Structural Equation Modeling for Sustainable Logistics Operation: Study on Practices by Organized Retail Sector

Abstract

Organized retail sector is witnessing growth of late and its core operation is Logistics. The adverse effect of Logistics results in degradation of the environment with higher emissions of Green House Gases (GHG) into the atmosphere.

Assessment of the level of adoption of Green Logistics and identification of the main drivers for adoption of Green Logistics practices by the organized retail players enumerated.  Primary data collected and analyzed using Structural Equation Modeling (SEM). Confirmatory Factor Analysis indicates that the correlation coefficient values were more than the adequate level. The complete measurement model for Goodness of Fit and incremental indices for the model analyzed and the Chi-Square/df value of  1.864  and 1.804 respectively indicates very good fit of the model and the Root Mean Square Error of Approximation (RMSEA) is 0.06 and 0.058 respectively which indicates that the SEM measurement model adequately supports the various constructs and is over identified.

The key driver for adoption of Green Logistics are the Government Policy and Regulations, Environmental Degradation and assuming Leadership in Sustainability by the retail organizations. Adoption of Green Logistics by Retail players would benefit the organization by reducing the operational cost in the long run, build the organizations brand value, enhance the employee morale and improve the sustainability performance.