Naval & Maritime Academy Logistics Conference - 2026131Subsequently, scholars have broadened the GSCM construct to encompass reverse logistics, carbon footprint management, sustainable packaging, and digital traceability. The evolution of GSCM reflects a shift in organizational priorities from reactive compliance to proactive value creation, increasingly viewed as a source of competitive advantage rather than a regulatory burden.2. Sustainable Logistics PerformanceSustainable logistics performance integrates the traditional Triple Bottom Line (TBL) framework of economic, environmental, and social outcomes into logistics operations. Conventional logistics performance metrics such as on-time delivery, order accuracy, and cost-per-kilometer are insufficient in isolation; sustainable logistics performance demands additional metrics including greenhouse gas (GHG) emissions per consignment, fuel efficiency ratios, waste recovery rates, and social compliance indices.The Global Logistics Emissions Council (GLEC) Framework and the ISO 14064 standard for greenhouse gas accounting provide internationally recognized methodologies for measuring the environmental dimension of logistics performance. These frameworks are increasingly adopted by multinational corporations to benchmark and report progress towards net-zero commitments.Researchers have identified four primary dimensions of sustainable logistics performance: (i) economic efficiency, encompassing cost reduction and asset utilization; (ii) environmental compliance, relating to emissions, waste, and resource consumption; (iii) delivery reliability, which captures service quality and responsiveness; and (iv) social responsibility, addressing labor standards and community impact. GSCM practices have been theorized to positively influence each of these dimensions through specific causal pathways.3. GSCM and Logistics Performance: Empirical EvidenceA substantial body of empirical research supports a positive association between GSCM practices and logistics performance. Green and colleagues (2012) found that green supply chain practices, particularly supplier environmental collaboration and ecodesign, significantly improved both environmental and economic performance among US manufacturers. Similarly, Rao and Holt (2005) demonstrated that GSCM practices led to improved competitiveness and economic performance in South-East Asian firms, with logistics costs and delivery times serving as key mediating variables.
Naval & Maritime Academy Logistics Conference - 2026132In the context of maritime and naval logistics, Psaraftis (2019) documented substantial efficiency gains from green shipping initiatives, including slow steaming, hull optimization, and alternative fuels, noting reductions in fuel costs of up to 30 per cent alongside proportional decreases in CO2 emissions. These findings underscore the significant potential of GSCM in high-impact, asset-intensive logistics sectors.Studies from developing economies, however, present a more nuanced picture. While GSCM adoption is increasing in countries such as India, China, and Sri Lanka, implementation depth remains uneven. Resource constraints, limited institutional support, and supply chain fragmentation pose significant barriers to realizing the full performance benefits associated with GSCM (Mudgal et al., 2010).Conceptual FrameworkDrawing on the Resource-Based View (RBV) of the firm, Institutional Theory, and Stakeholder Theory, this paper proposes an integrative conceptual framework that positions GSCM as a mediating construct between organizational antecedents and sustainable logistics performance outcomes.The framework identifies three categories of antecedents: (i) institutional pressures, comprising regulatory mandates, customer demands, and competitor behavior; (ii) organizational capabilities, including managerial commitment, technological infrastructure, and employee competencies; and (iii) supply chain collaboration, reflecting the degree of cooperation between upstream and downstream partners. These antecedents are theorized to drive GSCM adoption, which in turn enhances sustainable logistics performance across the four dimensions outlined in Section II.
Naval & Maritime Academy Logistics Conference - 2026133As illustrated in Table 1, each GSCM dimension generates distinct but complementary contributions to logistics performance. Green procurement addresses upstream inefficiencies and supplier-related emissions; green manufacturing targets production-stage resource consumption; green distribution optimizes transportation networks; reverse logistics recovers residual value and reduces disposal costs; and green packaging reduces material inputs and last-mile weight penalties.The framework also incorporates two moderating variables: industry type and national regulatory stringency. Logistics-intensive industries such as manufacturing and retail are expected to derive greater performance gains from GSCM adoption, while firms operating in more stringent regulatory environments are hypothesized to exhibit higher GSCM implementation depth.Key Findings And Discussion1. Green Procurement and Cost EfficiencyThe synthesis of literature consistently demonstrates that green procurement is among the most impactful GSCM dimensions for logistics cost performance. By mandating environmental criteria in supplier selection and integrating life-cycle costing methodologies, organizations can significantly reduce total cost of ownership. Packaging waste, transportation damage, and rework costs are all reduced when suppliers meet higher quality and environmental standards.organizations can significantly reduce total cost of ownership. Packaging waste, transportation damage, and rework costs are all reduced when suppliers meet higher quality and environmental standards.Evidence from the automotive sector indicates that firms implementing green procurement practices report logistics cost reductions of between 8 and 15 per cent over a three-year period, primarily attributable to reductions in inbound freight, waste handling, and supplier non-conformance penalties (Darnall et al., 2008). These gains are amplified when procurement is coordinated with green manufacturing, creating a multiplier effect across the supply chain.2. Green Distribution and Delivery ReliabilityGreen distribution strategies, including route optimization algorithms, intermodal transportation, and load consolidation, have demonstrated dual benefits of reducing carbon emissions and improving delivery reliability. The adoption of telematics and geographic information systems (GIS) in fleet management has enabled logistics operators to reduce empty running rates by up to 20 per cent, simultaneously cutting fuel costs and improving asset utilization.
Naval & Maritime Academy Logistics Conference - 2026134The emergence of electric and hydrogen-powered logistics vehicles represents a significant structural shift in the green distribution landscape. While capital costs remain elevated, total cost of ownership analyses over a 10-year horizon increasingly favor zero-emission alternatives, particularly in urban delivery contexts where fuel costs and congestion charges are material considerations. Delivery reliability metrics have shown marginal improvement due to the predictability of electric vehicle performance profiles compared to internal combustion engines.Collaboration between logistics service providers (LSPs) and shippers in designing green transportation networks has been identified as a critical success factor. Shared logistics infrastructure, including common-user warehouses and consolidated delivery platforms, reduces duplication of assets and enables proportional reductions in energy consumption per unit delivered.3. Reverse Logistics and Environmental ComplianceReverse logistics, encompassing the management of product returns, remanufacturing, refurbishing, and recycling, is a cornerstone of the circular economy and a principal mechanism through which GSCM contributes to environmental compliance. Studies indicate that organizations with mature reverse logistics systems recover between 40 and 70 per cent of residual product value, substantially reducing landfill volumes and associated disposal costs.Regulatory frameworks such as the European Union’s Extended Producer Responsibility (EPR) directives have accelerated reverse logistics investment among multinational corporations, with demonstrable improvements in environmental compliance metrics. In the logistics sector specifically, reverse logistics capabilities have become a key differentiator in tenders for government and institutional contracts, where environmental performance requirements are increasingly incorporated into evaluation criteria.The digitalization of reverse logistics through blockchain-enabled traceability platforms has further enhanced environmental compliance reporting. Real-time visibility into return flows, material recovery rates, and secondary market outcomes enables organizations to report accurately against sustainability benchmarks and to identify systemic inefficiencies for continuous improvement.4. Stakeholder Responsiveness and Social PerformanceThe social dimension of sustainable logistics performance is often the least operationalized but is gaining increasing prominence as stakeholder expectations evolve. Green supply chain practices contribute to social performance through improved working conditions in supplier facilities, reduced community exposure to logistics-related pollutants, and equitable participation of local communities in supply chain networks.
Naval & Maritime Academy Logistics Conference - 2026135Non-governmental organization (NGO) scrutiny and consumer activism have elevated the reputational stakes of logistics operations, particularly in sectors such as fast fashion, food, and electronics, where supply chains are globally dispersed and ethically complex. Organizations demonstrating credible GSCM commitments enjoy enhanced brand equity, higher customer retention rates, and preferential access to sustainable investment capital.Supply chain transparency, enabled by digital reporting tools and third-party sustainability audits, has emerged as the primary mechanism through which stakeholder responsiveness is communicated. The voluntary adoption of frameworks such as the Task Force on Climate-related Financial Disclosures (TCFD) and the Science Based Targets initiative (SBTi) reflects the growing alignment between logistics strategy and broader sustainability governance.Strategic Recommendations1. For Logistics ManagersLogistics managers should priorities the development of a GSCM roadmap that sequences implementation across the five key dimensions, beginning with green procurement given its upstream leverage effect. Investment in data analytics capabilities is essential to measure, monitor, and report performance across economic, environmental, and social metrics. Collaboration with supply chain partners should be institutionalized through formal green logistics agreements that specify performance targets, data-sharing protocols, and joint improvement programs.Fleet electrification strategies should be developed in coordination with energy providers to secure preferential tariffs and ensure grid reliability. Reverse logistics infrastructure should be co-invested with retailers and manufacturers to achieve the critical mass necessary for economic viability, particularly in markets where take-back volumes are insufficient to sustain dedicated operations.2. For PolicymakersPolicymakers in developing economies should accelerate the introduction of green procurement mandates in public logistics contracts, creating demand-side incentives for GSCM adoption among logistics service providers. Tax incentives, preferential financing, and regulatory sandboxes for green logistics innovations can lower the cost of GSCM transition for small and medium enterprises (SMEs) that face disproportionate resource constraints.
Naval & Maritime Academy Logistics Conference - 20261363. For ResearchersThe academic community should priorities longitudinal empirical studies that track the long-term performance outcomes of GSCM implementation, particularly in developing economy contexts where evidence remains sparse. Mixed-methods research designs that combine quantitative performance data with qualitative insights from supply chain actors would enrich theoretical understanding and provide richer guidance for practitioners.Future research should examine the role of emerging technologies, including artificial intelligence, digital twins, and autonomous logistics systems, as enablers and amplifiers of GSCM performance. The intersection of GSCM with humanitarian and defence logistics also represents an underexplored frontier with significant policy relevance.ConclusionThis paper has examined the role of Green Supply Chain Management in achieving sustainable logistics performance, synthesizing theoretical insights and empirical evidence across five GSCM dimensions. The findings affirm that GSCM is not merely a compliance obligation but a strategic enabler of competitive, resilient, and responsible logistics operations.Organizations that adopt an integrated, systemic approach to GSCM report consistent improvements in cost efficiency, delivery reliability, environmental compliance, and stakeholder responsiveness. These gains are contingent upon managerial commitment, supply chain collaboration, and enabling institutional frameworks, highlighting the multilevel governance requirements of effective GSCM implementation.The proposed conceptual framework offers a structured lens through which logistics managers, policymakers, and researchers can assess GSCM adoption and performance outcomes. As sustainability transitions from a voluntary aspiration to a regulatory and market imperative, the strategic integration of GSCM into logistics planning and operations will become an indispensable source of long-term value creation.This study contributes to the growing body of knowledge on sustainable supply chain management and provides a foundation for future empirical research, particularly in the context of developing economies and high-impact logistics sectors such as maritime, defense, and humanitarian logistics.
Naval & Maritime Academy Logistics Conference - 2026137AcknowledgementThe authors gratefully acknowledge the support of the Naval & Maritime Academy, Trincomalee, and the Sri Lanka Navy Logistics Command in facilitating access to operational insights that informed this research. The authors also thank the reviewers of the 08th Logistics Conference 2026 for their constructive feedback.REFERENCESDarnall N, Jolley GJ, and Handfield R (2008) Environmental management systems and green supply chain management: complements for sustainability? Business Strategy and the Environment, 17(1), 30-45.Green KW, Zelbst PJ, Meacham J, et al (2012) Green supply chain management practices: impact on performance. Supply Chain Management: An International Journal, 17(3), 290-305.Mudgal RK, Shankar R, Talib P, et al (2010) Modelling the barriers of green supply chain practices: an Indian perspective. International Journal of Logistics Systems and Management, 7(1), 81-107.Psaraftis HN (2019) Sustainable shipping: a call for measure. WMU Journal of Maritime Affairs, 18, 1-5.Rao P and Holt D (2005) Do green supply chains lead to competitiveness and economic performance? International Journal of Operations & Production Management, 25(9), 898-916.Srivastava SK (2007) Green supply-chain management: a state-of-the-art literature review. International Journal of Management Reviews, 9(1), 53-80.Zhu Q, Sarkis J, and Lai KH (2008) Confirmation of a measurement model for green supply chain management practices implementation. International Journal of Production Economics, 111(2), 261-273.
Naval & Maritime Academy Logistics Conference - 2026138INTENTIONALLY KEPT BLANK
Naval & Maritime Academy Logistics Conference - 2026139GREEN TRANSITION AS A PILLAR OF REBUILDING SRI LANKA’S LOGISTICS SYSTEMLieutenant Commander (S) GUYR JayawardanaLong Logistics Managment Course No.10Naval & Maritime AcademyAbstractThe 2025 Ditwa Cyclone exposed the inherent weaknesses of the logistics system of Sri Lanka, and there was a major dependency on fossil fuels, road transport, and centralized infrastructure. The paper examines how green transition can significantly be a significant implementation of restoring a more resilient, efficient, and sustainable logistics network. Based on such models as Avoid-Shift-Improve (ASI), the paper explores the following solutions as the electricity of the railways, the adoption of electric cars, the use of renewable energy, and the development of so-called blue-green ports. It also emphasizes the importance of robust infrastructure, natural solutions, and closed supply chains in the post-disaster recovery. Nevertheless, the shift is subject to severe problems like financial issues, limitations of energy grids, and fragmentation of regulations. This research states that through proper policy provision, creative financing and institutional changes, these obstacles can be defeated. And, the paper concludes by stating that a green logistical model is not only an environmental necessity but also an opportunity that Sri Lanka can take to enhance its competitiveness and sustainability in the long run across the globe.Keywords: Green Supply Chain Management, Sustainable Logistics, Environmental Performance, Reverse Logistics, Green Procurement.Key Words: Green logistics, Climate resilience, Renewable energy, Electric vehicles, Blue-green ports, Circular supply chains, Sri LankaIntroductionThe Post -Cyclone Strategic InflectionThe 2025 Ditwa Cyclone is a turning point of Year 2025 strategic decision of Sri Lanka because it was a year directly affected by development direction. Although the psyche of the wider community is that green logistics is something that is only accessible to highly developed countries, ditwa cyclone cleared that fog, and it was utterly shattered proving that this is not a virtue, it is a necessity of life and a national requirement that has to be enforced. There was impact in numerous areas and sectors, including humanitarian impact, infrastructure damage, logistical and supply chain breakdown, Energy and fuel vulnerability, economic consequences, agriculture and fishery sector impact, environment degradation and financial and investment implications.On a more detailed level, there were disruptions in ports, networks of roads were torn to pieces and blocked, fuel supplies were weakened and the county network was scattered.
Naval & Maritime Academy Logistics Conference - 2026140The crisis some identified as meteorological, however, it is more towards structural. This was an obvious sign that the art of logistics in Sri Lanka was so fossil fuel reliant, dominated by only a road system and centralized and unable to withstand climate instabilities (Ditwa). The Problem Statement The logistics of Sri Lanka that is over-reliant on highways with minimal rail freight integration, reduced emphasis on the use of inland water transport and inadequate adaptation to renewable energy. The central issue in this case, which currently Sri Lanka is trying to sabotage the implementation of all the above solutions even post crisis. The economic paralysis is followed by the one fuel or coal import delayed and a one key roadway crashed. Food security, which is the backbone of the economy of the country, logistics, demonstrated that the lack of readiness to one extreme of the climate. Is this the first extreme weather change or this is our first lack of preparedness to an extreme weather? Objectives Therefore, the paper was concentrated on the role of incorporating climate resilient, low carbon technologies into the post cyclone reconstruction process (at the moment) and the role such technologies play to lay the groundwork of the national clean logistics 2030 vision. The aim is to encompass a structured change that entails the concept of renewable energy, incorporation of multimode transportation means, robust norms in infrastructure, digital optimization of freight towards reconstruction. This transition may shoot beyond just an environmental compliance. By branding itself as a climate buoyant green hub of the Indian Ocean, Sri Lanka not only can attain the post disaster reconstructions, but also the future green bonds and the sustainably motivated foreign investments. In addition, it can turn the transforming vulnerability in to a competitive advantage of Sri Lanka. Literature Review & Theoretical Framework1. The Avoid-Shift- Improve (A-S-I) FrameworkThe decarbonization shift is possible through Avoid-Shift- Improve (A-S -I) Framework. Many climate institutes such as the United Nations Framework Convention on Climate Change (UNFCC) applied the same principle which was on three interrelated pillars. AUnnecessary motorized travels/ operations should be avoided, S- Shift to lower carbon modals that are defined by organizations (eg- public trasits, railway), I- Improve energy effective operations (UNFCCC, 2025).
Naval & Maritime Academy Logistics Conference - 2026141Such a simple but well-organized idea contributed to the simplification of numerous complicated issues of governments/ organizations. Moreover, this notion afforded the room to numerous policy, technological and behavioural models to evolve in the identical lines of organizational growth. In most organizations, this transformational change provided extra advantages to equity and the city quality life. (UNFCCC, 2025). However, ASI initial operationalization exposes tensions, especially with the phase of avoid, where a careful deep reform required. Similarly, the shift strategies also must focus on investments in public and active transport infrastructure. 2. Climate Resilience in Island EconomiesThe literature provided by the World Bank and Asian Development Bank (ADB) sheds light on climate resilience in island economies and how Building Back Better in entire logistics sectors and infrastructural developments can contribute to the minimization of the GHG reduction hand in hand with disaster risk management and climate adaptive design (World Bank, 2025). In the case of Small Island Developing States (SIDS), logistics systems are at once sources of development and they are extremely sensitive to shocks caused by climate. Therefore, it is clear that focus on the climate-proof infrastructure and modal diversification is a timely step of Sri Lanka. (World Bank, 2025). 3. The Concept of “Green Hubbing”The competitive advantage of logistics systems is nowadays being developed by the theme of Green Hubbing. The reports of the UN Trade and Development (UNCTAD) show that the ports that are becoming more attractive to the and investing in green energies, low emission and putting in place to a lower degree gradually, with more creative, adaptive and different ecofriendly, with approaches that can be achieved attracting more traffic to ports, driving national economies to greater heights. Nevertheless, this is partly critical to SIDS and new hubs since a response to higher freight charges and environmental requirements are necessary at times (OneTRADE, 2025). Nevertheless, the competitive advantage not only lies with the economical profit, as the numbers can be the present indication. The future was connected with sustainable branding, and adherence to international decarbonization systems and environmental requirements. 4. Digital Green Twinning Transition In addition, the Digital-Green Twin Transition highlights the role of transparency and greening in complementing one another. Recent studies scurry how the digital twin fits in with IoT and blockchain and offers greater opportunities to deliver real-time information on the tracking of emissions, predictive logistics modeling and optimized, efficiency on supply chain, and as a whole, as one. These systems provide a digital reproduce of a country as an ally nation, adjusting and conforming to international demands and specifications (OneTRADE, 2025).
Naval & Maritime Academy Logistics Conference - 2026142The information will convey the actual state of the situation of decision makers on improving the usage of energy. The difficulty, however, is that, difficulty in adapting to a vast region, system integration and investing to the demanded levels. (OneTRADE, 2025). Decarbonizing the freight backbone, a modal shift1. Rebuilding the Railway for Cargo (Shift)The restoration of the Railway to Cargo is a good move in time by the Sri Lanka. According to the Transport Ministry, a current masterplan of electrifying railways with a price tag of $1.2 billion is underway in the current bid to move 20 percent of road freight to rail by 2030 (Ministry of Transport, 2024). This is predominantly concerned with transformation of the change of pivot of the more road centric freights to a sustainable and less carbon network. Electrified railways have reduced carbon footprint as compared to the heavy diesel trucks. On the same note, when this can be energized through a decarbonized grid, emissions are at a net- zero level. The Global Green Growth Institute (GGGI) argues that electrified rails will be able to cut the national diesel consumption by 15-25 percent in the short and medium term. This has a direct impact on energy security and saving of foreign exchanges (GGGI, 2025).The problem in this case however is the infrastructure development, modernization and preliminary capital to such developments. In particular the financing and implementation abilities. Without these reforms and modal changes, (use of rails and other technological advancements) the shift targets only the small area of decarbonizing projects. Also, a critical hand is provided by inter government and non-government institutional coordination in project. Growth only cannot be gain through developed infrastructure, it also needs regulatory reforms, integrating ports and transport networks. The developments cannot achieve the intended goals of decarbonization without viewing the big picture.2. The EV Revolution in Last Mile Logistics (Improve)On the other hand, the EV revolution, specially in last mile logistics such as couriers and delivery fleets can be facelifted. EVs reduce a meaningful reduction in GHG emissions, when charged with clean electricity. Even though the challenges persist, early developments of EV fleets shown high suitability and lower maintenance costs (SLSEA, 2026). The charging infrastructure grid capacities with less capacity support high power charging clusters in both urban and peri urban areas and the technologies are emerging in Sri Lanka can identify as the key challenges. Even though the passenger vehicles are bit matured heavy electric vehicles are still developing related to range of travel, cost and load that it can carry.
Naval & Maritime Academy Logistics Conference - 2026143Similarly, the depot charging management to look through, if EVs are charged with the energy of the burning fossil fuel, the net carbon zero goal will diminish (SLSEA, 2026). Hence the policies should look towards not only electrification, also the supporting infrastructure, smart charging concepts along with embedded renewable energy integration. 3. Green Freight CorridorsConcept such as “Green Arteries” providing green routes and freight corridors, with EV charging set-up powered by a regional, area solar parks are a visionary model towards decarbonization. These concepts give way forward to clean energy gradually. Large coordination with Road Development Authority, energy panning teams of the nation and all freight workers/ organizations are essential to improve the technical standards and interoperability. Many countries after the initiation of “Green Arteries”, a broader shift took place from diesel dependent logistics, enhancing the energy and making a competitive advantage between the green corridors (SLSEA, 2026). Maritime and port transformation, “blue green logistics”1. Port of Colombo and HIP as Energy HubsSri Lankan Maritime industry mainly based on the Port of Colombo and the Hambantota International Port and it acts as the key to the logistics system and international trade of the country being an island nation. It is more crucial to enhance these ports in a more environment friendly manner and ability to cope with future disasters after the Ditwa Cyclone instead of simply repairing them. This is referred to as Blue Green Logistics that is integrating clean energy and sustainability in bringing about the efficient port performance. Usually above both ports are using machines which are powered by diesel. That diesel powered machines have resulted in high carbon emission and inefficiencies in operation process that is costly. Nevertheless, decarbonization can be realized by substituting electric powered cranes and other cargo handling devices with diesel-powered machines. Besides, this measure will contribute to the higher operational efficiency by decreasing fuel consumption and maintenance costs in the long run. This is an innovation of this transformation and such ports are pursuing a process that is referred to as cold ironing. This implies, that on arrival at the port, the ships can use the electricity provided by the shore as opposed to the ship diesel engine.This will contribute to decreasing the air pollution and make the port atmosphere cleaner and healthier. Moreover, this environment friendly action is match with the new global maritime standards.B. Alternative Fuels and Bunkering: According to the rules of International Maritime Organization global shipping industry is moving into a zero carbon fuels concept.
Naval & Maritime Academy Logistics Conference - 20261442. Alternative Fuels and BunkeringAccording to the rules of International Maritime Organization global shipping industry is moving into a zero carbon fuels concept. As such, it has to build new ports in Sri Lanka to accommodate new fuel like, green ammonia and hydrogen. This is not simply a mere environmental protection measure, this is a move towards attaining the competitiveness in the global shipping sector to develop the Sri Lankan economy. Furthermore, this assists in bringing in foreign investment, new technologies into country and in upholding the image of country as a modern shipping center.C. Renewable Power Plants: Renewable energy is the other point of the concept of Blue- Green Logistics.3. Logistics Hubs as Renewable Power PlantsRenewable energy is another aspect of Blue- Green Logistics concept. Sri Lankan ports consist with large warehouse and terminals which are having wide roof. These roofs can be used to set up solar panels to produce clean electricity which required to operate cranes, lightning and usage for administration buildings.In addition, in case of excess energy, it can be pumped to the national grid. This will decrease the reliance on foreign fuel and enhance the energy security of the country and reduce the environmental pollution. Thus, the conversion of the logistics infrastructures into the sources of energy implies, a trade-off between the economic effectiveness and the ecological sustainability. Moreover, the transformation of ports into Blue-Green logistic hubs are strategic in assisting Sri Lanka to be more competitive and modern technologywise as an eco-friendly maritime centre in the world of shipping. Resilient Infrastructure And Circular Economy1. LEED Certified ReconstructionsSerious weakness in the logistics system of Sri Lanka could be identify just after the Ditwah Cyclone as a result of damages happened to 45% of warehouses and other infrastructures. This shows an urgent rebuilding is required and it should not be limited to rebuild same as the previous. This rebuilding process should be done in resilient and sustainable way with a combination of green constructions, nature-based solutions and circular economy principles. LEED (Leadership in Energy and Environmental Design) certified reconstruction implies, in accordance with the international requirements of rebuild warehouses and logistics system in the environmentally friendly manner with the efficiency. This incorporates solar powered systems, efficient insulations, rain water collections and intelligent lighting. Those are hep features that reduce energy and water consumption and cost minimization with respect to operation in long term.
Naval & Maritime Academy Logistics Conference - 2026145As well as this infrastructure more resilient to the climate changes and risk. Adoption of such international standards would contribute to more foreign investors who are concerned with environment protection, which enhances the Sri Lankan logistics system, which is sustainable in global supply chain.B. Nature Based Solutions: It was noticed that with the heavy rain fall after the Ditwah Cyclone, the available drainage cannot handle the heavy rain fall. 2. Nature Based SolutionsAfter the Ditwah Cyclone, it came to noticed that existing drainage can not manage the heavy rain fall. Therefore, it is required to follow nature-based solutions to manage flooding and other climate changes (The Morning, 2026). The floods in the vulnerable areas can be addressed using the notion of Sponge City. This idea is compatible with green roof, wetland, permeable pavements, bioswales and vegetation to absorb and release rain water slowly to mitigate the chances of flood. Using this idea in industrial location can be used to manage the climate changes with minimal damages. Further, nature base solutions contribute to better air quality, biodiversity and creation of a sustainable working environment in an economical manner.3. Circular Supply ChainsThe approach of circular supply chain helps to reduce waste by reusing, repairing and recycling of products as reverse logistics. This strategy opens new business prospects of the recycling industries. In addition, it minimizes reliance on foreign raw materials. Hence, circular supply chain coupled with infrastructure brings an environmentally friendly, cost efficient and proactive logistics system to Sri Lanka.Critical Analysis Of Barriers And Policy Enablers1. The Finance GapAlthough the shift to a green and strong logistics system has serious strategic benefits. The process of its implementation in Sri Lanka is limited due to financial, infrastructural and regulatory considerations. These barriers should be addressed with specific policy enablers to achieve the success of the transformation process and make it sustainable. The Finance Gap Mobilizing sufficient capital to assist in the reconstruction of the estimated 4.1 billion after the cyclone is one of the most urgent issues. The old system of debt financing is becoming more and more unsustainable, especially considering the current fiscal limitations of Sri Lanka (Ministry of Finance, 2025). Consequently, the transition to the innovative financing mechanisms is essential. Climate-orientated financial instruments and sustainability-linked bonds are available as an alternative.
Naval & Maritime Academy Logistics Conference - 2026146Interaction with bodies like the International Monetary Fund further emphasizes the importance of fiscal discipline and allows one to access technical expertise and financial reform models. With the priorities of national reconstruction aligned with the global climate finance mechanisms, Sri Lanka will be able to overcome the funding gap without straining its debts (IMF, 2025).2. Energy Grid ConstraintsEnergy Grid Constraints The effectiveness of green logistics, specifically the process of switching to electric vehicles (EVs) and electrified ports, is strongly determined by the national energy grid capacity and reliability. Ceylon Electricity Board is currently confronted with a major challenge of increasing the demand of electricity by 400 percent due to EV logistics and industrial electrification by 2030 (CEB, 2025). The existing network infrastructure is not completely prepared to meet such a fast demand rate and will bringing up the question of the possibility of supply instability, peak load strain and overdependence on the use of fossil fuels to generate power (CEB, 2025). The green transition will be counterproductive without equal investments in grid modernization, renewable energy growth, and energy storage systems. Policy interventions should hence be geared towards the modernization of transmission and distribution networks, incorporation of smart grid technologies and expedition in the deployment of renewable energy. The other aspect that may be essential in financing and implementing these upgrades is through public-private partnerships. 3. Regulatory CohesionRegulatory Cohesion Regulatory fragmentation is one of the key non-technical obstacles to green logistics transformation. At present, several ministries and agencies are in charge of transport, energy, environment and trade usually causing overlapping mandates and bureaucracies. To meet this, it is urgently required that a single legislative act, e.g., a Green Logistics Act, should be created, which would consolidate the power base, simplify the approvals, and create clear national guidelines on sustainable logistics practices. This would ease the inter-agency coordination, minimize the administrative bottlenecks, and ensure the long-term policy of investors and stakeholders. Moreover, the centralized system of governance or a task force may be developed to monitor the implementation process to ensure that the national climate objectives and the development of the logistics sector are aligned. Finally, the green logistics transition in Sri Lanka requires overcoming financial constraints, energy constraints, and fragmentation of regulations. These barriers with the appropriate policy tools and institutional reforms can be converted into a sustainable growth and global competitiveness opportunities.
Naval & Maritime Academy Logistics Conference - 2026147Conclusion And Stratergic RoadmapThe discussion in the preceding chapters makes it evident that the green transition is not simply an environmental preference, but the only viable path to rebuilding a strong, efficient, and globally competitive logistics system in Sri Lanka. The disruptions caused by the Ditwah Cyclone have exposed deep structural weaknesses, while also creating a valuable opportunity to reshape the country’s logistics network into a low-carbon, modern, and climate-resilient system. Through the adoption of green infrastructure, renewable energy, sustainable maritime operations, and circular supply chains, Sri Lanka has the potential to reposition itself as a dependable and forward-looking logistics hub in the Indian Ocean.Looking ahead, immediate policy action is essential. Establishing a comprehensive National Green Logistics Framework should be a top government priority, as it would unify infrastructure development, energy transition, and regulatory measures under a single strategic vision. As an initial step, launching a pilot project for electric freight corridors in the Western Province in 2026 is recommended. This initiative would demonstrate the practical feasibility of green transport systems, help reduce urban emissions, and serve as a scalable model for nationwide adoption.Ultimately, the choices made today will shape whether Sri Lanka simply recovers or advances as a stronger, more sustainable, and internationally competitive nation.REFERENCESCentral Electricity Board (2025) Long-Term Generation Expansion Plan. CIMC (2025) Sri Lanka Port Sector Development & Future Trends. EFL 3PL (2025) Impact of Renewable Energy on 3PL Profitability. GGGI (2025) Modal Shift Analysis for Sri Lankan Freight Transport. HIPG (2025) Hambantota International Port Sustainability & Growth Report. IMF (2025) Debt Sustainability and Climate Finance in Sri Lanka. ILO (2025) Employment Impact Assessment of Cyclone Ditwah. Ministry of Finance (2025) Public Investment Programme (PIP) 2026–2030. Ministry of Transport (2024) National Railway Electrification Masterplan. OneTRADE (2025) National Single Window Implementation Roadmap 2027.
Naval & Maritime Academy Logistics Conference - 2026148SLSEA (2026) Sustainable Energy Revolution Strategy 2026. The Morning (2026) Ditwah Recovery: Lessons from Infrastructure Failure. UNDP (2026) Climate Promise: Innovations for Sri Lanka’s Recovery. UNFCCC (2025) Nationally Determined Contributions (NDCs) 3.0 (2026–2035). World Bank (2025) GRADE Report: Cyclone Ditwah Direct Damage Assessment. WRI (2024) Nature-Based Solutions for Urban Logistics Resilience.
Naval & Maritime Academy Logistics Conference - 2026149INTEGRATING SUSTAINABILITY INTO PUBLIC SECTOR PROCUREMENT:A FRAMEWORK FOR GREEN POLICY ADOPTION IN SRI LANKALieutenant Commander (S) YDS DhananjaniLong Logistics Managment Course No.10Naval & Maritime AcademyAbstractIn Sri Lanka, public procurement plays an important role in the national economic activity. But underutilized tools are available to achieve environmental and sustainability goals. This journal paper focuses on how to systematically integrate the public sector procurement through the Green Public Procurement policy, including military and civilian institutions, aligning with the government policy called “Clean Logistics 2030”. By focusing on international evidence, national commitments, and the present Logistics context, this journal paper is going to propose six practical pillars with a set of ten Key Performance Indicators (KPIs) for measure the progress from 2026 to 2030. This journal paper tries to introduce sustainability criteria into the public procurement process across the entire public sector. It may be helpful to reduce the lifecycle cost, lower carbon emissions, enhance institutional accountability, and it will contribute to the country’s National Determined Contributions. This journal paper concludes by recommending appropriate actionable policies for public sector decision-making.Key Words: Green Public Procurement, Sustainability, Logistics, Clean Logistics 2030IntroductionThe Post -Cyclone Strategic InflectionAcross the world, governments have identified that what they buy matters as much as the policies that are introduced. In most countries, allocated 13% to 20% of GDP is made for the process of public procurement. Approximately, the public procurement process used US$ 9.5 trillion in annual global spending (UNEP, 2022). This huge financial power gives governments the ability to move entire markets towards more sustainable products and services. Sri Lanka is a small island nation highly vulnerable to climate changes. Under the Paris agreement, Sri Lanka has committed to reducing greenhouse gas (GHG) emissions. The main aim is to achieve carbon neutrality by 2050 (Ministry of Environment, 2023). Transport is one of the key activities of logistics. It is the largest emitter within the energy sector.
Naval & Maritime Academy Logistics Conference - 2026150Approximately 46% of energy related emissions occur annually in Sri Lanka (UNFCCC, 2025). Rather than the environmental performance, public sector institutions still prioritized price and speed for the procurement process. Implementation of green practices into public procurement would not only reduce lifecycle costs and emissions, but also give a good signal to local contractors and suppliers. This paper focuses on the green policy adoption in public procurement and the Clean Logistics 2030 framework.Background And Context1. Green Public ProcurementGreen Public Procurement (GPP) means the process of meeting needs by purchasing goods, works, non-consultancy, and utility services by reducing the impact on the environment throughout the lifecycle (European Commission, 2016). The concept of Life-Cycle Costing (LCC) and the Life-Cycle Analysis (LCA) are the heart of GPP (EPA, 2024). Therefore, Life Cycle thinking is a new concept and should be compulsory for the implementation of GPP in Sri Lanka. The practice is just to take up front cost and make purchasing decisions. But in the GPP concept, it is mandatory to consider the total economic and environmental cost for the procurement decisions. This journal paper mainly focuses on the environmental dimensions of procurement. 2. Procurement Governance in Sri LankaSri Lanka’s national procurement is governed by the National Procurement Commission (NPC), established under constitution of democratic socialist republic of Sri Lanka and guided by the procurement manual issued by the Ministry of Finance. The procurement manual oversees the purchase of goods, works, and non consultancy services of all public entities (NPC, 2025). However, green criteria are not systematically introduced to the procurement processes. Therefore, procurement decisions are continuing with the prices. Very little consideration goes to the environmental factors and the LifeCycle Analysis (LCA). Global Evidence On Green Public Procurement1. Scale of Global GPP AdoptionThan in the past, evidence base for GPP has grown substantially. In 2022, by covering 38 countries OECD has conducted a survey regarding green public procurement. It was found that 92% of responding countries had adopted a GPP policy because they thought it was a national requirement.
Naval & Maritime Academy Logistics Conference - 2026151Figure 1 shows that OECD nations adopted GPP policies as a national requirement. South Asia, including Sri Lanka, shows a very small percentage when compared to other nations. This gap represents that Sri Lanka can adapt this concept without starting from the beginner level. 2. Efficiency and Cost SavingsThough Green Procurement does not create more costs, the common concern is that it takes too much cost. When analyzing the full Life-Cycle Cost, the common concern is wrong. The OECD noted that, by encouraging the analysis of the lifecycle costs in public procurement, the common concern can be eliminated. It has been proven that GPP gives long term economic and environmental benefits of sustainable procurement (OECD, 2024). Green Logistics strategies like consolidated shipment, route optimization, and energy efficient vehicles improve cost efficiency and reduce carbon emissions simultaneously (Hossain et al., 2024).
Naval & Maritime Academy Logistics Conference - 2026152Comparative Analysis Of The Adoption Of Green Public Procurement Policy In Countries And RegionsTable 1 shows how the countries adopt GPP programmes. Legally impose specific requirements for product categories. Italy imposes a legal mandate for 18 product categories. Legal imposition is more effective than the voluntary guidelines. South Korea integrates its existing e-procurement platform with digital monitoring systems. South Korea has improved the compliance and data quality of its integrated system dramatically. Japan invests in the training of its procurement workforce. It helps to faster adoption and reduce errors through the green criteria. India has made progress by using phased implementation. India, beginning with the central government procurement. As a regional nation, India provides a useful reference to Sri Lanka. By 2030 matured GPP system is the target vision of South Korea and Japan.Adoption Of Lifecycle Analysis And Lifecycle Costing For The Procurement In Sri LankaImplementation of Life Cycle Analysis and Life Cycle Costing into Green Public Procurement is the best purchasing decision from the lowest upfront price to the longterm value and analysis about the least environmental impact. This road map is designed to be a practical, phased approach and applicable to any public sector institution’s procurement in Sri Lanka. The lowest substantially evaluated bidder selection is the common procurement decision in public sector institutions (PG, 2024). There is no any sysytematic consideration about the total lifecycle costs or environmental impacts. This adoption criterion has been included six pillars how it should be change through policy implementation, capacity building, pilot projects, data systems and eventual mandatory integration.
Naval & Maritime Academy Logistics Conference - 20261531. Pillar I – Policy Integration & GuidelinesThe foundation of any successful green reform is to incorporate green criteria into the national procurement regulation. The Ministry of Finance, NPC, and the Ministry of Environment need to chair the incorporation of new policy recommendations. The LCA and LCC principles can be directly introduced as the procurement policy. Therefore, in the first year, the government should issue clear policy circulars in accordance with SDG 12.7. It should be clearly defined for each word and how it works throughout the procurement context. Under this pillar, it should be clearly specified which institutions should follow the policy and which categories of procurement are required to apply it. LCC calculation templates should be developed and introduced to align with guidelines for those who are engaging as procurement officers in front line of the process. 2. Pillar II – Capacity Building and Institutional SetupFor the implementation of new policy frameworks, Policy changes are not enough. It should need a well-performed and capable team. Therefore, procurement officers in respective public institutions needed an appropriate training regarding the effective incorporation of new policies. It should be a structured training regarding how to write green technical specifications, how to calculate lifecycle costs, and how to evaluate environmental performance.
Naval & Maritime Academy Logistics Conference - 2026154The training should be covered with procurement officers, auditors, and technical staff. Need to take support from the state universities to strengthen the institutional capacities of the process. In this pillar main target is to train 1000 procurement officers by covering all the public institutions by 2028. 3. Pillar III – Pilot Project in High Impact SectorsIn this phase, focus on pilot procurement, where lifecycle thinking is most visible and measurable benefits are realized. As a starting point, it is ideal to select street lighting, public buildings, and the government vehicle fleets. These are the identified sectors for the pilot project. • Street lightning – by considering maintenance cost and energy consumption, compare LED street lighting and using LCC over 10 – 15 years• Public Buildings – by comparing the lifecycle cost of 20 years, design the energy-efficient building for new government institutions, schools, and hospitals. • Government vehicle fleet – compare over 10 years about electric vehicles, conventional petrol diesel fleet, and total cost and emission of fuel efficiency4. Pillar IV – Data system & StandardizationCredibility depends on the consistency and the reliability of data. Therefore, in this stage, a common national database should be developed without depending on international data. Since it can make strategic decisions based on reliable and standardized, readily available data. In this stage, the LCA system boundaries should be clearly defined before being formally adopted. 5. Pillar V – Mandatory Integration into ProcurementThis stage is the transformational stage, how suppliers face competition for common public procurement and fundamentally reorient the criteria. In this stage, the government consists of a well-trained workforce, tested pilot projects, a built policy framework, and data infrastructure facilities. After the successful adoption of the main IV pillars, it contributed to identifying the highly impactful procurement categories. Moreover, the government has confidence to make mandatory LCA and LCC criteria. 6. Pillar VI – Monitoring, KPIs and Continuous ImprovementFor the sustainable progress of every phase, implementation required a parallel run and strong monitoring with an accountability framework. Therefore, KPIs should be established from the beginning of the phase. Annually, they should report to the Department of Census and Statistics, Sri Lanka, and the Auditor General’s Department. With the annual details, it should create a culture of continuous learning and evidencebased review regarding the GPP implementation.
Naval & Maritime Academy Logistics Conference - 2026155kpis for green public procurement progress measurement and trackingAdoption of Life Cycle Costing and Life Cycle Analysis across Sri Lanka’s Public sector procurement can be measured, monitored, and reported by using a system like a KPI framework. It is provide structured program. Effective monitoring is highly essential to the adoption of any new policy. In here, KPIs can ensure accountability, value for money, and track the environmental outcomes of the Green Public Procurement processes.Here are 10 Key Performance Indicators introduced, and they will cover the 6 adoption pillars. Each KPIs integrate with each phase of the implementation process. Summary of the KPIs is in Table 04.1. The percentage of public tenders using LCC and LCA evaluation criteria • Description – It formally includes the LCA and LCC evaluation criteria for (Construction, Transportation, Energy, ICT.), all procuring entities.
Naval & Maritime Academy Logistics Conference - 2026156• Measurement – Collect data through the e-procurement platform (PROMIS), and an annual audit of tender documents should be done by NPC.• Responsible by – National Procurement Commission2. Life Cycle Cost saving versus Traditional, substantially lowest quoted bid procurement• Description – It includes the calculation of total lifecycle cost (purchase, operational, maintenance, disposal) and compares with the traditional substantially lowest quoted bid approach cost.• Measurement – To analyse the post procurement life cycle cost per contract. Assess the initial LCC forecasting cost and the asset operational cost annually.• Responsible by – NPC and Ministry of Finance3. CO2 emission reduction of procured public assets under the GPP concept• Description – This KPI can measure the greenhouse gas emission reduction of procurement decisions across the public sector assets acquisitions.• Measurement – By using the DCS national emission coefficients, analyze the asset emission levels annually.• Responsibility – Ministry of Environment and Department of Census & Statistics (DCS)4. Training of the procurement officers across the government entities• Description – Personnel is the most important enabler of the GPP process. This KPI measures the capacity building of procurement officers, auditors, and trained technical staff across all government institutions.• Measurement – By linking all involved personnel to the system and NPC training register.• Responsible by – NPC5. Energy serving in the public sector assets• Description – under the LCC and LCA evaluation criteria, this KPI measures the reduction of energy consumption per unit in public sector institutions’ procured assets. • Measurement – To analyse the utility bill data from the Ministry of Finance. To analyze the street lighting data from the Road Development Authority. To analyse the vehicle fuel consumption by using all government institutions’ fleet management data.
Naval & Maritime Academy Logistics Conference - 20261576. Pilot procurement project completion and case study documentation• Description – In this KPI, uses to track the highly impactful sectors to which the LCC and LCA methodology is applied. The study should cover at least 3 sectors, and it can be identified that the obtained results, savings, and environmental benefits.• Measurement – Before publication of the study reports, it is necessary to conduct an independent review by the Central Technical Advisory Unit.• Responsible – Line ministries, NPC, Central Technical Advisory Unit7. National LCA and LCC data repository completeness• Description – This KPI measures pillar four criteria. The credible LCC and LCA evaluation criteria depend on the local relevant data. It measures coverage of the collected data and the completeness of the repository data. • Measurement – The joint assessment against the defined data framework is done by DCS and ICTA. • Responsible by – Department of Census & Statistics, ICTA, Ministry of Environment8. Bid compliance rate of the suppliers to include LCA and LCC criteria• Description – If the private sector can be able to prepare bid documents, including new criteria of LCC and LCA, it will become effective. This KPI measures how many bids are received in compliance with new criteria from private sector institutions.• Measurement – assess the NPC tender evaluation records compliance with the LCC and LCA bid criteria.• Responsible by – NPC, Ministry of Industry and Commerce9. Green procurement expenses % from total public procurement• Description – This KPI measures the total government procurement expenditure and the amount of procurement that has been done under the LCA and LCC criteria. • Measurement – The procurement expenditure data collected from the Ministry of Finance is evaluated with the NPC tender register under the LCA and LCC criteria procurements.• Responsible by – Ministry of Finance, NPC
Naval & Maritime Academy Logistics Conference - 202615810. Annual procurement audit compliance• Description – This KPI measures how procuring entities adhere to the LCA and LCC requirements. It should be an independent assessment. The Auditor General’s Department can ensure compliance with the policy criteria by conducting annual audits. Need to introduce the score report for major procuring entities. • Measurement – It can be measured by conducting an annual independent audit regarding the developed and adopted policy gaps• Responsible by - Auditor General’s Department, NPCChallenges And How To Overcome Them1. Cost perception barrier.The common thinking is that green products are more expensive. Therefore, many procurement officers who are engaging with the procurement actions, their practice is to make a purchase decision by considering the upfront price of a product or a service. But Green product can save money, and it is a long-term savings from maintenance, disposal, and other environmental costs. As a solution, this barrier can be overcome by train staff to use the Life Cycle Costing and showing how green products can save money.2. Fragmented Governance.Sri Lankan public sector procurement scattered across multiple ministries, provincial authorities, and departments. It has several levels of capacity and accountability. Therefore, coordination with public institutions and green practices is very weak. Fragmented governance limits the green practices and reduces the innovation of the sustainable logistics practices (Hossain et al., 2024). As a solution, NPC needs to issue guidelines for every public body, continue monitoring, and give support if necessary.3. Supplier readiness.Many SMEs and other local suppliers are unable to meet green standards immediately. Especially those who are engaging transport and some logistics activities. As a solution, they need phase approach to adhere to the new requirements. It should start from doing awareness programmes, then move to a new concept, and finally go to total adoption of new green criteria in their organizations. 4. Military specification constraints.Due to security requirements, strict rules and regulations, and the long assets lifecycle (Ships, craft, helicopters, guns, etc.), this creates a more complex process of the defence procurement. Therefore, quick changes are very difficult in the military context. As a solution, the specific green procurement criteria for the military context should be developed, considering the specific barriers and environmental aspects.
Naval & Maritime Academy Logistics Conference - 2026159Conclusion And Policy RecommendationsAdoption of the green framework in Sri Lanka’s public sector institutions is not only protecting the environment. It is a broader concept than that. In this paper try to emphasize the importance of the adoption of Life Cycle Costing and Life Cycle Analysis to the public sector procurement criteria, which is called the heart of Green Public Procurement (EPA, 2024). At present, there is no evidence to find about the LCA and LCC criteria adoption in the public sector procurement in Sri Lanka. This study provides a clear and practical six-pillar framework and 10 Key Performance Indicators for the implementation of LCA and LCC criteria into public procurement, barriers to the new adoption, and how to overcome these barriers towards the sustainable integration of the implementation.As per the observations following policy recommendations are proposed for the successful implementation of the LCA and LCC criteria into the public sector procurements.1. Within 12 months period of time, the GPP supplementary circular for the Procurement Guideline 2024 should be issued by the Ministry of Finance and the NPC by considering the mandatory green criteria for at least 5 -10 priority products and work categories.2. The GPP training programmes should be developed and launched by the NPC and SLIDA, targeting 1000 procurement officers, including 200 military sector personnel, by the end of 2028. 3. Integration of the environmental scoring module into e procurement platform should be established by the ICTA and NPC by 2028. It should consist of a direct data feeding system into the climate change tracking system.4. A national green supplier registration process should be established by the Ministry of Industry by 2028, with the SME certificate, and ensure accessibility of the market for green suppliers. 5. The Green procurement focal point should be appointed by the Ministry of Defence across the Army, Navy, and Air Force. The GPP pilot project should launch by 2027.6. The first Annual GPP progress report should be published by the NPC and the Ministry of Environment by December 2027. It should include all 10 KPIs proposed by this paper.
Naval & Maritime Academy Logistics Conference - 2026160REFERENCEEuropean Commission (2016) Buying Green: A Handbook on Green Public Procurement Green Public Procurement - Green Forum - European Commission https://green-forum.ec.europa.eu/green-business/green-public-procurement_en (Accessed 05 April 2026)Environmental Protection Agency (2024) Green Public Procurement Guidance for the Public Sector. Third Edition: 2024 IrelandAsbjørnsen, H., Berg, H. and Neby, S. (2025) ‘Sustainability in the military context: Selected findings from the Norwegian defence sector’, Procedia Computer Science [Online]. Available at: https://www.sciencedirect.com/science/article/pii/S1877050925006799 (Accessed: 1 April 2026).Hossain, M.S., Ahmed, F. and Rahman, M.H. (2024) ‘Integrating green procurement and logistics: Overcoming barriers for sustainable supply chains’, International Journal of Logistics [Online]. Available at: https://journal.sinergi.or.id/index.php/ijl/article/download/739/476 (Accessed: 1 April 2026).Letunovska, N., Kwilinski, A. and Kotenko, S. (2023) ‘Green supply chain management: The effect of procurement sustainability on reverse logistics’, Logistics, 7(3), p. 47. doi:10.3390/logistics7030047. Available at: https://www.mdpi.com/2305-6290/7/3/47 (Accessed: 1 April 2026).Miličević, Z.M. and Bojković, Z.S. (2023) ‘Military green technology: Present and future’, Vojnotehnički Glasnik / Military Technical Courier, 71(1), pp. 200–225. Available at: https://www.redalyc.org/journal/6617/661774087007 (Accessed: 1 April 2026).Ministry of Environment, Sri Lanka (2023) Carbon Net Zero 2050 Roadmap and Strategic Plan. Colombo: Ministry of Environment. Available at: http://www.climatechange.lk/CarbonNetZero2050.pdf (Accessed: 1 April 2026).National Procurement Commission (NPC) Sri Lanka (2025) Procurement Manual 2024 for Goods, Works and Non-Consulting Services. Colombo: NPC. Available at: https://nprocom.gov.lk/manuals/ (Accessed: 1 April 2026).Organisation for Economic Co-operation and Development (OECD) (2024) Harnessing Public Procurement for the Green Transition. Paris: OECD Publishing. doi:10.1787/e551f448-en. Available at: https://www.oecd.org/en/publications/harnessing-publicprocurement-for-the-green-transition_e551f448-en.html (Accessed: 1 April 2026).Public Utilities Commission of Sri Lanka (PUCSL) (2023) Environment and Renewable Energy. Colombo: PUCSL. Available at: https://www.pucsl.gov.lk/electricity/quality/environment-and-renewable-energy/ (Accessed: 1 April 2026).
Naval & Maritime Academy Logistics Conference - 2026161United Nations Environment Programme (UNEP) (2022) Sustainable Public Procurement: 2022 Global Review. Nairobi: UNEP. Available at: https://www.unep.org/explore-topics/resource-efficiency/what-we-do/sustainable-public-procurement (Accessed: 1 April 2026).United Nations Framework Convention on Climate Change (UNFCCC) (2025) Nationally Determined Contributions 3.0 (2026–2035): Sri Lanka. Geneva: UNFCCC. Available at:https://unfccc.int/sites/default/files/2025-09/Sri%20Lankas%20Nationally%20Determined%20Contributions%203.0%20(2026-2035)%20submitted%2022.09.2025%20(1).pdf (Accessed: 1 April 2026).
Naval & Maritime Academy Logistics Conference - 2026162INTENTIONALLY KEPT BLANK
Naval & Maritime Academy Logistics Conference - 2026163GREEN TRANSFORMATION IN INTEGRATED LOGISTICS SYSTEMS: A COMPREHENSIVE APPROACH TO ACHIEVING ENVIRONMENTAL SUSTAINABILITY, RESOURCE EFFICIENCY, AND LONG-TERM OPERATIONAL EXCELLENCELieutenant Commander (S) LHKT SrinathLong Logistics Managment Course No.10Naval & Maritime AcademyAbstractThe concern of green transformation has taken center stage in present day logistics system as a result of increase in environmental issues, tightening of regulations and heightening of stakeholder demands. The whole platform of sustainability implementation is offered by integration logistics systems that organize procurement, production, warehousing, transportation, and distribution. In this paper, the author will explore the idea of green transformation in integrated logistical systems with a focus on such important strategies as sustainable transportation, green warehousing, green packaging, and digital technologies. It also discusses the environmental, economic and social advantages of green logistics and how organizations can deal with the biggest challenges in implementation. The paper concludes that green transformation is both environmental requirement and a strategic way of enhancing efficiency, competitiveness, and sustainability in the long-term perspective.IntroductionThis has been brought about by the rapid growth of global trade and industrialization which has made the logistics systems more intricate and larger in magnitude. The current organization depends on the integrated logistics system to control the movement of goods, information, and resources throughout the whole supply chain. These systems have increased efficiency and lowered the costs of operations, but at the same time, led to the degradation of the environment, such as greenhouse emissions, air pollution, and overproduction of waste.As a reaction to these issues, companies and governments are becoming more concerned with the concept of sustainability. Green transformation in logistics has become an essential approach to decrease the impact on the environment and keep the operations effective. It entails incorporating environmentally friendly practices in all its logistics operations including sourcing of raw materials as well as the delivery of final products.The use of integrated logistics systems offers a special chance of introducing the green transformation since it allows organizing the process of various functions. This integration enables organizations to detect areas of inefficiency, to manage resources better and to embrace sustainable practices within the supply chain. The purpose of this paper is to present a detailed discussion of the concept of green transformation in the integrated logistics systems, its concepts, strategies, advantages, challenges and future perspectives.
Naval & Maritime Academy Logistics Conference - 2026164Literature ReviewGreen logistics is a concept that has been extensively debated in the literature in the last 20 years. McKinnon (2018) also states that green logistics is aimed at minimizing the environmental impact of logistics operations, especially transportation and warehousing. On the same note, Srivastava (2007) refers to green supply chain management as the incorporation of environmental thinking in the supply chain processes.According to Rodrigue, Slack, and Comtois (2017), one of the most significant contributors to carbon emissions in logistics systems is transportation, so it is one of the most important fields to be green transformed. They state that the optimal use of vehicles, the optimization of routes, and the use of alternative fuels are critical measures.Further, Dekker et al. (2012) emphasize the importance of reverse logistics in achieving sustainability. Reverse logistics refers to the process of returning, recycling and reusing products and materials, and it assists in minimizing waste and saving resources.The relevance of digital technologies in facilitating green logistics is also highlighted in the recent studies. Artificial Intelligence (AI), Internet of Things (IoT) and blockchain technologies enable better visibility and decision-making, resulting in more efficient and sustainable operations (Ivanov et al., 2019).On the whole, the literature indicates that the concept of green transformation is multidimensional and needs to be embedded in all logistics functions.Concept Of Green Transformation In Integrated Logistics SystemsGreen transformation in integrated logistics systems: The concept of green transformation in integrated logistics systems means the systematic implementation of environmentally friendly practices of all logistics processes. It is the redesign of processes, introduction of new technologies and modification of organizational culture in order to produce the minimal environmental impact. Integrated logistics systems entail a combination of different logistics functions into a single framework. This integration enables organizations to track performance, information sharing and coordination of activities. Consequently, the green initiatives are more effectively implemented within the entire system. Key elements of green transformation include:• Reducing carbon emissions• Improving energy efficiency• Reduction of waste and pollution.• Supporting the utilization of renewable resources.Organizations can make achievements both in the environment and operation through integrating these elements into logistics systems.
Naval & Maritime Academy Logistics Conference - 2026165Key Strategies For Green Transformation1. Sustainable TransportationOne of the most important elements of the logistics systems is transportation since it allows directly to transfer goods between the suppliers and customers. Nevertheless, it also contributes to the environmental issues to a large extent, especially because of the high rate of fuel consumption, emission of greenhouse gases, and polluting the air. Consequently, green transformation in the transport sector is receiving more attention in organizations in order to enhance sustainability. The conversion is expected to save fuel, decrease carbon emissions, and achieve a general increase in transport efficiency without service quality.Electric or hybrid vehicles can be seen as one of the main strategies that organizations can implement. These cars emit much less as compared to the traditional fuel powered vehicles. They also have long-term economic advantages due to the low maintenance and fuel costs, besides the fact that environmental impact is reduced. The other relevant solution is the adoption of systems to optimize routes. Such systems implement high-technology digital technologies and real-time information like traffic, weather, and delivery times to find the most efficient routes. Organizations are able to save time, fuel consumption, and enhance delivery performance by choosing less congested and shorter paths. A change in mode of transportation is also a viable sustainability indicator. Organizations can also substitute road transport with rail or sea transport where possible, particularly when the volume of shipment is large and the distance covered is long. These modes are usually eco-friendlier and more economical and can contribute to the minimization of the total carbon footprint of logistics. Moreover, consolidation of loads is critical in ensuring sustainability. Organizations are able to minimize the number of trips by consolidating various shipments into one delivery. This results in reduced fuel usage, emission and enhanced operation efficiency and low transportation costs.In general, green transportation strategies can be adopted to not only positively influence the environment, but also efficiency and organizational sustainability in the long run.2. Eco-Friendly WarehousingWarehousing plays a crucial role in the logistics system because it facilitates storage, handling, and distribution of the goods in the supply chain. The operations however, are also consuming huge volumes of energy especially in light, heating, cooling and powering up of equipment like forklifts and conveyor belts. The high consumption of energy causes high operational cost and major ecological effects, particularly carbon emission. Thus, green change within warehousing has turned out to be a major concern among organizations that aim at increasing sustainability and effectiveness.
Naval & Maritime Academy Logistics Conference - 2026166The core aim of green warehousing is to lessen the energy utilization and to maximize the utilization of accessible resources. When organizations embrace green practices, they can reduce waste, reduce energy consumption and make warehouses more environmentally friendly without affecting performance. It is one of the strategies that can be used to minimize the use of non-renewable sources of energy like solar power. By installing solar panels, warehouses will be able to produce their electricity and will not rely on non-renewable energy and will decrease carbon emissions. It is also advantageous in the long run-in terms of saving on energy.The other method that is of key importance is the introduction of energy saving lighting systems and especially the LED lights. Compared to traditional lighting, LEDs use less power, last longer, and need a smaller amount of maintenance, which makes them the best choice in large warehouses that need constant light. Enhancement of energy efficiency is also enhanced through automation. Smart sensors and automated material handling systems are technologies that can manage the lighting, temperature, and equipment use according to the real-time needs. As an example, lights may be programmed to switch off in unutilized spaces and equipment is only used, when necessary, hence minimizing the amount of energy wastage.Also, warehouse layout optimization enhances the use of space and operational efficiency. An efficient layout eliminates the unnecessary flow of goods and equipment avoiding time and energy and labor, as well as optimization of storage space. In general, the green warehousing practices are beneficial to minimize the environmental impact, reduce costs and enhance efficiency to reach the long-term sustainability objectives.3. Green PackagingA very important aspect of logistics systems is packaging, which guarantees the security of the product, its transportation, and allows safe delivery to clients. Nonetheless, it is also posing serious environmental problems especially with the extensive use of nonbiodegradable materials such as plastics. These substances are difficult to break down, which contributes to environmental pollution and destruction of ecosystems. This has seen green transformation in packaging gain prominence in organizations that seek to minimize the impact on the environment.Green packaging aims primarily at reduction of wastes, employment of sustainable materials and enhance packaging efficiency without negatively affecting product quality or safety. Recyclable or biodegradable materials like paper, plant-based materials, and biodegradable plastics are one of the strategies that are effective. These alternatives aid in minimizing landfill wastes and environmental pollution.
Naval & Maritime Academy Logistics Conference - 2026167The other significant strategy is the minimization of packaging and material use. By creating smaller and lighter packages, it not only saves the resources but also enhances transportation efficiency and lowers the use of fuel and carbon emissions.Sustainability is also supported by reusable packaging systems. Containers, pallets, crates, and other items can be reused several times, so new materials are not required, and the amount of waste is minimized.Also, it is necessary to rid packaging of unnecessary things. This can be achieved by not over-packaging the product by adding extra layers hence less wastage is used. In general, green packaging can make better use of resources, minimize environmental damage, and achieve sustainable logistics.4. Reverse LogisticsReverse logistics is a significant aspect of green transformation because it is concerned with the management of products once used. In contrast to the conventional logistics that focuses on the forward movement of goods, goods manufactured by producers, to consumers, reverse logistics focuses on the reverse flow, that is, the movement of consumers to organizations. The primary aim of it is to facilitate the environmental sustainability by reusing, recycling, remanufacturing, and disposing of the products.Important operations in reverse logistics are product returns, recycling, remanufacturing and waste management. Products that are sent back because of defects, surplus or dissatisfaction of the customer can be repaired, refurbished and reused. Recycling is the transformation of used materials into new products and remanufacturing transforms old products into usable forms. When non-reusable materials are properly disposed, it is in an environmentally friendly manner.Reduction of waste is one of the primary advantages of reverse logistics. The reuse and recovery of materials can help organizations to reduce landfill waste by a substantial percentage, which leads to cleaner environments and enhanced waste management. It also aids in saving natural resources by cutting on the production of new raw materials.Also, reverse logistics results in cost savings. Recycling of materials and components reduces the cost of production and enhances efficiency. These processes are further improved with the use of integrated logistics systems that allow the improved coordination, tracking, and control of returned goods. Altogether, reverse logistics helps in maintaining sustainability through less wastage, resource conservation, and the enhancement of cost effectiveness.
Naval & Maritime Academy Logistics Conference - 20261685. Intelligent Technologies and Digitalization.Digital technologies are central to contemporary green logistics since they enhance efficiency, mitigate the impact environmentally, and enable more effective decision-making. Such tools as artificial intelligence will assist in predicting demand precisely and reducing waste and surplus stock.IoT can be used to monitor deliveries, warehouse status, and energy consumption in real-time, which can help easily recognize inefficiencies. The analytics of big data improve the performance of operations by optimizing routes and using less fuel. The transparency and traceability are enhanced with the help of blockchain technology that guarantees adherence to ecological requirements. All in all, the technologies enable organizations to minimize waste and enhance the use of resources as well as attain longterm sustainability objectives in the logistics systems.Benefits Of Green Transformation1. Environmental BenefitsGreen transformation of logistics systems gives serious environmental payoffs since it decreases the total ecological footprint of logistics processes. Among the most significant benefits, there is the decrease of carbon emissions, the primary ones created during transportation and energy-consuming processes. Organizations can achieve a reduction in greenhouse gas emission by a large margin through adopting energy efficient technologies and sustainable practices.Moreover, green logistics does reduce the amount of waste by improving the management of resources, recycling, and reusing. It also enhances the preservation of the natural resources by minimizing the extraction of raw materials. All these efforts will help achieve the global sustainability objectives and help in the fight against climate change and thus the logistics systems will be more environmentally accountable.2. Economic BenefitsEven though green transformation may demand a significant initial investment in technologies, infrastructure, and training, it has significant long-term economic payoff. Among the benefits, there are savings in costs due to the efficient utilization of resources, including fuel, energy, and materials. To illustrate, efficient systems will consume less energy and efficient transportation will save on fuel. Besides, the reduction of waste and enhancement of operational efficiency result in reduced production and logistics costs. These improvements increase profitability over time and offer a good financial payback on investment therefore green transformation is economically productive to organizations.
Naval & Maritime Academy Logistics Conference - 20261693. Social BenefitsGreen logistics is also beneficial to the society in various ways. It lowers the pollution and emissions, thereby improving the air quality and the health of the populace, especially in cities where logistic operations are very concentrated. This results in improved livelihoods of societies. Moreover, the move to sustainable practices generates new jobs commonly known as green jobs in renewable energy, recycling, and environmental management fields. Green transformation also enhances corporate social responsibility (CSR), since organizations are seen to be keen on environmental protection and ethical practices. This will boost their reputation and earn the customer, employee and other stakeholders’ trust.4. Competitive AdvantageGreen logistics practices give the organization a highly competitive edge in the market. Customers are increasingly becoming environmentally conscious and are, therefore, more likely to associate themselves with companies that show a sense of sustainability and responsibility. Organizations are able to enhance customer satisfaction and loyalty by fulfilling these expectations. Moreover, environmental regulations are also followed to ensure that organizations are not punished or involved in legal complications. Brand image and separation of companies among their competitors are also enhanced through sustainable practices. With sustainability being one of the critical determinants of corporate success, companies investing in green transformation can be more likely to succeed in the long-term growth and market dominance.Challenges In ImplementationAlthough the numerous benefits are evident, green transformation of the logistics systems does not happen without difficulties. The use of new technologies, infrastructure upgrading, and employee training are one of the biggest obstacles because of the expensive initial cost. These are some of the costs that may pose a big challenge particularly to small and medium-sized businesses. The second significant problem is the ignorance and unawareness of green practices. The benefits might also be unknown to many organizations or they might not have the professionalism needed to implement the sustainable solutions. Another problem is the resistance to change. The new systems, processes or technology may find resistance because of uncertainty or fear of being disrupted by employees and management. This may delay the implementation process. Another limitation is poor infrastructure, especially in developing markets where access to renewable energy, electric vehicles, and high-tech can be limited. Moreover, regulatory impediments, including uneven or ambiguous environmental policies, may also pose further challenges to organizations that attempt to go green. These challenges need to be resolved with great leadership, strategic planning, government assistance, and constant innovation. To achieve a successful implementation of green transformation, organizations need to invest in education, training, and collaboration.
Naval & Maritime Academy Logistics Conference - 2026170Future Prospects Of Green LogisticsRapid technological advancements and rising environmental concerns are shaping the future of green logistics. Key trends include the adoption of electric and autonomous vehicles, which reduce emissions and improve transport efficiency. Smart logistics systems using AI, IoT, and data analytics are enhancing operational efficiency while minimizing environmental impact. The growth of circular economy practices promotes reuse, recycling, and remanufacturing to reduce waste and optimize resources. Increased use of renewable energy sources like solar and wind further supports sustainability. Additionally, stricter environmental regulations are pushing organizations to adopt greener practices, making sustainable logistics essential for long-term efficiency and resilience.ConclusionThe modern world requires green transformation of the integrated logistics systems in order to reach sustainable development. Organizations can also minimize their effect on the environment and enhance their efficiency and competitiveness by incorporating environmentally friendly practices in their logistics operations. The integrated logistics systems offer a powerful basis in which green initiatives can be implemented because of the ability to coordinate all functions. Despite the difficulties, green transformation has greater advantages and thus, it is a strategic concern in an organization. To sum up, green logistics is not an environmental need, but a major factor of long¬term business prosperity. The companies that adopt sustainability will be in a better position to survive in future.REFERENCESDekker, R., Bloemhof, J., & Mallidis, I. (2012). Operations research for green logistics – An overview of aspects, issues, contributions and challenges. European Journal of Operational Research, 219(3), 671–679.Ivanov, D., Tsipoulanidis, A., & Schönberger, J. (2019). Global Supply Chain and Operations Management. Springer.McKinnon, A. (2018). Decarbonizing Logistics: Distributing Goods in a Low Carbon World. Kogan Page.Rodrigue, J. P., Slack, B., & Comtois, C. (2017). The Geography of Transport Systems. Routledge.Srivastava, S. K. (2007). Green supply-chain management: A state-of-the-art literature review.International Journal of Management Reviews, 9(1), 53–80.World Bank. (2020). Sustainable Logistics and Supply Chain Management. World Bank Publications.
Naval & Maritime Academy Logistics Conference - 2026171SUB THEME 03Transparent Supply Chain Governance
Naval & Maritime Academy Logistics Conference - 2026172INTENTIONALLY KEPT BLANK
Naval & Maritime Academy Logistics Conference - 2026173DIGITAL TRANSPARENCY IN DEFENCE LOGISTICS: STRENGTHENING MALAYSIA’S SUPPLY CHAIN INTEGRITY THROUGH BLOCKCHAIN AND AI: FROM OPACITY TO ACCOUNTABILITY: TRANSFORMING MALAYSIA’S DEFENCE SUPPLY CHAIN.Lieutenant Commander Kamarul Abidin bin Sarudin RMN Long Logistics Managment Course No.10Naval & Maritime AcademyAbstractThe report discusses how digital transparency can be used to empower the defence supply chain of Malaysia, specifically in relation to blockchain and Artificial Intelligence (AI). The defence logistics system in Malaysia is still in its developing stage, yet it still encounters the main problems, namely, the lack of transparency, corruption threat, inefficiencies, and fragmented data management. Such problems destroy accountability, make operations more expensive, and deter the general effectiveness of the systems. The report has a transparent supply chain management framework, and the major principles that are adopted include traceability, accountability, data integrity and real-time visibility. It also determines the role of blockchain technology in enhancing transparency based on the decentralised and immutable records-keeping and AI-based predictive analytics and fraud detection, as well as optimisation of logistics operations. These technologies can be integrated to provide a hybrid model that can change the conventional defence logistics into a more efficient and accountable one. Major conclusions indicate that blockchain and AI implementation can help to minimise corruption rates and threats, enhance procurement efficiency, and increase trust in the stakeholders. Nevertheless, technical constraints, regulatory loopholes, and organisational resistance are some of the challenges that should be handled. The report ends by giving policy recommendations such as the establishment of a national digital defence logistics strategy, pilot projects, regulatory reinforcement, and workforce capacity building to help Malaysia when it comes to a transparent and resilient defence supply chain.Keywords: Transparent Supply Chain Management, Defence Logistics, Malaysia Defence Industry, Blockchain Technology, Artificial Intelligence (AI)
Naval & Maritime Academy Logistics Conference - 2026174Introduction Transparency is now an urgent need in contemporary defence logistics, where the multi-layered supply chains are involved with the high-value assets, sensitive information, and national interests of the state (Pokorny, 2026). High transparency leads to traceability, accountability, and trust in the procurement, storage and distribution processes, which minimises vulnerabilities that can undermine operational preparedness. Applying to the case of Malaysia, the defence supply chain is challenged by the issues of invisibility related to the operations of suppliers, inadequate data systems, risks of corruption and mismanagement (Sallehudin et al., 2025). Such problems may result in inefficiencies in terms of cost overruns, delays and poor governance.Defence Supply Chain (DSC) plays a crucial role in national security because it involves all organisations, resources and processes that make the acquisition and provision of defence supplies and services within the required time (Syamra’Suhaimi and Mokhtar, 2023). A robust DSC plays a pivotal role in safeguarding the national interests and keeping the operations at the optimal level since disruptions may affect the economic stability and capabilities of the military. The recent world crises and geopolitical tensions have also indicated the gaps brought about by the dependency and over-dependence on the outside suppliers, which have intensified the need to be self-reliant in the adaptive defence supply chain (Syamra’Suhaimi and Mokhtar, 2023).Figure 1: Military supply chain networkSource: Mohammed, Schaefer and Milisavljevic-Syed, 2023
Naval & Maritime Academy Logistics Conference - 2026175The purpose of this report is to assess how transparency and accountability can be improved in the defence logistics system in Malaysia through the use of new digital technologies, namely blockchain and artificial intelligence (AI). With the immutable and decentralised ledger properties of blockchain and AI-based analytics, it has a huge potential to convert opaque systems into auditable and efficient ones.This report has threefold objectives, which include evaluating the existing issues in the context of transparency in the Malaysian defence supply chain, discussing the potential of blockchain and AI as technological inputs, and suggesting strategic implementation measures. The report will be organised with the first stage being a conceptual framework, the second stage is analysis of the current practices, technological solutions and the policy implications. Conceptual Framework: Transparent Supply Chain Management1. Definition and PrinciplesTransparent supply chain management can be defined as a structured exposure and availability of information throughout the whole supply chain in order to allow the stakeholders to track and confirm activities (Schaefer, 2023). Among the important principles are traceability, which enables the ability to track the origin, use, and end use of materials and components; accountability, where the actors should be responsible to their action and decision; data integrity, which ensures that the information is correct, consistent, and cannot be altered; and real-time visibility, which makes the operational information available at the appropriate time (Karaduman and Gülhas, 2025). The combination of these principles makes the operations more coordinated, less uncertain, and helps come up with informed decisions, especially in a complex logistics setting where reliability and oversight are paramount.Figure 2: Pillars of a transparent supply chainSource: Self- Developed
Naval & Maritime Academy Logistics Conference - 20261762. Theoretical GroundingThe framework is based on the Supply Chain Transparency Theory that highlights the importance of information disclosure as one of the means to enhance efficiency, trust, and governance between the involved actors (Morgan, Gabler and Manhart, 2023). The presence of greater transparency will lower the level of information asymmetry, which is a fundamental problem of complicated supply networks. Moreover, the Principal-Agent Problem is very topical in defence procurement as the governmental bodies (principals) are dependent on the contractors and suppliers (agents), whose activity does not necessarily correspond to the interests of the population. Visibility absence may consequently result in opportunistic behaviour, inefficiencies and corruption. The transparent systems address these risks by ensuring alignment of incentives, better monitoring, and contractual compliance through the use of verifiable data.Figure 3: Technologies of supply chain transparencySource: McGrath et al., 20213. Relevance to the Defence SectorThe defence sector has its supply chains on high-risk and high-value chains that entail sensitive technologies, national security issues and high financial investments (Pokorny, 2026). In this case, any small inefficiencies or integrity violations can prove to be very operational and strategic. The supply chain management must be transparent to guarantee reliability, fraud and accountability in all procurement and logistic operations. Since several parties will be involved: international suppliers and individual contractors, transparency will lead to better coordination and trust. It also facilitates external compliance and auditability, which is essential in the protection of the public resources and the effective provision of defence capabilities.
Naval & Maritime Academy Logistics Conference - 2026177Overview of Malaysia’s Defence IndustryThe defence industry in Malaysia falls under the classification of a third-tier arms producer, producing most of its products, which are small arms, ammunition, armoured vehicles and small-sized ships using licensed production and imported materials. The evolution of Malaysia since the 1970s, which started with basic maintenance and repair, then with limited design and manufacturing, has mostly been in the fields of aerospace, maritime, and ICT (Abdullah and Zahari, 2023). The defence budget of Malaysia improved by 10.3% per year as it rose from 1.3 billion in 2022 to 4 billion in 2023 (APDR, 2023). Most of them are, however, assembly-based, where the R&D is minimal. Even though the local firms have good relations with the Ministry of Defence (MOD), they are dependent on the government contracts, which have to be diversified into the commercial markets and dual-use policies. Figure 4: Malaysia’s Defence BudgetSource: APDR, 2023A comparative study of the world defence sectors shows that Malaysia has a rather small presence in the international arena. The Indian Express (2022) reveals that Malaysia ranks 16th in the list of importers. The United States, the leading manufacturer of defence equipment, controls the world defence equipment market with a significant portion of the total arms production and export, backed by a high level of research and development (R&D) system and such large corporations as Lockheed Martin. On the same note, China has expanded its domestic potential at a very fast rate, and it has been concentrating on self-reliance and mass production of air, navy and missile systems. But in contrast, India is a transitional case, with high levels of importation as well as increasing local production as part of such programs as Make in India. In comparison with these countries, Malaysia is still dependent on imports and licensed manufacturing, has little export potential and technological richness. Spain is the key supplier in the country (32 per cent) (Indianexpress, 2022). This analogy highlights the necessity of Malaysia to improve on the aspects of innovation, improving local capacities, and the transparency of supply chains to stay competitive.
Naval & Maritime Academy Logistics Conference - 2026178Figure 5: Arms Exports, Arms Imports and Military Spending in The Indo-Pacific RegionSource: Indianexpress, 2022Challenges: Opacity And Integrity Risks The defence supply chain in Malaysia still experiences a serious problem concerning the issues of the lack of transparency and integrity, especially in the case of procurement. One of the problems is the lack of transparency, whereby the procurement decisions are not sufficiently traceable to facilitate oversight and accountability. A recent report by Transparency International notes that access to defence-related information in Malaysia is still limited because of national security reasons, which tend to restrict the interests of the people to scrutinise the information further and create information asymmetry (Transparency International Defence and Security, 2025). This is because it is not visible, hence it is hard to trace the processes of decision making, selecting suppliers and awarding contracts.
Naval & Maritime Academy Logistics Conference - 2026179There are also high corruption and fraud risks. In 2023, a significant probe found that there were system-wide anomalies in military procurement of more than 150 contracts worth over half a billion dollars, and dozens of companies that were suspected of bribery (Golin, 2025). These instances depict the way in which opaque systems may support immoral behaviours, such as favouritism and power abuse. The fact that the contracts are concentrated in the hands of a few firms is also a matter of concern regarding collusion and poor governance of competition.Another very serious challenge is inefficiencies, which are usually experienced in terms of delays and cost overruns. The efficiency of the military procurement (2025) is a topic of scholarly research that highlights that the lack of a proper coordination mechanism, ineffective communication, and poor processes play a significant role in decreasing the performance of procurement and augmenting the costs of operations (Paino, Anuwar and Wahidah, 2025). Fragmented systems and bureaucratic procedures aggravate such inefficiencies.Figure 6: Malaysia’s e-procurement systemSource: Ahmad, Abul Hassan and Ismail, 2021
Naval & Maritime Academy Logistics Conference - 2026180Besides, high data is siloing and low interoperability prevent effective sharing of information among agencies and stakeholders. Despite the moderate transparency rates of 73.9% disclosure in the e-procurement system in Malaysia, the challenges defining the system still exist in the areas that need full accountability, including organisational and contact information (Ahmad, Abul Hassan and Ismail, 2021). All in all, the above problems present a serious case of the necessity of integrated, transparent, and technologically-based solutions to enhance integrity and efficiency within the Malaysian defence supply chain.Role Of Blockchain In Enhancing Transparency1. Explanation of Blockchain TechnologyBlockchain is a decentralised electronic journal that documents transactions in a distributed system of computers in place of a central authority (Dong et al., 2023). All participants have the same copy of the ledger, which guarantees a high level of transparency and common visibility of information. An important characteristic is immutability, where once information is entered in a block and checked, it can never be changed without unanimity and thus avoids the possibility of tampering and fraud. Also, blockchain has the use of smart contracts, which are self-executing codes that automatically execute the terms of a contract when specific, defined conditions are fulfilled. Recent research underlines that these properties altogether lead to better data integrity, traceability and trust in the intricate supply chains (Snigdha and Oyshi, 2025). Blockchain ensures that the serious problem of information asymmetry and untrustworthy data is resolved in the logistics system by offering a secure, transparent, and real-time document on all transactions.2. Applications in Defence LogisticsThe defence logistics have a large application of blockchain technology, especially in the area of increasing transparency and control over operations. A significant use case is procurement tracking, in which blockchain is used to provide end-to-end visibility of the procurement operations, including selecting a supplier and delivering it. All transactions are monitored in a secure way, and the stakeholders can trace the origin, movement and handling of defence assets in real time. This will minimise the chances of manipulation and will enhance procurement accountability