Concept and Significance of SSCM - Book Report/Review Example

Concept and Significance of SSCM Introduction Sustainable Supply Chain Management (SSCM) is emerging as an innovative and changed management concept relating to the functioning of present supply chain practices in the different business organizations. The aspect of SSCM earns needed significance for it aims in generating needed collaboration between the different supply chain firms and also with the business organization to help in the gaining of right quantity and quality of products. This feature enhances the competitive advantage of the business organization through contributing in the meeting of the needs of the different stakeholders like management, investors, and customers and to the society at large (Syahruddin, 2013). The paper in this respect aims to conduct a review of a journal related to the concept and application of sustainable supply chain management. Critical review of the journal would be conducted through carrying out effective arguments based on views generated by other experts related to SSCM. The critical discussion would aim at generating an effective understanding of SSCM while evaluating different challenges faced in its implementation. It would also render effective recommendations relating to the problems faced. Concept and Significance of SSCM In the article, ‘Why research in sustainable supply chain management should have no future’ published in Journal of Supply Chain Management during 2014, Pagell and Shevchenko relate that the concept of Sustainable Supply Chain Management (SSCM) is constituted by several parameters pertaining to the economic, social and environmental aspects. Developing the concept of SSCM on the above aspects is taken to enhance the performance of Supply Chain Management systems (Guercini and Ranfagni, 2013). Thus, SSCM aims to focus on integrating, coordinating, organizing and also controlling the supply chain activities of a business organization to be economically viable in a manner that does not tend to affect the social and environmental systems. The generation of the SSCM concept as a bifurcation from the existing studies related to supply chain management gains significance, owing to the rise of sustainability issues relating to depleting natural resources and also the growing demand of stakeholders for better working and living standards. These issues also generate potential challenge relating to the development and application of SSCM practices (Pagell and Shevchenko, 2014). Linton, Klassen and Jaraman in the article, ‘Sustainable Supply Chains: An Introduction’ authored during 2007 in the Journal of Operations Management indicate the significance of integrating the concept of sustainability with supply chain activities. The focus of sustainability relating to social and environmental issues aims to evaluate the activities by moving beyond the scope of normal supply chain. It tends to integrate the activities related to product designing, manufacturing, and management of by-products and also in evaluating the product life cycle so as to generate minimal social and environmental impacts. Relating to product designing and manufacturing, SSCM aims to govern the activities to generate minimal environmental impacts both during and after the usability period of the product. It also aims to help in reducing the generation of by products through the use of effective technologies such that it helps in enhancing the efficiency of the production systems (Quariguasi Frota Neto et al., 2010). Similarly, the concept of SSCM is also undertaken to extend the life cycle of a product that helps in reducing the chances of making the product turn obsolete and thereby, requiring the use of natural resources for production of a new product. The designing and manufacturing activities related to a product also needs to be ideally conducted to make the product ready to be recycled at a later stage. Use of recycling activities further helps in reducing the impact on the social and natural environment (Linton et al., 2007). The study made by Linton, Klassen and Jaraman thus, aims to provide an elucidation to the concept of SSCM thereby enhancing the existing supply chain practices. The aspect of sustainability relating to supply chain is also argued by Darnall, Jolley and Handfield in an article published during 2008 in the Journal on Business Strategy and the Environment. Sustainable practices relating to supply chain aim in reducing the environmental impacts posed by the supply chain activities of a business organization. Supply chain functions tend to affect the natural environment both directly and indirectly. In terms of direct impacts, SSCM aims to reduce the amount of waste pertaining to activities related to warehousing, delivery and the disposal of different products and raw materials (Yakovleva et al., 2012). Indirect impacts relate to the accumulation of waste products from partner supplier firms which cumulatively affect the natural environment. Further sustainable practices are spelt by the authors relating to the reduction of cost of designing and production and also the incorporation of effective technology to enhance the usability and durability of the product (Darnall et al., 2008). Issues related to SSCM Pagell and Shevchenko (2014) argues that the use of sustainable supply chain practices contribute in reducing the exploitation of natural resources in contrast to the application of unsustainable supply chain practices. The authors counter argue that use of sustainable supply chain practices like lean supply chain management contributes in reducing but not in fully eliminating the harm generated to the natural environment. Continuous depletion of natural resources without generating replacement and greater amount of emissions in unsustainable supply chain practices generates greater harm (Pagell & Shevchenko, 2014). Kumar, Teichman and Timpernagel in the article, ‘A green supply chain is a requirement for profitability’ published during 2012 in International Journal of Production Research; reflect on the use of sustainable supply chain practices in reducing environmental harm. The design, production and packaging functions ought to be undertaken in such fashion as to remove such elements that tend to go as waste thereby, depleting the natural environment. (Source: Kumar et al., 2012) Further, SSCM practices are also indicated in choosing the right supplier base and in formulating the right kind of sourcing strategy that would contribute in reducing emission levels and also in reducing the cost related to sourcing. (Source: Kumar et al., 2012) It would also require evaluating the amount of unused and disposed resources and merchandises in the post-consumption phase and thereby would help in effectively planning for the future orders (Kumar et al., 2012). (Source: Kumar et al., 2012) The second issue related to SSCM highlighted by Pagell and Shevchenko (2014) relates to earning a trade-off between the economic or profitability bottom-line of a company and the social and environmental objectives of green supply chain practices. From the viewpoint of stakeholders SSCM practices require the investors, employees and the company management to fulfill social and environmental responsibilities keeping an eye on the economic growth. A profitable business concern stands sustainable from the viewpoint of the stakeholders (Pagell and Shevchenko, 2014). Reflecting on the above issue, the article written by Maruf Hasan in American Journal of Industrial and Business Management during 2013 can be rightly evaluated. Hasan reflects that the use of sustainable supply chain practices tends to have positive impacts on the operational performance of a company. Incorporation of SSCM practices aptly contributes in reducing inventory and operational cost thereby generating greater efficiency. The reduction in business cost coupled with enhancement of market share contributes in generation of greater profitability in the long run (Hasan, 2013). Pagell and Shevchenko (2014) reflect on another considerable challenge relating to the evaluation and applicability of SSCM practices. The supply chain practices of business organizations are incorporated and developed based on past empirical models related to the applicability of supply chain in different business cases. Pagell and Shevchenko argues that sustainable supply chain practices require changes and innovation to be generated in the existing supply chain paradigm. Thus, the parameter of sustainability has been increasingly linked to futuristic changes and developments (Pagell and Shevchenko, 2014). Frey, Iraldo and Testa in an article featured in a management journal during 2013 also reiterates on the above point that sustainability can be incorporated through the generation of needed innovation and change. Generation of sustainability in the existing supply chain mechanism is made possible through the incorporation of needed collaboration between the different stakeholders with also the development of infrastructures to support research and development activities (Frey et al., 2013). Pagell and Shevchenko (2014) also argue relating to the measure of the total impact gained from sustainable supply chain practices. In cases where sustainable supply chain practices indicate on lower emission levels and also reduced impact on natural resources the above indicators are taken to signify a growth in the annual profits of the company. Again the reduction in the emission levels at an organization’s end also tends to signify the growth in the emission levels at the end of a supplier. The measurement of the effectiveness of the supply chain gains significance in that it tends to evaluate the total effect of the supply chain either positively or negatively upon the organization. This reflects a change from the existing measure of supply chain where differences relating to the degree of harm generated to the environment are evaluated based on individual activities (Pagell & Shevchenko, 2014). Hall, Matos and Silvestre in an article published during 2012 in International Journal of Production Research identify that effectiveness of the SSCM is understood through integration of supply chain activities with other key elements related to social, environmental and financial aspects. Thus, evaluation of the effectiveness of SSCM needs to be carried out in a holistic fashion rather than aiming to identify the independent impacts of the incorporation of sustainability in the supply chain dimension (Hall et al., 2012). Solutions to the Issues Reflecting on the issue relating to measurement of the impact of SSCM on a triple bottom-line approach, Pagell and Shevchenko (2014) state on a social level the measurement of the effectiveness of the SSCM can be made relating to the development of workplace conditions of workers operating in supply chain firms. The case of Pepsi is also highlighted where it aims in the replenishing of the natural resource base (water) which is used as a potential material by the company in the production of carbonated drinks. Focusing on the environmental side, the effectiveness of incorporation of SSCM practices can be measured in terms of the reduction in the emission levels relating to the transportation and logistics functions of the company (Pagell and Shevchenko, 2014). Hollos, Blome and Foerstl in an article authored during 2012 in the International Journal of Production Research further reinstates on the measurement of the effects of SSCM relating to the triple bottom line aspect. The first measurement of the effectiveness of SSCM relates to the effective collaboration or integration between the different supplier groups to help in meeting the objectives of procurement functions at a strategic level. The second metric of effectiveness of SSCM relate to the development of co-operation between the different suppliers to help in the sourcing of products at a lower price thereby indicating operational efficiency. Finally, the degree of use of greener supply chain activities also stands to be an effective metric of SSCM such that it indicates on the enhancement of operational performance (Hollos et al., 2012). The same is indicated through the use of the following model. (Source: Hollos et al., 2012) Developments related to the field of SSCM are taken to be largely promoted through gaining both an in-depth and analytical understanding of the same through the incorporation of exploratory and analytical research methods. Pagell and Shevchenko (2014) state in this respect that use of the above tools contributes in helping reflect new advances that can be generated in the field of SSCM. The use of the above methods is taken to contribute in evaluating the degree of sustainability involved in the existing supply chain activities and also in generating effective recommendations related to the same (Pagell and Shevchenko, 2014). Cao et al. (2010) in an article authored during 2010 in International Journal of Production Research indicated on the use of analytical research tools for understanding the manner of collaboration that is required to be generated in SSCM to generate needed effectiveness. The level of collaboration between the different supply chain parties is observed in terms of sharing effective information related to sales forecast, changes in stock levels, fixation of delivery timings, decisions related to product designs and also pertaining to product prices. Real time sharing of data along the above aspects contributes in value generation relating to the supply chain practices in terms of generating greater efficiency and productivity (Cao et al., 2010). Future of SSCM Highlighting on the growing significance of SSCM, Pagell and Shevchenko (2014) reflects that in the near future the aspect of sustainability would not be identified in an isolated fashion relating to the conducting of supply chain management functions. The incorporation of the parameters related to sustainability would contribute in generating needed value additions to the existing supply chain practices. It would in turn enhance the organizational productivity and efficiency in the long run (Pagell and Shevchenko, 2014). Mann et al. (2010) in an article authored for the IUP Journal of Operations Management reflects on the different drivers that guide on the increased incorporation of SSCM principles in the present supply chain management domain. The different drivers reflected by the authors are presented below in a diagrammatic form. (Source: Mann et al., 2010) The above table reflects on a large number of factors relating to different facets that in turn signify the need for incorporating SSCM. Organizations having developed their supply chain functions based on the above sustainability mechanisms thus gain the potential of performing more efficiently and productively. Fulfillment of the sustainability objectives related to the above aspects would potentially contribute in helping the business organizations to gain both on profitability and also in being able to sustain their market for a greater period (Mann et al., 2010). Conclusion The review of the journal article authored by Mark Pagell and Anton Shevchenko reflects that conducting of supply chain activities to meet the objectives of triple bottom line makes SSCM an innovative and emerging concept. Measures of efficiency and productivity related to supply chain activities is assured for it contributes in meeting of social and environmental objectives while focusing on the generation of needed profitability. The aspect of sustainability dealt with supply chain management relates to the protection of the natural resource base of the regions from where natural resources are extracted in abundance. It also helps in protection of worker’s rights and interests relating to supply chain firms. SSCM also contributes in controlling of emission levels from operation and logistics and also in governing the designing, production and pricing functions to generate benefits pertaining to recycling and affordability aspects. Operating based on the above aspects is thus taken to help an organization to focus on sustained development and growth in the long run thus helping in generating greater profitability and market share. This reflects on the growing importance of SSCM concept in meeting the changing needs of the business and consumer society. References Cao, M., Vonderembse, M.A., Zhang, Q. and Ragu-Nathan, T.S., 2010. Supply chain collaboration: Conceptualization and instrument development. International Journal of Production Research, 48(22), pp.6613-35. Darnall, N., Jolley, G.J. and Handfield, R., 2008. Environmental Management Systems and Green Supply Chain Management: Complements for Sustainability? Business Strategy and the Environment, 18, pp.30-45. Frey, M., Iraldo, F. and Testa, F., 2013. The determinants of innovation in green supply chains: evidence from an Italian sectoral study. R&D Management, 43(4), pp.352-64. Guercini, S. and Ranfagni, S., 2013. Sustainability and Luxury. Journal of Corporate Citizenship, (52), pp.76-89. Hall, J., Matos, S. and Silvestre, B., 2012. Understanding why firms should invest in sustainable supply chains: a complexity approach. International Journal of Production Research, 50(5), pp.1332-48. Hasan, M., 2013. Sustainable Supply Chain Management Practices and Operational Performance. American Journal of Industrial and Business Management, 3, pp.42-48. Hollos, D., Blome, C. and Foerstl, K., 2012. Does sustainable supplier co-operation affect performance? Examining implications for the triple bottom line. International Journal of Production Research, 11(1), pp.2968-86. Kumar, S., Teichman, S. and Timpernagel, T., 2012. A green supply chain is a requirement for profitability. International Journal of Production Research, 50(5), pp.1278-96. Linton, J.D., Klassen, R. and Jayaraman, V., 2007. Sustainable supply chains: An introduction. Journal of Operations Management, 30, pp.1-8. Mann, H., Kumar, U., Kumar, V. and Mann, I.J.S., 2010. Drivers of Sustainable Supply Chain Management. IUP Journal of Operations Management, 9(4), pp.52-63. Pagell, M. and Shevchenko, A., 2014. Why research in sustainable supply chain management should have no future. Journal of Supply Chain Management , 50(1), pp.44-55. Quariguasi Frota Neto, J. et al., 2010. From closed-loop to sustainable supply chains: the WEEE case. International Journal of Production Research, 48(15), pp.4463-81. Syahruddin, N., 2013. Sustainable Supply Chain Management: A Case Study of Indonesia's Cocoa Industry. Bulletin of Indonesian Economic Studies, 49(1), pp.114-15. Yakovleva, N., Sarkis, J. and Sloan, T., 2012. Sustainable benchmarking of supply chains: the case of the food industry. International Journal of Production Research, 50(5), pp.1297-317. Read More