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2016 | OriginalPaper | Chapter

3. Integrated Supply Network and Business Sustainability

Authors : Ki-Hoon Lee, Stephan Vachon

Published in: Business Value and Sustainability

Publisher: Palgrave Macmillan UK

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Abstract

Most global organizations have discovered that the way to compete has moved from a ‘company vs. company’ basis to a ‘supply network vs. supply network’ basis (Christopher 2011; Beske and Seuring 2014). Because supply networks have contributed to accelerate globalization by directly connecting actors or business partners in emergent and developed economies, supply network management in a global context has altered the basis of competition—from company competition to supply chain competition. As such, this new competitive landscape suggests more challenges. As explained by von Geibler (2013), ‘Within complex global production systems, single value chain actors alone cannot manage key sustainability challenges effectively.’ (p. 39) When we ask whether there is a ‘business case for sustainability’, we see that numerous successful sustainability models have been adopted, and development by leading global organizations has become highly focused internally at the firm level. By focusing internally, organizations can only capture a limited scope of sustainability leaving aside opportunities for learning and benchmarking. What if the value chain or supply network based business cases for sustainability could be developed for the purposes of learning and knowledge sharing? From a business sustainability perspective, we argue that when a firm designs a sustainability management strategy and programme, it should not only consider the short-term outcomes of its activities (firm-centric) but also the longer-term outcomes that would lead to a wider impact beyond business boundaries (supply network-centric).

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Appendix
Available only for authorised users
Footnotes
1
In “the seven sins of greenwashing”, available at www.​sinsofgreenwashi​ng.​org/​findings/​greenwashing-report-2009 (accessed 20 May 2014) the TerraChoice Group (2009) defines greenwashing as “the act of misleading consumers regarding the environmental practices of a company or the environmental benefits of a product or service.” For more discussion, see Ramus, C. and Montiel, I. (2005) What are corporate environmental policies, a form of greenwashing? Business and Society, 44(4), 377–414.
 
2
In supply chain management, final product manufacturers (e.g. General Motors, Coca-Cola, and Samsung Electronics) are positioned between suppliers (upstream) and retailers and consumers (downstream). The firm (also known as final product manufacturers) in the middle of the supply chain (i.e. between the upstream and the downstream in the supply chain) is referred to as the focal firm.
 
3
Reputational risk pertaining to poor sustainability management upstream of the supply chain is not related to disruption risk. Chapter 8 will provide more details about reputational risk and sustainability in supply networks.
 
4
Measuring value for sustainability is in progress internationally. For example, KPMG proposed ‘true value’ methodology to bridge the gap between earnings and ‘true’ earnings by taking environmental and social externalities into account. Also International Integrated Reporting Council (IIRC) states that society is underpinned by six forms of capitals (financial, manufactured, intellectual, social and relationship, human, and natural), companies should account for all capitals for business value creation. Also World Business Council for Sustainable Development (WBCSD) published ‘a call for collaboration’ to highlight natural capital and social capital protocol to measure and value corporate impacts. Also WBCSD recently proposed the measuring impact framework, the GHG protocol, and the emerging Natural Capital Protocol (http://​www.​naturalcapitalco​alition.​org/​natural-capital-protocolhtml), accessed 22 February 2015.
 
5
More discussion can be found in Chap. 2.
 
6
Australia, Belgium, France, Germany, Hungary, Japan, Korea, Spain, Switzerland, United Kingdom, USA (in total 11 countries).
 
8
In supply network management, the demand-related bullwhip effect is known as variability in customer demand often becomes amplified as orders pass upstream in a supply chain (Lee et al. 1997).
 
9
For more details, see Nike Materials Sustainability Index, available at www.​nikeinc.​com.
 
10
Source: Walmart, 2010. Global Sustainability Report. In carbon emission measurement and reporting, WRI/WBCSD (2011)’s GHG Protocol is widely used. Scope 1 refers to all direct GHG emissions; Scope 2 refers to indirect GHG emissions from consumption of purchased electricity, heat or steam; Scope 3 refers to other indirect emissions from a supply chain. For more details, see Chap. 5 carbon management in the supply network in this book.
 
11
Retail Industry Leaders Association (2013) Retail Sustainability Report, Arlington, VA.
 
12
In the US, Home Depot, Target, Walmart, Costco, Best Buy, Safeway, Kroger, Lowe’s, and Sears are leading retailers. In the UK, Aldi, ASDA, Sainsbury, Lidl, Marks and Spencer, Morrisons, Tesco, Waitrose, and Cooperative are leading businesses.
 
13
Zhang, C. (2012) Apple manufacturing plant workers complain of long hours, militant culture. Available at http://​edition.​cnn.​com/​2012/​02/​06/​world/​asia/​china-apple-foxconn-workers/​index.​html (accessed 20 October 2014).
 
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Metadata
Title
Integrated Supply Network and Business Sustainability
Authors
Ki-Hoon Lee
Stephan Vachon
Copyright Year
2016
DOI
https://doi.org/10.1057/978-1-137-43576-7_3

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