Pagell and Wu’s goal is to address a lack of comparative and integrative studies in the literature on sustainable supply chain management. In doing so they examine a range of practices that their exemplary case study firms are undertaking and find some interesting differences between theoretical predictions that have been made in the literature vs reality. Ultimately, this study provides an good investigation into management practices that some of the best firms are using. This is of particular interest for people and organizations seeking to transition to triple-bottom line style practices (one of the strengths of the paper is that it acknowledges the often-elided social aspect, although the social component isn’t extensively explored).
Pagell and Wu undertake a short literature review, examine the relationship between existing best-practices such as lean, Total Quality Management & Just In Time, collaboration and certification. They also examine a number of other practices including reconceptualizing the supply chain and closed-loop production.
Pagell and Wu undertake a series of semi-structured interviews with staff at each of their ten exemplar firms. Each firm is a representative of a unique industry (cleaning products, forest & wood products, electronic scraps, etc..) Their goal was to uncover the unique strategies that these sector leaders were using. Once interviews were completed the authors coded their responses and then began an qualitative analysis exercise of pattern matching and data reduction. Data was analyzed within and between cases.
Pagell and Wu ultimately distill their analysis down to a set of bundled concepts/practices:
Commonalities, cognitions and orientations:
- Integrating a sustainability idea into the business plan
- Creating organizational commitment
- Creating a touchstone/guardrail concept or value to guide decisions
- Integrating conversations about sustainability into the business routinely.
- Integrating efforts to increase sustainability into every aspect/department.
Ensuring Supplier continuity
- Decommoditization within the chain — ie, buying goods not just on price, but also integrating social/enviro elements into choice; as well, some firms were volunterarily providing long-term contracts and development resources to their suppliers in return for stable relationships and more information about the goods provided [p 49]
- These practices are also related to the practice of reducing supplier risks, helping to develop the supplier’s business (perhaps through additional training in how to supply certified/organic goods to the business and competitors)
- Transparent tracing of profitability is the final element within this cluster of concepts, and is also related to the notion of making sure that suppliers businesses are stable and economical sustainable.
Related, but separate is the set of strategies revolving around a reconceptualization of what the business and supply chain do.
- The business model may be redefined
- The boundaries of the chain may be redrawn — NGOs and competitors may be brought within parts of the chain.
- Moving to closed-loop supply chains.
Management and sourcing:
- Careful supplier selection and collaboration.
- Traceability is similar to transparency, but focuses on the materials in the supply chain (contents, methods used, wastes, etc)
- Certification
Operations and Human Capital investment:
- TQM
- Lean/JIT
- Commitment to employees
- Maintaining and building the business culture
- Life Cycle analysis
- Measurement and reward systems.
The analysis presented suggests that some of the most interesting strategies that have been proposed, though, such as Life Cycle Analysis, linking rewards to performance, transparency, unusual partnerships with suppliers, closed-loops and supplier development are still very much marginal practices — many of them being put into place by only two or three of the firms surveyed. Interestingly, TQM and Just In Time were also very marginal, despite those being practices that were widely supposed to be closely linked with sustainable supply chain management. One issue that may be relevant with regard to TQM and JIT is the lock-in effect of those incremental practices, whereas real sustainability innovation may well require much large changes.
Other snippets:
“It is interesting to note that while many supply chains are chasing lower wages to parts of the globe with questionable social and/or environmental protections, many of the organizations in our sample are profitably moving in a different direction.”
-this is particularly interesting given the current interest in re-localization.
“…sustainable chains invest in human capital. This may be one of the most concrete social outcomes in our sample. Nine have human resource practices that increase employee well-being and commitment to the organization…”
The authors also note the inability of Life Cycle Analysis tools to generally capture social issues.
“Our analysis suggests that the practices that lead to a more sustainable supply chain are equal parts best practice… and new behaviours.”
References of interest:
Handfield, R.B. et al. “Integrating Environmental Concerns into the design process…”
Matos, S. and J. Hall: “Integrating Sustainable development into the supply chain…”
McDonough W and M Braungart. “A world of abundance…”
Specter, M. “Big Foor…”
Starik, M. and G.P. Rands: “Weaving an Integrated Web…”
Zhu, Q. and J Sarkis. “Relationships Between Operational Practices and Performance Among Early Adopters of Green Supply Chain Management PRactices in Chinese Manufacturing Enterprises.”
Zhu, Q. and et al. “Confirmation of a measurement model for green supply chain management practices and implementations.”
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