Supply chain management is defined as the management of upstream and downstream value-added flows of materials, final goods, and related information among suppliers, company, resellers, and final consumers. (Nabil Abu el Ata, Rudolf Schmandt (2016)). It involves the optimisation of the movement of raw materials from the supplier to the refiner, turning the raw materials into finished goods, and the movement of the finished goods to a store, where it will be bought by consumers.
Due to firms wanting the highest and cheapest output of products, optimal supply chain management is often unsustainable in an environmental, economical, as well as social way.
This survey contributes to earlier literature by discussing several papers about sustainability in supply chain management, as well as identify gaps in current literature. I will be focussing on the environmental-, and social dimension of sustainable supply chain management.
The environmental dimension
One of the most prominent issues in environmental (green) supply chain management is the release of greenhouse gases, the most detrimental of which is CO2. CO2 has harmful effects on human health and also has environmentally undesirable consequences, such as the acceleration of the greenhouse effect, thus contributing to global warming.
According to Paksoy, Bekta?, and Özceylan (2010) the most significant source of CO2 in the supply chain is the transport between different processes. Given the recent concerns about the harmful consequences of supply chain management on the environment, it has become necessary to specifically take into account environmental concerns when managing a supply chain.
According to Srivastava (2007), to incorporate environmental concerns into supply chain management, two streams can be distinguished in current literature, specifically green operations and green design.
Green operations look to address issues such as remanufacturing, designing the supply chain to include reverse logistics (recycling, repairing, and reusing products), and the environmentally conscious management of waste.
Green design is focused on the integration of environmental concerns into the design of a product, since the product design plays a huge part in how well a product can be re-used, repaired, or recycled. It aims to increase the understanding of how the design of a product impacts the environment.
The social dimension
According to the Global Reporting Initiative, for a company to have a socially sustainable supply chain, it needs to follow a set of 4 criteria for supply chain management. The company needs to:
1. Have good labour practices
2. Have decent work conditions
3. Adhere to human rights
4. Have product responsibility
An example of a company not following these criteria is Nike. Nike has many subcontractors in south-eastern Asia, where labour is cheap. Their clothes are made in sweatshops, where workers have to work inhumane hours, in brutal and dangerous work environments (Robert J. Bies, Jerald Greenberg; 2017).
Many companies have struggled to implement social sustainability practices in to their supply chains. A study by Mamic (2005) draws attention to this problem across footwear, apparel and retail sectors in which there are often thousands of suppliers.
Multinational enterprises need this many suppliers to remain competitive and to be able to respond quickly to the market. The study suggested that the multinational enterprises should prioritize their suppliers according to their social sustainability.
There is also little literature available on the implementation of socially sustainable supply chains. This is one of the reasons many companies have not yet implemented a social sustainability standard into their supply chain.
1: ?Nabil Abu el Ata, Rudolf Schmandt (2016), The Tyranny of Uncertainty, Springer