National Institute of Textile Engineering & Research

Analysis Of Supply Chain Sustainability Drivers Using A Structural

Equation Modeling Approach
Course Code: IPE-4200
Course Title: Thesis

A thesis by:
Name ID DU Roll

Md. Ahsanullah Nayem IP1701043 447

Ahmad Adnan IP1701053 407

Md. Nadim Faysal IP1701059 449

Md. Monir Hossen IP1701067 412

This report is submitted in partial fulfillment of the requirements for the degree of
Bachelor of Science in Industrial and Production Engineering

Department of Industrial and Production Engineering

National Institute of Textile Engineering and Research (NITER)

University of Dhaka

October 2021
 Certification

The undersigned have examined the thesis entitled ‘Analysis of Supply Chain Sustainability
Drivers Using A Structural Equation Modeling Approach’ presented by Ahmad Adnan, Md.
Ahsanullah Nayem, Md. Monir Hossen, Md. Nadim Faysal candidates for the degree of
Bachelor of Science in Industrial & Production Engineering and hereby certify that it is worthy
of acceptance.

Nurul Ahad Choudhury

Thesis Supervisor
Lecturer
Dept. of Industrial & Production Engineering
Signature & Date

Fahmeda Zarin
Thesis Supervisor
Assistant Professor
Dept. of English
Signature & Date

Dr. S M Fijul Kabir

Department Head
Assistant Professor
Dept. of Industrial & Production Engineering
Signature & Date

ii
 Abstract

Supply chain management is the management of a product or service, ensuring a smooth

production flow, starting with raw materials and finishing with delivery to the consumer.Supply
chain sustainability refers to the management of environmental, social, and economic
consequences.The promotion of good governance practices across the whole life cycle of goods
and services are also included in it.Supply chain sustainability has been one of the most dynamic
and productive decision management study topics in the last 30 years. The goal of this research is
to establish a relationship with the factors and their impacts on their sustainability.This research is
based on an exploratory survey that was done with employees and specialists from several
industries as well as direct industry professionals. In addition, a quantitative survey of 232
respondents was done to assess the requirements and make recommendations based on genuine
opinions. According to the opinion, a model was formulated in AMOS software.The findings of
the study show that activity-based research assists in identifying the schematic relationship
between factors that are considered as latent variables and measured variables. The measured
variables have a strong correlation with all of the latent variables following a structural equation
modeling approach.It aimed to develop a relationship with the factors and the impacts on
sustainability for those factors. Activity based research is becoming a standard way to get desired
outcomes than method or process-based research for a sustainable supply chain.This study is
unique for its activity-based structural equation modeling approach. The suggested approach and
conclusions will assist textile industries in addressing the challenges in supply chain management
and will provide some crucial recommendations for achieving supply chain sustainability.

Keywords

Supply Chain, Supply Chain Sustainability, latent variables, measured variables, structural
equation modeling

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 Declaration

We hereby declare that this submission is our own work and that, to best of our knowledge and

belief, contains no material previously published or written by another person nor material which

to a substantial extent has been accepted for the award of any other degree or diploma of the

university or other institute of higher degree, except here due acknowledgement has been made

in the text.

Name & Date__________________________

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 Acknowledgement

This research proposal concludes our Bachelor's degree studies in Industrial and Production
Engineering. It is a pleasure for us to conduct a research on ‘Analysis of Supply Chain
Sustainability Drivers using a Structural Equation Modeling Approach’, particularly in the context
of the textile industry.

Firstly, gratefulness goes to Almighty Allah to give us the ability to complete our thesis. We would
like to express our gratitude to our supervisor, Nurul Ahad Choudhury (Lecturer, Department of
Industrial & Production Engineering), for his invaluable assistance, advice, and recommendations
in successfully completing the thesis and Fahmeda Zarin (Assistant Professor, Department of
English) for her kind suggestions and co-operations.

We would like to express our gratitude to our course coordinator Mahamudul Hassan (Assistant
Professor, Department of Industrial & Production Engineering). Thanks to our classmates and
friends who provided us with valuable information and suggestions. Finally, we would like to
thank our parents and relatives for their support and encouragement throughout our studies; you
are always with us wherever we are today.

v
 Table of Contents

Table of Contents ........................................................................................................................... vi

List of Figures .............................................................................................................................. viii
CHAPTER ONE......................................................................................................................... 1
1.1 Introduction: .............................................................................................................................. 1
1.2 Significance of the study ........................................................................................................... 3
1.3 Background of the research ...................................................................................................... 4
1.4 Objective of the Study .............................................................................................................. 7
1.5 Problem statement of the research ............................................................................................ 8
CHAPTER TWO........................................................................................................................ 9
2.1 Introduction ............................................................................................................................... 9
2.2 Sustainable supply chain management: .................................................................................. 10
2.2.1 The necessity of Supply Chain Management: ..................................................................... 11
2.2.2 Achievement of economic prosperity .................................................................................. 11
2.2.3 Challenges to sustainability in industrial process ................................................................ 13
2.3 Challenges to supply chain sustainability in the textile industry: ........................................... 13
2.4 Review of recent research work:............................................................................................. 16
2.5 Gap in the literature ................................................................................................................ 18
2.6 Structural Equation Modeling: Review of papers that have applied SEM: ............................ 20
CHAPTER THREE ................................................................................................................ 23
3.1 Introduction: ............................................................................................................................ 23
3.2 Materials and Instruments: ...................................................................................................... 23
3.3 Steps involved in the research................................................................................................. 24
3.4 Theoretical construction of the study ...................................................................................... 27
3.4.1 Description of SEM ............................................................................................................. 27
3.4.2 Steps involved in SEM......................................................................................................... 29
CHAPTER FOUR .................................................................................................................... 31
4.1 Assumption and hypothesis of the model ............................................................................... 31
4.1.1 Assumptions......................................................................................................................... 31

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4.1.2: Hypothesis .......................................................................................................................... 32
4.2 Latent variables of the model .................................................................................................. 33
4.3 Measured variables of the model ............................................................................................ 34
4.4 Development of a Sustainable SCM model ........................................................................... 35
4.5 Population and Survey Sample ............................................................................................... 37
4.6 Desciptive data of the Survey ................................................................................................. 38
4.7 Reliability and Validity Tests ................................................................................................. 40
4.7.1 Chronbach Alpha Reliability Test ...................................................................................... 40
4.7.2 Chi-squared test ................................................................................................................... 45
4.7.3 Composite Reliability Test .................................................................................................. 47
4.7.4 Convergent Validity Test ..................................................................................................... 51
CHAPTER FIVE ...................................................................................................................... 52
CHAPTER SIX......................................................................................................................... 64
6.1 Discussions ............................................................................................................................. 64
6.2 Outcome of the Research ........................................................................................................ 65
6.3 Limitations of the research: .................................................................................................... 67
6.4 Future Recommendation of the Research ............................................................................... 67
6.5 Conclusion .............................................................................................................................. 68
Reference ...................................................................................................................................... 68
Appendix ....................................................................................................................................... 72

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 List of Figures

Figure 1. Sustainable supply chain ................................................................................................. 2

Figure 2 Steps involved in the research ........................................................................................ 24
Figure 3 Prerequisite of SEM modeling for survey based application ........................................ 28
Figure 4 Flow chart of Structured equation modeling steps ......................................................... 29
Figure 5 Development of a sustainable SCM model .................................................................... 36
Figure 6 People involved in supply chain decision making ......................................................... 39
Figure 7 Number of male and female taking part in the survey ................................................... 39
Figure 8 Structural Model Results ................................................................................................ 54

List of Tables
Table 4.1 Mean and Variances of the survey data ........................................................................ 38
Table 4.2 Case Processing Summary ............................................................................................ 41
Table 4.3 Reliability Statistics ...................................................................................................... 41
Table 4.4 Item Statistics ................................................................................................................ 42
Table 4.5 Inter-Item Correlation Matrix ....................................................................................... 43
Table 4.6 Item Total Statistics ...................................................................................................... 44
Table 4.7 Chi Square Test ............................................................................................................. 46
Table 4.8 Symmetric Measures of Chi Square Test ..................................................................... 47
Table 4.9 Composite Reliability Test ........................................................................................... 48
Table 4.10 Convergent Validity Test ............................................................................................ 52
Table 5.1 Correlation between the latent variables ....................................................................... 55
Table 5.2 Standardized Regression Weights ................................................................................ 57
Table 5.3 Intercepts ....................................................................................................................... 59
Table 5.4 Regression Weights ...................................................................................................... 60

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Table 5.5 Squared Multiple Correlations between the measured variables .................................. 61
Table 5.6 Computation of degrees of freedom ............................................................................. 62
Table 5.7 CMIN ............................................................................................................................ 62
Table 5.8 Baseline Comparisons................................................................................................... 63
Table 5.9 FMIN ............................................................................................................................ 63
Table 5.10 Model fit indices for the measurement model ............................................................ 63
Table 6.1 Correlations between variables ..................................................................................... 65
Table 6.2 Standardized Regression Weights ................................................................................ 66
Table 6.3 Model fit indices for the measurement model .............................................................. 67

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 ___________________________________________________________________________

CHAPTER
ONE
______________________________________________________________________________

INTRODUCTION
1.1 Introduction:
In recent years, globalization places demands on supply chain management to reach beyond pure
economic issues and matters like, e.g., environmentally friendly production and fair labour
condition. This raises interest in its intersection with sustainable development, which is usually
realized in an economic, environmental and social dimension. Sustainably managing supply chains
has become a growing concern for companies of all sizes and across a wider range of industries.
Meeting environmental and social standards along all stages of the supply chain ensures that
minimum sustainability performance is reached at least. Production processes are dispersed every
so often around the globe. Suppliers, focal companies and customers are linked by information,
material and capital flows. In line with the value of the product comes the environmental and social
liability incurred during different phases of the production. With this regard, focal companies of
supply chains might be held accountable for the environmental and social function of their
suppliers. Focal companies are those companies that usually govern the supply chain, provide
direct contact to the customer and design the product or service proffered [1]. Carter and Rogers
(2008) use a theoretical theory-building approach to synthesize the literature at the time and
incorporate complementary theoretical bases to introduce a conceptual framework of sustainability
as it is applied to the supply chain – a concept which they refer to as SSCM (Figure 1).
 Environmental Social
performance performance
Sustainability

Economic
performance

Figure 1: Sustainable supply

chain

At the center of this conceptualization is Elkington’s triple bottom line: the intersection of the
environmental, social and economic activities. This is a potentially powerful means of conveying
what sustainability means for an organization. Rather than suggesting that firms identify and
engage in social and environmental activities which will hopefully help, the triple bottom line
explicitly directs managers to identify those activities which develop economic performance and
command the averting of social and environmental activities which fall outside of this intersection.
[2]

The economic system deepens on society and human existence; in specific, the sustainability of
societies and the preservation of traditional variety resists the easy economic thrive. Social well-
being metrics considers the societal influence on production activities, including treated goods by
basic safety policies, sustainability, and labor rights compliance. Workforces, consumers and the
broader society are both financially and politically impacted by the actions of the organization and
by maintaining socially constructive practices. A contented employee can avail of the firms with

2
higher productivity, customer satisfaction and can uphold greater values for the organizations.
Social aspects of a sustainable firm can provide certain power to attract more and more customers,
creating greater brand values, wider recognitions and capture community support as they are
serving the society as integrating systems which led them to achieve the more favorable economic
desire of organizations. By describing social indicators, a company can open a broader door to
avail of economic sustainability which also can activate the beneficial impacts towards
organizational values, environmental viability and serve the society where they are doing business.
[3]

1.2 Significance of the study

Inspired by the COVID-19 pandemic and the challenges it poses to supply chain sustainability,
this study aims to investigate the drivers of the sustainable supply chain to confront supply chain
disturbances in such a pandemic in the context of a particular emerging economy: Bangladesh [4].
At present, the business community talking about a particular topic is supply chain management,
whether large multinational enterprise groups or micro-companies, they pay a high degree of
attention to supply chain, especially in some state-owned enterprises, in the context of the financial
crisis, proposed economic development needs to change, everyone wants to refocus again up the
supply chain. Early in the last century, although there is no clear definition of supply chain
management and control concept, some companies had been intentionally or unintentionally, the
enterprise supply chain of control, which reflects the supply chain is important. We are talking
about the supply chain is not only a supplier connected to the user's logistics chain, the information
chain, capital chain but a value-added chain, materials in the supply chain due to processing,
packaging, transport and other processes to add value, through the combination of dynamic
processes, to obtain efficiency, to the relevant corporate revenue. Enterprise supply chain
management and control refer to the entire supply chain system for planning, coordination,
operation, control and optimization of the various activities and processes, and its goal is to correct
products required by customers (Right Product) at the right time (Right Time), right quality (Right
Quality), in the right quantity (Right Quantity) and the correct state (Right Status) to the correct
location (Right Place) - "6R", and to minimize the total cost. The implementation of supply chain
management and control can facilitate information sharing, enable enterprises to maintain a high
degree of market sensitivity. [5]
3
Information is collected at each and every stage of the supply chain, this information is very vibrant
as it helps the supply chain to rectify itself at any of the stages and helps the supply chain to
reconfigure itself, thereby maximizing the supply chain profitability. The day-to-day operation of
any facility requires proper analysis of the information available so that production schedules can
be made. The available information helps the company to produce on time, maintain a good
inventory and also provide. The process of exchange of information between customer and
supplier give desirable information to meet the effectiveness of supply chain management. Thus,
a continuous conversation with the customer helps to develop strategy and maximize the goals of
green initiatives supported. When all stakeholders have symmetric information, then there will be
fewer chances of uncertainty. [6]

The most broadly known explanation of sustainability, or more accurately sustainable

development, states that sustainable development is “development that converges the needs of the
present-day without compromising the ability of upcoming generations to meet their own wants”
(World Commission on Environment and Development, 1987) [7]. This study aims to gain this
goal.

1.3 Background of the research

Supply chain management (SCM) is the management of a network of interconnected organizations

involved in the delivery of products and services to end customers. There has been rising interest
in recent years in how organizations adopt sustainability in their supply chains, which has been
expressed as SCM that merges the triple bottom line of sustainability. Sustainable SCM means
that organizations are held responsible for the environmental and social performance of the
stakeholders, especially the suppliers [8]. There is a rapidly increasing awareness in the industry
that today’s supply chains are flawed. So far, many manufacturing companies generate waste and
pollution and are menacing the existence of life on planet earth. Subsequently, these challenges
push organizations to seriously consider the environmental impact while doing their business. As
the population of the world increases and resource availability decreases, companies are starting
to realize that supply chains must be re-designed [9]. From the companies’ perspective, they must
portray the environmentally friendly image of products, processes, systems and technologies, and
the way business is conducted [10]. During the past decades companies have been working to

4
expand their environmental performance and have involved the supply chain in this course. This
is mainly the case for international companies, which usually have many suppliers because their
suppliers are usually small- and medium-sized enterprises that can contribute to the sustainability
of the products and processes. These suppliers sometimes have to be guided because of their
insignificant environmental knowledge or financial sources. Companies have to design a
sustainable supply chain that balances quite a few aspects sometimes in a challenging way. The
independent and worldwide accepted guiding principles issued by the International Organization
for Standardization (ISO) based in Geneva can offer directions. The ISO has issued standards
directed towards the environment through the ISO 14000 series (ISO, 2004) [11] Increasing
pressures from authorities, customers, employees, shareholders and other stakeholder groups have
prompted corporations to address the economic, environmental, and social implications of their
activities. As a result, the concept of sustainability and its applications to business practices have
gained prominence. Integrating the concept of sustainability with core business functions that fall
within the domain of supply chain management (SCM), such as procurement, logistics, and
knowledge management, has led to a critical and interdisciplinary field: sustainable supply chain
management (SSCM) [12].

Production processes are frequently spread out around the world. Suppliers, focal corporations and
customers are connected by material, information and capital flows. In line with the value of the
product comes the environmental and social burden gained during different phases of production.
Focal companies of these chains might be held accountable for the environmental and social
performance of their suppliers. These companies are asked to reflect the environmental and social
problems present in their entire supply chain. For example, clothing distributors such as Benetton,
Nike, Disney, Levi Strauss or Adidas have been blamed in current years for problems occurring
during the production of their apparel. Brutal working conditions or contaminations of the local
environment were often mentioned as problems. Based on this, supply chain managers have seen
the integration of environmental and social issues, including those embedded in related standards
(e.g., ISO 14001) into their daily tasks.

Nowadays, establishments are under pressure to exhibit sustainable development in their

operations and these demands are coming from consumers, media, government, investors and
stakeholders. Additionally, it is becoming well-defined that a traditional approach towards
operations is not sustainable and organizations must adapt their processes to conform to regulations
5
and achieve sustainability. This has resulted in corporations being identified as a means to facilitate
the implementation of sustainable practices, furthermore the requisite to meet the interests of
stakeholders and generate competitive advantage for their business. Sustainability has emerged
from concerns about the lessening of natural resources for future generations and has reformed to
be considered the development that meets the needs of the present without compromising the
ability of future generations to meet their own needs. [13]

At present, the concerned community talking about a particular topic is supply chain management,
whether a large multinational companies or small-companies, pay a high degree of attention to
supply chain sustainability, in the context of the financial crisis, propositioned economic
development need to be changed, everyone wants to refocus again up the sustainability. For
example: Ford Model T production directly transformed the automotive industry production model
, but also to achieve the old Ford’s dream that each worker can afford the car; beginning of the
1960s , Japan's Toyota Motor executive Lean Production (JIT) the pursuit of rationalization of
production equalization, through the process of transformation, help Toyota out of the stagflation
of the 1970s the global economic difficulties and successfully entered the United States market;
late 90s of last century, the Haier Group in order to cope with global competition , gradually
improve Haier began as a link in the supply chain business process reengineering model, to achieve
its management of innovations that help Haier to get remarkable achievements; known world
famous Nike company does not own all the products manufactured but all outsourced to other
manufacturers , Nike has taken in the production of a virtual approach, they are only responsible
for the design and marketing, Nike worldwide has made remarkable achievements. There are many
similar examples, including Apple, IBM, Nissan, McDonald's etc. [14]

Bangladesh was widely known bottomless basket since 1971. People seemed to think of the RMG
industry in Bangladesh as a spot of poverty and as a symbol of small businesses. Nevertheless,
currently, the economy is growing. Its economic expansion is now being trailed by ecological
degradation. The time is ripe for Bangladesh to follow the direction of sustainable progress which
typically means implementing policies to solidify its growth of the economy to be more
sustainable. Bangladesh Bureau of Statistics delivered a valuation that this nation’s economy grew
by 7.86% in FY18 up from 7.28% in FY17 averaging over 6% a year for the past decade [3] . By
providing low-cost manufacturing services, Bangladesh gains an impressive economic growth
while using its radiant ready-made garments (RMG) segment. This also helps Bangladesh to hold
6
a strong stand with a leading position in the global RMG sector. Asian RMG industries are now
approaching towards grabbing the ample opportunities of going sustainable movement and
creating a profound attraction to the more eco-friendly buyers. Bangladeshi factories are refining
their environmental performance by taking required initiatives like clean production frameworks
and green water treatment facilities, while the government is also enforcing new legislation and
putting super pressure on the manufacturer to practice sustainable approaches. The worldwide
demand for green-oriented products and services forms enormous pressure and motivates the
factories to comprise more environmentally friendly green business. Whereas the buyers asking
the producer to provide more eco-friendly products, green business oriented textile factories can
gain a significant competitive advantage since there is an opportunity to gain some incentives. This
strategy can draw more and more buyers for the European Union and the USA, where
environmentally eco-labeled products have a huge demand.

1.4 Objective of the Study

The importance of sustainability in a supply chain extends beyond going green. Practicing eco-
awareness in every aspect of your business improves your reputation and further legitimizes your
organization.

1. To find out the supply chain sustainability drivers and analyze them.
2. To introduce a continuous improvement system to remain up to date as much as possible
with technological progress.
3. To improve productivity in a sustainable manner at optimum cost.
4. To find out the proper way of using sustainable techniques and resources to increase the
organization efficiency.

7
1.5 Problem statement of the research

The study addresses the current chain of supply and procurement systems of the textile
sector of Bangladesh to make efforts for bringing about sustainable improvements. The
study will look forward to investigate and find the answers of the following questions:

1. What are the key variables that influence the applicability of a sustainable supply chain in
the textile industries of Bangladesh?
2. What are the co-relations between the factors found in this study?
3. What kind of research and development initiatives can be taken to achieve the objectives?
4. What are the variables to manage the performance of operations?
5. What are the environmental strategies to be followed to attain sustainability in the supply
chain?
6. What are the strategies to manage resources effectively?

8
______________________________________________________________________________

CHAPTER
TWO
______________________________________________________________________________

LITERATURE REVIEW

2.1 Introduction
In the contemporary world of globalization, many textile retailers are building strong supply
chains to achieve an advantage over their competitors by offering good value to their customers.
Supply chain management (SCM) is very expert in managing risk, dynamism, and complexities
of global sourcing. Various Performance measurements are a way to identify the success and
potential of supply management strategies. One primary side of the SCM is selecting the perfect
supply sources in the global environment that can support corporate strategy. Unlike the
conventional adversarial relationships, effective SCM in the new competition point out seeking
good relationships in the long term. Textile sector always maintains quality as the key competitive
factor, and current competition is not only the concern of the individual firm. It involves the entire
supply chain. Actually, the quality of the final product that the customer receives is clearly the
result of a chain of successive spinning, weaving, apparel and distribution. In the recent
competitive environment, quality is considered a feature of all market segments, starting from
basic to complicated segments to meet the specific requirements and choices of all types of
customers. Moreover, quality cannot be limited to the area of the intrinsic quality of the products.
The textile industry involves problems of volatility, making it difficult to forecast fashion trends
and consumer demands. Traditional forecasting techniques cannot provide the accuracy required
for leading logistics in the fashion market. Therefore, predicting risks could be sorted by being
less dependent on the traditional forecasting methods [15]. This can be gained by shortening lead
times, as this gives better response to consumer demand. Speed-to-market has become a
fundamentally significant way to emulate with the increasing demand for fashion variety [16].A
textile industry is an important contributor to a country's income, thus playing a critical role in
economic development. The Textile industry is a long chain with raw materials production,
complement production, clothing production. [17]. For our country, this dependence on the textile

9
sector is magnified to a greater degree. SCM ideas and philosophies are thought of as a common
management tool for all manufacturers to combat to improve their product quality, minimize their
product and service cost, and shorten their product delivery time and response time in a
competitive market. The efficient SCM of the textile industry beneficiates lower inventories,
fewer costs, higher productivity, less lead times, higher profits and greater customer loyalty [18].
So, every textile industry needs to seek for greater sustainability to obtain the benefits on a long
term basis. A thorough analysis of the recent developments and researches in the field of Supply
chain and its relevant fields will pave the way for further research in this field.

2.2 Sustainable supply chain management:

SCM is creating a direct impact in the industry's overall performance. Nowadays, the consumer
has become more conscious and expert in having stock of what they actually want. Customers
want discounts, cash on delivery, and suitable return processes for unwanted purchases. But more
than that they want higher quality in the products which implies more Importance on the effective
adaptation of sustainable measures in a supply chain.

10
2.2.1 The necessity of Supply Chain Management:
Supply chain management is necessary nowadays for the smooth production of any type of industry.
The various reasons for these are:

● Ensuring customer service. The customer always wants a preferable service.

However, if the delivery varies from the ordered one, they lose the organization's trust.

● An organization's reputation depends on how efficiently they deliver the goods to the
customer at the right time at the right place through a smooth process.

● After getting a delivered product, if the customer faces any problem and does not get
any solution from where they bought it, they lose their trust. However, a smooth SCM can
ensure the solution of that problem without hampering the manufacturer or seller. [19]

2.2.2 Achievement of economic prosperity

Proper utilization of resources and correct SCM methods can be a blessing. SCM will ensure
minimization of product cost and transport cost too. The economic prosperity that might happen are
as follows: [20]

● SCM ensures minimization of production cost. If the required raw materials arrive
late, the production gets stuck, and the overall organization may face a considerable loss.
But if the raw materials come in time, they don't face any hamper due to the supply of
raw materials, which a proper SCM system can ensure.
11
● SCM ensures the minimization of transportation cost of raw material to the final
product. For example, a product is supposed to be delivered by ship. Due to the late
sourcing of raw materials, the product is late manufactured. It has to be delivered in
time. Hence the manufacturer has to send it by air, which may consume more money than
a ship.

● Keeping stock of raw materials is like a challenge for every manufacturer, which
requires effective risk management. However, a proper SCM can eliminate this risk.

12
2.2.3 Challenges to sustainability in industrial process

Some problems can arise in the overall industrial process related to sustainability. The issues are
directly related to productivity. Hence to solve the problems that should be addressed to develop
sustainability in SCM: [21]

● Lack of proper sustainability in the industrial process can decrease the production
time that may hamper the organizations profit.

● Lack of proper sustainability can hamper the relationship between manufacturer

and customer.

● Service after the sale is not possible without SCM sustainability.

● Without a proper sustainability system, the industry can't integrate their production
system.

● Without a proper sustainable SCM, the production cost may increase.

● The shipping ways may change for late sourcing of raw material. As a result, the
organization has to pay extra transportation costs, both raw material sourcing and final
shipping.

2.3 Challenges to supply chain sustainability in the textile industry:

Many industries face structural changes like global sourcing and high levels of price competition,
impacting consumer behaviour. Consumers are shifting from high-cost and luxury items to long-

13
lasting classics. [22] Companies try to keep their production demands and reconsider their suppliers.
It may create fake relationships with new and existing suppliers [23]. Inexperienced suppliers
cannot communicate effectively in English, which can result in a lot of miscommunication. Worker
loyalty is too low, and workers move to factories for more money or better working conditions. [24]
They have job dissatisfaction and want to leave or even engage in strike actions. There are some
more lackings in this sector. For instance, lack of transformation from a low price RMG producing
industry to a producer of value-added items, Lack of investment in independent R&D and
improving industry-institute collaborations, lack of improvement of the innovative capacity of the
sectors.
The most critical challenge is to gain sustainability without losing competitiveness in the market
and also without increasing the cost [25]

The COVID-19 pandemic has led to a 3% drop in global trade values in the first quarter of 2020.
The economic growth of Bangladesh depends on the export of clothing & apparel which is
approximately 80% of the country's total export earnings. It also constitutes approximately 12% of
the country's GDP. Industry to industry dependency is a phenomenon that can be seen everywhere
nowadays. For example some industries depend on only raw materials, some are for specific items
to make the finished product. For a textile industry, it's very important to have a consistent supply
chain management system for ensuring their target outputs. [26] In every industry, industries whose
operations are more globalized, particularly those that depend on Chinese raw materials for
production, were most exposed to supply chain disruption for COVID-19. This was the case for
instruments, machinery, automotive, and communication equipment. On the other hand, the fashion
industry faces significant risks. During COVID-19, as consumers worldwide remained in lockdown,
there was no need for new products. A highly integrated global supply chain characterizes this
industry. Many developing countries supply material at a low-cost. [27]

Besides China, many other countries act crucially as key hubs around which trade of fashion and
related products takes place. During this era, China closed its shipment of raw materials; as a result,
some factories were forced to pack up their operations. The majority of the Bangladeshi garments
factories are hooked into China for their raw materials and other accessories for the production of
clothes. As the customers also canceled shipments and orders, the factory owners fell in complexity
from both the supplier and demand sides. In fact, the entire apparel supply chain was disrupted from
14
top to bottom. Brands and retailers canceled or postponed orders and payments. Primark, M&S,
H&M, Arcadia Group, Nordstrom, American Eagle, V.F. Corporation, PVH Corp, Levi's, Target,
and similar high-end brands canceled new orders. About 738 factories received order cancellation
emails. Hence, orders for the U.S. $ 2.4 billion worth of currency are canceled, as reported by
newspapers quoting BGMEA sources. [28]

Surprisingly, some industries manufactured different types of masks, personal protective equipment
(PPE), gloves and gowns for medical staff, etc. As the pandemic spread throughout the planet, this
provided further opportunity for Bangladeshi garments manufacturers to supply garment products
essential for covid-19. Even a number of the foreign buyers canceled their original products and re-
ordered for protective gear like masks, PPEs, gloves, and gowns, etc. [29]

The ever-changing nature of the textile supply chain has always made the task of developing
sustainability extremely difficult. These difficulties has been intensified further by the pandemic
situation. So the textile industries need to find out solution to tackle these challenges and continue
to thrive after sustainability.

15
2.4 Review of recent research work:
The recent research articles and works related to the subject matter of this study paves the way for
more opportunities for in-depth analysis and scopes for further improvement. The field of supply
chain has been a popular choice of research over recent years. Moreover, the customer demand and
a challenging global market have drawn the interest of researchers to explore the topic of
sustainability in both international and local supply chains.

Supply Chain Management concept is related to increasing the output and to get a consistent result.
L.M. et al. (1991) researched "Supply‐Chain Management: The Industrial Organization
Perspective". They found out that the continuity of keeping the system consistent with the supply
chain management philosophy is the theoretical based knowledge approach which is related to the
advantages, disadvantages and applications of vertical integration and obligational contracts. (30).
The quick decision-making for sourcing has a critical impact on the performance of industrial
construction projects. Here we can get how engineering-procure-construction (EPC) firms select
suppliers in the early stages of the project. Azambuja et al. (1994) conducted a research on Strategic
Procurement Practices for the Industrial Supply Chain and found out that cross-case analysis
expresses similarities and differences between EPCs and helps to match empirical findings. [30]

The concept of industrial ecology is a very emerging thing for getting ecologically sustainable
industrial development. Raymond et al. (2004) conducted a study on Integrating green supply chain
management in embryonic eco-industrial development and analyzed that optimizing materials and
flow of energy in facilities within specific areas or industrial ecosystems may be a basic industrial
ecology strategy [31]. Naqbi (2018) conducted research on Supply Chain integration and
Sustainable supply chain performance. He examined the relationship between internal integration
and sustainable supply chain performance. The paper shows the manufacturing effort of UAE under
subject investigation and its relationship with sustainability goals. This literature has been reviewed
to develop the hypothesis of the study.

The Importance of dynamic modeling in the supply chain management system has emerged after a
long period of time. Angerhofer et. al. (1996) conducted research on System dynamics modeling in
supply chain management. They said that this modeling deals with inventory decision and policy
16
development. Time compression, supply chain design and integration, and international supply
chain management are also given emphasis on this research [32]. The core benefits of Information
and Technology application in Supply Chain Management are electronic business solutions for
improving customer service. Auramo et. al. (2005) researched on Benefits of Information and
Technology in supply chain management: an explorative study of progressive companies. They
found out that Improved efficiency allows company people to focus more on critical business, the
proper utilization of electronic business solutions improves information quality, etc.

Vries et. al. (2011) researched Supply chain management in health services. This paper refers to
qualitative approach based analysis of the existing literature on healthcare SCM. Also with the
elements of particular issues like e-business are used to get the knowledge related to healthcare
delivery chain management. [33]. In the process of industrial marketing, it is very important to keep
a good relationship between supplier with the manufacturer and manufacturer with the customer.
Murfield et. al. (1999) researched Supply chain management in industrial marketing–Relationships
matter. They found out that Systematic continuity of keeping a good relationship between buyer-
supplier can bring good advantages of purchasing also in the consistent Industrial distribution
section The relationship between multiple companies is very important for better production
performance. A systematic approach of process systems must interact with other systems for a better
production performance. MetinTürkaya conducted research on Multi-company collaborative supply
chain management with economic and environmental considerations. They found that the
interaction among process systems is typically established when these systems exchange materials
like steam and electricity. A smooth SCM system can bring the right things into the right place at
the right time. [34]

Patel (2015) researched Supply Chain Management for the Food Processing Industry. He explained
the ways of developing transportation and SCM within the food processing industry (sugar
industry). This paper also represents the ways to decrease lead time using lean tools and supply
chain management. (39) Herrera et. al. (2016) researched on A dynamic viewpoint to plastic-supply
chain management in Colombia. It shows that strategic modeling is a significant measure to make
trust in a simulation model regardless of validity test. They also analyzed the major variables of the
SCM and show a dynamic angle of vision to realize the relationship between the players. The main
point of this paper focuses on an overview of the strategic modeling and finding out drivers of a
17
system dynamics model in SCM. [35]

Moktadir (2018) conducted research on Modeling the interrelationships among barriers to

sustainable supply chain management in the leather industry. He has found out such obstacles and
examines the causal relationships between them for the effective execution of SSCM in the leather
processing industry. This paper is trying to support the leather processing industry in a structural
way, In order that managers can find the most influential barriers and work to elect them.

Roy (2020) researched on Evaluating Strategies for Environmental Sustainability. He offered a

methodology by integrating a fuzzy cognitive map (FCM) and DEA for judgment strategies for
environmental sustainability. In this paper identifies 18 generic strategies for environmental
sustainability and used to prioritize strategies using these impact values. [36]

Gupta (2020) conducted research on Barriers and overcoming strategies to supply chain
sustainability innovation. He found some of the barriers that stop the adoption, implementation and
upscaling of sustainable supply chain innovation. The findings give directorial and policy insights
for guiding the structure of the strategic operations framework [37] Silvestre (2016) conducted
research on Sustainable supply chain management: current debate and future directions. He
discussed SCM and covered some of the key elements of literature's past argument and trends for
future directions. It highlights the progress of this research area and amplify the Importance of a
full consideration of sustainability. [38]

2.5 Gap in the literature

Research Gap:

• Shashi K. Shahi et al only focused on the upstream suppliers and downstream customers to
create the link between SSCM practices and the business performance in the textile industry.
But this research paper also emphasizes both types of variables to get a feasible structural
model that makes the chain more sustainable.
• Apurbo Sarkar et al found that the interrelation between environmental and economic
sustainability is more favourable than the interaction with social sustainability. But in the

18
 current thesis, all three aspects of sustainability in the supply chain are likewise significant
and interconnected. [3]
• The study of Pervez Akhtar et al (2019) with PLS-SEM found that the green supply chain
management initiatives did not have a satisfactory level of positive impacts on an
organization’s economic performance. In the current study with the structural equation
modelling approach, it is proved that the economic performance of firms increases as they
take on sustainable initiatives.
• From the literature review, it is clear that there are many previously published articles
discussing various SSCM aspects including; barriers and the implementation process.
However, it was recognized that there is a scarcity of studies in developing countries
addressing SSCM practices. Current research is focusing on Bangladesh, a developing
country.
• Findings from Esraa Osama Zayed and Ehab A. Yaseen (2020) confirmed that governmental
regulations and policies are among the main factors influencing the implementation of SSCM
in industries. The current paper showed evidence that top management support and
commitment is the powerful factor driving SSCM implementation.

19
2.6 Structural Equation Modeling: Review of papers that have applied SEM:

"Structural equation modeling" is actually an umbrella term that describes a wide spectrum of
modeling methodologies. Structural equation modeling (SEM) accounts for a diverse set of
computer algorithms, mathematical models and statistical methods that fit networks of constructs
to data [30]. It has become a standard technique within the social sciences. Psychologists, for
example, rely on SEM techniques for scale expansion. Education experts use it to track students'
academic achievements over time and to evaluate experimental learning involvements. In criminal
justice and criminology, SEM is smart because it offers a flexible array of techniques that can
address a variety of research questions and hypotheses. [39]

SEM is a clan of statistical techniques which combines and integrates path analysis and factor
analysis. Indeed, use of SEM software for a model in which each variable has only one indicator is
a type of path analysis. On the other hand, wherein each variable has multiple indicators, but then
again there are no direct effects (arrows) connecting the variables is a type of factor analysis.
Alternative expression for SEM is covariance structure modeling, covariance structure analysis and
analysis of covariance structures.

Partial least square-structural equation modelling (PLS-SEM) is a commonly used statistical

analysis method that can be run in different industries. The prior study concerned with the
automobile industry in India shows a great result applying PLS-SEM dealing with technical and
social lean practices on SMEs' performance. Utilizing the application of PLS-SEM modeling, the
study constructed three higher-order constructs, namely lean technical practices (LTP), lean social
practice (LSP) and organizational performance (ORP).

Commonly there are two different approaches to SEM: variance-based (VBSEM) and covariance-
based (CBSEM) (47). PLS exists to be a variance-based SEM system that has gained proliferation
in a variation of academic disciplines such as human resource management, international business
marketing, accounting management , tourism, hospitality strategic management and agricultural
science have applied PLS-SEM (48). One of the specialities of this technique is its ability to identify
complex inter-relationships between observed and latent variables. To adopt PLS-SEM a specialized
software SmartPLS can be a decent choice which is a graphical user interface for SEM using partial
least squares path modeling. [40]
20
A.R. Mclntosh et.al applied structured equation modeling for network analysis in functional brain
imaging. Functional neuroimaging techniques have provided an exclusive opportunity to
simultaneously examine the activity within a single subject's entire brain. [41]

Hans Baumgartner et.al chose structure equation modeling for researching marketing and consumer.
Since the advancement of a broad-spectrum framework for denoting structural equation models with
latent variables - referred to as the Jihreskog-Keesling-Wiley model by Bentler- and the
implementation of the statistical approach in the LISREL computer program, latent variable
modeling has become a widespread research tool in the behavioral and social sciences.

Structural equation models can be specified to investigate measurement issues, to study structural
relationships among sets of variables or to achieve both purposes concurrently. Most published
applications of SEM are factor-analytic measurement studies and incorporated investigations of both
the measurement structure triggering a set of observed variables and the structural relations among
the latent variables. In some cases SEM is also used for inspecting the relationships among variables
which are all measured by single indicators. [42]

Bo Xiong et.al reviewed the application of structured equation modeling in construction research.
Structural equation modeling (SEM) is a resourceful multivariate statistical method, and applications
have been increasing since its initiation in the 1980s. SEM applications have been accelerating over
time. Since Bentler's appeal to apply the technique to handle latent variables in psychological science,
structural equation modeling (SEM) has become a quasi-routine in the social sciences. Computer
programs meant for conducting SEM analyses have emerged and enabled the technique to be used
in even broader functions. Lately advanced graphical user interfaces have also made much easier for
researchers and general practitioners to use. On one hand, the utility of SEM in approximating
reasonable results in measurement and structural analyses has been widely acknowledged. On the
other hand, SEM has been roasted for generating implausible decisions due to its
indiscriminateusage. [43]

In the statistical sense, this model refers to a group of equations with additional assumptions of the
analyzed structure, in which the parameters are defined on the basis of statistical observation. Hence,
structural equations signify equations using parameters in the analysis of the observable or latent
variables.

21
Matin Fatemi et.al focused on effects of supply chain management on tomato export in Iran while
applying structured equation modeling. Iran is one of the prominent countries in the world to
manufacture tomatoes but the level that they export globally is low. This concern may have resulted
from a major problem within managing tomatoes' supply chain. This study examined the relationship
between SCM and the performance of tomato companies in the tomato products export sector by
identifying the main components of SCM; which is involved of six main dimensions: information
sharing, cooperation, long-term relationship, flexibility, quality and delivery. [44]

Sustainability of small and medium sized enterprises (SMEs) is important SMEs contribute to GDP
significantly in every economy. Chrisovalantis Malesios et.al develop an innovative sustainable
supply chain performance measurement model for SMEs using structured equation modeling .This
study uses structural equation modeling. It introduced regression models for sustainability practices
and performance using various constructs (e.g., economic, operational, environmental and social),
sub-constructs and proxies for specific region. This study also deal with the possibility of using
structural equation modeling as a measurement model for measuring themagnitude of
sustainabilityof SMEs' supply chain through separate indicators of sustainability and its sub-
constructs. [45]

22
 ______________________________________________________________________________
CHAPTER
THREE
______________________________________________________________________________

RESEARCH METHODOLOGY

3.1 Introduction:
Analysis of previous research papers and works linked to SCM provided the way for more
development. Over the last several years, supply chain research has been increasingly popular.
Furthermore, researchers are interested in exploring the topic due to ever-changing client demand
and a tough worldwide market. Similarly, the ever-changing customer demand and a challenging
global market have piqued the interest of researchers. They investigate the topic of sustainability in
supply chains. This thesis work was initiated to maintain a long-term supply chain in order to produce
high-quality results. In this case, it was important to generate concepts and identify goals. It is also
crucial to consider the study's precision and experience. At the time of application, the concept and
model formulation must be designed and implemented. The study shows how model development
and data collection can be done in a systemic way. Finally, the most essential factor is to consider
the outcomes.

3.2 Materials and Instruments:

SPSS, AMOS software

23
3.3 Steps involved in the research

Phase 1:
Concept generation • Concept generation
and objective • Objective identification
identification • Literature Review

Phase2:1:
•• Conceptualizing
Phase Concept generation
Concept the
Planning generation research design
and objective
research study •• Identifying
Objective identification
latent and measured variable
identification •• Model
Literature Review and survey
formulation

Phase 2:
Planning the
research study
• Conceptualizing research design
• Identifying latent and measured variable
Phase 3: • Model formulation and survey
Figure 0-1. Steps
Conducting the • Collection of Data
involved in the
research • Data Calculation and analysis
research
• Making a model according to the data

Phase 3:
Conducting the • Collection of Data
research
• Data Calculation and analysis
• • Making
Phase 4: Presenting the results
Presenting
a model according to the data
• Providing recommendations
outcomes and
providing • Identification of future scopes
recommendation

• Presenting the results

Phase 4: • Steps
Figure 02: involved
Providing in the research
recommendations
Presenting • Identification of future scopes
outcomes and
providing
recommendation

24
Phase 1: Concept generation and objective identification

Step 1.1: Concept generation

Firstly, supply chain was selected as a field of research. Analyzing all the sub topics of supply chain
later on Supply Chain Sustainability was selected as the topic of research.

The main goal was to investigate the drivers of a sustainable supply chain in order to deal with supply
chain disruptions.

Step 1.2: Objective identification

The primary goal was to identify the SCM drivers. The other objectives were to introduce a
continuous improvement system and remain up to date as much as possible with technological
progress. The objectives were found out and the thesis was approached accordingly.

Step 1.3: Literature Review

The previous thesis articles and works related to the supply chain gave the foundation. It also
provided the scopes for future improvements. Analysis of the research works were done and the
scopes to improve were thought before starting this research.

Phase 2: Planning the research study

Step 2.1: Conceptualizing research design

The in depth analysis of recent researches assisted in approaching this research. SEM model was
thought to be one of the approach perfect for this research. SEM model is like an umbrella that
encompasses a wide range of modeling techniques. It's smart because it provides a versatile set of
procedures that may be used to address a wide range of research topics and ideas. It can be used to
look into measurement concerns, explore structural links between sets of variables, or do both at the
same time.

25
Step 2.2: Identifying latent and measured variable

A latent variable does not have a direct impact on the research, it cannot be observed.

A measured variable can take one or more values and have a direct impact on the research. These
variables were identified in this step.

Step 2.3: Model formulation and survey

A survey was conducted to learn about the user's experience from all sectors of people involved with
direct or indirect supply chains to formulate the structural process of this study and gain application
experience.

Phase 3: Conducting the research

Step 3.1: Collection of Data

Data were collected according to the survey. The data were pasted in SPSS software for analysis.
Later it was arranged in an excel file for further analysis.

Step 3.2: Data Calculation and analysis

The study has been elevated to a new level after receiving data from the users. A wide range of
outputs aided in determining how the model should be constructed and how people are putting it into
practice.

Step 3.3: Making a model according to the data

A new model was generated in AMOS software after the final analysis.

Phase 4: Presenting outcomes and providing recommendation

Step 4.1: Presenting the results

The results are presented in chapter 4 and 5.

Step 4.2: Providing recommendations

26
The recommendations are provided in chapter 6.

Step 4.3: Identification of future scopes

Following the implementation of the study and consideration of overall performance, the future scope
of application is predicted in chapter 6.

3.4 Theoretical construction of the study

The integration of green and social aspects with cost-effective considerations, known as the
triple-bottom-line (TBL) dimensions of organizational sustainability has continually gained
relevance for managerial choice making in general and for supply chain management (SCM)
in particular [46].

To manage sustainable supply chain, this research takes the approach of SEM (Structural equation
modeling). It is a technique to deliver quantitative tests of theoretical method. The researcher
hypothesizes firm relationships among a set of variables and at that point analytically tests those
relationships. SEM is the preferred method for confirming (or disconfirming) theoretical models in
a quantitative fashion with big number of variables. It recognizes the effect of measurement error.
Greater credit is given to the reliability and validity of the observed variable scores got from
measurement instruments.

In this part of the paper a mathematical approach is taken expressing the logical process through
mathematical symbols.

3.4.1 Description of SEM

Structural equation modeling has achieved an increased acceptance in the last decades. It has emitted
in many scientific segments, like in the social sciences, economics, operations research, project
management, logistics and supply chain management and also in the natural sciences, engineering,
marketing research, educational research etc. SEM is a advanced statistical tool, that combines the

27
confirmatory factor analysis and the multiple regression analysis (simultaneous equations models)
into the comprehensive modeling framework where the relations between the observed (measured)
variables (also called indicator or manifest variables) and the latent factors (unmeasured constructs)
can be studied. On the contrary, the causal relations of the constructs among themselves can be
studied in the structural part of the SEM model.. The purpose of structural equation modeling is to
give a quantitative test of one or more theoretical models.

Conceptual
Model
Organization of an
appropriate SEM
framework

Hypothesis Development

Quantitative Design
Conduction of Survey
Sample Selection

Application of
further analysis and
SEM modeling

Figure 3: Prerequisite of SEM modeling for survey based

application

28
3.4.2 Steps involved in SEM
The steps of structured equation modeling can be presented in a flow chart.

Specify Model

yes
no
Select measures, Model
collect data Idendtified ?

Respecify model

Yes

No
Justifiable
Moderate fit
respecification
adequate ? ?

Yes

No
Interpret estimates

Consider equivalent or
near-equibvalent
models Report results

Figure 4: Flow chart of Structured equation modeling steps

29
Step 1: Model specification
The application of SEM always begins with the specification of a model. A model is a formal
statement of the structure assumed to have given rise to the observed data. Those mechanisms reflect
the fundamental hypotheses that motivated the analysis, as well as characteristics of the sample and
research design. The model also includes features that ensure unique values can be obtained for the
parameters to be estimated

Step 2: Estimation
Once a model has been specified, its parameters identified, and the data prepared for analysis (As
shown in the figure) the implementation moves to estimation. The purpose of estimation is to find
values for the free parameters. The means by which parameter estimates are derived depends on
which of a number of possible estimation methods are used.

Step 3: Evaluation of Fit

While a set of parameter estimates obtained from appropriate data for an identified model that
minimize the discrepancy between the observed and implied covariance matrices, that discrepancy
may be comparatively large or small. In an SEM analysis, the evaluation of fit concerns whether the
specified model offers an acceptable account of the data or should be rejected or respecified (if the
original or reconsidered intent is model generation).

Step 4: Respecification
The evaluation of fit can send the researcher in one of two tracks to interpretation and reporting or
to respecification. Although interpretation and reporting is the desired direction, often the evaluation
of fit does not yield support for the specified model and any alternatives, sending the researcher in
the track of respecification.

30
Step 5: Interpretation and Reporting
When the evaluation of fit yields support for a model- the originally specified model or r a modified
version of it, the researcher moves to the final step in the implementation framework. Given the
technical trials associated with specification, estimation, and evaluation of fit, it is perhaps
extraordinary that many of the criticisms leveled at SEM have focused on the interpretation and
reporting of outcomes. For that reason the researcher who uses SEM must take special care in
interpreting results and reporting information about the analysis and results.

___________________________________________________________________________

CHAPTER
FOUR
___________________________________________________________________________

DATA COLLECTION AND MODEL

FORMULATION

4.1 Assumption and hypothesis of the model

To collect data some assumptions and hypothesis are developed. After the assumption, survey and
analysis of survey data are done.

4.1.1 Assumptions

The work is directly on activity based SCM. For example: Fuel consumption, closed loop
manufacturing etc. The purpose of this research is by applying all those measured variable activity
to get a correlation of the positive impact on sustainability.

It is assumed,
31
 1. In the RMG sector, measures suggested for sustainability of Supply Chain Management are
applicable.
2. The proposed model is a generalized model, not a product-specified model
3. Our research is activity based SCM not strategy based SCM.
4. The nature of the latent variables is completely defined by their respective measured
variables. Any possible influence by other variables are excluded from this research

4.1.2: Hypothesis

There were 4 latent variables and 11 measured variables.The 4 latent variables are important for
sustainability which is directly applicable for Supply Chain Development.

The latent variables are:

1. Research and development initiatives

2. Operations Management Performance
3. Environmental Strategies
4. Effective Resource Management Strategies
5 point likert scale has been used which offers 5 different answers related to an agreement that would
be distinct enough for the respondents, without throwing them into a confusing situation.

For each of the statements, Participant marked circle the answer that best characterizes how they feel
about the statement. So following are the formulated hypotheses of the research:

1. Building and funding a Sustainability-based R&D department expands production

2. Information sharing between SCM partners increases Research and development scopes
3. Adapting to modern Sustainable technologies enlarges the scope for better research in the
field of sustainability
4. Procurement of products that support sustainability is crucial for operation management
performance
5. Maintenance of Proper layout and route design will minimize transportation and help in
overall operations management performance

32
 6. Reduction of work in process inventory is proportional to operational management’s
performance
7. Limiting the usage of toxic materials is a crucial strategy for environmental issues
8. Efficient Energy management systems are beneficial to a better environment ensuring
sustainability.
9. Reduction of Water Usage and wastewater generation will lead to a healthy industrial
environment.
10.Efficient waste disposal system positively influences proper resource management.
11.Proper recycling system is a significant influence for proper resource management.

4.2 Latent variables of the model

1. Research and development initiatives: It has been chosen as a latent variable to reduce
disruption risks in a supply chain: demand, process, supply, and environmental.
2. Operations Management Performance: Operations Management steps are very important
and correlated with the supply chain management. That’s why it has been taken as a latent
variable.
3. Environmental Strategies: Environmental strategy causes an increased environmental
investment, both internally as well as outside in coordination with suppliers. It has been taken
as a latent variable because it is highly related to supply chain management.
4. Effective Resource Management Strategies: As resource management assists
organizations in optimizing people by giving information on their workloads, availability,
project time requirements, capabilities, and more. Organizations can provide their managers
with the tools they need to adequately and fairly allocate projects to the appropriate resources.
Effective resource management policies have a significant impact on an organization's supply
chain management sustainability. As a result, it has been taken as a latent variable.

33
4.3 Measured variables of the model
1. Building and funding a Sustainability-based R&D department: It is vital for organizations
because it provides important data and resources, which leads to improvements in existing
processes where efficiency can be raised and costs can be decreased.
2. Increasing information sharing between SCM partners: Supply chain efficiency is essential
as today's competition is not between companies but between supply chains. Sharing of
information can increase supply chain efficiency by reducing inventories and smoothing
performance.
3. Adapting to modern Sustainable technologies: Sustainable technology prevents corrosion,
contamination, and other negative environmental effects through its application and
manufacturing. Technology is efficient in terms of energy and resource utilization.
4. Procurement of products that support sustainability: Sustainable procurement reduces waste,
carbon emissions, energy and water consumption, protects biodiversity, minimizes purchases
from non-sustainable sources, enables fair and sustainable economic growth, and offers social
benefits.
5. Proper layout and route design to minimize transportation: In order to save time, increase
efficiencies, and eliminate human reliance, organizations in the 21st century supply chain
require technology to automate logistics processes from beginning to end. It helps
organisations to save operating expenses, save time, and improve work efficiency.
6. Reduction of work in process inventory: Manufacturing work in progress (WIP)
minimization leads to increased flexibility, improved cash flow, improved customer service,
and reduced organizational risks. When WIP is significantly reduced, focusing on both raw
materials and finished products, enormous benefits can be achieved.
7. Limiting the usage of toxic materials: Toxic materials are hazardous or safe to use, it is crucial
to control and manage the risks associated with them.
8. Proper energy management: Energy management refers to the process of managing and
reducing an organization's energy consumption. It's significant because it allows for cost
reductions, which is becoming increasingly crucial as energy costs increase.
9. Reduction of Water Usage and waste water generation: Wastewater treatment is critical for
the health of a wide variety of habitats. When wastewater is adequately treated, it can be used
as a supply of water for a variety of uses. Instead of going to waste, good wastewater
treatment permits the maximum amount of water to be reused.
34
 10. Efficient waste disposal system: Protection of the environment - from pollution and
contamination. Companies may purchase recyclable materials because of their value.
Furthermore, the waste management industry provides career opportunities.
11. Proper recycling system: Organization benefits from recycling because it reduces their raw
material costs, improves revenue, and reduces their carbon footprint. Also, recycling can aid
the development of a positive workplace culture, that encourages employees.

4.4 Development of a Sustainable SCM model

Sustainable supply chain management involves integrating environmentally and financially viable
practices into the comprehensive supply chain lifecycle, from product design and development, to
material selection, manufacturing, packaging, transportation, warehousing, distribution,
consumption, return and disposal. Environmentally sustainable supply chain management and
practices can assist organizations in not only reducing their total carbon footprint, but also in
optimizing their end-to-end operations to accomplish greater cost savings and profitability. All
supply chains can be optimized using sustainable practices.

Sustainability in the supply chain encapsulates a number of dissimilar priorities. Environmental

stewardship, conservation of resources, reduction of carbon footprint, financial savings and viability,
Social responsibility, supply chain sustainability practices, in order to succeed, must deliver
improved environmental performance within a financially viable operating construct.

35
Building and funding a Sustainability-
based R&D department

Increasing information sharing

between SCM partners Research and
development
initiatives
Adapting to modern Sustainable
technologies

Procurement of products that

support sustainability

Operations
Proper layout and route design to Management
minimize transportation Performance

Reduction of work in process

inventory

Limiting the usage of toxic

materials

Environment
Strategies
Proper energy management

Reduction of Water Usage and

wastewater generation

Efficient waste disposal system

Manufacturing
Performance

Proper recycling system

Figure 5: Development of a sustainable SCM model

36
4.5 Population and Survey Sample

The first step in any SEM model preparation is to decide on the number of samples and population
data that are required for the model. Basically the work is for the textile industry because of the
current position of Bangladesh. Sustainability is a major important thing for Bangladesh in RMG
(Ready Made Garments)sector then other industries. As of knowing, the textile industry frequently
changes their system and flows on the basis of customer requirements. That’s why a survey has been
made with 232 random people of knitting, weaving, washing etc. on Supply Chain Management
Sustainability especially with directly RMG involved and uninvolved people.

There was used a 5 point likert scale which offers 5 different answers related to an agreement that
would be distinct enough for the respondents, without throwing them into a confusing situation.

The response was n(n-1) of their individual opinion about SCM. As a result random samples help to
collect data from a portion of a population and use sampling statistics to generalize the required
findings to a large population.

The opinion had been taken from both female and male. Some of them were involved directly in
supply chain management. So as a result, an accurate opinion has arrived. The survey was a
qualitative and quantitative questionnaire style survey. They had been asked 11 questions with 5
characterized answers to get the comprehensive opinion. Their opinion has been received online.
Generally a Google form has been created and shared online. On the other hand, 15 industries gave
their opinion directly. Mainly the survey came up with 11 different questions which were relevant to
Sustainability of Supply Chain Management. In the production line from the very first initiative to
final result, the elements have to go through various systems. As a result the system needs to operate
by users who know the system very well. That’s why they can relate with our measured variables for
the application. Around 80% of employees were aware of their supply chain system. 20% was
uninvolved. So that’s why we got a very clean opinion. For the specific industry like RMG gave 2
opinions. One is to stay in their traditional system in spite of knowing technological improvement.
The other said to go for improvement which was future development initiatives. They are interested
in adopting modern sustainable technologies. Also for proper energy management and proper
recycling systems. They were very glad to know the possibilities of working efficiency based on a
better outcome. Also proper layout and route design to minimize transportation.

So finally the survey result analyzing started to formulate a model.

37
4.6 Desciptive data of the Survey
Table 4.1: Mean and Variances of the survey data

Measured Variables Mean Variances

H1 5.539 0.291

H2 5.553 0.305

H3 5.638 6.960

H4 5.500 0.250

H5 5.605 2.577

H6 5.257 5.092

H7 5.329 0.450

H8 5.520 6.349

H9 5.428 0.328

H10 5.467 2.152

H11 5.441 0.194

Here,

H1=Building & funding a sustainable based R&D department,

H2=Increasing information sharing between SCM partners,

H3= Adapting to modern sustainable technology,

H4=Procurement of materials that support sustainability,

H5=Proper layout and route design to minimize transportation,

H6=Reduction of work in process inventory,

38
H7=Limiting the usage of toxic materials,

H8=Proper energy Management,

H9=Reduction of water usage and wastewater generation,

H10=Efficient waste disposal system,

H11=Proper recycling system

Figure 6: People involved in supply chain decision making

Figure 7: Number of male and female taking part in the survey

39
4.7 Reliability and Validity Tests

In this study, structural equation modelling (SEM) tools are used for data analysis and testing
relationships between variables. SEM is performed using SPSS (a software for statistical data
analysis) and AMOS (software that can be used to perform structural equation modeling). In brief,
structural equation modeling is a family of multivariate statistical analysis methods used to model a
network of complex structural relationships between one or more measured variables and latent
constructs. The proposed equation model that explain the effects of supply chain sustainability
drivers in textile and garment industries in Bangladesh was constructed using four latent variables,
namely, Research and development initiatives, Operation management performance, Environmental
strategies and Effective resourse management strategies. The measured variables are: H1(Building
and funding a sustainable based R&D department), H2(Increasing information sharing between SCM
partners), H3 (Adapting to modern sustainable technology), H4(Procurement of materials that
support sustainability), H5(Proper layout and route design to minimize transportation),
H6(Reduction of work in process inventory), H7(Limiting the usage of toxic materials), H8(Proper
energy Management), H9(Reduction of water usage and wastewater generation), H10(Efficient
waste disposal system), H11(Proper recycling system).

The Chronbach’s Alpha value is .952 which is as expected for the 11 items mentioned above proved
to be reliable ones.

4.7.1 Chronbach Alpha Reliability Test

Cronbach’s alpha is a measure of internal consistency, that is, how closely related a set of items are
as a group. It is considered to be a measure of scale reliability. A ‘high’ value for alpha does not infer
that the measure is unidimensional. If in addition to measuring internal consistency, the study wish
to provide evidence that the scale in question is unidimensional, further analyses can be performed.
Technically speaking, Cronbach’s alpha is not a statistical test; it is a coefficient of reliability (or
consistency).

Furthermore, if the average inter-item correlation is low, alpha will be low. As the average inter-
item correlation increases, Cronbach’s alpha increases as well.
40
 Table 4.2: Case Processing Summary

Case Processing Summary

N %

Cases Valid 213 100.0

Excludeda 0 .0

Total 213 100.0

a. Listwise deletion based on all variables

in the procedure.

Table 4.3: Reliability Statistics

Reliability Statistics

Cronbach's
Alpha Based
on
Cronbach's Standardized N of
Alpha Items Items

.952 .953 11

41
Table 4.4: Item Statistics

Item Statistics

Measured Variables Mean Std. Deviation N

H1 4.5587 .52538 213

H2 4.5634 .53374 213

H3 4.5634 .52483 213

H4 4.5305 .57071 213

H5 4.6150 .50671 213

H6 4.5822 .52221 213

H7 4.5822 .53116 213

H8 4.5540 .55214 213

H9 4.5211 .56282 213

H10 4.5915 .50219 213

H11 4.5164 .55454 213

42
Table 4.5: Inter-Item Correlation Matrix

Inter-Item Correlation Matrix

H1 H2 H3 H4 H5 H6 H7 H8 H9 H10 H11

H1 1.000 .824 .718 .659 .705 .769 .655 .700 .718 .815 .705

H2 .824 1.000 .647 .563 .649 .713 .635 .601 .635 .704 .638

H3 .718 .647 1.000 .525 .678 .656 .645 .578 .582 .716 .649

H4 .659 .563 .525 1.000 .595 .510 .579 .590 .604 .628 .576

H5 .705 .649 .678 .595 1.000 .744 .661 .648 .591 .732 .577

H6 .769 .713 .656 .510 .744 1.000 .677 .659 .632 .695 .586

H7 .655 .635 .645 .579 .661 .677 1.000 .616 .542 .648 .560

H8 .700 .601 .578 .590 .648 .659 .616 1.000 .676 .701 .633

H9 .718 .635 .582 .604 .591 .632 .542 .676 1.000 .640 .585

H10 .815 .704 .716 .628 .732 .695 .648 .701 .640 1.000 .676

H11 .705 .638 .649 .576 .577 .586 .560 .633 .585 .676 1.000

43
Table 4.6: Item Total Statistics

Item-total statistics

Scale Corrected Item- Squared

Scale Mean if Variance if Total Multiple Cronbach's Alpha if
Item Deleted Item Deleted Correlation Correlation Item Deleted

H1 45.6197 19.133 .889 .835 .944

H2 45.6150 19.445 .800 .708 .947

H3 45.6150 19.634 .771 .635 .948

H4 45.6479 19.635 .699 .543 .951

H5 45.5634 19.662 .796 .681 .947

H6 45.5962 19.515 .804 .713 .947

H7 45.5962 19.685 .749 .595 .949

H8 45.6244 19.424 .774 .634 .948

H9 45.6573 19.462 .749 .598 .949

H10 45.5869 19.489 .847 .747 .946

H11 45.6620 19.536 .745 .584 .949

Cronbach’s Alpha estimates the internal consistency reliability. It is an indicator of consistency. The
Cronbach Alpha can range from .00 to 1.0 where .00 means no consistency in measurement and 1.0

44
means perfect consistency in measurement. In this study’s particular case the value is .952 which
means that 95.2% of the variance in the scores is reliable variance. Therefore 4.8% is error variance
which is quite lower.

4.7.2 Chi-squared test

A chi-squared test is a statistical hypothesis test. It is also written as χ2 test. A chi-squared test
is valid to perform when the test statistic is chi-squared distributed under the null hypothesis,
specifically Pearson's chi-squared test and variants thereof.

Pearson's chi-squared test is used to determine whether there is a statistically significant difference
between the expected frequencies and the observed frequencies in one or more categories of
a contingency table.

In the standard applications of this test, the observations are classified into mutually exclusive
classes. If the null hypothesis that there are no differences between the classes in the population is
true, the test statistic computed from the observations follows a χ2 frequency distribution.

The purpose of the test is to evaluate how likely the observed frequencies would be assuming the
null hypothesis is true.

The proposed equation model that explain the effects of supply chain sustainability drivers in textile
and garment industries in Bangladesh was constructed using four latent variables, namely, Research
and development initiatives, Operation management performance, Environmental strategies and
Effective resourse management strategies. The measured variables are: H1(Building and funding a
sustainable based R&D department), H2(Increasing information sharing between SCM partners), H3
(Adapting to modern sustainable technology), H4(Procurement of materials that support
sustainability), H5(Proper layout and route design to minimize transportation), H6(Reduction of
work in process inventory), H7(Limiting the usage of toxic materials), H8(Proper energy
Management), H9(Reduction of water usage and wastewater generation), H10(Efficient waste
disposal system), H11(Proper recycling system). In the below chi squared test people involved in

45
supply chain decision making is labelled as Location. H1 is the first activity which is building &
funding a sustainable based R&D department.

Table 4.7: Chi Square Test

Location * H1

Crosstab

H1

Moderate Agree Strongly agree Total

Loca Yes Count 1 72 88 161

tion
Expected Count 2.3 66.5 92.2 161.0

No Count 2 16 34 52

Expected Count .7 21.5 29.8 52.0

Total Count 3 88 122 213

Expected Count 3.0 88.0 122.0 213.0

Chi-Square Tests

Value df Asymptotic Significance (2-sided)

Pearson Chi-Square 5.544a 2 .063

Likelihood Ratio 5.124 2 .077

Linear-by-Linear
.801 1 .371
Association

N of Valid Cases 213

a. 2 cells (33.3%) have expected count less than 5. The minimum expected count is .73.

46
The Chi-square statistic is a non-parametric (distribution free) tool designed to analyze group
differences when the dependent variable is measured at a nominal level. Like all non-parametric
statistics. Particularly, it does not require equality of variances among the study groups in the data.
Unlike many other non-parametric and some parametric statistics, the calculations needed to
compute the Chi-square provide considerable information about how each of the groups performed
in the study. This richness of detail allows the researcher to understand the results and thus to derive
more detailed information from this statistic than from many others. The Chi-square is a significance
statistic, and should be followed with a strength statistic. In the table, the result shows that 2 cells
(33%) have expected count less than 5. If the percentage was less than 20% than the test would be
accepted. Therefore, no proper association between the job location and the activity is seen.

Table 4.8: Symmetric Measures of Chi Square Test

Symmetric Measures

Value Approximate Significance

Nominal by Phi .161 .063

Nominal
Cramer's V .161 .063

N of Valid Cases 213

4.7.3 Composite Reliability Test

Composite reliability (sometimes called construct reliability) is a measure of internal consistency in

scale items, much like Cronbach's alpha. It can be thought of as being equal to the total amount of
true score variance relative to the total scale score variance.

47
Table 4.9: Composite Reliability Test

Indi Latent Stand Square Measu Sum of Sum of Squar C+ Compos

cato Variables ardize of remen the the e of ME ite
r d Standa t measur standar the Reliabil
Vari Loadi rdized Error= ement dized Sum ity= C/
able ngs Loadin 1- A Error loading of the (C+ME)
s gs(A) (ME) s Stand
ardize
d
Loadi
ngs (
C)

H1 Research and 0.939 0.8817 0.118 0.7666 2.582 6.666 7.43 0.89685
Development 21 279 94 724 341 8484
Initiaves 8

H2 Research and 0.852 0.7259 0.274

Development 04 096
Initiaves

H3 Research and 0.791 0.6256 0.374

Development 81 319
Initiaves

48
Indic Latent Standar Square Measur Sum of Sum of Square C+M Composi
ator Variabl dized of ement the the of the E te
Varia es Loadin Standard Error= measur standar Sum of Reliabilit
bles gs ized 1- A ement dized the y= C/
Loadings Error loading Standar (C+ME)
(A) (ME) s dized
Loadin
gs ( C )

H4 Operati 0.717 0.514089 0.48591 1.0996 2.382 5.6739 6.77 0.837659

ons 1 18 24 3542 824
Manag
ement
Perfor
mance

H5 Operati 0.823 0.677329 0.32267

ons 1
Manag
ement
Perfor
mance

H6 Operati 0.842 0.708964 0.29103

ons 6
Manag
ement
Perfor
mance

49
Indic Latent Standar Square Measur Sum of Sum of Square C+M Compos
ator Variable dized of ement the the of the E ite
Varia s Loadin Standar Error= measure standar Sum of Reliabil
bles gs dized 1- A ment dized the ity= C/
Loadin Error loading Standar (C+ME
gs(A) (ME) s dized )
Loadin
gs ( C )

H7 Environ 0.773 0.5975 0.40247 1.15523 2.352 5.5319 6.687 0.82724

mental 29 1 8 04 142 4883
Strategie
s

H8 Environ 0.807 0.6512 0.34875

mental 49 1
Strategie
s

H9 Environ 0.772 0.5959 0.40401

mental 84 6
Strategie
s

Indic Latent Standa Square Measur Sum of Sum of Square C+M Composit
ator Variables rdized of ement the the of the E e
Vari Loadin Standar Error= measur standa Sum of Reliabilit
ables gs dized 1- A ement rdized the y= C/
Loadin Error loadin Standa (C+ME)
gs(A) (ME) gs rdized

50
 Loadin
gs ( C )

H10 Effective 0.879 0.7726 0.2273 0.6359 1.648 2.7159 3.35 0.810257
Resourse 41 59 98 04 1902 579
Managem
ent
Strategies

H11 Effective 0.769 0.5913 0.4086

Resourse 61 39
Managem
ent
Strategies

Composite reliability of measurement model must be greater than 0.6

So, Composite reliability should be 0.7 or higher. From the calculation, the study got that the four
measurement model of latent variables that are Research and development initiatives, Operations
management performance, Environmental strategies, and Effective resource management strategies
are having required internal consistency reliability among the indicator variables (H1, H2, H3, H4,
H5, H6, H7, H8, H9, H10, H11) under their own latent variables as all the values of composite
reliability are 0.8 or higher. Therefore, the latent variables have composite reliability.

4.7.4 Convergent Validity Test

Convergent validity expresses that tests having the same or similar constructs should be highly
correlated. Convergent validity refers to how closely the new scale is related to other variables and
other measures of the same construct. Convergent validity, a parameter often used
in sociology, psychology, and other behavioral sciences, refers to the degree to which two measures
of constructs that theoretically should be related, are in fact related. Convergent validity can be
51
estimated using correlation coefficients. A successful evaluation of convergent validity shows that a
test of a concept is highly correlated with other tests designed to measure theoretically similar
concepts.

Table 4.10: Convergent Validity Test

Indicator Latent Variables Standardized Square of Sum of the squared

Variables Loadings Standardized standardized loading
loadings

Research and Development

<--- 0.939
H1 Initiaves 0.881721

Research and Development

<--- 0.852 2.233306
H2 Initiaves 0.725904

Research and Development

<--- 0.791
H3 Initiaves 0.625681

Operations Management
<--- 0.717
H4 Performance 0.514089

Operations Management
<--- 0.823 1.900382
H5 Performance 0.677329

Operations Management
<--- 0.842
H6 Performance 0.708964

H7 <--- Environmental Strategies 0.773 0.597529

H8 <--- Environmental Strategies 0.807 0.651249 1.844762

H9 <--- Environmental Strategies 0.772 0.595984

Effective Resourse Management

<--- 0.879
H10 Strategies 0.772641
1.364002
Effective Resourse Management
<--- 0.769
H11 Strategies 0.591361

52
AVE (Average Variance Extracted) = ∑(Standardized loading 2) / Number of Indicators

As the calculation of this study found, all the values of AVE are more than o.5

And so, the latent variables follows convergent validity

___________________________________________________________________________

CHAPTER
FIVE
___________________________________________________________________________

PATH ANALYSIS AND RESULT

In this study, structural equation modelling (SEM), validity and reliability tests were performed for
data analysis and testing relationships between variables. The tests were performed using SPSS (a
software for data analysis) and AMOS (a software to perform structural equation modelling).

In brief, structural equation modelling is a statistical analysis method which is used to model a
network of complex structural relationships between one or more measured variables and latent
variables.

53
Figure 8: Structural Model Results

54
 Table 11: Correlation between the latent variables

Estimate

LV2 <--> LV1 .959

LV4 <--> LV2 .964

LV1 <--> LV3 .940

LV4 <--> LV3 .970

LV2 <--> LV3 .999

LV4 <--> LV1 .985

Here LV1, LV2, LV3, LV4 are the four latent variables. These variables are namely LV1= Research
and development initiatives, LV2= Operations Management Performance, LV3= Environmental
Strategies, LV4= Effective Resource Management Strategies

From the above figure of Structural Model Results some correlations can be generated. The
correlations are analyzed sequentially according to the figure.

The correlation between LV2 and LV1 or Operations Management Performance and Research and
development initiatives is 0.959. There is a close relationship between the two variables. And each
of the variables influences the other one strongly. This close relationship suggests that research and
development initiatives will affect Operation Management Performance. It should be kept in mind
so that any changes will bring good to both of them.

Secondly, the correlation between LV4 and LV2 or Effective Resource Management Strategies and
Operations Management Performance is 0.964. An intimate relationship exists between the two
variables. And each of the variables influences the other one strongly. This estimated value of 0.964
says that any change in Effective Resource Management Strategies will play a vital role in Operation

55
Management Performance. In other words it can be said, if any strategies are developed for the well
being of the industry, how it is affecting operations management should also be looked upon.

Thirdly the correlation between LV1 and LV3 or Research and development initiatives and
Environmental Strategies is 0.940. An good relationship exists between the two variables. Each of
the variables influences the other one strongly. This estimated value of 0.940 says that any change
in Research and development initiatives will play a vital role in Environmental Strategies. In other
words it can be said, if any Research and development initiatives are taken for the well being of the
industry, how it is affecting environment stategies should be evaluated as well.

Fourthly the correlation between LV4 and LV3 or Effective Resource Management Strategies and
Environmental Strategies is 0.970. An very strong correlation exists between the two variables. This
estimated value of 0.970 says that any change in Effective Resource Management Strategies change
and affect Environmental Strategies. In other words it can be said, if any Effective Resource
Management Strategies are taken for the well being of the industry, how it is affecting environment
stategies should be looked upon as well.

Fifthly the correlation between LV2 and LV3 or Operations Management Performance and
Environmental Strategies is 0.999. One of the strongest correlation exists between the two variables.
This estimated value of 0.999 says that any change in Operations Management Performance will
definitely change and affect Environmental Strategies. In other words it can be said, if any
Operations Management Performance are taken for the well being of the industry, how it is affecting
environment stategies should be evaluated too.

Lastly the correlation between LV4 and LV1 or Effective Resource Management Strategies and
Research and development initiatives is 0.985. One of the strongest correlation exists between the
two variables. This estimated value of 0.985 suggests that any change in Effective Resource
Management Strategies will affect Research and development initiatives. If any Effective Resource
Management Strategies are developed in the industry, how it is affecting Research and development
initiatives should also be seen.

56
 Table 12: Standardized Regression Weights

Estimate

H6 <--- LV2 .842

H5 <--- LV2 .823

H4 <--- LV2 .717

H3 <--- LV1 .791

H2 <--- LV1 .852

H1 <--- LV1 .939

H7 <--- LV3 .773

H8 <--- LV3 .807

H9 <--- LV3 .772

H10 <--- LV4 .879

H11 <--- LV4 .769

The proposed equation model has four latent variables, namely, LV1=Research and development
initiatives, LV2=Operation management performance, LV3=Environmental strategies and LV4=
Effective resourse management strategies. The measured variables are:

H1=Building & funding a sustainable based R&D department,

H2=Increasing information sharing between SCM partners,

57
H3= Adapting to modern sustainable technology,

H4=Procurement of materials that support sustainability,

H5=Proper layout and route design to minimize transportation,

H6=Reduction of work in process inventory,

H7=Limiting the usage of toxic materials,

H8=Proper energy Management,

H9=Reduction of water usage and wastewater generation,

H10=Efficient waste disposal system,

H11=Proper recycling system

In the above table it can be seen that the highest estimate is 0.939 from LV1 to H1 which is Research
and development initiatives and Building & funding a sustainable based R&D department. The value
0.939 suggests that the measured variable, Building & funding a sustainable based R&D department
is very strongly connected with the latent variable Research and development initiatives.

The lowest estimate is 0.717, LV2 to H4, which is Operation management performance and
Procurement of materials that support sustainability. Comparatively these two do not have that much
strong relationship. But the value is well above the recommended margin.

So from the abaove analysis, it can be said that standard regression weights are well above the
margin. The recommended value is 0.6 and each of them are above the line.

58
 Table 13: Intercepts

Estimate P

H6 4.582 ***

H5 4.615 ***

H4 4.531 ***

H3 4.563 ***

H2 4.563 ***

H1 4.559 ***

H7 4.582 ***

H8 4.554 ***

H9 4.521 ***

H10 4.592 ***

H11 4.516 ***

59
 Table 14: Regression Weights

H6 <--- LV2

H5 <--- LV2 ***

H4 <--- LV2 ***

H3 <--- LV1

H2 <--- LV1 ***

H1 <--- LV1 ***

H7 <--- LV3

H8 <--- LV3 ***

H9 <--- LV3 ***

H10 <--- LV4

H11 <--- LV4 ***

The level of statistical significance, p is sometimes said as a value between 0 and 1. If the value of
p-is smaller, the stronger is the evidence to reject the null hypothesis

This value represents the probability of obtaining the observed difference (or a larger one) in the
outcome measure of the sample, given that no difference exists between treatments in the population
(the null-hypothesis is true).

60
The stars are only intended to flag levels of significance for 3 of the most commonly used levels. If
a p-value is less than 0.05, it is flagged with one star (*). If a p-value is less than 0.01, it is flagged
with 2 stars (**). If a p-value is less than 0.001, it is flagged with three stars (***)

When P value is <0.001 or three stars, it is considered to be highly significant. From the above
tables we can find the value of P is highly significant.

Table 15: Squared Multiple Correlations between the measured variables

Estimate

H11 .592

H10 .773

H9 .596

H8 .651

H7 .597

H1 .881

H2 .726

H3 .625

H4 .514

H5 .677

H6 .708

61
Squared Multiple Correlations (R2) must be less than 1. Squared multiple correlation (R) is called
the coefficient of determination which is defined as the proportion of the total variation explained by
the model. value R Square can not be greater than one.

In the above figure it is seen that Squared Multiple Correlations (R2) estimates are all less than 01,
which is within the range.

Table 3: Degrees of Freedom

Table 16: Computation of degrees of freedom

Number of distinct sample moments: 77

Number of distinct parameters to be estimated: 39

Degrees of freedom (77 - 39): 38

Minimum was achieved

Chi-square = 102.754

Degrees of freedom = 38

Probability level = .000

Table 17: CMIN

Model NPAR CMIN DF P CMIN/DF

Default model 39 102.754 38 .000 2.704

Saturated model 77 .000 0

Independence model 22 1991.918 55 .000 36.217

62
Table 18: Baseline Comparisons

NFI RFI IFI TLI

Model CFI
Delta1 rho1 Delta2 rho2

Default model .948 .925 .967 .952 .967

Saturated model 1.000 1.000 1.000

Independence model .000 .000 .000 .000 .000

Table 19: FMIN

Model FMIN F0 LO 90 HI 90

Default model .485 .305 .181 .466

Saturated model .000 .000 .000 .000

Independence model 9.396 9.136 8.466 9.842

The degree of freedom, Comparative Fit Index (CFI), Non-Normed Fit Index/Tucker Lewis index
(NNFI/TLI) and Incremental Fit Index (IFI) were analysed to check the felicitousness of the solution
and goodness-of-fit of the model .

From the table below, we can find the perfect fit, recommended values and result for CFI, IFI,TLI
respectively.

Table 20 Model fit indices for the measurement model

Index Perfect fit Accepted values Model Result

CFI 0.97< CFI<1 0.95< CFI<0.97 0.967

IFI 0.95< IFI<1 0.90< IFI<0.95 0.967

TLI 0.90<TLI<1 0.90<TLI<0.95 0.952

63
As shown in Table above, all the indices have commonly accepted levels, demonstrating that the
measurement model exhibited a good fit.

___________________________________________________________________________

CHAPTER
SIX
___________________________________________________________________________

DISCUSSION AND CONCLUSION

6.1 Discussions

This paper is about Analysing Supply Chain Sustainability Drivers Using Structural Equation
Modelling Approach. The drivers(latent and measured variables) were identified according to the
significance and importance it has in this industry. Some hypothesis were developed based on the
importance. A draft model was also developed. Then it was all about the opinion of 232
respondents who attented actively in the survey.

Based on the survey detailed analysis were done on SPSS software. The relationship between each
of the latent and meaured variable were analyzed. Later on a model was developed in AMOS
software. One of the notable things in this research is after developing the model, it was again
proved strong by some of the validity and reliability tests.

The path analysis, path co-effiecient were done effectively which can bring major change in
sustainability. Surely, path analysis is one of the key things done. And all of the results supported
the model to be well fit.

Compared to early literature on supply chain sustainability, the analysis were not done based on
activity which were directly or indirectly related to sustainability. This research tries to find out
statistically the close relationships between the variables.

To make textile industries sustainable in supply chain these factors can be the key and it is already
proved by this research. Proper use of this factors can be effective in making sure the supply chain
is sustainable in textile indutries and can optimize the overall process.
64
6.2 Outcome of the Research

The proposed model was succesful in finding the key factors and close relationship between the
drivers. The model had 4 drivers (latent variables)

Individual’s decision were prioritized, and most of them were directly involved in supply chain
decision making.

After the path analysis of the model it was seen each of the varibles were closely connected.

Table 21: Correlations between variables

Latent
Estimate
Variables

LV2 <--> LV1 .959

LV4 <--> LV2 .964

LV1 <--> LV3 .940

LV4 <--> LV3 .970

LV2 <--> LV3 .999

LV4 <--> LV1 .985

If the path between LV2 and LV1 is looked for example, it is significantly supported, the value of
p is ***. And the path between Research and development initiatives and Operations Management
Performance is 0.959 which is a very strong relationship. In this way each and every latent variables
(drivers) have a strong relationship with each other.

65
 Table 22 Standardized Regression Weights

Estimate

H6 <--- LV2 .842

H5 <--- LV2 .823

H4 <--- LV2 .717

H3 <--- LV1 .791

H2 <--- LV1 .852

H1 <--- LV1 .939

H7 <--- LV3 .773

H8 <--- LV3 .807

H9 <--- LV3 .772

H10 <--- LV4 .879

H11 <--- LV4 .769

The Standardized Regression Weights are also above the recommended level making sure that each
and every ,measured variables have a strong significance in this research.

66
Table 23: Model fit indices for the measurement model

Index Perfect fit Accepted values Model Result

CFI 0.97< CFI<1 0.95< CFI<0.97 0.967

IFI 0.95< IFI<1 0.90< IFI<0.95 0.967

TLI 0.90<TLI<1 0.90<TLI<0.95 0.952

As shown in Table above, all the indices have commonly accepted levels. The indexes were evaluated
and tested in SPSS software. After the evaluation the results were found out. Hence, the model
formulated is a good fit having all the results in between the accepted values.

6.3 Limitations of the research:

The research was based on SEM, and a model was developed. The model was formulated based on
survey. Here survey was one of the major parts of the research. Due to different obstacles it was not
possible to collect the survey physically. Some of the limitations of the research are as follows:

1. The study consisted 4 latent variables and 11 measured variables. By overcoming the data
collection limitation and other barriers this research is further expandable.
2. Because of the Covid-19 pandemic physically data collection was not possible. If this study
could be run with data collected physically, the scope would be higher.
3. The only targeted area was the supply chain which could be extended.

6.4 Future Recommendation of the Research

Future recommendations are basically the limitations of this research. The limitations are the
opportunities for further work on this sector. Some future recommendations of the research are as
follows:

1. The research was done in textile industries. Since this is a very effective thing to find the
correlation between variables this research can also be applied and spread to other industries
and other sectors.

67
 2. The paper focused only on Supply Chain field however this analysis can be expanded in other
fields as well to find the relationship between different variables.
3. The research was analyzed using 11 drivers. If the drivers can be increased the test can be
more effective for the respective industry.

6.5 Conclusion

Supply Chain Sustainability drivers can be different for different type of industries. But there are
some specific drivers while there are some general drivers that play similar roles in different
industries. For textile industries, the the sustainability in the supply chain is even more crjucil in
Bangladesh , since it textile industries are making a very notable impact on economy. Furthermore,
If the environmental aspects are considered then it becomes evene more essential to effectively find
out the drivers and thir correltion b etween each other. Using Structural Equation Modelling the
relationship between the variables can be easily identified. In this paper the drivers(latent and
measured variables) were identified according to the significance it has in the industry. As the
research progressed, it became evident there is enough dependencies between the drivers and there
is strong reason to accept the hypotheses.

Moreover based on personal interest and business interest analysis of multiple factors are possible.
Optimization and sustainability in textile industries will be easy if all the drivers are given the highest
priorities. At the same time the results from the research indicate that the constructed model shows
significant correlations between the fators and sub-factors. Therefore the authorities and decision-
makers of supply chains will be benefitted from the outcomes of this research.

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 Appendix

Survey Questionnaire

Title: Survey on Supply Chain Sustainability

Hello there! Glad to have you in a part of the survey. We are researching on "Analysis of supply
chain sustainability drivers using a structural equation modelling approach". Appreciation for your
efforts to build a sustainable environment.

Your responses should be based on ensuring a sustainable supply chain. For each of the statements
below, circle the answer that best characterizes how you feel about the statement.

Participant information:

We consider you as an important citizen of this country and we want to take your opinion with great
care. So, help us to build a sustainable society by providing your information which will be
documented securely.

1. Your full name:

Note: Answer should be written in text format

2. Designation:

Note: Answer should be written in text format

3. Age
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Note: Answer should be written in text format

4. Gender

Male

Female

Note: One of the options is to be selected

5. Are you involved in supply chain decision making?

Yes

No

Note: One of the options is to be selected

For each of the statements below, circle the answer that best characterizes how you feel about the
statement.

Where:

1 = Strongly Disagree,

2 = Disagree,

3= Neutral,

4 = Agree,

5= Strongly Agree,

1. Building and funding a Sustainability-based R&D department expands production

1 2 3 4 5
Strongly Strongly
Disagree Agree

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2. Information sharing between SCM partners increases Research and development scopes

1 2 3 4 5
Strongly Strongly
Disagree Agree

3. Adapting to modern Sustainable technologies enlarges the scope for better research in the field of
sustainability

1 2 3 4 5
Strongly Strongly
Disagree Agree

4. Procurement of products that support sustainability is crucial for operation management

performance

1 2 3 4 5
Strongly Strongly
Disagree Agree

5. Maintenance of Proper layout and route design will minimize transportation and help in overall
operations management performance

1 2 3 4 5
Strongly Strongly
Disagree Agree

6. Reduction of work in process inventory is proportional to operational management's performance

1 2 3 4 5
Strongly Strongly
Disagree Agree

7. Limiting the usage of toxic materials is a crucial strategy for environmental issues

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 1 2 3 4 5
Strongly Strongly
Disagree Agree

8. Efficient Energy management systems are beneficial to a better environment ensuring

sustainability

1 2 3 4 5
Strongly Strongly
Disagree Agree

9. Reduction of Water Usage and wastewater generation will lead to a healthy industrial environment.

1 2 3 4 5
Strongly Strongly
Disagree Agree

10. Efficient waste disposal system positively influences proper resource management.

1 2 3 4 5
Strongly Strongly
Disagree Agree

11. Proper recycling system is a significant influence for proper resource management.

1 2 3 4 5
Strongly Strongly
Disagree Agree

Message on completion: Thanks for your valuable time for taking part in building a sustainable
world. Please share this survey form with your friends and help them participate as well.

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