JOHN MANUWA
LAW, DIGITAL INNOVATION AND SUSTAINABILITY STUDENT
The concept of sustainability in supply chains holds profound significance in addressing environmental and social challenges in today’s interconnected global economy. Supply chains, serving as vital conduits for delivering goods and services, face pressing issues like carbon emissions, deforestation leading to biodiversity loss, water scarcity, and labor rights violations. To achieve sustainable supply chain management, businesses must prioritize responsible sourcing, ethical labor practices, and reducing environmental footprints. These measures are crucial in mitigating adverse environmental and social impacts, paving the way for a more responsible and sustainable future [1].
Sustainability in the supply chain goes beyond a mere conceptual explanation; it involves integrating environmental, social, and corporate governance factors right from sourcing raw materials, through the conversion process, and up to the product’s market delivery. However, the scope of the supply chain is not confined to this point—it extends further even after the product has entered the market.
To elaborate, it necessitates careful strategizing and implementation of approaches for reusing, recycling, and retiring products. Notably, a pivotal aspect of sustainability in the supply chain lies in its alignment with the principles of a circular economy. This means that resources are utilized efficiently, waste is minimized, and products are designed to facilitate their eventual reintegration into the production cycle. In essence, sustainability in the supply chain is a comprehensive commitment that encompasses the entire lifecycle of products, fostering responsible practices and contributing to a more environmentally conscious and socially responsible way of conducting business [2].
The landscape of supply chain strategies is undergoing a profound change, redefining sustainability. This transition stems from recognizing the necessity of a holistic and systemic approach. It requires moving away from a shareholder-focused approach advocated by Friedman in 1970 to embracing stakeholder value, as emphasized by Freeman in 2010. This shift directs attention to acknowledging intricate interconnections and the growing significance of collaborative endeavors’. As a result, a systemic perspective that encompasses relationships and interconnected processes [3] replaces the traditional linear view of the supply chain.
Indeed some time recently as of late, the concept of sustainability inside supply chains has pulled in considerable consideration, reflecting a developing acknowledgement of its basic parts in tending to natural and social impacts. Analysts have investigated different measurements of this multifaceted contributing to a more profound understanding of how businesses can successfully coordinate supportability standards into their supply chain operations
Seuring and Müller (2008) have underscored the significance of embedding environmental considerations throughout the supply chain lifecycle; their work emphasizes the potential for reduced environmental footprints through the careful management of raw material sourcing, production processes, and product end-of-life strategies. This integrated approach aligns with the overarching aim of minimizing ecological impacts while promoting operational efficiency [4].
Ahi and Searcy (2013) have delved into the ethical dimensions of sustainable supply chain management, highlighting the importance of social responsibility and ethical sourcing practices. Their research underscores the need for companies to embrace responsible sourcing to ensure fair labor practices, humane working conditions, and equitable treatment of workers across the supply chain network. This emphasis on ethical sourcing aligns with the broader goal of achieving positive social outcomes while simultaneously enhancing supply chain sustainability [5].
Boons and Ludeke-Freund (2013) have contributed to the discourse by exploring the application of circular economy principles within supply chains. Their work examines the potential for resource efficiency and waste reduction through designing products with a focus on reuse, remanufacturing, and recycling. This approach supports the transition from a linear consumption model to a circular framework that optimizes resource use and mitigates environmental degradation [6].
Beske and Seuring (2014) have shed light on the role of stakeholder engagement and collaboration in advancing sustainable supply chain practices. Their research underscores the importance of involving various stakeholders—ranging from suppliers to regulatory bodies—in decision-making processes. This approach enhances the effectiveness of sustainability initiatives by fostering collective action, aligning diverse interests, and promoting transparency across the supply chain network [7].
Bocken et al. (2014) have advocated for a systemic and holistic approach to integrating sustainability into supply chains. Their work emphasizes the need to incorporate sustainability considerations from the outset of product design through to end-of-life management [8].
Environmental Impacts
In recent times, the environmental consequences stemming from supply chains have garnered significant attention from both the scientific and political spheres. With the escalating apprehensions about climate change, efforts to mitigate its repercussions have gained momentum, all the while ensuring that organizations can prosper.
Yet, this concern transcends the confines of research and policymaking. Its implications resonate deeply within the business realm, affecting influential figures in industries. These key players can reshape supply chains sustainably by actively seeking inventive resolutions. In essence, the pursuit of environmentally conscious strategies is not solely an academic or governmental endeavour; it is a clarion call to business leaders, urging them to embrace innovation for a greener future [9].
Environmental impacts in the supply chain strain resource consumption, waste generation, and carbon footprint, which collectively strain ecosystems and contribute to climate change. Additionally, deforestation, habitat destruction, pollution, and excessive water usage degrade biodiversity and ecosystems, compromising the planet’s health. A poignant example of environmental impact lies in the fast fashion industry. Rapid production and disposal of garments lead to immense resource depletion, excessive waste, and heightened pollution due to synthetic materials and dyes. Supply chains, particularly in consumer goods packaging, are a major environmental concern, responsible for over 90% of the sector’s damage, as highlighted by a McKinsey report. Greenhouse gas emissions from these chains contribute significantly, accounting for 80% of emissions per company, necessitating a 90% reduction by 2050 for Paris Agreement compliance. Oceanic trade, transporting 90% of global trade, is another culprit, causing pollution and harm to 87% of oceans due to commercial activities, including shipping and fishing [10].
Social impacts
Social impacts within supply chains encompass a range of challenges, from labor conditions to human rights concerns and community neglect. These complexities yield significant consequences. Instances of inadequate wages, hazardous workplaces, and insufficient labor rights contribute to worker exploitation, undermining well-being and ethical reputation.
Simultaneously, overlooking community well-being within operational areas can lead to disenchantment. Such sentiments can escalate into social tensions, triggering protests and public backlash, and endangering brand reputation and sustainability [11].
The social impacts of supply chains extend beyond labor conditions and human rights violations. Supply constraints can result in inflation, as seen in the US (CNN Investigation 2021). This situation arises when scarcity and increased demand drive up prices, affecting consumers’ purchasing power. The supply crunch, as evident in reduced food availability and rising costs, affects vulnerable populations, straining food banks and schools. This multifaceted issue underscores the intricate relationship between supply chain disruptions and broader social challenges, highlighting the urgency for comprehensive solutions that address economic stability and societal well-being [12].
Strategies for addressing environmental impacts
To be able to mitigate the environmental impacts associated with the supply chains, leaders of businesses and organizations must be conscious enough to rethink and re-strategize their manner and approaches to the production, transportation, and distribution of goods and services. One critical aspect is sustainable sourcing and responsible procurement. This involves the meticulous selection of suppliers based on their adherence to environmentally friendly and ethical practices, as well as the procurement of materials and resources that align with sustainability objectives.
Energy efficiency and the integration of renewable resources are fundamental elements in sustainable supply chain management. Energy efficiency initiatives aim to optimize operational processes, manufacturing techniques, and transportation systems to curtail energy consumption and resultant greenhouse gas emissions. Concurrently, adopting renewable energy sources such as solar and wind power within the supply chain’s energy matrix further diminishes dependence on fossil fuels. These initiatives collectively contribute to making the entire supply chain more sustainable, energy-efficient, and environmentally responsible.
Circular economy principles are pivotal to sustainable supply chain management as they advocate for a fundamental shift away from the linear take-make-dispose model. Instead, circular economy approaches underscore waste reduction and the maximization of resource utilization through strategies like product reuse, material recycling, and product design for extended lifespans. This approach not only minimizes waste generation but also conserves valuable resources, reduces the necessity for fresh raw materials, and limits the environmental consequences of production and disposal [13].
Unipart Group is one of the many businesses that has shown a strong commitment to environmental sustainability through its long-term partnership with key customers and suppliers. Noteworthy practices include a zero-waste-to-landfill policy, the establishment of environmental KPIs to monitor performance, and regular tracking of key metrics like energy consumption, carbon emissions, waste generation, and water usage. A digital application, reviewed by site-specific environmental representatives, supports these efforts, along with the utilization of Unipart Way tools for continuous improvement.
An exemplary showcase of Unipart’s environmental focus is demonstrated at the newly opened NHS Supply Chain site in Bury St Edmunds. This state-of-the-art facility aligns with their shared commitment to sustainability. It features an advanced rainwater harvesting system, energy-efficient LED roof lighting, extensive tree and shrub planting, electric vehicle charging stations, and a bike shelter, reflecting a dedication to eco-conscious practices. Additionally, collaboration with the local council for a dedicated bus stop emphasizes their commitment to reducing vehicle pollution in the area. Unipart’s sustainability initiatives underscore their proactive approach towards minimizing their environmental impact and delivering savings for critical NHS frontline services [14].
Strategies for addressing social impacts
Mani et al. (2016) propose six dimensions for Socially Sustainable Supply Chains (SCSS): equity, safety, health and welfare, philanthropy, ethics, and human rights. These dimensions encompass aspects like diversity policies, safety regulations, healthcare availability, philanthropy, ethical compliance, and labor rights. However, they may not fully align with the realities faced by suppliers in underdeveloped countries, particularly in industries like fast fashion and electronics. These dimensions often reflect a Northwestern perspective, potentially causing implementation challenges. Bridging this gap is crucial for advancing social performance in international supply chains within the broader sustainability framework [15].
In the context of social impacts within supply chains, the prioritization process involves the assessment of three key criteria. Firstly, “labor intensity in worker hours per unit process” quantifies the labor input required for each stage of the supply chain. This indicates areas where labor is a significant factor, highlighting potential vulnerabilities or opportunities for worker welfare enhancement.
Secondly, the “risk for, or opportunity to affect, relevant social themes” pertains to Human Rights, Labor Rights and Decent Work, Governance, and Access to Community Services. This assesses how supply chain operations can affect these critical aspects of society. For instance, it gauges whether practices contribute to fair labor conditions, support human rights, upholds governance standards, and promote community well-being.
Lastly, the “gravity of a social issue” measures the severity of a given social concern. It weighs the potential negative consequences if a particular aspect of the supply chain fails to address social impacts adequately. This helps prioritize areas that require urgent attention to prevent or mitigate detrimental effects [11].
In the discourse on modern supply chain sustainability, technology plays an indispensable role, acting as a catalyst for environmental and social progress. It fuels innovation and operational efficiency while instilling an ethical business ethos. Technology’s specific roles are diverse: it empowers real-time data analytics, enhances transparency via blockchain, ensures safety through IoT sensors, aids risk assessment and compliance with supply chain management software, optimizes operations with AI, fosters transparency and collaboration with communication tools, and enables sustainable planning through digital twins. These roles collectively empower organizations to navigate the complexities of sustainability, fostering responsible practices and driving positive, enduring change within the supply chain.
Finally, addressing social and environmental issues within the supply chain is not only crucial for sustainability but also for fostering economic growth and development. Sustainability has gained prominence as a key topic of discussion among businesses, governments, policymakers, and civil societies. It is indeed a joint responsibility to work towards making our planet and society safer while ensuring that our economy thrives. By integrating sustainability into supply chain practices, we can create a win-win situation where businesses contribute to a more sustainable and equitable world while also reaping economic benefits.
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BIBLIOGRAPHY
- UN Global Compact: https://unglobalcompact.org/what-is-gc/our-work/supply-chain/
- IBM Blog: https://www.ibm.com/blog/what-is-supply-chain-sustainability/
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- Seuring, S., & Müller, M. (2008). From a literature review to a conceptual framework for sustainable supply chain management. Journal of Cleaner Production, 16(15), 1699-1710.
- Ahi, P., & Searcy, C. (2013). A comparative literature analysis of definitions for green and sustainable supply chain management. Journal of Cleaner Production, 52, 329-341.
- Boons, F., & Lüdeke-Freund, F. (2013). Business models for sustainable innovation: state-of-the-art and steps towards a research agenda. Journal of Cleaner Production, 45, 9-19.
- Beske, P., & Seuring, S. (2014). Putting sustainability into supply chain management. Supply Chain Management: An International Journal, 19(3), 322-331.
- Bocken, N. M., Short, S. W., Rana, P., & Evans, S. (2014). A literature and practice review to develop sustainable business model archetypes. Journal of Cleaner Production, 65, 42-56.
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- McKinsey sustainability report: https://www.mckinsey.com/capabilities/sustainability/our-insights/starting-at-the-source-sustainability-in-supply-chains.
- Identifying Social Impacts in Product Supply Chains: Overview and Application of the Social Hotspot Database by Catherine Benoit-Norris et al; https://www.mdpi.com/2071-1050/4/9/1946.
- CIPS – https://www.cips.org/supply-management/news/2021/november/social-impact-of-supply-chain-issues-emerging/
- Harvard Business School Review; A more sustainable supply chain: https://hbr.org/2020/03/a-more-sustainable-supply-chain.
- Unipart Logiestic: https://www.unipart.com/logistics/reducing-the-environmental-impact-in-supply-chains/.
- Social sustainability in supply chains: the role of local practices and informal networks 2022: https://www.emerald.com/insight/content/doi/10.1108/IJPDLM-09-2021-0405/full/html#:~:text=Amongst%20other%20things%2C%20this%20includes,locations%20(health%20and%20welfare)%2C.