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Case studies of 10 exemplar firms are used to build a coherent and testable
model of the elements necessary to create a sustainable supply chain. The
cases build on previous research by examining the chain as an entirety, by
explicitly examining both the social and environmental outcomes of the
chain's activities, and by explicitly asking what these exemplar organizations
are doing that is unique in regards to managing their supply chains in a
sustainable manner. The analysis suggests that the practices that lead to a
more sustainable supply chain are equal parts best practices in traditional
supply chain management and new behaviors, some of which run counter to
existing accepted "best" practice.
INTRODUCTION
Interest in green and now sustainable supp(y chains has
been growing for over a decade and the topic is becoming
mainstream (Corbett and Kleindorfer 2003; Corbett and
Klassen 2006). However, there are still fundamental issues researchers need to address in order to offer managers prescriptive models of how to create sustainable
supply chains.
First, much of the existing research has been focused on
the _question of whether it pays to be green/sustainable
(e.g., Russo and Fouts 1997; Pagell, Yang, Krumwied and
Sheu 2004). While important, many believe this question is becoming irrelevant because it is increasingly clear
that organizations will need to deal with environmental
and social issues (e.g., Kleindorfer, Singha and Van
Wassenhove 2005; Corbett and Klassen 2006).
Second with some notable exceptions (see for instance,
Zhu and Sarkis 2004; Zhu, Sarkis and Lai 2008), the
development of the field has tended to focus on studies
of a single function or activity as opposed to looking at
the entire chain (Rao and Holt 2005). As we review the
literature it seems as if almost every study posits a
different task/behavior/investment as being the key to
being sustainable.
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37
1. What are leaders in sustainable supply chain management doing that is different from leaders in traditional
supply chain management?
2. Are there patterns of behaviors across these exemplar
firms that can be used to build a theoretical and testable model of an integrated sustainable supply chain?
LITERATURE REVIEW
Discussions of sustainability are driven by the basic
notion that a supply chain's performance should be
measured not just by profits, but also by the impact of
the chain on ecological and social systems (Gladwin,
Kennelly and Krause 1995; Starik and Rands 1995;
Jennings and Zandbergen 2005). To be truly sustainable
a supply chain would at worst do no net harm to natural
or social systems while still producing a profit over an
extended period of time; a truly sustainable supply chain
could, customers willing, continue to do business forever. As far as we know, no such supply chain exists today.
And none of the exemplars we studied claim to have
arrived at true sustainability. Instead most are significantly more sustainable than others in their industry. So all
things being equal these more sustainable organizations
could continue in business for far longer than their average competitor.
A sustainable supply chain is then one that performs
well on both traditional measures of profit and loss as
well as on an expanded conceptualization of performance that includes social and natural dimensions. Such
a conceptualization of performance is generally referred
to as the triple bottom line (Elkington 1999; Kleindorfer
et al. 2005). The triple bottom line concept has its detractors because it is often used with a narrow accounting
focus (Vanclay 2004) and/or as a means for companies to
avoid looking at their supply chain as a single system that
simultaneously impacts communities, economies and
the environment (Johnson 1991 ). These are valid criticisms but for the purposes of this manuscript we take the
perspective that the triple bottom line is a tool to measure an organization's progress toward the end goal of
being truly sustainable.
If a sustainable chain is one that performs well on all
elements of the triple bottom line, sustainable supply
chain management is then the specific managerial actions that are taken to make the supply chain more
sustainable with an end goal of creating a truly sustainable chain. When we refer to a sustainable supply chain
we are in essence referring to an outcome for that supply
chain. When we discuss sustainable supply chain management we are referring to managerial decisions and/ or
behaviors. In an attempt at parsimoniously enhancing
understanding of the sustainable supply chain management literature we have condensed the literature review
into three themes.
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Ten Exemplars
I
suggests that TQM and other continuous improvement
focused operational philosophies may be most useful for
making an existing supply chain more sustainable.
However, the same operational philosophy may become
a hindrance when the organization needs to radically
change what they do to become truly sustainable.
Two best practices in purchasing that have received
significant attention in regard to -sustainability are collaboration and certification. Collaborative behaviors
with suppliers and customers are a component of creating an environmentally sustainable supply chain (Carter
and Carter 1998; Zhu and Sarkis 2004). Research suggests a few specific behaviors to support collaboration
in sustainable supply chains. Goodman (2000) posits
that there have to be incentives to reduce suppliers' risks
from engaging in the new/novel collaborative processes
required by sustainability. And Rao and Holt (2005)
suggest that firms need to educate their suppliers and
have their suppliers educate each other.
A second fundamental purchasing activity that has received attention in the literature is supplier certification.
Certification is one of the few areas where social issues
such as child labor and unsafe working conditions
are addressed in the sustainable supply chain management literature (e.g., Teuscher, Gruninger and Ferdinand
2005).
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Integration
The third theme is that to create a sustainable chain
managers need to integrate sustainability goals, practices
and cognitions into day-to-day supply chain management. Responsibility for sustainability cannot be given to
a separate entity within the organization; it must be part
of everyone's job, starting with top management.
The beliefs and behaviors of top management as they
relate to sustainability have been the subject of significant
study. There are numerous studies linking a proactive
stance toward the environment to efforts to become
more sustainable (e.g., Klassen and Whybark 1999).
There is also evidence that this proactive stance needs to
be backed with a tangible commitment to sustainability,
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39
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METHODS
The three themes in the literature then provide some
guidance as to what may matter as organizations attempt
to make their supply chains sustainable. However, the
literature is incomplete and it is clear that there is a need
to understand what elements are truly unique to sustainable supply chain management, how these elements
fit together with each other and existing best practices,
and why this bundle of practices leads to sustainability; a
need to build theory (Handfield and Melnyk 1998). The
present study returns sustainable supply chain management research to theory building via a series of case
studies of exemplars in the move toward more sustainable supply chains.
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Sample
Our fundamental research question asks what the
leaders in sustainable supply chain management are
doing that is different. Therefore a focus on exemplars is
needed. In addition, while the literature has examples of
single case studies of leading edge firms (e.g., Goodman
2000) to the best of our knowledge no one has examined
multiple exemplars simultaneously to build propositions
based on patterns of behavior.
Exemplars are organizations that are well ahead of
their industry on either social and/or environmental
performance while still maintaining economic viability.
Identifying exemplars in sustainable supply chain management is complicated because rigorous metrics of environmental and/or social performance are absent in
many industries (Specter 2008). In addition, claims of
sustainability progress are often little more than "greenwashing" (Preuss 2005). Given these constraints we
identified a pool of potential exemplars using a range of
data, all of which came from third parties.
Some of the potential respondent organizations had
received third party certification and/or recognition. For
instance, one firm was the first in their industry to receive
the EPA's Green Seal, while others had certifications from
NGO's such as the Rainforest Alliance. Other possible
respondents were identified because they had been selected by state environmental regulators as examples to
show other organizations that it was possible to exceed
regulations and maintain/improve operational effectiveness. We also used newspaper articles, articles in the
business press, presentations at sustainability conferences, investments in socially responsible funds and the
like to identify organizations that could be considered
exemplars. Each of the identified organizations had been
recognized and/or reported on in multiple outlets.
From our initial list of organizations that broadly fit the
definition of an exemplar we collected data from 10
supply chains from 10 different organizations (see Table
I). Data were collected in 2006 and 2007. Suggestions for
the number of cases to use in multiple case study research
vary, but Eisenhart (1989) suggests seven cases as the
maximum that a person can mentally process. Yin
(1994) and others are more circumspect in regards to
hard numbers and instead suggest that data should be
collected until saturation. In operations and supply chain
management research there are numerous examples of
multiple case study research using from three to 11 cases
(e.g., Pagell 2004; Wu and Choi 2005; Matos and Hall
2007). We stopped at 10 cases because we were near or at
a saturation point and were also reaching the limits of
the amount of data that could be processed in one study.
The level of analysis for the study is formally the supply
chain. At the two larger multinationals we focused on a
single chain as opposed to the entire company. This focus
was necessary at the firms that had multiple supply
chains because these multiple supply chains could be
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Ten Exemplars
TABLE I
Description
Cleaning
Products
(CP)
Regional producer
and distributor of
cleaning products for
janitorial markets
Regional grower and
processor of forest
products
Forest and
Wood
Products
(FW)
Electronic
Scrap (ES)
National e-scrap
collection and
recycling service
Local pizza restaurant
Pizza
Restaurants chain with 4 outlets
(PR)
Multinational IT
IT
Equipment hardware and services
(In
provider
Snack Food Multinational
(SF)
producer and
distributor of organic
and all natural snack
foods
National provider of
Paper
Products
nontraditional paper
(PP)
Size/
Price
Level of
Vertical
Ownership Premium?
Integration
Medium/
private
No
Janitorial
service
providers
Product design
High
Large/
private
No
Wholesale
dimensional
lumber
Operations
Very low
-virtual
chain
Medium
Small/
private
No
Consumer
and B to B
Small/
private
Yes
Low
Large/
public
No
Retail food
and
beverage
Consumer
and B to B
Supply chain
design, reverse
logistics
Supply chain
design, operations,
product design
Operations, reverse
logistics
Medium
Medium/
private
Yes
Retail/
consumer
food
Operations,
sourcing
Very low
- virtual
chain
Small/
private
Yes
Product design,
sourcing
Medium/
private
Yes
Consumer
and some
specialty
printing
Consumer
appliance
Large/
public
Yes
Medium/
private
Yes
Building
Renovation
Local sustainable
Medium
cabinetry and building
contractor
(B~)
Process(es) at Which
They Are Considered
Exemplars
Low
Lighting
Products
(LP)
Food and
Beverage
(FB)
Global distributor of
retail food and
beverages
Market
Low
managed in very different ways (Bowen, Cousins, Lammin and Faruk 2001).
We followed a theoretical sampling approach (Eisenhart 1989; Miles and Huberman 1994; Pagell 2004;
Matos and Hall 2007) across multiple industries because
all industries are grappling with the need to become
sustainable, pointing to a need to develop propositions
and theory that would be generalizable to a wide range of
organizations. A multiple industry design has two additional benefits. First, focusing on one industry might not
Operations,
distribution
Retail food
and
beverage
Sourcing in the
developing world,
supply chain
design, certification
Homeowners Product and service
design, operations
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41
Interview Protocol
We used a semistructured interview protocol 1 at all of
the organizations Eisenhart (1989) for two reasons. We
had designed the sample to include companies with
different capabilities, therefore a semistructured protocol
gave us the flexibility to focus on what was unique at
each of the companies. In general, there was some theoretical underpinning for items included in the protocol.
For example innovation has been seen as a key component of creating sustainable chains (e.g., Christmann
2000) so it was important to understand how environmental and/or social issues were addressed in the innovation/design process.
Data Collection
The research design was based on the recommendations of Eisenhart (1989), Yin (1994), Miles and Huberman (1994) and Handfield and Melnyk (1998) and
closely followed previous research in operations and
supply chain management (e.g., Walton, Handfield and
1
The protocol was made available during the review process and is
available from the first author upon request.
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Ten Exemplars
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tion has long been studied (i.e., Pagell 2004) but it has
not previously been linked to sustainability.
Table II also contains practices identified as important
in the literature review that were not important to the
sampled organizations. For instance, the literature suggests that lean and TQM are key components for sustainable supply chain management. Yet our data suggests
that while most (8) of the supply chains in this study
perform well on traditional operational performance
metrics, the adoption of lean, TQM or similar principles
is not a salient factor that explains their achievement in
sustainability.
.
The within case analysis also identified practices that
were reinterpretations of concepts that had previously
appeared in the literature and/or practices that were truly
novel. Table Ill is a summary of these practices. An example is transparency and traceability. The literature
provides discussions of transparency (e.g., Hart 1995;
Roth, Tsay, Pullma and Gray 2008). But discussions of
transparency generally involve a chain providing information to the public about what it is doing. Our analysis
distinguishes traceability from transparency. Traceability
is an internal practice of sharing information among
chain members about materials and methods (toxins,
use of child labor, type of solvents used and so on)
to optimize noneconomic chain performance and minimize risks. Typical traceability activities included
demanding information on all materials used in a supplier's product (even those the supplier bought) to ensure
that all inputs meet the buying firm's standards and/or
requiring that suppliers provide evidence that working
conditions were acceptable.
Transparency is a new but related activity whereby
organizations were actually demanding information on
the flow of money through their entire chain. The key
difference between traceability and transparency is that
with transparency the buying firm is demanding to know
the profitability of every supplier in the chain, with the
explicit goal of ensuring that chain members at origins
(in our sample farmers) made enough of a profit to do
more than just subsist. Traceability is then concerned
with how things are made while transparency is concerned with profits across the entire chain.
From Tables II and Ill the data were rearranged in
numerous ways to attempt to both reduce it and create
more meaning. This was a multistep iterative process.
For instance, one activity involved rearranging the individual practices into larger "meta constructs" with a goal
of identifying individual practices that hung together. In
one of our initial classifications we grouped individual
practices by function. Hence in this iteration supplier
certification and supplier development were put together
with all other sourcing management practices.
In addition to grouping we needed to eliminate those
practices that seemed tangential to our purpose and/or
which were highly company specific. So for instance, one
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Ten Exemplars
TABLE II
Proactive stance/
organizational commitment
Reconceptualizing what the
chain does - business
redefinition
Supplier selection
Collaborate with suppliers
Integrate environmental
efforts into the entire
organization
Supplier certification
Reconceptualizing who is in
the chain (ecocentric
perspective)
Supplier development
Reducing supplier risk
Life cycle thinking/analysis
Closed loops/reverse logistics
Collaborate with customers
Measurement and reward
systems linked to sustainability
TOM
Lean/JIT
Commitment to employees
(high quality work)
Internal supply chain
integration
Sustainability helps in
recruiting/motivating
employees
Maintain and/or build culture
formally
Buy on total cost not price
Adding new suppliers to spur
change/innovation
CP
FW
ES
PR
IT SF
pp
LP
FB
BR
N y
Yes
N y
Yes
Yes
Yes
9
8
8
y
y
y
y
y
y
y
y
y
y
y
y
y
N y
y
y
y
y
y
y
Yes
Yes
7
6
y
y
y
y
y
y
Yes
Yes
Yes
Yes
Yes
Yes
6
4
4
3
3
3
N
N
N
L
N
y
y
y
y
y
N
y
y
y
y
N
N
N
N
N
L
L
N
L
N
N
N
L
Yes
Yes
No
3
2
9
y
y
y
L
N
L
L
No
Previously
Linked to
Sustainability
Number in
Sample Engaged
in Practice
Yes
y
N
y
y
N
L
N
N
N
L
N
N
N
L
N
L
L
N
y
L
y
y
y
y
N
N
N
No
No
N y
No
No
4
2
N
N
N
N
N
N
y
y
N
N
y
L
N
N
L
N
N
N
Y=yes they engage in the activity in significant amounts; N=no engagement in activity; L=limited
engagement in activity.
April 2CXYJ
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TABLE Ill
Conversation
Touchstone
value
Business
model
Traceability
Decommoditize
inputs
Developed
own
certification
Supplier
supplier
interaction
Continuity of
suppliers
Local chain
Supplier
development
-to improve
other chains
Transparency
Licensing
Count
CP
FW
ES
PR
IT
SF
pp
LP
FB
BR
Description
r
r
Y=yes they engage in the activity in significant amounts; N=no engagement in activity; L=limited
engagement in activity.
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Ten Exemplars
TABLE IV
Bundle 1: commonalities,
cognitions and orientations
Count
8
9
9
9
8
8
6
6
4
3
3
2
9
6Y,3L
3Y,4L
9
8
8Y/1L
7
4Y/2L
3
2
9
8
4
3
Y=yes they engage in the activity in significant amounts; N=no engagement in activity; L=limited
engagement in activity.
t
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The moving of data from case based displays toconstruct based displays required multiple iterations. As with
any research, attempts were made to be both parsimonious and complete, which lead to trying a number of
different categorizations. The following are the five key
bundles of practices that arise from the analysis.
Bundle 1
Commonalities, Cognitions and
Orientations. The sampled supply chains have a great
deal of variance in terms of size, scope, types of goods
and services they create and so on. Yet they also have
common attributes, especially when it comes to
managerial orientations toward sustainability and the
role of environmental and social concerns in decisionmaking.
The literature suggests that innovative organizations
will be leaders in sustainability (Christmann 2000).
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Ten Exemplars
TABLE V
Number of Respondents
Who Do Not Decommoditize
Engaged in Practice n=4
5
6
4
5
0
1
1
9
10
7
9
6
6
5
6
3
4
2
3
Total Engaged
in Practice
(Y and L)
Continuity
Formal mention of continuity
of suppliers
Supplier development - to
improve other chains
Transparency
Reducing supplier risk
Supplier development
Sourcing management
Supplier selection
Collaborate with suppliers
Supplier certification
Traceability
Y=yes they engage in the activity in significant amounts; N=no engagement in activity; L=limited
engagement in activity.
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Ten Exemplars
values people and the environment. Employees consistently described their employers as thoughtful, caring, committed and so on. This investment was often
started as part of a social agenda. For instance, Lighting
Products goes out of its way to hire refugees while
Electronic Scrap creates work for groups with very high
levels of unemployment such as the developmentally
disabled. However, over time these behaviors have
strengthened the chains that engage in them.
In sum, sustainable chains are engaging in a wide array
of managerial practices, many of which are familiar, that
have previously been linked to enhanced operational/
organization performance. And some of the novel
practices such as a focus on traceability and/or transparency are novel forms of existing practices (information sharing). In general the external focus is on
sourcing while the internal focus is on investing in
employees. An operational forus on TQM and/or Lean
is not evident in our sample. And while reverse chains are
not the norm, presently this seems to be the direction
that the sampled chains are heading.
DISCUSSION
Our analysis suggests that the practices that lead to a
more sustainable supply chain are equal parts best
practices in traditional supply chain management and
new behaviors. Our findings are summarized in Figure 1.
The ability to be innovative has been linked to
sustainability. Our sample is by nature comprised of innovative firms. So an organizational capability to innovate is then a precursor to successful sustainable supply
chain management. The other organizational attribute
that is a precursor to sustainable supply chain management is managerial orientation. The literature suggests
that firms need to be proactive and committed. Our
analysis suggests that being proactive and committed can
only be effective if the business model and the environmental and social elements of sustainability are aligned.
This business model then guides decision making. In the
case of our sample this guidance was provided by
touchstone values. When the employees have a way to
think about sustainability that is compatible with business goals it is then possible for sustainability to become
part of the day to day conversation. But that can only
happen if responsibility for the noneconomic components of sustainability is shared across all employees and
not housed in a single function or individual.
Proposition 1: An innovation capability is required to
create a sustainable supply chain.
Proposition 2: A positive management orientation toward sustainability is required to create a sustainable
supply chain.
Proposition 2a: Management orientation is evidenced by
a business model where economic goals are compatible
with environmental and social goals.
Proposition 2b: Management orientation is evidenced
by sustainability being part of the day-to-day conversation.
Proposition 2c: Managerial orientation is evidenced by a
touchstone value that guides decision making.
Proposition 2d: Managerial orientation is evidenced by
responsibility for social and environmental concerns
being shared across the organization.
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FIGURE1
A Model of Sustainable Supply Chain Management Practices
Having an Economically
Viable Supply Chain
Design I Innovation
Capability
Guardrail Value
Alignment of
Environmental, Social
and Economic Goals
Proactive and
Commitment
Integration
Managerial Orientation
Toward Sustainability
Transparency
Traceability
Supplier Certification
Decommodization
New Behaviors
Sustainability Outcomes
- Simultaneous High
>---+---Performance on
Indicators of Economic,
Environmental and
Social Performance
Rewards and
Incentives
Intrinsic & Extrinsic
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Proposition 3: Sustainability becomes integrated in the
organization when the organization has both a managerial orientation toward sustainability and an innovation
capability.
The data suggest that those organizations which have
an innovation capability and a managerial orientation
toward sustainability will engage in two unique sets of
activities. First, they will reconceptualize who is in the
supply chain. Rather than viewing NGOs and the like as
adversaries, sustainable supply chains leverage the skills
and abilities of these nontraditional chain members.
Proposition 4: Managers of sustainable supply chains
will collaborate with nontraditional members such as
NGOs, regulators, competitors and members of the community.
A concern for supplier continuity is the second activity
or practice that will arise from the ability to innovate and
a management orientation toward sustainability. There
are multiple elements of continuity all of which seem
linked to improving the flows of information in the
chain with an end goal of ensuring that all members of
the chain not only survive but thrive. However, the
adoption of some of individual practices is limited,
suggesting that additional contingencies are at work. We
explore this possibility further when discussing potential
future research.
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A component of being sustainable is economic viability. Therefore, a sustainable chain based on the triple
bottom line would have to be sustainable from a traditional economic standpoint. Our data strongly support
such a supposition. The sampled supply chains are generally economically viable and engaged in practices the
literature associates with increased profitability. However,
the data suggest that existing best practices are not universally linked to high levels of sustainability performance. Traditional best practices in purchasing and
human resources seem to be tied to all elements of the
triple bottom line. However, there is no evidence that
lean or TQM is needed to become a leader at sustainable
supply chain management. On the other hand, some
concern for dosing loops and reverse logistics does seem
to be required to make further progress toward sustainability.
Proposition 6: A supply chain that performs well on traditional operational metrics is a foundation of a sustainable supply chain. A supply chain that performs poorly
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Ten Exemplars
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CONCLUSION
Existing studies have tended to examine what was the
same about sustainable supply chain management. Our
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