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Incorporating Sustainability into Supply Chain
Logistics: Evolution and Future Opportunities
Hui-Nee AuYong
Universiti Tunku Abdul Rahman
(auyonghn@utar.edu.my)
Suhaiza Zailani
Azmin Azliza Aziz
University of Malaya
(shmz@um.edu.my)
(aazliza@um.edu.my)
Volume 23, Number 4
December 2017, pp. 267-294
Evolving consumer awareness has led to academic and corporate interest in
establishing sustainable supply chain logistics. Yet, this area is still in its
infancy with various potentials. This study aims to briefly review the literature
of the sustainable supply chain logistics over the last decade based on the
triple bottom line approach. A number of common challenges have been
identified. Opportunities are also highlighted in disciplines such as logistics
and occupational safety and health management. This study emphasizes the
importance of sustainable supply chain logistics. It is hoped that this study
able to provide platform for proposing future research opportunities.
Keywords: Economic, Environment, Occupational Safety and Health, Social,
Supply Chain Logistics (SCL), Sustainability
1. Introduction Globalization and competition have forced many companies to revisit their supply
chain logistics strategies. The ideologies of logistics and supply chain have been
influenced in the last few decades. Firms are increasingly replacing the traditional
objectives of their supply chain which focused on reducing costs, time and quality to
newer concepts which include responsiveness, agility and leanness (Norrman and
Jansson, 2004). According to Williams, Esper and Ozment (2002), the importance of
partnerships and strategic alliances have changed, as the industry migrates from the
traditional supply chain management approach to the e-supply chain management
(eSCM) perspective. Moreover, the focus on leadership style also provides potential
of leadership changes to reap fully the benefits of operating in the eSCM
environment. In recent years, there has been increasing awareness of the
sustainability of supply chain logistics, in which enterprises compete based on
multiple competitive performance objectives such as quality, price, responsiveness,
flexibility, and dependability. Sustainability could be referred as ability of
organizations to satisfy the needs and expectations of customers and other
stakeholders including shareholders, employees, supply chain partners and society
over the long term in a balanced way (ISO, 2009).
With various firms involved in supply chain and logistics processes, differing
quality and standards may exists, leading to conflicts in maintaining sustainability.
For instance, failure to maintain appropriate temperature and abusive storage
conditions resulting from inconsiderate actions of supply chain partners may lead to
268 International J. of Opers. and Quant. Management
safety issue in the food industry (Soosay, 2008). Hence, providing suppliers with
training on sustainability issues or partnering with them in developing sustainability
management system such as health and safety conditions might be able to reduce the
risks of poor quality or production disruptions (United Nations Global Impact, 2010).
As the field of supply chain logistics has an inherent connection to sustainability, it is
necessary for researchers to continue to enhance the extant body of knowledge to
offer theoretical and pragmatic insights to facilitate supply chain managers to meet
these challenges. As management principles and theories linked to sustainable supply
chain logistics continue to develop, there is a need to evaluate our existing position
and where we should be going as we move forward.
While various studies have been focusing on integrating the idea of sustainability
and supply chain (Seuring & Muller, 2008; Srivasta, 2007; Mollenkopf, Stolze, Tate
& Ueltschy, 2010; Winter & Knemeyer, 2013), there is little work done to explore
the role of logistics as a supply chain function towards sustainability. The annual
logistics costs of the world‘s gross domestic product was estimated at 12 per cent
and this supply chain function was ranked as second to the costs of goods sold for
most firms (Dey et al. 2011). Beyond the monetary costs, logistics process also
appears to produce up to 75 per cent of a firm‘s carbon footprint, implying a
substantial impact on the environment (The Council of Supply Chain Management
Professionals, 2008). More recent studies such as Kucukvar et al. (2016) showed that
onsite and upstream supply chains found to have over 90% of total energy use and
carbon footprint. In other words, as the findings of Silva, Fritz and Nunes (2015),
the research on sustainability is focusing on the environmental dimension while the
research on supply chain management is focusing on the economic dimension. The
combination of economic and environmental costs contributed by logistics to supply
chain management makes it a key area, creating a need to explore opportunities to
boost the logistics performance.
There are many review studies reported in the past. Hervani, Helms and Sarkis
(2005) provide an integrative framework for study, design and evaluation of green
supply chain management performance tools. Vanany, Zailani and Pujawan (2009)
suggest that supply chain risk management is a relatively ―immature‖ issue with
rapid growth of interest, therefore future research should explore collaborative risk
management and strategies could for a resilient or robust supply chain. Some
researchers focused on theory-building efforts. According to Tseng, Lim and Wong
(2015), the top-ranking aspect to consider in sustainable supply chain management is
the stakeholders. On the other hand, Seuring (2013) suggests the three dominant
approaches on the modeling side as equilibrium models, multi criteria decision
making and analytical hierarchy process. Touboulic and Walker (2015) observed that
theory-building efforts in sustainable supply chain management remained scarce,
where the predominance theories applied were macro theories, i.e. resource-based
view, stakeholder theory and institutional theory. Some others emphasized practical
relevancy. Jonsson and Holmström (2016) highlighted the four components of
practically relevant supply chain planning (SCP) theory, i.e. context, intervention,
mechanism, and outcome (CIMO). Their research concluded that past literatures
have been identifying enablers and antecedents for outcomes without reference to
implementable practices and practical contexts, which were considered insufficient
for relevancy to practice. According to Witt struck and Teuteberg (2011), signaling,
information provision and the adoption of standards are pre-conditions for strategy
AuYong, Zailani, Aziz 269
commitment, mutual learning, the establishment of ecological cycles and the critical
success factors of SSCM. Specifically, Giunipero, Hooker and Den slow (2012)
indicated that top management initiatives and government regulations drive
purchasing and supply management sustainability while investments in sustainability
and economic uncertainty are a hindrance. Nevertheless, Silvestre (2016) describes
four promising avenues for future sustainable supply chain management
investigations, namely (i) Sustainable Supply Chain Drivers and Barriers, (ii)
Sustainable Supply Chain Genesis, (iii) Sustainable Supply Chains and Innovation,
and (iv) Supply Chain Sustainability Trajectories.
Moreover, while various studies have been conducted in diverse areas of
sustainability encompassing green purchasing, ethical sourcing, carbon footprint and
reverse logistics, much of these researches focused solely on individual element,
such as environmental. Hence, this study aims to provide a review on the
development of research focusing on the integration of sustainability and the area of
logistics in the supply chain in a broader picture, based on the triple bottom line
approach. It is expected that this study able to provide platform for proposing future
research opportunities.
2. Supply Chain Logistics Elements Supply chain logistics (SCL) is better understood within the context of end-to-end
supply chain (Metro Vancouver, 2009). It could be referred as a part of the chain that
plans, implements and controls the efficient, effective forward and reverse flow and
storage of goods, services and related information between the point of origin and
consumption in order to meet the customers‘ needs (Zakaria et al. 2010). These
various activities imply that managing logistics processes in supply chains can be
complex and difficult. Moreover, with intense globalization, firms are increasingly
expanding global sourcing of materials, equipment and finished goods, leading to
huge logistics and distribution challenges, which requires a greater degree of
coordination ever before. A retailer purchasing goods from international markets for
instance need reliable partners to ensure products are delivered in a timely manner.
Continuous flow of supplied inputs is not only crucial at the final stage, yet it is also
critical in the production stage, in which shortages of raw materials could lead to
underutilization of capital intensive processing facilities and labor. Some of the
common problems arising from inefficient logistics and distribution process include
delayed product and service delivery, high product damage rate and supply
disruptions.
Figure 1 Supply Chain Logistics Functions within an End-to-End Supply Chain
Source: Sustainable Supply Chain Logistics Guide (Metro Vancouver, 2009)
270 International J. of Opers. and Quant. Management
At the heart of these issues is the fact that businesses along the supply chain need
to reconfigure their logistics operations to gain and sustain their competitive
advantage. The logistics operation has been positioned as an area in which firms
could gain strategic advantage over their competitors. The focus has been
transformed from cost effective to enhanced quality and timely production and
delivery, responsiveness, agility and leanness (Norrman and Jansson, 2004). A new
and expanded role of logistics function will be required in the new extended
manufacturing enterprises, as a firm‘s success will increasingly depend on its ability
to coordinate and integrate the production activities at geographically dispersed and
distinct locations with its logistics operations, of which this new enterprise logistics
will place a high priority on both inter-firm and intra-firm integration of logistics
activities for sustainable commercial success. This is pertinent as the integration of
sustainability concepts into logistics concerns not only diverse business activities and
processes across functional silos within an individual business entity, yet also
involve cooperation between parties across the network of relationship that form a
supply chain. For instance, Hasan (2013) reported that companies which are working
together in measuring supplier performance, developing alternative methods of
supply and increasing the recyclable content of products able to increase logistics
efficiency and serve customers better.
Figure 2 Key Focus Areas within Logistics and SCM
Source: Adapted from Kearney (1999) by Norrman and Jansson (2004)
3. Sustainable Elements The term sustainability could be defined as using resources to meet the needs of the
present without compromising the ability of future generations to meet their own
needs (The World Commission on Environment and Development, 1987). This
definition implies the necessity of firms to not only focus on meeting economic
goals, but also concentrate on the sustainment of nature‘s resources and the societies
served (Elkington, 2004). Morana (2013) also introduces a framework for
sustainable development of supply chain management (Figure 3) with details about
every aspects using the balanced scorecard (BSC) as a strategy performance
management tool.
The economic dimension is well understood, developed and widely used as a basis
to measure organizations performance e.g. profitability (Guide Jr. & Van
Wassenhove, 2009). It was found that the green supply chain management practices
lead to better performance in economic, environmental, operational, and social
AuYong, Zailani, Aziz 271
performance (Geng, Mansouri and Aktas, 2017). The environmental element
includes a set of organizational goals that deals with aims to promote greater
environmental responsibilities and encourage development of environmental friendly
technologies and business processes (Klasses, 2001). The social dimension refers to
organizations‘ ethical responsibility that may encompass activities that are not
necessarily codified into law, but nevertheless are expected of business by societal
members.
Figure 3 Sustainable Supply Chain Management (SuSCM) (Morana, 2013)
Researchers also scrutinise into the practical outcomes of these three dimensions.
Dalé, Roldan and Hansen (2011) concluded that the economic pillar is the most
important one, while the environmental pillar is becoming more relevant, and the
social one is still incipient. Ashby, Leat and Hudson-Smith (2012) suggest that the
environmental dimension and social dimension are treated separately in the literature
with limited integration, and the sustainability research provides limited practical
outputs. Varsei (2016) found that the literature has predominantly dealt with one or
two dimensions, while sustainability has been misinterpreted as green or
environmental practices with the general oversight of the social dimension.
Nevertheless, Adetunji, Price and Fleming (2008) suggest that the SSCM is
considered from the perspective of green procurement/purchasing in the construction
sector, and they observed a high culture of health and safety and environmental
consciousness due to the sector‘s high exposure to environmental, health and safety
issues. Furthermore, the results from Pereseina et al. (2014) show that intensified
international collaboration on environment and traffic safety can help sustainable
supply chain management, and the results from Chacón Vargas and Carlos Eduardo
(2016) suggest that environmental and social responsibilities are increasingly
important issues for the stakeholders of focal companies in emergent economies.
Despite the less prevalent of social and environmental elements in business practice,
these dimensions are characterized as essential business operations that could
provide economic benefits. For instance, re-organization of production process for
improved environmental performance may create opportunities for firms to innovate,
with less energy used and lower waste handling costs may be reaped (Mohezar and
Zailani, 2014).
272 International J. of Opers. and Quant. Management
Within the context of supply chain logistics, the increased outsourcing of activities
across globe and growing concerns on societal and environmental impact of
production and consumption led to renewed interest in sustainability. The business
processes which cut across different functions within a firm and across other firms
within the supply chain provide direction as to future research opportunities focused
on the integration of sustainability and supply chain logistics. For instance, the
procurement trend of U.S. apparel industry which manufactures most of their
products in developing countries presents a number of pertinent social issues
including the provision of clean and safe working conditions within suppliers‘
factories and maintenance of fair rates of pay for workers and contractors employed
by suppliers (Dargusch and Ward 2010) which have raised the importance of
sustainability concept. This concept has been put forward by NGOs, government and
multilateral institutions as a step in limiting the negative impact of firms‘ production
on society and environment. Organizational practices that lead to more sustainable
supply chains are found to be a mixture of best practices in traditional supply chain
management and also new proactive behaviours towards sustainable practices, with
the three elements aligned adequately (Pagell and Wu, 2009). Concurrently, logistics
performance of a firm depends greatly on the company‘s supply chain management
strategy and sustainability approaches such as waste elimination, supply chain risks
management and cleaner production (Govindan et al. 2014; Green, Whitten and
Inman 2008). In summary, the field of sustainable supply chains has evolved from a
perspective and investigation of standalone research in social and environmental
areas; through a corporate social responsibility perspective; to the beginnings of the
convergence of perspectives of sustainability as the triple bottom line (Carter and
Easton, 2011).
4. Research Methodology In order to establish the current state and identify opportunities for future research on
sustainable supply chain logistics, an extensive literature review was conducted. The
assessment period for the study is between the years of 1995 and 2016, representing
a 22-year time horizon for the analysis. The year of 1995 was used as a starting point
as at this time the intersection between sustainability and SCM began to appear in
literature (Seuring, 2004). Various databases including EBSCO, Emerald, Taylor and
Francis, Science Direct and Wiley Inter-Science were utilised to identify relevant
articles. Among the journals selected are
Applied Energy
California Management Review
Corporate Social Responsibility and Environmental Management
European Journal of Operational Research
IIMB Management Review
International Journal of Physical Distribution and Logistics Management
International Journal of Production Economics
Journal of Cleaner Production
Omega
Resources, Conservation, and Recycling
Supply Chain Management: An International Journal
Transportation Research Part E: Logistics and Transportation Review
AuYong, Zailani, Aziz 273
In selecting the articles, a decision was made to focus on three different
disciplines. They were logistics/SM, operations/production management and
social/environmental management. Over one hundred articles were reviewed and
they were classified based on the triple bottom line approach. Under the economic
sustainability, all literature dealing with economic applications such as financial
performance, cost reduction, competitive advantage and economic benefits were
placed. All literature that concern with carbon footprint, green logistics, recycling
and emission reduction were grouped as under the environmental classification.
Social approach consists of literature that highlights issues such as fair trade, human
rights, social responsibility and labor practices.
5. Findings and Discussions Our findings indicate that the number of publications in the domain of sustainable
logistics supply chains is growing with years, implying that more researchers are
undertaking research in this area. Nevertheless, most of the articles that were
examined were published in the single domain with more focus were given on
environment and economic dimensions, rather than sustainability as a holistic
integrated concept. This is expected with the heightened consumers concern on
environmental issues relating to product-and-process derived pollution. For instance,
a regulation was implemented globally over relatively short timeframe to phase out
chemicals with Ozone Depleting Potential during 1990s (Linton, 2007). A steady
increase on public recognition of global warming as environmental issue could also
represent the on-going development in this area of sustainability. Yet, an increasing
number of recent publications were found to posit sustainability issue on holistic
perspective, suggesting the arising of subtle movement towards a broader
examination of sustainability in the literature.
Table 1 Classification of Sustainable SCL Research
Category Author
Internal: Economic Factors
Norrman & Janss on (2004), Kleind or fer & Saad (2005), Narasimhan &Talluri (2009)
External: Environmental
Factors
Wu & Dunn (1995), Enarsson (1998), Guide & Srivastava (1998), Beamon (1990) ,
Walton et al. (1998), Hand field et al. (2002), Arena et al.
(2003), Sarkis (2003),
Vachon & Klassen (2006b), Matos & Hall (2007), Srivastava
(2007), Vachon (2007),
de Brito & van der Laan (2010),Gold et al. (2010), Sarkis et al.
(2010)
External: Social Factors Cantor (2008), Hutchins & Sutherland (2008), Halldorsson et al.
(2009)
5.1 SCL Sustainable Economically
Literatures on SCL sustainable economically are mainly focus on supply chain risks.
Since supply chains involve hundred if not thousands of companies over several
tiers, there are significant risks inherited owing to the failure of environmental or
social performance and disruptions of operational processes. In line with this, several
studies in this dimension had attempted to categorise the supply chain risks. For
274 International J. of Opers. and Quant. Management
instance, Johnson (2001) divided supply chains risks between supply risks (e.g.
capacity limitations, currency fluctuations and supply disruptions) and demand risks
(e.g. seasonal imbalances, volatility of fads, new products). From the other point of
view, Zsidisin et al. (2000) focused on supply risks related to design, quality, cost,
availability, manufacturability, supplier, legal, and environmental, health and safety.
According to Chopra and Meindl (2007), all supply chains were subject to some
amount of risk, including supply disruptions and delays, demand fluctuations, and
price fluctuations; while Narasimhan and Talluri (2009) characterised supply chain
risk as a disruption or negative outcome triggered by unpredictable and/or uncertain
events. A more recent study conducted by Vilko and Hallikas (2012) analyzed the
risk impacts in terms of delays in the supply chain.
Within the supply chain context, a second category of literature focus on
discussing ways to mitigate the risks associated with sustainable SCL practice.
Braithwaite and Hall (1999) emphasized that the relationship between corporate
strategy, risk and the implications for supply chain management are poorly
understood and in need of further exploration. Building on this perspective, Souter
(2000) and Christopher et al. (2002) further stressed that companies should not only
focus on their own risks: they must be able to identify and assess the potential causes
or sources of those risks at every significant link along the network. Conventional
strategic management, which focuses on individual firm as the competitive unit in
the industry, is no longer a key to a sustainable competitive advantage. Achieving
competitiveness and excellent firm performance requires a supply chain which is
able to respond quickly to any fluctuations in customer demands and uncertainty
occurring along the network. Therefore, successful supply chain logistics
management requires a transformation; from managing individual functions to
coordinating and integrating key business processes with chain members.
Christopher and Peck (2004) argued that as supply chains become more complex
as a result of global sourcing, supply chain risk increases. Hence, the challenge to
business was to mitigate that risk through creating more resilient supply chains. In
this perspective, resilience implied flexibility and agility, and its implications on
supply chain extend beyond process redesign to fundamental decisions on sourcing
and the establishment of more collaborative supply chain relationships based on far
greater transparency of information. A number of focal firms for instance have
introduced supplier evaluation schemes, in which suppliers are assessed on how they
deal with environmental and social issues. This approach serves as a guarantee that
the supplier will act according to the standard, thus help avoiding related sustainable
risks. This was highlighted in 37 papers, in which environmental and social
performance were seen as the prerequisites for suppliers to be included as part of the
supply network. Several authors have reported that in the textile industry, producers
offering organic cotton products had to ensure that they had such supplier before
entering the business. This prompted producers to allocate considerable investments
at partner locations as a means to develop supply structure and help improve
production facilities and processes, leading to reduced supply risks. Notwithstanding
this, there seems to be a need for deeper information flow along the supply chain, in
which suppliers have to obtained detailed insights into subsequent stages of life-
cycle.
Bhamra, Dani and Burnard (2011) identified areas for advancing resilience
research, in particular: the relationship between human and organizational resilience;
AuYong, Zailani, Aziz 275
understanding interfaces between organizational and infrastructural resilience. With
regard to supplier management, the result from Harms, Hansen and Schaltegger
(2013) reveals that Germany companies mainly implement risk-oriented sustainable
supply chain management (SSCM) strategies. Furthermore, Mensah, Merkuryev,
Longo (2015) developed a supply chain resilient strategy with appropriate strategies
and tools namely, six sigma practices, lean production, flexibility and a strong
corporate culture, while Hohentein, et al. (2015), and Ansari and Kant (2017) argued
that most research has been qualitative. Authors such as Brandenburg et al. (2014)
evaluated developments and directions of sustainable supply chain management, and
has provided a content analysis on quantitative, formal models that address this
research area.
On the other hand, Kleindorfer and Saad (2005) used operations principles, such as
supply chain optimization, supply chain agility, contingency planning, collaborative
sharing of information in the supply chain, flexibility and modularity, and total
quality management (TQM) as the building blocks to effectively manage disruptive
risk in a supply chain. Christopher and Lee (2004) suggest that the element to
mitigate supply chain risk is improved ‗end-to-end‘ visibility. Ghadge, Dani and
Kalawsky (2012) identified future research agenda in supply chain risk management
include behavioural perceptions, sustainability factors, risk mitigation through
collaboration contracts, visibility and Traceability, risk propagation and recovery
planning, industry impact and holistic approach.
Another stream of research in economic dimension focusing on the discussion of
supply chain logistics performance. According to Spekman, Kamauff Jr and Myhr
(1998), firms must select both partners and supply chain strategies carefully. This is
due to coordination and collaboration are different which require different levels of
trust and commitment, hence different outcomes, while information technology is
key to the development of an integrated supply chain. Findings from Skjoett-Larsen
(2000) concluded that third party logistics (3PL) were not merely a means to cost
efficiency, but also as a strategic tool for creating competitive advantage. The result
of Pradabwong et al. (2017) highlights the role of intra- and inter-organizational
practices, and clearly demonstrates the joint role and impact of business process
management (BPM) and supply chain collaboration (SCC) respectively.
Three aspects relating to risks were commonly mentioned in the literature as
barriers for implementing sustainable supply chain logistics - higher costs,
coordination efforts and complexity, and missing communication along the network
(Seuring and Miller, 2008). Number of studies has demonstrated a link between
sustainability in SCL with lower costs (e.g. Roa and Holt 2005). Yet, extending the
supply chain to include issues such as recycling and refurbishing adds new level of
complexities which in turn could increase costs at least in the short term. Issues such
as the uncertainty associated with the recovery process with regards to quality,
quantity and timing of returned products as well as the collection and transportation
of these products, containers, pallets and packaging reflect increase costs from
society to supply chain partners. Despite that the relationship between economic
performance and environmental are observed, long-term studies are not yet existed to
provide a comprehensive insights. Performance of the logistics function has often
been mentioned in the context of common indicators such as quality, speed,
dependability, flexibility and cost. The impact of social dimension on economic
performance is further rarely addressed in the literature.
276 International J. of Opers. and Quant. Management
Table 2 Economics Initiatives Based on Sustainable SCL Research
Category Author
Transparency of Information Christopher & Lee (2004), Christopher and Peck (2004)
Total Quality Management (TQM) Kleindorfer and Saad (2005)
Supply disruptions and delays Chopra and Meindl (2007)
Demand Fluctuations Chopra and Meindl (2007)
Price Fluctuations Chopra and Meindl (2007)
SC Risk Narasimhan and Talluri (2009), Vilko and Hallikas (2012), Harms, Hansen and
Schaltegger (2013)
Key drivers: Selection of partners / strategies,
role of intra- and inter-organizational
practices
Spekman, Kamauff Jr and Myhr (1998),
Skjoett-Larsen (2000), Pradabwong et al.
(2017)
5.2 SCL Sustainable Environmentally
During the last two decades, purchasing and supply chain managers have seen the
integration of environmental issues embedded in related standards into their daily
tasks (Aronsson and Brodin, 2006). Such triggers have increased interests in green
supply chain management (GSCM) literature. Srivastara (2007) defined green supply
chain management (GSCM) as integrating environment thinking into supply chain
management, including product design, material sourcing and selection,
manufacturing processes, delivery of the final product to the consumers, and end-of-
life management of the product after its useful life. As for the key driver that
promote green supply chain, manufacturers in UK perceive the greatest pressure to
improve environmental performance is through legislation (Holt & Ghobadian,
2009).
Within this area of research, several key themes have emerged including the
concepts of green design, green operations, reverse logistics, waste management and
green manufacturing (Guide, and Srivastava, 1998; Srivastava, 2007). Several
authors have discussed techniques such as life cycle assessment in assisting firms to
design products that are able to minimize environmental impact over its useable life
and afterwards (Arena et al. 2003; Beamon 2008; De Carvalho, 2012;
Khiewnavawongsa and Schmidt, 2008). This field of research however, are found to
be interfacing with the engineering and reverse logistics while considering resource
depletion as environmental impacts. The management of sustainability through eco-
design has avoided depletion of resources and increased the value created by
individual products. For instance, Lee and Lam (2012) suggest that the use of
information system and technology for reverse logistics enhances the customer's
business process and provides value-added process for customer retention. Yet, the
challenge for the producer of the product is to develop offerings that enable them to
capture more of the product value. The degree to which a product can be reused,
remanufactured, recycled, incinerated or dispose of depends greatly on the product
design. For instance, high lead content in cathode ray tube and electronic products
results in difficulties for disposal process owing to the toxicity of lead (Linton et al.
2007). Such issue has been discussed by several authors (e.g. Gold et al. 2010; Ryan,
2010; Vachon, 2003; Sarkis et al. 2010; Rahman and Subramaniam, 2011).
AuYong, Zailani, Aziz 277
Ruamsook and Thom chick (2012) suggest that the most visible and
environmentally damaging element of supply chains and logistics activities is freight
transportation, and the two issues pertinent are greenhouse gas emissions and their
dependence on finite petroleum resources. In line with these research, substantial
number of papers have also focused on the carbon footprint issue as an ecological
impact (Ngo and Mohanta, 2010; Srivastava, 2008; McKinnon, 2010; Hsu, et al.
2013, Hogget 2014). A carbon footprint could be defined as the total set of
greenhouse gas emission in the form of CO2 that are produced directly or indirectly
by an individual, event, organization or product (Carbon Trust, 2007). Wu, Dunn and
Forman (2012) suggest that energy efficiency, fuel efficient, and fuel saving are
among the most mentioned in green supply chain. Rossi et al. (2013) put three
bodies of knowledge, i.e. logistics service providers, eco-efficiency and logistics
innovation into a single framework of eco-efficiency innovation. Furthermore, study
from Byrne, Ryan and Heavy (2013) shows though many organizations are willing to
implement sustainable logistics practices to address the environmental impact, there
are concerns of hidden costs and risks associated with the implementation.
Another stream of literature focused on green purchasing. In particular, Malian et
al. (2012) found that environmental purchasing and sustainable packaging has a
positive effect on economic, social and operational performance. In this respect, the
integration of sustainability concepts into supply chain logistics has also been
discussed in the literature from regulatory and monitoring aspects (Hadfield et al.
2002; Zhu, Saris & Gang, 2005; Tunic, 2006; Cabana, Ramudhin & Paquet, 2012)
discussed environmental regulations. Changes in policy might force manufacturers to
explore new opportunities and change existing practices as a means to improve the
sustainability of supply chain logistics function. Often, multinational corporations
(MNCs), large retailers and brand name firms play a significant part in controlling
and taking the responsibility of their partners' environmental practice, enabling them
to monitor the supply chain logistics function over long distances without owning the
firm. Management systems play a pertinent role in this regard and could serve as the
minimum performance required. They mainly center on environmental management
systems namely ISO 14001. Mamic (2005) for instance had gained insights on how
such standards are implemented in the multinational corporations and their suppliers
firms in the retail industry. Building on this idea, comprehensive supplier audits are
thus required in green purchasing, which might again trigger further partnering as an
effort to joint process improvement. In a more recent study, Pimenta and Ball (2015)
found that the diffusion of environmental sustainability practices across
manufacturing supply chain is sharply related to the purchasing, performance
assessment and collaboration. The upstream supply chain logistics management
activities are better designed with careful considerations of environmental aspects in
regards to the products and processes. Glover et al. (2014) suggest that cost
reduction is the dominant logic to pursue a sustainable agenda. Particularly, the
results from Liu and Chang (2017) show that both closed-loop orientation (CLO) and
green supply chain management (GSCM) have positive effects on the environmental
performance and economic performance and that CLO positively impacts the level of
implementation of GSCM.
Nevertheless, Amol and Ashish (2016) suggest that to achieve environmental
sustainability, behavioural issues need to be addressed, while, practices of reverse
logistics, closed-loop supply chain management and waste management need special
278 International J. of Opers. and Quant. Management
focus. Others studies focused on environmental risk management. For example,
Manuj and Mentzer (2008) looked into the applicability of six risk management
strategies with respect to environmental conditions in a global manufacturing supply
chain context, namely postponement, speculation, hedging, control/share/transfer,
security, and avoidance. Specifically, Wong, Wong, and Boon-itt (2015) identified
four green supply chain integration (GSCI) practices in internal, supplier, customer,
and stakeholder.
Table 3 Environmental Initiatives Based on Sustainable SCL Research
Category Author
Green / Eco- Design
Eltaeb and Zailani (2009)
Green Purchasing Enarsson (1998), EltaebandZailani (2009), Zailani et al. (2012)
Reverse Logistics
Byrne and Deeb (1993), Shih (2001), Geyer and Jackson (2004),
Nagorney and Toyasaki (2005), Min et al. (2006), Srivastava and
Srivastava (2006), EltaebandZailani (2009), Sarkis et al. (2010), Rahman and Subramaniam (2011)
Life-cycle analysis Schmidt (2008), Matos and Hall (2007)
Green Marketing Shang et al. (2010)
Resource /
Transaction Costs
Wu and Dunn (1995), McKinnon (1998), Rodrigue, Slack and
Comtois(2001), Seuring(2001), Rosen et al. (2002), Vachon (2003), Gold
et al. (2010), Ryan (2010), Glover et al. (2014)
Environmental
Impacts /
Waste management
Murphy et al. (1994), McKinnon (1998), BearingPoint (2008), Srivastava
(2008), Ngo and Mohanta(2010), Wu, Dunn and Forman (2012), Hsu, et
al. (2013), Hoggett (2014)
Environmental risk
management Manuj and Mentzer (2008)
Key drivers Holt and Ghobadian (2009), Wong, Wong, and Boon-itt (2015), Amol and
Ashish (2016)
5.3 SCL Sustainable Socially
Being a socially responsible organization requires a firm not to only concern on
improving profits, yet to also maximize societal welfare, by participating in activities
that are not necessarily codified into law, but nevertheless are expected by
community. Example of such activities includes educational support, economic
development, job training, employees volunteering, healthcare and housing. For
instance, in the transportation sector, Deakin (2001) has introduced sustainable
transportation concept, which focusing on meeting the mobility needs while
preserving and enhancing human and ecosystem health, economic progress and
social justice of existing as well as future. Carter and Jennings (2002) has further
explored the notion of sustainable warehousing, which include activities such as
proper storing and disposing of hazardous materials, donation of excess inventory to
local people and safety training of forklift operations. Specifically, Hutchins and
Sutherland (2008) further proposed four social performances that businesses should
establish. Firstly, labor equity expresses the distribution of worker compensation
within a company. Secondly, health care was needed to characterize a corporation‘s
role in providing or helping the health care of companies‘ staff as well as their
families. Safety refers to the safety of the workplace within a company. Lastly,
AuYong, Zailani, Aziz 279
philanthropy described financial support that companies offer to community and to
greater community.
Within this area of research, few studies have been conducted to explore
antecedents of socially sustainable supply chain logistics. The starting points are
external force and incentives established by different groups, with stakeholders form
the widest category. Motivation to satisfy the stakeholder demands emerge from the
fact that addressing stakeholder needs can be correlated with a firm‘s survival,
economic well-being and competitive (Mitchell et al. 1997). León and Juan (2014)
argue that the increasing sustainability awareness within society is pressuring
Logistics and Transportation (l&t) companies to integrate CSR principles into their
strategies and policies. For instance, De Brito, Carbone and Blanquart (2008) pointed
stakeholders' concern for consumers' health as prerequisite for sustainable logistics
solutions. They advocated that certified retailers selling organic cotton products need
to explicitly advertise traceability function along the chain to assure customers that
their products do not contain genetically modified cotton, which is associated with
health hazards. In an earlier study, McIntyre (2003) suggested that those firms that
could respond to sustainability issues would generally be more proactive and are able
to meet changing customer requirements and market forces, hence capable of
creating an innovative and distinctive value chain. Notwithstanding these, all modes
of government control in a form of legislation or economic incentive are of great
relevance. Castka and Balzarova (2008) argued that organizations would adopt the
social responsibility agenda for strategic, altruistic or coercive reasons, as this will
facilitates firms in avoiding fines, penalties and public protest campaigns, leading to
higher likelihood of long-term survival. Community has been highlighted as one of
the main social issues in sustainable supply chain (e.g. Maloni and Brown, 2006;
Borrella et al., 2012). Specifically, Marshall et al. (2015) identify different types of
social and environmental supply chain practices, and uncover measures that bringing
in new stakeholders into the decision-making process.
Since a failure of social responsibility aspect will not only affect individual firm,
focal companies often passes the pressure on to suppliers. Some key actors,
commonly consisting of multinational corporations (MNCs), large retailers and
brand-name firms take control and responsibility of environmental and social
practices of their suppliers and third party logistics providers in determining what
should be produced, how and by whom (Anderson and Skjoett-Larsen, 2009). In
return, Soosay (2015) suggests that it is the downstream players that reap most of
these benefits and enhanced reputation. In a similar vein, Cantor (2008) urged the
importance of firms across all echelons of the supply chain to improve their safety
practices. This is reflected by study conducted by Kiathulthorn and Sathapornwanit
(2012), which demonstrated that all Third Party Logistics (TPL) providers are
subjected to comply with the buying company‘s code of CSR conduct laid down.
Andersen and Skjoett-Larsen (2009) suggest that practising CSR in supply chains
requires that it is embedded within the entire organization. Specifically, Carter and
Jennings (2002) argued that the third party logistics providers should take their
drivers‘ quality of life into account, such as operating schedules that permit drivers‘
adequate time at home, and paying adequate salary; where safety issue is also
concerned such as adequately maintained vehicles as well as properly cleaned trailers
and tankers. Furthering these thoughts, Andersen and Skjoett-Larsen (2009) argued
that embedment of CSR within the focal firm and its suppliers required employee
280 International J. of Opers. and Quant. Management
training and sharing of experience, training of key personnel at the supplier level,
positive incentives for suppliers in the form of long-term contracts and enlarged
purchasing orders, and regular auditing of suppliers‘ performance. Particularly, the
importance of supply chain talent management issues have been emphasized by
Stank, Dittmann and Autry (2001), and Hohenstein, Feisel and Hartmann (2014).
Table 4 Social Initiatives Based on Sustainable SCL Research
Category Author
Labor Equity Carter (2004), Hutchins and Sutherland (2008), Van Horne Institute(2014)
Health Care Hutchins and Sutherland (2008)
Safety Carter (2004), Hutchins and Sutherland (2008)
Philanthropy Hutchins and Sutherland (2008)
Community Maloni and Brown (2006)
Key drivers Stank, Dittmann and Autry (2001), Andersen and Skjoett-Larsen (2009),
Hohenstein, Feisel and Hartmann (2014), Marshall et al. (2015)
5.4 Discussion
The examination and classification of the extant literature illustrate that there is
sufficient activity and on-going development in the domain of sustainable logistics
supply chain. As such it is imperative and valuable for researchers to periodically
evaluate the progress and identify any additional opportunities. As firms are faced
with pressures to proactively tackle the sustainability issues in their logistics
activities, it is pertinent for researchers to continue seeking ways to support this
managerial effort.
Despite the rigorous development of sustainability issues in logistics operations,
the discussion is still in its early stage. One may argue that it is premature. While
there have been many examples of environmental and public health concerns,
consumers remain sceptic around the sustainability issue with the suspicion that so-
called ―green washing‖ is commonplace. Although consumers declare that
sustainability in products is important to them, there is little evidence that associate
this element with buying habits (Harrington, 2011), offering a major avenue for
future research. One implication of sustainability for researchers therefore is to assist
firms in developing new estimation tools that could be adapted to existing techniques
as an effort to address the new questions of sustainability in supply chain logistics.
Total costs for instance, must include the effects of resource depletion and the
generation of by-products that are neither captured nor used. While it is apparent that
integrating sustainability into supply chain logistics would provide a broad range of
strategic benefits and may not necessarily reflect in financial gains, only few studies
examine firm performance from this perspective. For instance, companies that
reduce the packaging not only achieve savings in cost but also embrace sustainability
into branding. And the fact that sustainability advances quickly become
commoditized is a positive driver for innovation (Harrington, 2011). Establishing the
missing link to the economic dimension therefore would seem to be imperative in
assuring a long-term view towards the integration of sustainability in logistics
operations. Similarly, there is also value for increasing understanding as to how the
three dimensions - social, economic and environment interact and support each other
AuYong, Zailani, Aziz 281
in the pursuit of economically viable and sustainable supply chain logistics,
highlighting opportunities for taking a more holistic approach.
The literature review highlights that there is growing recognitions of the role
played by external pressures and incentives established by different groups as
influencing factors that trigger firms to embrace sustainable SCL. Changes in policy
and legislation introduced by many countries and jurisdiction that address
sustainability issues have become influential proponent for manufacturers and
researchers to explore the sustainability across logistics operations. Yet, the
transformation could also flow in the opposite direction. Research and practice in
this area could also impact policy development by presenting alternative scenarios
for the expansion of sustainable SCL. For instance, the high lead content in cathode
ray tube and electronic products which has resulted in complicated disposal
decisions, have led to special regulations being introduced (Linton et al. 2007).
Policies have been developed to divert these products from being disposed at
municipal landfills to the reused and remanufactured process with the intent of
integrating led used into new products. Having illustrated the effects of integrating
sustainability in SCL on policy, desired outcomes are not only affected by policy, but
also requires changes in the policy, creating a need for researcher to consider looking
into this issue.
Based on the analysis on the classification matrix, much of the academic
discussion in the research area point towards the need for cooperation among supply
chain partners in addressing sustainable supply chain logistics issues. The focus on
optimising operations through the development of sustainability has moved from a
particular firm to the entire supply chain. Specifically, there appears to be an
opportunity for researchers to examine this issue beyond focal firms' perspectives to
include external parties. For instance, apparel manufacturers such as Nike and
Adidas have been blamed for inhumane working conditions and contaminations of
the local environment, problem occurring during the production of their clothing at
suppliers' plants. Behavioural issues such as trust for instance, is crucial across all
members in the network and must be guaranteed from the input suppliers until the
end customers in pursuit if sustainable development.
Table 5 Major Research Strands Representing the Causal Linkages
to the Future Research Scope
Issues Opportunities / Constraints
Need Managerial Measurement and
Control Opportunities to Develop new Estimation Tools
Growing Influence of Legislation Opportunities to offer New Products or Services
Need Cooperation among Supply
Chain Partners
Constraints of Talent Management of behavioural
issues to be addressed
6. Conclusions Increasing consumers' interests in environment-friendly product lifecycle and
societal concerns has led to the integration of sustainability in managing business
operations. Nevertheless, research that attempts to discuss sustainable SCL is rather
limited. Within the existing literature, researchers have studied different angles to
sustainable SCL. The industry has developed beyond internal aspects of risk controls
282 International J. of Opers. and Quant. Management
that ensure economical interest, to intense attention on environmental sustainability,
and currently focuses on social aspects such as occupational safety, labor equity,
freedom of association, anti-corruption or CSR. These approaches are expected to be
further analyzed. Specifically, it is imperative to understand the types of sustainable
SCL, and the appropriate initiatives. As the sustainable SCL research is growing
rapidly, we see continual progress in building knowledge and insight. Despite the
abundant theories, concepts and practices of sustainable SCL available in the
literature, this issue still remains inconclusive, due to the theoretical and
methodological aspects identified in the literature. This paper highlights several
general as well as more specific opportunities for future research-based on a
literature-based classification matrix built on the three sustainable dimensions. In the
areas of sustainable supply chain logistics, there is growing role played by external
parties, on top of inclination towards cooperation among supply chain partners.
Nevertheless, Logistics Bureau (2017) gives alerts of the 6 supply chain trends
cannot be ignored, namely (i) Warehouse Robotics in the Supply Chain, (ii)
Autonomous Road Transportation, (iii)The Blurred Line Between Logistics and
Technology Services, (iv) The Appeal of Supply Chain Social Responsibility, (v)
The Race for the Last Mile, and (vi) The Rise of the Virtual Logistics Team.
Specifically, based on Accenture‘s Strategy Supply Chain Workforce Research 2016,
supply chain executives believe digital advances will augment the supply chain
workforce, most significantly in the following areas: 65%: More forward looking,
strategic decisions to support business goals, 51%: More data-driven decision
making requiring more analytical skills, and 46%: More automation of transactional
activities and exception handling (Kreutzer, Meyer and Puertas, 2017). Hence, the
influence of disruptive technology to sustainable supply chain management is crucial
in the coming decade, not only in terms of efficiency but survival of the fittest.
Social responsibilities to the community are increasingly important issues in these
days of technology that is changing the global workplace rapidly, and as artificial
intelligence (AI) causes job losses and threatening the workforce, very likely the
government will have to provide a guaranteed basic income to the affected people. It
is hoped that through the understanding of existing literature and suggested research
opportunities presented, researchers are better equipped to proactively conduct future
sustainable SCL research, which would greatly facilitate firms and society in
addressing such issue.
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About Our Authors
Hui-Nee AuYong achieved her Bachelor of Science (Hon.) at Universiti Putra
Malaysia, MA at University of Tsukuba and Ph.D. at University of Science
Malaysia. She is an Assistant Professor and Dean of the Faculty of Business and
Finance, Universiti Tunku Abdul Rahman. She was certified safety and health officer
and a Member of the Malaysian Institute of Management. She is author of more than
60 peer-reviewed conference and indexed journal papers. Her research topics include
economics and operations management.
Suhaiza Zailani has received her MSc and PhD in Management Science from
Lancaster University. She is a Professor of Supply Chain with University of Malaya,
and Director of the University Malaya Entrepreneurship Centre. She has published
more than 100 papers in various citation indexed journals on Operations
Management. Her current ISI H-Index is 7, Scopus H-Index is 12 and GS H-Index is
18. She has won USM Sanggar Sanjung 2012. She has 74 MBA, 3 MA, 2 DBA and
16 PhD students successfully completed their dissertations under her supervision.
Azmin Azliza Aziz has received her Bachelor of Science (Industrial Mathematics)
from Universiti Teknologi Malaysia, Master of Applied Statistics from Macquarie
University and Ph.D. in Operations Research from University of Warwick. She is a
Senior Lecturer at University of Malaya. She is author and reviewer of more than 20
peer-reviewed conference and indexed journal papers. Her research interest includes
the area of transportation optimization, quantitative analysis and recently working on
halal logistics. She has 6 master students successfully completed their dissertations
under her supervision and currently supervising 5 PhD students.
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