Chapter 3

Empirical investigation of SSCM for Indian thermal power sector

3.0 Introduction

This chapter discusses the outcomes and key observations of a questionnaire-based

survey on Indian thermal power industries. The major objective of this survey is to
explore the current practices and issues related to SSCM in Indian thermal power
industries. This chapter begins with the formulation of hypotheses related to SSCM
practices. This chapter further discusses several other aspects of the survey including
the development of the questionnaire, its administration, validity and descriptive
statistics. Discussions on the results of hypotheses testing are also provided in this
chapter along with survey results and managerial implications.

3.1 Hypotheses formulation

This part focuses on the development of hypotheses. In this research two types of
hypotheses have been devised. The first type of hypotheses addresses the SSCM success
of various issues related to SSCM, while the second type of hypotheses apprehends the
dissimilarities between different sectors regarding the issues.

3.1.1 Hypothesis related to SSCM drivers

Drivers or enablers of the sustainable supply chain management refer to the factors that
initiate socio-environmental involvement in the supply chains of the firms. More is the
influential ability of these drivers higher is the inclination of the firms to adopt SSCM.
Societal pressure and governing bodies have been considered as the most important
drivers of SSCM. With increasing awareness of the detrimental impacts of thermal
power industries, pressure on these firms is escalating from society, its own employees
and also from the government to reduce their socio-environmental impacts. Besides, the
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thermal power sector has also begun to realize that for an effective utilization of SSCM
practices the involvement of academicians is of great importance and the firm's
performance may be accelerated with more academic involvement leading to the
development of new process and technologies. Moreover, thermal power industries
being perceived as the second largest polluting industry have also the risks of attracting
negative media attention and public outcry. Therefore, formulation of the first
hypothesis is as such

Hypothesis 1. SSCM adoption in Indian thermal power industries is initiated by (i)

employee pressure (ii) government policies (iii) academic involvement and (iv)
expected risks of non-adoption.

3.1.2 Hypothesis related to SSCM barriers

Various factors offer resistance to SSCM implementation in thermal power industries.

In this research, these factors are treated as barriers of SSCM. These factors may be
either external or internal to the industries. External factors and internal factors have
been termed as ‘threat' and ‘weakness' respectively in this research. One of the main
resistance to the SSCM practices for most of the organizations in developing economy
like India is the lack of adequate resources. They suffer to get the skilled human
resource, best quality tools and adequate funds to carry out sustainable operations.
Another important issue which is emphasized by various authors is lack of sector-
specific performance measurement issues. Besides, these lacks of coordination among
various departments of the organizations and unacquainted society have also been
advocated by many researchers to offer hindrance to SSCM practices. Hence, the
second hypothesis in this research is formulated as follows.

Hypothesis 2. SSCM adoption in Indian thermal power industries are negatively

influenced by (i) resource limitations (ii) lack of performance management measures
(iii) lack of coordination and (iv) unacquainted society
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3.1.3 Hypotheses related to behavioural factors

SSCM implementation is a complex phenomenon and its effectiveness depends highly

on the human resources of the organization like any other business strategy because
employees are a primary source of organizational strength (Muduli et al., 2013). The
willingness of a person to perform a certain action is equally important as his ability to
do particular work owing to the fact that without personal interest and zeal, no one can
perform to a level that reaches or exceeds his ability (Muduli et al., 2013).
Hence, the success of operations management tools and techniques, and the
accuracy of its theories rely heavily on our understanding of human behavior (Bendoly
et al., 2006). People often fail to make choices consistent with normative or optimal
policy and do so in specific and systematic ways (Tokar, 2010). Reis and Pena (2001)
suggest that in order to be successful in the application of improvement techniques, it is
important to recognize the human element including the resistance to, and, fear of
change (Atilgan and McCullen, 2011).
The level of support by the top management of any organization particularly in
thermal power plants plays a significant role to motivate its employee for effective
implementation of SSCM adoption and efficient utilization of environmental resources
to excel SSCM practices. Participative work culture, which is the cornerstone of
diversity and empowerment, has been perceived to enhance SSCM adoption practices
(Muduli et al., 2013). Another important factor, Readiness to adopt changes by the
employees is the critical precursor either of a successful organizational change or
failure.
Additionally, in the present globalization scenario, SSCM success demands that
various teams of a company integrate and develop the working culture that will enhance
the exchange of their idea not only within the country but also cross-country. Based on
these extensive literature reviews, the third hypothesis has been formulated as such:

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Hypothesis 3. SSCM performance in thermal power industries is improved by the soft

factors (i) Scale of Managerial support for SSCM Implementation (ii) Participative
work culture (iii) Employee Readiness for Adoption of SSCM related changes
(iv) Coordination among various teams
3.1.4 Hypotheses related to selection of suppliers (outsourcing)

Sustainable supply chain management (SSCM) has been determined to be a powerful

tool that extends the duty of commercial enterprise establishments from being reactive
in reducing pollutants and waste and different sustainable related efforts, to proactively
assuming full duty for their products from acquisition of raw materials to the end
disposal of the products enlightening the view of sustainability (Zailani et al., 2012).
Hence, sustainable procurement is the first step towards making supply chain
sustainable which is also supported by several researchers (Buyukozkan and Cifci,
2011; Trapp and Sarkis, 2016; Sengar et al., 2018). Govindan et al. (2013) observed that
sustainable outsourcing partner (SOP) can implement green innovations in their
operations that would support focal firms to attain a sustainable supply chain. Bai and
Sarkis (2010) analyzed supplier must have environmental certification and ability to
invest in renewable energy initiatives and research for better and more sustainable
products. Buyukozkan and Cifci (2011) studied that the suppliers should be able to
provide green items which can be reused, recycle and disposed of in an environment-
friendly manner.
These facts led to the formulation of the fourth hypothesis as follows:

Hypothesis 4. Improvement in SSCM practices requires selection of suppliers based on

the criteria (i) Lean management practices (ii) Investment in high technology
(iii) Green transport channel and (iv) Reverse logistics

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3.2 Questionnaire development

Thermal industries are in an urge to get profit, fulfill demand and show maximum
benefiting which they deserve to achieve by implementing SSCM in their regular
practice. So to find the measuring criteria which are helping in achieving the goal of
SSCM implementation in Indian thermal power industries, a survey has been
undertaken of a standard designed questionnaire on various issues of sustainable supply
chain management. The survey instrument was categorized into different sections.
These are given in Appendix 1-6.

 Drivers or Enablers (Appendix 1)

 Barriers (Appendix 2)
 Performance measures indicators
 Social measures (Appendix 3)
 Environmental measures (Appendix 4)
 Economic measures (Appendix 5)
 Supplier selection criteria (Appendix 6)

3.2.1 Structure and content validation of the questionnaire

The questionnaire was tested for (i) reliability, (ii) content validity, (iii) construct
validity.

Reliability: Reliability evaluates the identical results produced by any measuring

instrument on repeated attempts of any test or another extent of measurement (E.
Carmines and R. Zeller, 1979). The internal consistency and reliability of the
questionnaire, pertinent to any applications, were measured using Cronbach's coefficient
(Alpha, α) which is treated as a measure of the extent of homogeneity of the survey
instrument (Z. Zhang et al., 2000). The internal consistency of all survey instrument

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shown their higher response values for all the questions exceeds 0.7, which is the
minimum suggested value (J. Nunnally, 1967).

Content validity: Due to the lack of quantitative measures of the survey instrument,
content validity evaluates it subjectively. A measure has content validity if there is
general agreement that the measure has items that cover all aspects of the variable being
measured (Z. Hoque and W. James, 2000). In this research the framing of the measuring
items based on exhaustive literature review and through the assessment done by a group
of fifteen persons, those were experts from the similar fields from industry as well as
from academics. Among them, five experts from academics ( including three with
special research interest on sustainable supply chain and other two with the research
interest in small business and supply chain management), whereas another ten members
of the expert team work in the top, middle and low-level management positions in
different Indian thermal power plants. The working experience of these respondents
was varying between minimum of five to ten years and even more than that. The content
validity was further tested during the pilot survey as per the prescribed guidelines
(C. Forza, 2002). The questionnaire was further improved either by deleting some
questions or by modifying a few questions to convey their intended meaning through a
careful review of the responses received during the pilot study.

Construct validity: Construct validity evaluates the degree to which all the elements of
a construct measure the same construct (Z. Zhang et al., 2000). In order to test the
construct validity a test of unifactoriality has been proposed in the literature (J. Antony,
et al., 2002). Unifactoriality of each construct was checked using the Varimax rotation
method through principal component analysis. The items having a factor loading of 0.5
or higher and across loading of 0.35 or less are further used for the improvement of the
questionnaire.

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3.3 Questionnaire administration

Questionnaires were sent to different Indian thermal power plants through self-
addressed envelope by post to the persons having minimum of five to ten years and
more than that of experience in the similar field of working in different sections of the
particular plant. So it varies from person to person working in the different area like
operations, production, quality, environmental safety etc. in the posts of the foreman to
managers and general managers with high experience. Besides this, another method like
E-mail survey was conducted. Along with this the method like personal visits and phone
calls were adopted for enhancement of the response rates. It is requested to respondents
to respond each answer of the questionnaire in a five-point Likert scale (i.e. 1 = totally
disagree, 2 = partially disagree, 3 = no opinion, 4 = partially agree, 5 = totally agree).

3.4 Survey responses and respondent profile

A total of 400 survey instruments were sent while 146 responses were received. But out
of 146 responses, 131 were accepted for further analysis. Hence the response rate of
32.7 percent is attained. The rate of response is higher than that of obtained by Muduli
and Barve (2011) 28.8 percent, Wee and Quazi (2005) 21.9 percent and V. Ravi (2005)
21 percent in the similar field of research, hence this response rate is considered
reasonable.

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Zone wise response rates

24.63% Central and West zone

41.09%
South zone
27.56%

North zone
6.75%
East zone

Figure 3.1: Percent of respondents of the survey, zone wise

Out of the 131 valid responses, 41.09% of the respondents are from the eastern part of
India, 27.56% are from the southern part, 24.63% belongs to the central and western
part of India while remaining 6.72% are from north India as shown in figure 3.1.
Similarly based on the number of years of experience, 31.4% of the respondents
have less than 5 years of experience, 37.5% have experience between 5 to 10 years,
24.3% have experience between 10 to 15 years, while 6.8% have more than 15 years of
experience as shown in figure 3.2.

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Respondent profile based on number of years of experience

6.80%

31.40%
24.30%
Experience <5 years
Experience 5 -10 years
Experience 10-15 years
Experience > 15 years
37.50%

Figure 3.2: Respondent profile based on number of years of experience

Based upon the designation 33.28% of the respondents were in executive level
whereas rest are in various managerial levels (42.54% in assistant manager level,
18.42% in deputy managerial position whereas 5.78% are in senior managerial position)
as shown in figure 3.3.

3.4.1 Non-response bias

Responses provided by the early and the late respondents were compared to test the
non-response bias. The idea behind this is that the responses provided by the late
respondents are more likely to that of the non-respondents than the early respondents
(J.S. Armstrong and T. Overton, 1977). In this survey non-response bias was tested by
comparing the responses of the early respondents (72 in this case who responded
without any reminder or with a single reminder) with that of the late respondents (in this
case 52 who responded after two or more reminders). The test results of t-tests on some
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of the key SSCM variables indicate the absence of any significant dissimilarity between
responses of early and late respondents. Therefore non-response bias in this study is
ruled out.

Respondents based on designation

5.76%

18.42% Excutive
33.28%
Asst. Manager
Deputy Manager
Senior Manager
42.54%

Figure 3.3: Percent of respondents of the survey based on their designation

3.5 Hypotheses testing

Multiple linear regression analysis test has been employed to test the hypotheses on the
Statistical Package for the Social Sciences (SPSS) software (license version 17.0).

3.5.1 Hypothesis 1: SSCM adoption in Indian thermal power industries is initiated by

(i) employee pressure (ii) government policies (iii) academic involvement and
(iv) expected risks of non-adoption.

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Hypothesis 1 was tested through multiple linear regression analysis using SPSS
17.0. In the test, ‘SSCM performance’ was considered as the dependent variable while,
‘employee pressure’, ‘government policies’, ‘academic involvement’ and ‘expected
risks of non-adoption’ was considered as the independent variables. The test results are
represented in table 3.1.
The model derived from the analysis is: SSCM performance = 16.818 + 1.588
employee pressure + 0.685 regulatory requirements + 0.712 government policies +0.798
academic involvement +0.531 expected risks of non-adoption. It can be observed from
the results that independent variables included in the model have an influence on the
dependent variable at a high significance level (p values are less than 0.05). Hence the
hypothesis is accepted.

Table 3.1: Results of regression analysis for drivers of SSCM

Multiple R 0.612
R- square 0.431
Adjusted R Square 0.411
Std. Error 2.912
Durbin-Watson 1.792
F 24.916, p<=0.000
Variables Unstandardized Standardized t sig VIF
coefficients Beta
Constant 16.818
Government policies 1.588 0.472 6.401 0.000 1.189
Expected risks of non- 0.712 0.171 2.388 0.016 1.178
adoption
Employee pressure 0.568 0.168 2.858 0.008 1.018
Academic involvement 0.431 0.149 2.112 0.029 1.230

3.5.2 Hypothesis 2: SSCM adoption in Indian thermal power industries are negatively
influenced by (i) Resource limitations (ii) Lack of performance management measures
(iii) Lack of coordination and (iv) Unacquainted society
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A multiple linear regression analysis was carried out to test hypothesis 2. Here ‘SSCM
performance’ was taken as the dependent variable and the variables ‘resource
limitations’, ‘lack of performance management measures’, ‘lack of coordination’ and
‘unacquainted society’ were considered as the independent variable. The test results are
shown in table 3.2. The model derived from the analysis can be represented as
-6.512+0.412 resource limitations +0.812 lack of performance management measures
+0.391 lack of coordination +0.572 unacquainted society. The results indicate that all
the independent variables influence the dependent variable at a high significance level
(p<=0.001). Therefore the hypothesis was accepted.

Table 3.2: Results of regression analysis for barriers of SSCM

Multiple R 0.662
R- square 0.523
Adjusted R Square 0.506
Std. Error 4.221
F 38.723, p<=0.000
Variables Unstandardized Standardized t sig VIF
Coefficients Beta
Constant -6.512
Resource limitations 0.412 0.200 3.273 0.001 1.098
Lack of performance 0.812 0.494 7.927 0.000 1.139
management
measures
Lack of coordination 0.391 0.329 5.427 0.000 1.080

Unacquainted society 0.572 0.421 6.243 0.000 1.213

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3.5.3 Hypothesis 3. SSCM performance in thermal power industries is improved by

the soft factors (i) Scale of managerial support for SSCM implementation (ii)
Participative work culture (iii) Employee readiness for adoption of SSCM related
changes (iv) Coordination among various teams
To test hypothesis 3, a multiple linear regression analysis was carried out. Here the
behavioral (soft factors) are independent variables whereas ‘perceived SSCM outcome’
is the dependent variable.

Table 3.3: Results of regression analysis of behavioural factors of SSCM

Multiple R 0.624
R- square 0.504
Adjusted R Square 0.472
Std. Error 4.298
Durbin-Watson 1.702
F 24.102, p<=0.000
Variables Standardized t sig VIF
Beta
Scale of managerial support for 0.282 3.201 0.012 2.112
SSCM implementation
Participative work culture 0.162 2.211 0.028 1.498
Coordination among various 0.172 2.052 0.038 1.831
teams
Employee motivation 0.131 1.798 0.048 1.322

The test results are shown in table 3.3. The results of the analysis indicate the existence
of a positive relationship between the behavioral factors and perceived SSCM outcome.
Hence hypothesis 3 was accepted.

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3.5.4 Hypothesis 4. Improvement in SSCM practices requires selection of suppliers

based on the criteria (i) Lean management practices (ii) Investment in high technology
(iii Green transport channel and (iv) Reverse logistics
Hypothesis 4 was tested employing a multiple linear regression analysis where the
behavioral (soft factors) were treated as independent variables and ‘perceived SSCM
outcome’ as the dependent variable.

Table 3.4: Results of regression analysis of supplier selection criteria

Multiple R 0.686
R- square 0.508
Adjusted R Square 0.468
Std. Error 4.301
Durbin-Watson 1.698
F 24.098, p<=0.000
Variables Standardized Beta t sig VIF
Lean management practices 0.312 3.198 0.021 2.108
Investment in high technology 0.162 2.218 0.031 1.487
Green transport channel 0.168 2.048 0.041 1.789
Reverse logistics 0.138 2.038 0.038 1.401

The test results are shown in table 3.4. The results of the analysis indicate the existence
of a positive relationship between the supplier selection criteria and perceived SSCM
outcome. Hence hypothesis 4 was accepted.

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3.6 Discussion

The research work presented in this chapter attempts to explore the perception of Indian
thermal power plants (TPPs) regarding the factors that affect SSCM implementation.
Further, the type and strength of influence of these factors on SSCM adoption were
investigated based on the data collected through a questionnaire based survey. The data
collected were analyzed using various statistical methods. The survey results indicate
that the industries operating in Indian thermal power sector perceive pressures from
regulative bodies for SSCM adoption. Further, their perception regarding risks of non-
adoption of SSCM practices also serves as a significant driver for its adoption. Analysis
of the survey results indicates that there are ten factors which are perceived as barriers
to SSCM implementation by the TPPs operating in India. Among the barriers ‘lack of
performance management measures' was perceived as the strongest barrier. The results
also indicate that the industries interested in SSCM implementation also suffers from
limited availability of resources. Lack of coordination among involving departments
also perceived as one of the major barriers to SSCM adoption by the TPPs.
SSCM is a relatively new concept and is in the development phase particularly
in the context of TPPs; hence few studies are available in the literature. In this respect
the present survey that delineates the importance of factors influencing SSCM
implementation through hypotheses assumes importance. In hypothesis 1, the direction
of influence of four factors ‘government policies’, ‘expected risks of non-adoption’ and
‘employee pressure’ and ‘academic involvement’ on SSCM adoption were tested. The
results indicated a positive relationship between the dependent and the independent
variables. However, it was found that the four factors account for 43.1% of the
variation. This indicates that there exist some more factors that drive SSCM adoption in
Indian TPPs.
Hypothesis 2 tests the impact of four independent variables ‘resource
limitations’, ‘lack of performance management measures’, ‘lack of coordination’ and
‘unacquainted society’ SSCM implementation. A positive relationship between the

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independent variables and the dependent variable indicates that these factors greatly
influence SSCM performance. However, as the questionnaire asked the respondents
regarding their perception about inhibiting the effect of these factors on SSCM, so it
could be concluded that policies towards the reduction of the influence of these factors
would improve SSCM performance. Hypothesis 3 tests the relationship among
behavioral factors on SSCM success. The results indicate a positive relationship exists
or in other words a higher level of managerial involvement in SSCM related efforts that
encourages participative work culture and employee motivation leads to enhanced
SSCM performance.
Hypothesis 4 tests whether the selection of suppliers based on various criteria has
any influence on SSCM performance. The results indicated that TPPs perceives the
selection of suppliers has an impact on SSCM performance on the positive direction.

3.7 Conclusion

Questionnaire based survey that has attempted to investigate various issues related to
SSCM implementation in TPPs has been reported in this chapter. Four hypotheses have
been proposed and tested for their validity. Based on the results, all the hypotheses were
accepted. The hypothesized findings validate some important and widely discussed
aspects of SSCM in thermal power industries.

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