Impact of green practices through green product and service innovation: sustainable product-service system performance model

ABSTRACT

Today, the manufacturing industry faces worldwide challenges, ecological hazards, climate change, and the use of non-renewable natural resources, so industry players are manoeuvring in a sustainable direction. In this case, green manufacturing practices are used as a starter to contribute to products and services that can help achieve sustainable development goals. The research aims to explore green practices with empirical evidence in the literature and expert opinions of tire manufacturing industry practitioners. The study proposes a framework of key factors: TMC (Top Management Commitment), PPP (Pollution Prevention Practices), and PSP (Product Stewardship Practices) that can affect GPSI (Green Product Service Innovation) significantly affect SPSSP (Sustainable Product-Service System Performance). The study used statistical analysis to calculate the minimum sample size with (G*Power 3.1), the results were 205 respondents adequate, and structural model analysis using Structural Equation Modeling (SmartPLS 4.0). The results show that TMC and PSP significantly affect SPSSP, but PPP does not affect SPSSP. The findings also suggest that the relationship between key factors and SPSSP can be mediated by GPSI. The recommendations of this study provide suggestions to top management for the adoption of GPSI as a novelty in green manufacturing, and as value creation for sustainable development achievements.

KEYWORDS:

• Green practices
• green product service innovation
• sustainable product-service system per formance

1. Introduction

The manufacturing industry plays an important role in pushing a country to achieve sustainable development goals. Although the manufacturing industry plays a major role, it does not escape several environmental, economic, and social issues. The manufacturing industry faces challenges to comply with environmental rules and regulations due to global warming, depletion of natural resource supply, environmental pollution, product utilisation, and other different issues regarding industrial waste management issues (Secondi et al. 2019). To pursue sustainability the manufacturing industry must make more serious manufacturing sustainability changes (Garetti and Taisch 2012), in support of sustainable manufacturing development the Triple Bottom Line Sustainability (TBLS) is very popular in improving economic, social, and environmental performance (Jayashree et al. 2021; Gimenez, Sierra, and Rodon 2012). Therefore, it takes understanding and awareness from all stakeholders (Akhtar et al. 2018; Hariyani and Mishra 2022), to encourage organisations in the current efforts at green practices by adopting clean production, and open innovation in the manufacturing sector towards Sustainable Manufacturing (SM) (Hao, Helo, and Shamsuzzoha 2018; Javaid et al. 2021). It is a challenge to review the sustainability of green practices in the manufacturing sector.

In recent years, people’s green-minded practices have increased more strongly to meet public demand for more compliant service products (Ford and Despeisse 2016), previous studies reveal sustainable manufacturing practices aim to reduce production’s impact on the environment while optimising production efficiency (Nordin, Ashari, and Farizal Rajemi 2014; Trujillo-Gallego, Sarache, and Afonso Sellitto 2021; Chuanpeng et al. 2017). In the goal of manufacturing development, it should be encouraged by conducting green practice campaigns (Go Green) (Weihong et al. 2021; Sangwan and Choudhary 2018). Green Manufacturing Practices (GMP) are able to create the value of TBL sustainability, social to reduce the number of carbon emissions, and surf the ecological environment (Xiao et al. 2021), saving energy and time costs. (Domingo and Aguado 2015) able to describe the achievement of improved sustainability, lean green practices of manufacturing, and more eco-efficient (M. A. Rehman, Seth, and Shrivastava 2016). Implementing green practices can significantly lower and improve the performance of carbon emissions through the structure of manufacturing (Xu et al. 2021), and that is less and have great potential for sustainable environmental concerns (Seliger et al. 2008).

GMP can be done by encouraging organisations to adopt green innovation as the creation of green products that are environmentally friendly (Jayaraman, Singh, and Anandnarayan 2012), to expand competitive advantage through organisational culture and a wide range of organisational knowledge and innovations (Azeem et al. 2021), increasing consumers’ willingness to pay for a friendly product environment and promoting green products (Al Mamun et al. 2018; Laroche, Bergeron, and Barbaro-Forleo 2001), green products are environmentally friendly how consumers utilise awareness so that consumers can create a decision to buy environmentally friendly products (Maniatis 2016). GMP is expected to minimise waste and pollution if implemented correctly (Dinesh, Rehman, and Shrivastava 2018). Pollution Prevention Practices (PPP) are one of eliminating the amount of waste that will be released into the natural environment at its source (Hoque and Clarke 2013). PPP is an environmental strategy to improve recycling, process efficiency, and improve occupational safety and health (Fukuzawa 2012; Zhou and Tang 2021; Bhupendra and Sangle 2016), and as an environmentally friendly operation (Galeazzo, Furlan, and Vinelli 2014; Bhupendra and Sangle 2015). In addition, the flow from other GMPs is the Product stewardship Practices (PSP) as responsible for the adverse environmental impact of the product by all parties involved in the life cycle (Hesterberg et al. 2012).

For this reason, there needs to be organisational support and commitment from peak management (TMC) in Green Product Innovation (GPI) because GPI can affect market demand and company performance (Lin, Hua Tan, and Geng 2013). Green products as motivations that stimulate green consumption may encourage environmental thinking to increase demand, estimating the current market share for eco-friendly products (Ritter et al. 2015). In addition, companies must also pay attention to sustainable services to meet the concern of community services adopting a green environment, companies if achieving competitive advantage need to adopt Green Service Innovation (GSI) (Chen et al. 2015; McDermott and Prajogo 2012). Therefore, companies should use strategic differentiation to help increase competitive advantage by creating environmentally friendly products, so it is necessary to develop products that have greenish and breakthrough attributes for environmentally friendly products (Lin and Shan Chen 2017). GSI is a new thing, it is still rare for companies to implement green service innovations.

Organisations need to integrate green practices into the Sustainability of Product and Service Systems (SPSS) as one of the product and service innovation models, encouraging sustainable production and consumption patterns (Cook, Bhamra, and Lemon 2006) to provide many opportunities in competing companies today (Armstrong et al. 2015). SPSS has a profound impact on the social well-being, economic prosperity, and environment of our planet (TBLS) (Vezzoli et al. 2015; Hernandez 2019; Mattioda et al. 2013). SPSS can help achieve better customer satisfaction of environmental attention (Pan and Thi Ngoc Nguyen 2015), by offering environmentally friendly green products (Önül 2011; Manzini and Vezzoli 2003), and improving their business performance as a sustainable product-service system performance (SPSSP). Therefore, the organisation raises green practices in business operations. This demonstrates the importance of taking action to build organisational capabilities and the role TMC needs to have certain capabilities that ensure the implementation of green practices. hence the industry must innovate on products and services by adopting green practices such as PPP, PSP, GPI, and GSI that affect SPSSP. Therefore, this study addresses the following research questions.

Q1. Do key factors (TMC, PPP, and PSP) affect GPSI green practices?

Q2. Do GPSI green practices contribute to achieving SPSSP?

Q3. Does GPSI green practice mediate the relationship between the primary key factor and the SPSSP?

The study provides valuable insights into green practices for manufacturing companies, as research into the ability of green practices to be sustainable is still not widely discussed in developing countries. Therefore, the study aims to answer the research question that the key factors: TMC, PPP, and PSP significantly influence the new green practices of GPSI, and significantly affect SPSSP. The determinant enables organisations to adopt new green practices as breakthroughs enhance SPSSP for competitive advantage.

This article is structured as follows: Section 2 describes the background of theories and hypotheses linked based on the theory of green practice. Section 3 discusses the methodologies used such as sampling and data collection, data analysis, SEM measurement, and structural model analysis. Section 4 summarises the findings, results, and discussions. The final Section presents the research conclusions and implications.

2. Literature review

2.1 Implementation of green practice in the tire industry

Following the Government of Indonesia’s, regulation on the implementation of the achievement of the Sustainable Development Goals (SDGs) on 4 July 2017. Therefore, the manufacturing industry focuses on achieving the SDGs programme, namely Responsible Consumption and Production point 12 of the 17 SDGs. The manufacturing industry is expected to be able to be more productive and highly competitive for a more advanced and developing future in Indonesia. The manufacturing industry contributes significantly to Indonesia’s Gross Domestic Product (GDP) of 17.34%, and the Ministry of Industry continues to strive to target an increase above 20% by 2024 (Department of Statistics 2021). The Indonesian government has introduced several programmes to improve sustainable performance including the adoption of green practices in manufacturing and the new concept of TBLS achieving social, economic, and environmental goals (Gimenez, Sierra, and Rodon 2012). Improving sustainable performance opinions (Maniatis 2016), the concept of TBLS is a challenge for companies to carry out an environmentally friendly green product that is beneficial to the environment, society, and economy. For this reason, this research will focus on seven tire manufacturing industries in Indonesia to be surveyed, because the tire manufacturing industry has implemented or is adopting green practices. Domestic tire manufacturers are members of the Indonesian Tire Companies Association (APBI), targeting by 2030 to increase the ratio of recycled and renewable materials by 5 to 40% and reduce emissions by 50%. These seven companies have implemented green manufacturing practices with a tier of five advanced companies and two intermediate companies out of the 18 indicators used by (OECD 2011). This research will combine the green practices of the seven tire manufacturing industries with empirical evidence of literature from developing countries.

2.2 Green innovation and implementation

In recent years, global experts have revealed that sustainable manufacturing is a highlight in itself, in the development goals of sustainable manufacturing should be encouraged by carrying out green practices (Weihong et al. 2021) because it can reduce ecological damage and improve the performance of current business operations (Ali et al. 2019). The company has sought to conduct research and develop environmentally based green innovations (Weng, Shen Chen, and Ching Chen 2015; Khan, Kaur Johl, and Ntim 2019; Conding et al. 2012) by conducting GPSI (Chan et al. 2016; Tariq, Badir, and Chonglerttham 2019; Eric, Purtik, and Welpe 2017), Green product innovation has been recognised as one of the key factors to achieve growth, environmental sustainability, and a better quality of life (Dangelico and Pujari 2010). Green products have a competitive advantage and the success of new products that are environmentally friendly (Wong and Bigliardi 2012). Green service innovation capabilities enable organisations to achieve competitive advantage and sustainability of their business (Fernando, Jose Chiappetta Jabbour, and Xin Wah 2019; Chen et al. 2015). Research on GPSI in certain domains in the manufacturing industry (Ali et al. 2019), which has implemented green practices or is in progress to find out how far the manufacturing industry is towards sustainable manufacturing.

In the implementation of GPSI in the tire industry, GPSI can improve new product processes or sustainable process systems, improve clean production process systems, reduce CO2 emissions from the entire value chain (Waheed et al. 2020), and develop innovative environmentally friendly materials in product design (Chang 2016), so with green services able to expand services based on concern for the environment, offering new customer service practices based on concern for the environment (Chen et al. 2015). Therefore, companies should use strategic differentiation to help improve company performance by creating environmentally friendly products with GPSI implementation as an impetus for sustainability.

2.3 Green innovation and sustainable product service system performance

Innovation of green products and services is essential to improve the performance of sustainable products and services (Chen et al. 2015). Sustainable Product-Service System Performance (SPSSP) is a model to improve sustainable performance, where the combination of system products and services is designed in such a way that it can provide added value to be able to meet consumers’ desires to achieve TBLS (Chuanpeng et al. 2017). TBLS can measure SPSSP effectively through a comprehensive view (Lee et al. 2012). The principles of TBLS Sustainability and GPSI bring about an integrated sustainable company (Mattioda et al. 2013; Aggarwal et al. 2022). SPSSP supports three aspects of TBLS, the Economic aspect saves energy consumption costs, Launch of new environmentally friendly products (Laosirihongthong, Adebanjo, and Choon Tan 2013). Environmental aspects create products beneficial to the environment and reduce negative impacts on the environment (Zhu, Sarkis, and Hung Lai 2008). Social sustainability perspectives increase organisational agility, shape environmentally friendly purchasing attitudes and behaviours, improve employee welfare and care, and care about employee safety and health (Sari et al. 2021). For the integrated development of SPSSP, organisations must design environmentally friendly sustainable models and EcoM2 EcoM2 (Pigosso and McAloone 2016). Therefore, the adoption of GPSI green practices will support the manufacturing industry to remain competitive and contribute to sustainable development goals.

3. Theoretical background

A conceptual framework was developed to examine the adoption of green practices for sustainable products and services in the manufacturing industry.

3.1 Top Management Commitments (TMC)

To implement sustainable manufacturing, a road framework must be developed by policymakers in decision-making, and the role of TMC organisations and practitioners as tools and practices is the key to success (Hariyani and Mishra 2022). Management who excels in the organisation must be committed to allocating capital for the company’s mission because TMC has a very positive influence on relationships related to corporate profits (Tzempelikos 2015). Previous researchers (Sony and Naik 2020) posited that TMC is influential in achieving its vision and actively participates in updating the organisational structure, planning, directing, coordination, setting, goal setting, leadership style, resource allocation, and so on.

(Hermano and Martín-Cruz 2016) Ability to redesign an enterprise, the ability to remember changing business environments, and the ability of top management to adapt, integrate, and reconfigure resources and capabilities to cope with a dynamic market. (Burki, Ersoy, and Najam 2019) argue that the function and impact of TMC are critical in realising a sustainable business strategy. (Wijethilake and Lama 2019), Illustrates that TMC is one of the capabilities for sustainable development. Sustainable development at the company level requires balance, so there is a need for organisational support. According to (Henry, Buyl, and Jansen 2019), The role of TMC management is highly influential in achieving TBLS performance as a challenge, and TMC is very behaviourally integrated and more likely to engage in sustainability-oriented actions (Jahanshahi and Brem 2017). Organisations adopt green practices with the goal of achieving sustainability. The role of the TMC to determine in policymaking to innovate related to green practices such as GPSI is a special concern (M. A. A. Rehman, Shrivastava, and Shrivastava 2015). Companies excelling in GPSI can achieve a higher level of market performance, in other words, by promoting green products and meeting consumer demand in improving organisational performance (Lin, Hua Tan, and Geng 2013). Consumer behaviour can weigh the environmental and economic benefits of consuming green products (Maniatis 2016) and the role of organisations in TMC engagement that combines green practices GMP and GPI in the manufacturing sector (Waheed et al. 2020), Eco-friendly practices in manufacturing require organisational engagement, including TMC capabilities and responsibilities and strategies, TMC that will be conscious to encourage green practices to be included in products and services (Latan et al. 2018). Therefore, the TMC is instrumental in leading the organisation towards sustainable development.

3.2 Pollution Prevention Practices (PPP)

Damage to the surrounding environment caused by industrial activities is one of the special concerns of society today (Murillo-Luna, Garcés-Ayerbe, and Rivera-Torres 2011). The increasing demand for environmentally friendly products implies that there is a great opportunity for business people to have proven to reduce costs and increase efficiency, namely by carrying out green innovations in pollution prevention management (Deltas, Ramirez Harrington, and Khanna 2014). Recycling is an achievement of a green environment (Hoque and Clarke 2013), with pollution prevention through recycling and reuse, recovery, and sale for reuse. Improvement and sustainability through environmental design are the life cycle of assessment, product design, and redesign. PPP based on eco-efficiency for pollution prevention analysis, companies can re-engineer or redesign processes as one of the company’s strategies to implement PPP to reduce fuel consumption, and resources, reduce pollution and save (Petraru and Gavrilescu 2010). In the manufacturing sector, businesses and governments are working together to encourage the adoption of green technologies as more environmentally friendly purchasing decisions can have a far-reaching impact on public health by reducing pollution (Hill, Petroni, and Collins 2021). The opinion of (Abdul-Rashid et al. 2017) on PPP as a push towards sustainable manufacturing aims to reduce environmental impact during manufacturing operations by implementing strategies such as waste minimisation, resource efficiency, energy saving, and end-of-life management. This research argues that green practices with PPP adoption in the tire industry will drive sustainable competitive advantage.

3.3 Product Stewardship Practices (PSP)

(Jensen and Remmen 2017) PSP is a concept of a circular economy (CE). Which circles as a business model of sustainable development. CE deals with the principles of reduction, the extension of service life, reuse, remanufacturing, and recycling of products. PPP recycling services increase green environmental awareness, thereby reducing the gap in action value and affordable repair capabilities that support the formation of CE (Blake, Farrelly, and Hannon 2019). The implementation of PSP strategies can create differentiation advantages for companies (Bhupendra and Sangle 2018) and play an important role in responsible health, safety, and the environment (Landry, Scherrer, and Tenney 2009). Product stewardship strategies must adapt to today’s increasingly competitive market with a balance between reducing costs, the provision at competitive prices, manufacturing design, and resultant CE drivers and Corporate Social Responsibility (CSR) (Takhar and Liyange 2019). The PSP provides a comprehensive view of sustainability challenges (Bhupendra and Sangle 2017) to improve sustainable flexibility performance with innovation as a competitive advantage. Thus, companies must adopt PSP green practices so that the system of products and services can attract the attention of sustainable consumers.

3.4 Research Gap

Through a literature survey, the authors found that developed countries such as China, Taiwan, and India began to adopt green manufacturing practices (Chen et al. 2015; Lin and Shan Chen 2017). Businesses in the manufacturing sector are beginning to face the challenge of environmental degradation. The Chinese state began to integrate environmental management systems into business and develop green innovation strategies, adopting green practices that involve supportive participating organisations (Guoyou et al. 2013). Subsequent researchers (Lin, Hua Tan, and Geng 2013; Lin and Shan Chen 2017; Chang 2018) the case of companies in Taiwan discussed the absorbency of green innovation, they proposed the innovation of green products and services, to improve company performance. Green innovation is the main path to achieving sustainability. In achieving sustainable development, they enhance the company’s sustainable development by involving green organisation and innovation (Zhang and Zhu 2019; Chang 2016). The study (Waheed et al. 2020) provides implications for green production on how organisations can achieve stakeholder engagement by combining green manufacturing and green product innovation.

Likewise, most previous green practice studies considered a green product and service innovation against their business performance but did not consider TBLS, nor did they discuss GPSI performance against the TBLS concept. Therefore, this study tries to trap this gap by revealing the effect of GPSI on TBLS, it is noteworthy to observe the essence of sustainable manufacturing, and GPSI is new in green innovation. For this reason, researchers will investigate whether GPSI affects SPSSP with

theoretical and empirical approaches from developed countries.

3.5 Conceptual framework

Based on the literature survey above, Figure 1 shows the proposed framework, between the determining factors, GPSI, and SPSSP.

Figure 1. Conceptual framework.

4. Methodology

The purpose of this study is to examine the impact of green practices from the determinants of GPSI success in implementing sustainable development goals with SPSSP. This study considers three capabilities, namely TMC, PPP, and PSP. The development and validation of models for measuring SPSSP involve the following stages: theoretical exploration of green practices and expert opinions: data collection, questionnaire design, and surveys presented. The study uses structural equation modeling(SEM).

4.1 Measurement

For measurements, the study created a 5-point Likert scale questionnaire, from ‘disagree’ (1) to ‘strongly agree’ (5). The study adopts all measurement items from the existing literature partially modified or modified completely by adjusting the actual conditions of sustainable manufacturing green practices. Table 1 shows the model constructs and items code used by the research questionnaire.

Table 1. Constructs used in the research questionnaire.

Construct	Items Code					References
Top Management Commitment
Goal and Objectives	TMC1			To implement green practices, our top management is committed to setting policies and strategies based on green practices		(Padma, Ganesh, and Rajendran 2008; Henry, Buyl, and Jansen 2019)
	TMC2			Communicate green practice-related initiatives to all employees
	TMC3			Assess green practice policies periodically and consequently
	TMC4			Emphasising ongoing review and improvement of green practices
Partnership	TMC5			Our top management engages suppliers in decision-making about green practices
	TMC6			Our suppliers are the organisation’s green partners and have ISO certification		(Santos, Lannelongue, and Gonzalez-Benito 2019; Hutomo, Mohd Saudi, and Sinaga 2018)
	TMC7			Collaborate with suppliers and integrate into green practices
Resource Allocation	TMC8			To implement green practices, our top management allocates sufficient resources		(Padma, Ganesh, and Rajendran 2008; Jahanshahi and Brem 2017)
	TMC9			Allocate sufficient resources to learn and innovate
	TMC10			Allocate sufficient fencing for green practices
Pollution Prevention Practices
Reduce	PPP1			To implement green practices, our organisation reduces energy use		(Rusinko 2007; Kloas et al. 2015; Niyitanga et al. 2021)
	PPP2			Reduce the use of materials
	PPP3			Reduce solid waste
	PPP4			Reduce emissions
	PPP5			Chemically stabilising/solidified B3 sewage treatment
Recycle	PPP6			To implement green practices, our organisation recycles Products		(Miller et al. 2014; Fazli and Rodrigue 2020; Sala and Serra 2004; Tiew et al. 2015)
	PPP7			Recycling solid waste
	PPP8			Recycling water
Repair	PPP9			To implement green practices, our organisation makes improvements to the quality of existing products		(Terzioğlu and Wever 2021)
	PPP10			Improved quality of new products
Repurposed	PPP11			To implement green practices, our organisation uses materials and parts that have been reused		(Pérez-Martínez et al. 2021; Chris, Thompson, and Swan 2020)
Product Stewardship Practices
Design Product	PSP1			To implement green practices, our organisation redesigns products to improve sustainability	(Rusinko 2007; Szalavetz 2019)
	PSP2			Redesign the process to improve sustainability
	PSP3			Sustainable product research and development
Eco Production	PSP4			To implement green practices, our organisation uses renewable materials	(Baines et al. 2012)
	PSP5			Using environmentally friendly energy
	PSP6			Using environmentally friendly certification
	PSP7			Eco-efficiency
Green Product Service Innovation
Green Product Innovation	GPSI1			To implement green product innovation, our organisation improves new product processes or process systems	(Waheed et al. 2020; Chang 2016)
	GPSI2			Development of innovative and environmentally friendly materials in product design
	GPSI3			End-of-life product management
Green Product Service Innovation
Green service Innovation	GPSI4			To implement green service innovation, our organisation expands products/services based on environmental concern	(Chen et al. 2015)
	GPSI5			Creating and establishing new green product/service practices based on concern for the environment
	GPSI6			Offering new product/customer service green practices based on concern for the environment
	GPSI7			Offering new green practices in products/after-sales services based on the commitment to the environment
	GPSI8			Offering new green practices in product/service development based on environment and concern
	GPSI9			Propose new green practices in promoting products/services related to environmental reputation
	GPSI10			Propose new green practices related to internal administration and operations based on environmental concerns
Sustainable Product Service Systems Performance
Economic		SPSSP1	Implementing green practices helps our organisation achieve sustainability by saving on energy consumption costs				(Lin, Hua Tan, and Geng 2013; Laosirihongthong, Adebanjo, and Choon Tan 2013; Zhu, Sarkis, and Hung Lai 2008)
		SPSSP2	Reduce the cost of purchasing materials
		SPSSP3	Launch of new environmentally friendly products
		SPSSP4	Increase product demand
		SPSSP5	Improving the quality of products and services
Environment		SPSSP6	Implementing green practices helps our organisation achieve sustainability by creating products that benefit the environment				(Laosirihongthong, Adebanjo, and Choon Tan 2013; Zhu, Sarkis, and Hung Lai 2008)
		SPSSP7	The product is not harmful to the environment
		SPSSP8	Reduce the negative impact on the environment
		SPSSP9	Products of slight pollution
Social		SPSSP10	Implementing green practices helps our organisation achieve sustainability by increasing organisational agility				(Yong et al. 2020; Sari et al. 2021)
		SPSSP11	Create an environmentally friendly organisational culture
		SPSSP12	Assist in customer and supplier collaboration
		SPSSP13	Increase customer satisfaction
		SPSSP14	Shaping environmentally friendly purchasing attitudes and behaviours
		SPSSP15	Well-being and caring for employees
		SPSSP16	Safety and health of employees

4.2 Sampling and data collection

The survey was targeted at individual tire manufacturing industry companies, asked to address issues related to the green practices of the manufacturing industry. The survey was addressed to professional employees for sample collection, seven tire manufacturing industry companies were selected that were declared to have been or are still in the process of implementing green practices. Data collection for two months through online and offline interview interactions, then recapitulating the results of data collection to be used as a questionnaire and distributed through Google form. Some of the main challenges faced in this study are getting access to tire manufacturing companies because the team manager is difficult to find and limited time. However, with perseverance, as many as 300 questionnaires were successfully sent. A total of 245 questionnaires were returned, while forty incomplete questionnaires were eliminated. A valid response is 205. The initial response rate was 81% of responses, 68% of which were declared valid. So, a total of 205 responses will be analysed.

4.3 Data analysis and result

Because this research is explorative, the content is formative construction and aims as a significant capability (Ramayah et al. 2018) in continuous implementation. Therefore, this study used PLS-SEM to analyse the data. PLS-SEM is a soft sensing technique that provides strong results and does not require restrictive assumptions such as data normality, observational independence, and metric uniformity variables (Antonio et al. 2017; Sarstedt et al. 2016). To present modeling done with G*Power 3.1 and SmartPLS 4 Software.

4.4 Measurement model analysis

In model analysis measurements, the first step is to determine the minimum sample size amount with G*Power (Ringle, Da Silva, and Bido 2015). With G*Power the required sample size is calculated as a function of the user-defined value for the significant level required α, the desired statistical strength of 1-β, and the size of the detected population effect (Edgar et al. 2009). Therefore, this study refers to (Hoc, Fong, and Law 2014) as a parameter for calculating the minimum sample: test family = f-test; statistical test = multiple linear regression, fixed model and deviation R² from zero; test power = 80%; error probability = 5%, and effect size = 15% is medium. The results of the minimum sample calculation with G*Power as recommended above that the analysis of this model requires a minimum sample of 68 respondents. The study provided 205 respondents. So, the sample is very sufficient for analysis.

The next step is to test the reliability and validity of the data with the PLS-SEM method. The reliability test consists of Cronbach’s alpha and Composite Reliability (CR), while the validity test consists of convergent and discriminant. In reliability Testing, measuring cases or phenomena of the likelihood of inconsistent occurrence, the minimum alpha threshold of the coefficient value is 0.6 (Hair 2009), if an item has less than the cut-off value, it is recommended to be omitted from the variable. Therefore, there are some items omitted when the loading is less than 0.5, and to meet the value of the AVEs must be > 0.5. So, none of the items from TMC, PPP, PSP, GPSI, and SPSSP are omitted because the coefficient value is above 0.6, as shown in Table 2. Furthermore, it uses CFA techniques to observe the validity and reliability of variables, where validity is observed using loading and AVEs, while reliability uses Cronbach’s alpha

Table 2. Result of the measurement model.

Construct	Items Code	Outer loadings	rho_A	CR	AVE	Cronbach’ Alpha
Top Management Commitment	TMC1	0,808	0,942	0,944	0,628	0,934
	TMC2	0,812
	TMC3	0,849
	TMC4	0,894
	TMC5	0,842
	TMC6	0,782
	TMC7	0,775
	TMC8	0,715
	TMC9	0,732
	TMC10	0,692
Pollution Prevention Practices	PPP1	0,833	0,964	0,964	0,711	0,959
	PPP2	0,867
	PPP3	0,888
	PPP4	0,887
	PPP5	0,903
	PPP6	0,827
	PPP7	0,872
	PPP8	0,770
	PPP9	0,826
	PPP10	0,820
	PPP11	0,770
Product Stewardship Practices	PSP1	0,830	0,948	0,952	0,742	0,941
	PSP2	0,860
	PSP3	0,865
	PSP4	0,925
	PSP5	0,913
	PSP6	0,872
	PSP7	0,753
Green Product Service Innovation	GPSI1	0,848	0,968	0,971	0,770	0,966
	GPSI2	0,831
	GPSI3	0,898
	GPSI4	0,920
	GPSI5	0,913
	GPSI6	0,936
	GPSI7	0,927
	GPSI8	0,836
	GPSI9	0,842
	GPSI10	0,810
Sustainable Product-Service System Performance	SPSSP1	0,835	0,967	0,969	0,663	0,966
	SPSSP2	0,845
	SPSSP3	0,825
	SPSSP4	0,861
	SPSSP5	0,879
	SPSSP6	0,878
	SPSSP7	0,868
	SPSSP8	0,806
	SPSSP9	0,825
	SPSSP10	0,762
	SPSSP11	0,730
	SPSSP12	0,757
	SPSSP13	0,764
	SPSSP14	0,752
	SPSSP15	0,816
	SPSSP16	0,799

(α) and Composite reliability (CR). Table 2 shows all items of values>0.6 Cronbach’ alpha (α) and CR values where the value should be > 0.7 (Hoc, Fong, and Law 2014). In addition, researchers examined the discriminant validity for each of the indicators. According to (Claes and Larcker 1981), the value of √AVEs must be > the value of the correlation coefficient with other constructions. Table 3 meets the requirements and thus establishes that the validity of the recommended discriminant has qualified. Figure 2 shows the results of the SEM-PLS processing output Assessment of a measurement model that shows the relationship between variables. Based on the measurement model of reliability and validity variables, the use of SEM to examine pathway relationships between latent variables by observing beta and significance values of direct relationships and mediation effects, results are shown in Tables 4 and 5, inspired by past related studies conducted by (Ghazali et al. 2017; Jakhar 2017). Researchers used a measure of compatibility with SRMR. According to (Li Tze and Bentler 1999), SRMR can be used to identify fitness models where SRMR should be < 0.08 since the current value is 0.071.

Figure 2. Research methodology.

Table 3. Discriminant validity.

Construct	GPSI	PPP	PSP	SPSSP	TMC
GPSI	0,877
PPP	0,332	0,843
PSP	0,412	0,356	0,861
SPSSP	0,707	0,394	0,559	0,814
TMC	0,508	0,331	0,453	0,697	0,792

Table 4. Direct relationship.

Paths	(O)	(M)	(STDEV)	T Statistics	P Values	Hypotheses
GPSI -> SPSSP	0,414	0,385	0,111	3,742	0,000	Supported
PPP -> GPSI	0,139	0,140	0,070	1,969	0,049	Supported
PPP -> SPSSP	0,063	0,070	0,069	0,912	0,362	Not Supported
PSP -> GPSI	0,193	0,194	0,095	2,025	0,043	Supported
PSP -> SPSSP	0,196	0,210	0,100	1,969	0,050	Supported
TMC -> GPSI	0,375	0,365	0,117	3,199	0,001	Supported
TMC -> SPSSP	0,377	0,386	0,074	5,062	0,000	Supported

Table 5. Mediation effect.

Paths	(O)	(M)	(STDEV)	T Statistics	P Values	Hypotheses
PPP -> GPSI -> SPSSP	0,057	0,051	0,027	2,156	0,032	Supported
TMC -> GPSI -> SPSSP	0,155	0,148	0,074	2,093	0,037	Supported
PSP -> GPSI -> SPSSP	0,080	0,070	0,034	2,350	0,019	Supported

4.5 Structural model analysis

This study assumes eight hypotheses to explore the relationship between TMC, PPP, PSP, SPSSP, and GPSI as GPSI mediating effects. Based on empirical findings and expert opinions on green practices. Further analysis of structural models, used to test hypotheses after examination of reliability and validity tests. The results of hypothesis testing are shown in Figure 3 and Table 5. The results of the model evaluation using beta and significant values, namely t-value = 1.96 (p = 5%), which means that the significant value (p < 0.05) hypothesis is accepted or rejected. The results interpret that all direct relationships are accepted except PPP has reached a t-value of>1.96, indicating a significant relationship because the p-value<0.05. But another result is that PPP has a positive effect as well as TMC and PSP on GPSI as mediation. Showing that TMC, PPP, and PSP positively impact GPSI can achieve a significant t-value>1.96 relationships. The relationship between GPSI and SPSSP is very important.

Figure 3. Structure model.

The effect of TMC, PPP, and PSP on GPSI was found to be β-values of 0.375, 0.139, and 0.193 and t-values of 3.199, 1.969, and 2.025. In addition, the effect of TMC, PPP, and PSP on SPSSP showed β-values of 0.377, 0.196, 0.063 and t-values of 5.062, 1.969, 0.912, thus, direct influence on SPSSP hypotheses is accepted unless PPP t-values of<1.96 are less supportive. Thus, the relationship between GPSI and SPSSP showed a β-value of 0.414 and a t-value of 3.742 direct effects. The results of the direct effects of TMC, PPP, and PSP have a significant effect on GPSI, and the effect of GPSI has a significant effect on SPSSP. Another result, PPP did not have a significant effect on SPSSP. For mediation effects, Table 5 shows that TMC, PPP, and PSP variables have a significant effect on SPSSP mediated by GPSI. Figure 2 shows the result of an r-square (R2) value of 0.689% for SPSSP. Thus, all constructs bring about a 69% change in a good SPSSP (Chin 1998), and other results of predictive relevance (Q2) indicate the efficiency of the model and the value should be >zero because the current value is >zero.

This study supports the creation of SPSSP. Figure 2 shows the SPSSP model, and the results show that TMC and PSP affect SPSSP, for PPP does not significantly affect SPSSP. GPSI as a positive mediation between TMC, PPP, PSP, and SPSSP. Adopting green practices such as GPSI can contribute to SPSSP. The following discussion and implications of the study findings are discussed.

5. Discussion

Based on empirical studies, this study explores the relationship between TMC, PPP, and PSP with the mediating effects of GPSI. With this, the authors integrate the framework taking into account the characteristics of the company to offer a theoretical framework of green practice leading to the SPSSP. This study uses a field survey of tire manufacturing industries that have implemented or are in the process of the green manufacturing practice. Industry professional employees are selected to participate in validating the research framework. The findings confirm the positive relationship between TMC, PSP, and SPSSP, unless PPP does not affect directly, PPP must first be mediated by GPSI. For this reason, the GPSI variable mediates a positive relationship with TMC, PPP, PSP, and SPSSP. The study discussion is as follows:

The first significant variable, TMC has a positive effect, the findings suggest that the effect of TMC on constructive support is critical as the company’s drive to green change with GPSI. The results follow previous studies. (Jayashree et al. 2021) Describes the TMC as an organisation capable of manoeuvring to promote TBL sustainability, and (Henry, Buyl, and Jansen 2019) argue in such a way. According to the authors mentioned above, the TMC ensures policies and strategies to establish green practices such as GPSI to support SPSSP. In establishing GPSI, TMC allocated the right resources to introduce green practices as support for sustainability on target in GPSI implementation. Research related to manufacturing green practices shows that GPSI can improve social welfare and reduce environmental pollution (R. J. Lin, Hua Tan, and Geng 2013; Yong et al. 2020), leading to SPSSP towards SM development.

In addition, the study findings show that PSP has a significant influence on GPSI and SPSSP. The PSP is part of the green manufacturing framework as the most effective driver in industrial waste management. These results are by research conducted by (Waheed et al. 2020), where the author shows that PSP such as redesigning sustainable products and processes, using environmentally friendly energy, and doing Eco-efficiency, can significantly affect GPSI and SPSSP. Another finding made by (Blake, Farrelly, and Hannon 2019) is that PSP can increase service awareness green environment. To reduce the gap in action value. Waste management strategies on product design to ensure continuous improvement capabilities, further supporting the circular economy in sustainable development goals. Therefore, organisations need to change practices from conventional to green practices, such as PSP changing sustainable processes and products, and can attract the attention of consumers of traditional purchases to the purchase of environmentally friendly products (Akehurst, Afonso, and Martins Gonçalves 2012). Companies must also ensure that in the implementation PSPs are implemented to increase clean production, which will have an impact on the quality of the environment, thus contributing to SM development.

Further findings, the results of the study revealed that PPP has a significant effect on GPSI. The findings are in line with those made (Deif 2011; Me-Nsope and Larkins 2016), and that adopting PPP for sustainability requires changing the design of the process and the products adopted, such as integrating green technologies into reality. They revealed that focusing solely on pollution prevention without treatment with the adoption of sustainable green technologies will be able to affect environmental performance. In addition, research conducted by (Chang 2018) shows that in strategies to improve PPP performance, companies need to propose the concept of GPSI as an ability to present new perspectives on green innovation. There may be several causes; First, this research was conducted on manufacturing industries that have or are currently in green practices, and data collection from managers who are experts in tire manufacturing, most of them have partially utilised technology 4.0 and integrated the adoption of GPSI today, As a green manufacturing industry with the implementation of technology 4.0 in green practices, the strength of the relationship between GPSI and SPSSP will have a significant effect. Study results (Gupta et al. 2022) Adopting advanced technology helps achieve operational excellence with greater efficiency and productivity. Thus, GPSI as an alternative to SPSS, GPSI also received extreme attention from global academic experts and practitioners related to the issue of environmental care in green practices by carrying out green innovations in the manufacturing industry as a form of achieving sustainable development.

Regarding the second research question, does GPSI contribute to achieving SPSSP? The study finds that GPSI implementation significantly affects SPSSP. The results of this study Confirms that the successful implementation of GPSI contributes to increasing profits for the company, launching new environmentally friendly products, saving energy consumption costs, reducing material purchase costs, and improving the quality of products and services. The findings are in line with the study (Dangelico and Pujari 2010; Calabrese et al. 2018) GPSI’s green practices promote environmentally friendly product services that are beneficial to the environment and not harmful to the environment. GPSI’s green practice view is supported by (Digalwar, Tagalpallewar, and Sunnapwar 2013; Henry, Buyl, and Jansen 2019; Sumit et al. 2018), helping organisations achieve sustainability by improving the social welfare care for employees, employee safety, and health that affects TBLS.

Continuing to the third research question, does GPSI mediate the relationship between PPP, PSP, TMC, and SPSSP green practices? The results of the study validate the mediating role of GPSI, which serves as the underlying mechanism for explaining the relationship between green practice capability and SPSSP. The findings reveal that GPSI implementing through PSP and PPP, and there needs to be a boost by management commitments. Several previous studies have addressed the effective implementation of green practices in the relationship between determinants of green manufacturing practice and SPSSP (Chang 2016; Lin and Shan Chen 2017; Waheed et al. 2020). However, from a GPSI perspective, very few have investigated empirically how GPSI mediates the determinant relationship between SPSSP, and some researchers in developing countries have revealed that GPSI is new to the green practice. In this regard, this research empirically tests the relationship that GPSI as a mediation shows that the proper incorporation of mediators will help clarify the determining factors for achieving SM development.

6. Conclusion and implication

In the face of highly competitive competition, the Company seeks to learn green practices to meet market demand. As green manufacturing practices continue to be explored for sustainable development goals, there is not enough research to study the key relationships between green practices and sustainable performance, especially in the context of developing and developed countries. Considering the research gap, this study contributes to green practices by exploring determinants such as TMC, PPP, and PSP, which facilitate GPSI with positive effects on SPSSP. To answer the first research question, this Study shows that TMC is very important in encouraging the implementation of GPSI green practices in the achievement of sustainable goals. In addition, PSP is a breakthrough in product recycling and the use of environmentally friendly energy that allows supporting GPSI and the ability to improve the formation of a circular economy. Continuing to the second question, GPSI can improve sustainable production process systems and conduct research and develop environment-based green innovations. The last question, the research findings show that the relationship between determinants and SPSSP can be mediated by GPSI, based on these findings, SPSSP is a model that can contribute to minimising costs, reducing emissions and saving energy, improving environmentally friendly practices, and caring for public welfare and health. This study helps policymakers and practitioners with the implementation of GPSI, as it forms the latest innovative green practice efforts for sustainable development goals.

6.1 Managerial implication

From a managerial standpoint, the study has implications for eco-friendly products and services with valuable direction on how merging the roles of TMC, PPP, and PSP into GPSI can improve SPSSP. Strategic management is advised to adopt green practices as one of the strategies to increase market share as well as achieve environmental performance, improve environmentally friendly products and services, and launch new environmentally friendly products (Wong and Bigliardi 2012; R. J. Lin, Hua Tan, and Geng 2013; Chen et al. 2015). The development of the SPSSP model can help companies reduce CO2 emissions from their entire value chain: Raw materials, Manufacturing, Logistics, After-Use, and Product Development. In addition, management in achieving SPSSP, the organisation must adopt green practices such as GPSI. Because GPSI gets attention from organisations in policymakers, commitment to encouraging the involvement of social and environmental organisations and building beneficial cooperation with economic stakeholders (Rahardjo et al. 2013). GSPI is essential for organisations that have greenness attributes and breakthroughs in the competitive advantage of the current era (Lin and Shan Chen 2017; Chang 2018). The study recommends that management focuses on strengths and competencies to build safe, healthy, prosperous communities and make education more accessible and inclusive for current and future generations. Therefore, the role of the organisation is needed as a key driver to achieve a green company’s competitive advantage by using the GPSI approach which can ultimately support the achievement of SPSSP for the company’s success.

6.2 Theoretical implication

The study focuses on green practices in the manufacturing industry. When viewed from a theoretical point of view, this study contributes to the literature by providing an understanding of TMC, PPP, PSP, GPSI, and SPSSP. In addition, the study also integrates environmentally friendly practices in the manufacturing industry and also fills the literature gap with empirical evidence in developed countries. TMC and PSP show very positive things about GPSI green practices. SPSSP requires green manufacturing innovation, namely the GPSI revolution, this study provides researchers and academics with a deep understanding of organisational support to win an environmentally green image from GPSI mediation using the case of the tire manufacturing industry and similar industries. The study provides GPSI-related insights for SPSSP that can improve manufacturing business performance through proposed models and contribute to goal 17 SDGs. For this reason, the results of the study will encourage many academics to explore more avenues for implementing green practices.

6.3 Limitations and suggestions for future studies

The study offers GPSI green practice guidance for practitioners, although there are some obstacles, for this reason, we need to be careful in rallying the research findings because this research was conducted in the tire industry that has implemented green practices. Therefore, other manufacturing research is done carefully. In addition, the study considered only three determinants. Researchers hope that future research can focus on other determinants: Digitalisation innovation, sustainable human resource management, and uncertain conditions to obtain better findings that can influence sustainable manufacturing development goals.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Additional information

Notes on contributors

Slamet Hariadi

Slamet Hariadi is currently a master student of Industrial Engineering at Trisakti University in Jakarta, Indonesia. His research interests include sustainable production, Sustainable product design, and product service system models.

Parwadi Moengin

Parwadi Moengin is a professor in operations research at Industrial Engineering Department, Trisakti University in Jakarta, Indonesia. His research interests include operations research and simulation systems.

Rahmi Maulidya

Rahmi Maulidya is a lecturer at Industrial Engineering Department, Trisakti University in Jakarta, Indonesia. His research interests are Production Planning and Scheduling.