SUSTAINABILITY AND THE SUPPLY CHAIN

After reading this chapter, you will be able to 

Discuss the challenge to sustainability posed by the tragedy of the commons. 

Understand the role of incentives for successful sustainability efforts. 

Sustainability has become a key priority in the design and operation of supply chains in the twenty-first centnry. A focus on sustainability allows a supply chain to better serve more environmentally conscious customers while often improving supply chain performance. In this chapter, we explore the importance of sustainability, some challenges to designing and operating more snstainable supply chains, and the role of different supply chain drivers in improving snstainability. 

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Chapter 17 Sustainability and the Supply Chain Pricing of Emissions... 

In market economies, however, companies are confronted with competition when selling to customers and they use the market competition when purchasing from suppliers. On the other hand, market constellations can change, when many customers compete for limited resources or raw materials provided by few large suppliers. In these situations, prices, values as well as ensured profitability within each company are decisive for the sustainable survival of the business. While the supply chain emphasizes the supply aspects including ensured supply and availability (Corsten 2001, p. 94), an essence of Porter s value chain underlining the value focus and the supply chain concept is required as basis for the study. 

Saicheua, V., Cooper, T., Knox, A., 2012. Public Understanding Towards Sustainable Clothing and the Supply Chain, macromarketing.org. 

As awareness and scientific understanding of the environmental and social issues facing the ATs industry has expanded, stakeholders within the apparel industry have developed various tools and indices for measuring different aspects of sustainability within the supply chain. Two of the first leading tools were the Outdoor Industry Association s Eco Index (OIA, 2014) and Nike s Apparel Environmental Design Tool (Nike, 2010), both of which evolved into the Sustainable Apparel Coalition s (SAC) Higg Index. 

In the creation of value networks, the company s focus changes. It requires a holistic view. It becomes less tactical and more focused on driving long-term sustainable value. The supply chain can become the engine of growth. The network becomes the enabler. It is no longer about money moving from one company to another. Instead, it is a discussion of value. 

Managing the returns channel as a business process offers the same opportunity to achieve a sustainable competitive advantage as managing the supply chain from an outbound perspective (Clen-denin 1997). Effective process management of the returns channel enables identification of productivity-improvement opportunities and breakthrough projects. 

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