixed research approach and industry based cross-sectional research design. All pharmaceutical industry found in and around Addis Ababa were the study population. The sample size (n = 200) was computed using Yamane‘s formula and probability and non-probability sampling methods were used. This study used primary and secondary data. Data were collected by using a questionnaire and semi-structured in-depth interview, focus group discussion & participatory observations. Data were analyzed by using SPSS-26 and 5% of participants were pretested. Green practices (OC, GM, ED, GP, GMK, GDR, GRL and LR) were measured using 40-items. Items were measured on five-point Likert scale and their Cronbach‘s-α was 0.866. Descriptive, correlation and multiple linear regression statistical methods were used. Variables with P-value of < 0.05 & the regression coefficient (β) ≠ 0 were considered as statistically significant. Results: Recycling, energy efficiency, transport optimization & water management were critical green practices while limited local suppliers, government support, financial incentives were from the challenges. Green manufacturing & green reverse logistics practices respectively impacted environmental (β =.536, β =.257, p < 0.001), financial (β =.374, β=.221, p < 0.001), operational (β =.319, p < 0.001, β= .197, p < 0.01) & overall pharmaceutical industry (β =.429, β =.253, p < 0.001) performances. Conclusion: The study concluded that green manufacturing and green reverse logistics greatly affected almost all forms of GSCM performances. As a result, companies should always prioritize enhancing these aspects, while consistent support from regulatory body can help alleviate significant challenges