Sustainable Supply Chain Management

Introduction

Industry increasingly recognises the challenges of responding to concerns about the environment. These challenges include both how to respond to compliance with emerging climate policies such as the EU Emission Trading Scheme and to changing consumer demands for carbon neutral products and/or environmentally friendly and sustainable production processes. These issues directly impact on production processes and supply chain management. In order for organisations to minimise their impact on the environment, it has been argued that they need to evaluate and act from a total system perspective (Wu & Dunn, 1995). The supply chain represents such a holistic system and is a strong candidate for far-reaching greening initiatives. Supply chains link various types of organisations and extend across multiple boundaries before reaching the consumer. The volume of goods and produce being carried across the globe continues to grow. This is due in part to higher productivity, increased efficiency in primary industries, cheaper freight costs and the rapid expansion of the BRIC (Brazil, Russia, India, and China) nations.

Conventional approaches to supply chain management continue to encounter the challenge of how to balance being effective and cost efficient on one hand, whilst becoming more environmentally friendly on the other (Rodrigue, Slack & Comtois, 2001). Technology has been presented as a means to resolve this tension between the need for cost efficiency in SCM and improved quality, safety, and environmental sustainability. Many current technology scenarios for cutting emissions are focused on large-investment solutions like electrical vehicles, aircrafts running on bio fuels, and ships running on hydrogen fuel cells, or hybrid fuel cells (Stangeland, 2008). An alternative to evolution towards green supply management can be seen in several emerging technologies that can assist companies in achieving cost efficiency, value advantage (Rundh, 2008) and environmental sustainability. One candidate technology is Radio Frequency IDentification (RFID). However, the evidence of the return on investment (ROI) in terms of cost efficiencies or effectiveness of these responses to improve moves to carbon neutrality are lacking for most current technologies (O’Connor, 2005). From a research perspective there is also a challenge in how to approach this tension and the generation of insights that can be used meaningfully by multiple stakeholders (industry, governments, community and consumers). Aside from the challenges of a lack of evidence of ROI, the use of technology such as RFIDs presents issues around standardisation in global supply chains.