Transformation of Green Supply Chain Management on Sustainable Competitive Advantage in Coconut Agro-industry: The Mediating Role of Green Process Innovation

Abstract

North Sulawesi, as a primary coconut-producing province in Indonesia, encounters intensifying ecological transitions and global sustainability mandates across agribusiness supply chains. Conventional supply practices marked by excessive energy consumption and unmanaged byproducts (husk and shell waste) are increasingly yielding to Green Supply Chain Management (GSCM). This study investigates the impact of GSCM practices on sustainable competitive advantage among coconut agro-industrial MSMEs, while examining the mediating role of green process innovation. A quantitative census and purposive sampling method was deployed, capturing data from 125 operational managers and owners of small-to-medium coconut processing facilities (VCO, crude/cooking oil, charcoal briquettes, and desiccated coconut) across North Sulawesi. Data were evaluated via Partial Least Squares Structural Equation Modeling (PLS-SEM) utilizing SmartPLS 4.0. The empirical findings indicate that Green Supply Chain Management exerts a robust positive effect on green process innovation (β = 0.592, p < 0.001) and sustainable competitive advantage (β = 0.248, p < 0.001). In addition, green process innovation significantly enhances sustainable competitive advantage (β = 0.485, p < 0.001) and acts as a significant partial mediator linking GSCM to sustainable competitive advantage (β = 0.287, p < 0.001). The structural model explains 55.1% of the variance in green process innovation (R² = 0.551) and 61.2% in sustainable competitive advantage (R² = 0.612). These insights validate that green purchasing and circular waste utilization yield strategic differentiation that augments cost efficiencies and premium eco-reputation in competitive export markets.