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The Importance of the cooperation along the supply chain

Due to globalization, which is driven by political measures of international institutions and technological progress, the behavior of companies has changed since the middle of the 20th century. As a result of the reduction of trade barriers, the linking of markets and increasing technological innovations, production and acquisition processes are relocated globally. ^[1]

This development is intensified in developing countries and emerging economies as focal companies gain cost advantages due to weakly enforced or lacking of social and environmental law. Not only does this development lead to an increase of branching and complexity of supply chains, but it also gives rise to the outsourcing of control and knowledge of particular steps in the production process to the supplier.Cite error: The <ref> tag has too many names (see the help page).

The integrated strategy is in line with traditional SCM because thereby traditional cost and service considerations are merely complemented by social and environmental issues. The main focus still lies on increasing the customer’s value even though customer preferences regarding social and environmental aspects are more incorporated than before. Methods which are typically used by following this approach are reverse logistics, product stewardship or green SCM, for instance.

The alignment strategy, however, rates economic, social and ecological aspects equally which induces trade-offs between the three dimensions of sustainability. In contrast to an integrated strategy, an alignment strategy considers environmental and social issues not only as a response to customer demand but also based on discrete organizational goals. Examples are the triple bottom line or CSR approaches.

The replacement strategy substitutes the traditional SCM concept with an alternative concept to actually fulfill social and environmental requirements. It is based on the idea that the traditional SCM concept is inconsistent with sustainability. The aim of SCM to increase value for the customer as effectively and efficiently as possible has caused spatial distance between production and consumption which resulted in expanding transportation. Growing transportation in turn tends to have negative effects on the environment. The replacement strategy therefore gives up the absolute profit-oriented SCM approach and focuses more on how and where production takes place. Thus, customers should also reconsider their criteria for product choices. A possible consequence might be that instead of the for SCM currently common “global-to-local” concept a “local-to-local” concept is applied. A “local-to-local” concept implies that production as well as consumption take place on a regional level, which means that production is not shifted on the global level. A typical approach to this strategy is the carbon footprint, in order to unfold the amount of greenhouse gas emissions released on the entire life cycle. Furthermore, there are similar approaches concerning water and air pollution or energy and resource consumption.^[2]

Implementation of a SSCM strategy

In order to implement a sustainable supply chain strategy, several aspects have to be taken into account. Scientific as well as applied literature deals with risk assessment and the evaluation and control of the supply chain. These are typically listed as important steps towards the implementation of a SSCM.

Risk Assessment

Risk assessments support companies in analyzing risk factors from internal structures, from its supply chain and environment. For this purpose, the strategy, practices, resources and capabilities which are applied by or found in a company, are analyzed. Due to the interdependency of focal companies with their partners along the supply chain, this analysis is not restricted to the company itself but covers the partners within the supply chain as well. The goal is to identify potential conflicts within the organization and between organizations of the supply chain.^[3] However, a company should first identify, understand and cope with problems found in-house before working out the details of a sustainable supply chain with other companies. A sustainability report might support this.Cite error: A <ref> tag is missing the closing </ref> (see the help page). ^[4] Such a risk analysis enables the company to classify suppliers into risk groups and to establish a suitable management approach.^[5]

The goal of risk assessment is to identify gaps in the SCM strategy and to develop approaches to alleviate risks. Depending on the size of those gaps, more or less aggressive actions are necessary.^[3]

Evaluation and control of the value added chain

Similar to SCM, SSCM is based on communication and cooperation between the focal company and its supply chain.Cite error: A <ref> tag is missing the closing </ref> (see the help page).

Reverse logistics hence can serve as an environmentally friendly tool through recycling, remanufacturing or reusable packaging.^[6]

In contrast to reverse logistics, closed-loop supply chain management additionally takes into account the whole return process of products, including acquisition, testing, sorting, distribution and marketing. It consists of two chains, a forward and a backward chain. The forward chain serves to distribute the product whereas the backward chain serves to return the product. A returned product enters the primary market through the forward chain, or is redirected to a secondary market.^[2]

Hence reverse logistics and closed-loop supply chains focus especially on the value added for the customers and their preferences regarding social and environmental issues. Therefore they are particularly suited for the integrated strategy.

Product stewardship

Product stewardship refers to the responsibility which manufacturers and retailers take for their products. From the perspective of SCM this is particularly related to sustainability. Manufacturers and retailers thus are responsible to reduce the ecological footprint of their products in accordance with their supply chain partners and therefore try to diminish the impacts their products have on the climate.^[2] The approach hence focuses on the product and the value added for the customer so that it is attributed to the integrated strategy.^[2]

References

^ Schaltegger, S. /Harms, D. (2010): Sustainable Supply Chain Management: Praxisstand in deutschen Unternehmen, Centre for Sustainability Management, Leuphana Universität Lüneburg.
^ ^a ^b ^c ^d Cite error: The named reference Hall09 was invoked but never defined (see the help page).
^ ^a ^b Cite error: The named reference Cetinkaya11 was invoked but never defined (see the help page).
^ Cite error: The named reference NZBCSD was invoked but never defined (see the help page).
^ Cite error: The named reference UNspain was invoked but never defined (see the help page).
^ Cite error: The named reference Rogers01 was invoked but never defined (see the help page).

[Schaltegger10-1] Schaltegger, S. /Harms, D. (2010): Sustainable Supply Chain Management: Praxisstand in deutschen Unternehmen, Centre for Sustainability Management, Leuphana Universität Lüneburg.

[Hall09-2] Cite error: The named reference Hall09 was invoked but never defined (see the help page).

[Cetinkaya11-3] Cite error: The named reference Cetinkaya11 was invoked but never defined (see the help page).

[NZBCSD-4] Cite error: The named reference NZBCSD was invoked but never defined (see the help page).

[UNspain-5] Cite error: The named reference UNspain was invoked but never defined (see the help page).

[Rogers01-6] Cite error: The named reference Rogers01 was invoked but never defined (see the help page).

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