Sustainable Value Chains: A Critical Analysis of Sustainable Supply Chain Failures in Developing and Developed Economies

Sustainable Value Chains: A Critical Analysis of Sustainable Supply Chain Failures in Developing and Developed Economies

Idahosa Igbinakhase (University of KwaZulu-Natal, South Africa) and Vannie Naidoo (University of KwaZulu-Natal, South Africa)
DOI: 10.4018/978-1-5225-9558-8.ch011

Abstract

This chapter explores sustainable value chains with a focus on sustainable supply chain failures in developed and developing economies. Sustainable supply chains are effective environmentally friendly systems that contribute to the delivery of products and services from suppliers to customers/clients, and there are several challenges that contribute to sustainable supply chain failures such as complexity of supply chains, unfair trade practices, lack of transparency, unfair labor practices, product sustainability, and dependence on multiple suppliers. Supply chain failures have adverse effects such as to wastage of resources. Firms must adopt more sustainable approaches to the design and implementation of their supply chains in order to reduce cases of future supply chain failures.
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Introduction

Sustainable businesses have become one of the resultant outcomes to achieve society’s sustainable goals such as thriving lives and livelihoods; sustainable food security; sustainable water security, universal clean energy; healthy and productive ecosystems, and governance for sustainable societies (Griggs et al., 2013), which are the dominant theme of both past and current sustainable development narratives (Griggs et al., 2013; Kates et al., 2005), in a world that is becoming increasingly watchful of man’s activities on the environment in a bid to salvage the environment and correct certain damages that have been done to the environment for the benefit of all. Sustainable business is defined as a business that meets the economic value needs of an organization in consideration of other types of value that are beneficial to diverse stakeholders in the business environment (Bocken et al., 2013). As important stakeholders in the sustainable development drive, sustainable businesses are part of a ‘social movement’ (Kates et al., 2005) whose activities reflects the definition of sustainable development in terms of goals, indicators, values and practice (Kates et al., 2005). It is based on the sustainability ideology that sustainable value chain has become an integral part of sustainable business activities in the society.

Sustainable value chain contains different environmental value chain functions that lead to the realization of the value chain set objectives. The ‘value chain’ in an ideal ‘sustainable value chain’ reflects different value - adding activities as opined by Porter (1985) and Porter (2001). According to Fearne et al. (2012), sustainable value chain are indicative of elements such as economic, environmental, and social considerations and value - adding activities that are beneficial to all stakeholders. It is important to add that the economic, environmental and social considerations and value - adding activities, have good motivations, opportunities and potentials (Power & Simpson, 2016). Despite the good intentions of a well designed sustainable value chain, which is to serve and benefit all stakeholders’ interests, certain things still go wrong that lead to sustainable value chain failures and huge consequences for all intended beneficiaries / stakeholders. For example and using sustainable supply chain, Power & Simpson (2016) studied ‘Aligning goals and outcomes in supply chain management’ and notes that many businesses have found conflicting success stories in their use of sustainable supply chains despite integrating sustainable supply chains as part of their business process and activities. Furthermore, Mol (2015) investigated transparency and value chain sustainability and argues that due to the significance attached to transparency in value chains, issues of power struggles, with uncertain outcomes are always ever present as businesses interacts with the society. This further shows the importance of investigating sustainable value chain failures, with sustainable supply chain failures as a focus to provide detailed explanation that will result in reducing cases of sustainable supply chain failures in the business environments. It is important to state that sustainable businesses in developed and developing business environments should reduce sustainable supply chain failures because they make the environment unsafe and increases wastage of scarce resources.

The main aim of this chapter is to present a critical view of sustainable supply chain failures in developing and developed business environments / economies with the intention of expanding general understanding of what is sustainable supply chain failures, why do sustainable supply chain failures occur, the impacts of sustainable supply chain failures to the business environment and her stakeholders, and lessons to be learnt from sustainable supply chain failures to prevent it from occurring and the solutions to sustainable supply chain challenges and failures.

The following are the objectives of this chapter:

Key Terms in this Chapter

Sustainable Development: This refers to a universal principle hinged on carrying out development activities that does not compromise the needs and resources of all stakeholders in a business environment presently and in the future.

Value Chain Analysis: This refers to an analytical tool utilized by a firm to analyze its operational activities that contribute to the creation of a product or the delivery of a service that meets the need of a target market.

Supply Chain Failures: This refers to supply chains failing to achieve their intended purpose or defined goals/objectives.

Sustainability: This refers to the process of adhering to development activities that does not compromise the needs and resources of all stakeholders presently and in the future within a defined business environment.

Ethics: This refers to set of moral principles that guide an individual’s conduct or activity.

Quality: This refers to the distinguishing standard or grade of something.

Risk Management: This refers to the identification, analysis, acceptance, and management of risk in order to reduce any adverse effect from a decision or venture.

Suppliers: This refers to a designated group or firm that provides goods or services based on agreement with a firm or business.

Value Chain: This refers to a set of activities that are part of a firm’s operation that contribute to the creation of a product or delivery of a service that meets the need of a target market.

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