A SUSTAINABLE SUPPLY CHAIN MANAGEMENT

FRAMEWORK FOR IT PRODUCTS: AN EXPLORATORY STUDY

The way the business is done at present has undergone radical transformation due to
globalization and outsourcing, intense competition and changing markets, use of technology
and information sharing, and to address ever increasing expectations of consumers. The focus
has shifted from a single organization to a network of organizations collaborating together
with a greater emphasis on managing their supply chains. Now when environment issues and
harmful effect of their supply chain operations have become a global concern, organizations
are forced to initiate green initiative in their supply chains in order to address legislative and
societal pressures. These ideas were embraced by the researchers and organizations started
reporting their supply chains on triple parameters of economic, environment and social
performance. The whole idea of integrating these three parameters in a more comprehensive
manner was the motivation to develop a Sustainable Supply Chain Management (SSCM)
framework, which reduces cost, protects environment and helps the society at large. The
objective of the study is to identify the current issues in existing supply chains of Indian IT
product companies and to develop a comprehensive sustainable supply chain management
framework. It also explores the required metric for all supply chain partners and measures for
IT product manufacturer. The study has also made an attempt to develop a sustainability
index for the manufacturer.

In the present global and dynamic business environment, survival and growth have become
the major challenges for the organizations. Globalization, newer business models,
technological advancements and interdependencies on business partners have further
increased the complexity of the current businesses. Now the focus of doing business has
shifted to integration and collaboration with a greater emphasis on managing their supply
chains. Integration of business activities and collaboration with upstream and downstream
partners has become an integral part of doing business. Businesses realized that integration
and collaboration among the partners for efficient and economic utilization of resources leads
to better performance.
Modern idea of a supply chain is attributed to the research conducted by
Forrester (1961) at the Massachusetts Institute of Technology (MIT), who proposed the
industrial dynamics model (widely known as Forrester Effect) identifying five flows of any
economic activity money, orders, materials, personnel and equipment and their
interrelationship by an information network, which is now called a supply chain [5].
Mentzer et al. (2001) extensively examined various definition of the terms supply chain
and
presented the following synthesized definition: A supply chain (SC) is a set of three or more
entities directly involved in the upstream and downstream flow of products, services,
finances,
and information from a source to the customer [7].

In todays business environment, companies do not only compete on manufacturer to

manufacturer basis; rather the true competitive battle occurs between one supply chains to
another supply chain [8]. This
inclusiveness leads to the concept of Green Supply Chain Management (GrSCM), which
incorporates ecological factors and supply chain management principles to make the supply
chain activities less harmful to the environment. Penfield (2007) has defined GrSCM as the
process of using environment-friendly inputs and transforming these inputs into outputs that
can be reclaimed and reused at the end of their lifecycle, thus creating a sustainable supply
chain [17]. The IT industry is growing rapidly as a manufacturing oriented industry, but due
to innovative
nature of its products and high rate of obsolescence, it has the highest rate of e-waste
generation [18]. In the year 1981, Freer Spreckley [19] suggested organizations to measure
and report on
social, environmental and financial performance Carter and Rogers (2008) extended the
concept of sustainability from the organization to the supply chain and argued that the natural
environment, society, and economic performance constitute the organizational sustainability
[20]. Primarily, sustainable supply chain management would include the economic efficiency
as a base level of a supply chain. This concepts corresponds with the triple bottom line (TBL)
perspective given by Elkington (1998) which states at the intersection of social,
environmental, and economic performance are activities that an organization can engage in
which not only are beneficial from a social and environmental standpoint, but that also make
economic sense and result in competitive advantage for the firm [21]. Thus sustainability in
SC can be achieved by being innovative, environmentally
conscious and socially responsible.

Considering the current dynamic and ever changing business environment and need to
develop sustainable supply chain management framework, it is imperative to develop a
contemporary sustainable supply chain framework, metric and performance measures for the
Indian IT product industry, which caters to the needs of developing nations such as India
considering indigenous economic, environmental, social and cultural factors.

The Information Technology industry is one of the worlds largest and fastest growing
industries. IT is increasingly finding applications in all sectors of the economy and thus is
accepted as a key enabler in development [135]. The IT sector is broadly categorized into IT
services and software, Information technology
enabled services (ITeS) and IT hardware products segment. [24]. IT Hardware segment
includes personal storage devices, printers, servers, Personal Computers (PCs),
supercomputers, data processing equipment and peripherals such as monitors, keyboards,
disk
drives, plotters, SMPS, modems, networking products and add-on cards [136]. Global
hardware production is concentrated in the AsiaPacific and the North American region.
Singapore, Taiwan, China, Thailand and Korea are the largest producers and exporters of
computer hardware and peripherals in the world. Branded personal computer majors such as
Hewlett Packard, IBM and Dell outsource their production to Asian countries and focus on
marketing and services.

PROFILE OF THE IT INDUSTRY IN INDIA

After the opening up of the Indian economy during reforms of 1991-92, incentives provided
by the government in form of lower value added tax (VAT) on software and elimination
ofduties on imports of information technology products, and investments made for IT and
ITES
services, IT industry has flourished and India is playing a major role as a technology provider
to the world economies. Setting up of Software Technology Parks (STP), and Special
Economic Zones (SEZ) has encouraged entrepreneurs to utilize their skills and expertise and
increase export of software services many-fold [134].

Evolution of Indian Electronics and IT Hardware Industry

The Government of India has identified growth of IT hardware manufacturing sector as a

thrust area and has taken a number of steps for promotion of this industry in the country.
Setting up of a mission to implement schemes and policies in a focused and targeted manner,
incentivization, eco-system development and attracting investment in electronics hardware
manufacturing sector are amongst the major initiatives which are under consideration of the
Government to take advantage of this opportunity.
Information technology (IT) industry in India has been instrumental in making India a major
player on the world map. Indian organizations in the industry have become global
multinationals - with over 400 delivery centers (overseas), the industry has presence in 52
countries, with more than 10 organizations listed on overseas stock exchanges and serving
more than 400 Fortune 500 customers [135].
Figure
 Indian IT Industry Market Value

India has invited investors to boost foreign technology induction both through FDI and
through foreign technology collaboration agreements and has established greater
transparency
in policies and investor friendly procedures. A foreign company can hold equity in Indian
companies up to 100% [134]. IT sector in India has witnessed high inflow of FDI which has
boosted the Indian economy in recent years.