The Roles of First and Second Tier Suppliers in Greening International Supply Chains

Abstract

Green Supply Chain Management (GSCM) requires coordinated action across firms from different countries. The chapter uses a case study of a Taiwanese SME supplying automotive parts to a large French car-maker to analyze to what extent and why final customers’ GSCM are integrated in their first tier suppliers (the case study company) and second tier suppliers (SME suppliers of the case study company). It is found that there are no formal collaboration mechanisms between firms in this supply chain. The SMEs are mainly reactive approaches in response to various pressures. Greening drive decreases in less environmentally regulated markets where final customers are not environmentally sensitive. Shared values act as incentive to exchange information and develop mentorship relations between customers and first-tier suppliers. These relations provided the blue-print for similar mentorship relationship between first-tier and second tier suppliers. First tier supplier teach second-tier supplier how to satisfy customers’ requirement but such collaboration depends on two factors: (a) the extent of environmental awareness of second tier suppliers have and (b) the supply chain complexity and weight of first and second tier sales to European Markets.