Linking corporate social responsibility and corporate sustainability with SCM, firms have to consider economic, social and environmental sustainability in their supply chain (Svensson 2007). CSR and CS conceptual framework and practices are suggested to be implemented by all interrelated firms (i.e., both upstream and downstream parties) in all stage of supply chain to achieve complete sustainability (Darnall, Jolley & Handfield 2008). Hence, sustainable SCM is defined as “the management of material, information and capital flows as well as cooperation among companies along the supply chain while taking goals from all three dimensions of sustainable development, i.e., economic, environmental and social, into account which are derived from customer and stakeholder requirements. In sustainable supply chain, environmental and social criteria need to be fulfilled by the members to remain within the supply chain, while it is expected that competitiveness would be maintained through meeting customer needs and related economic criteria.” (Seuring & Müller 2008, pp.1700). Maloni and Brown (2006), Linton, Klassen, and Jayaraman (2007) and Seuring and Müller (2008) agreed that firms must emphasise CSR and CS concepts in their SCM practices because firms are not isolated entities, but rather interconnected with other firms along the supply chain. Thus, an individual firm is unable to accomplish sustainable supply chain as a whole. Therefore, as sustainable SCM is critical to achieve holistic sustainability performance (Andersen & Skjoett- Larsen 2009), 3Ps must be incorporated into SCM to achieve sustainability.
30 Firms are challenged to improve their supply chain performance by focusing on the mix of cost reduction, responsiveness, security, sustainability, resilience and innovation. By taking part in a sustainable supply chain, firms could improve organizational performance (Melnyk et al.
2010). Carter and Rogers (2008) stated that sustainable supply chain is positively associated with economic performance or organizational performance when firm incorporate 3Ps into their business activities. Firms acting according to these principles could enhance market boundaries, improve market penetration, enhance customer satisfaction, reduce cost of production, mitigate risks from institutional pressure, and charge higher prices, when their products and services are accepted by societies. Moreover, Holmes, Power and Walter (1996) stated that labour costs could be reduced due to the better working incentives and motivation, which result in higher productivity. Carter, Ellram, and Tate (2007) stated that labour costs could be reduced due to the decrease in health and safety costs due to creating safer workplace.
Moreover, firms could reduce production costs due to reduced packaging waste and recyclability of materials used in production (Mollenkopf et al. 2005). According to Carter and Dresner (2001), a firm could also prevent costs of compliance with government regulations.
Hanson, Melnyk and Calantone (2010) posited that the implementation of environmental management system could reduce cost of production, improve product quality, and reduce product lead time. Ellen, Webb, and Mohr (2006) found that firms could enhance their reputation, as sustainable behaviors make them more attractive to their customers, suppliers and other stakeholders. In short, sustainability in the supply chain could improve organizational performance.
Enablers of sustainable supply chains must be identified prior commencing any sustainability programmes at any stage of the supply chain (Faisal & Akhtar 2011). They are including top management commitment, strategic planning, competitive advantages, collaborative relationships, trust among supply chain partners, support to partners in the supply chain, and information sharing. These enablers are discussed in more detail. First, top management commitment is one of the most critical drivers. In order to achieve the objectives of sustainability, top management (i.e., chief executive officer, board of directors, and managers) must redesign, reform and restructure their vision towards sustainability. They must design and implement policies and strategies in line with sustainability objectives. They have to persuade employees to perceive the future organizational success when working towards sustainability based dimensions and encourage employees to act accordingly. Hanna, Newman, and Johnson (2000) indicated that sustainable supply chain is positively related to employees involvement.
31 Moreover, top management must encourage partners along the supply chain to be actively involved in the sustainability program. As Robert (2003) insisted, sustainability initiative is likely to be successful, if sustainability programmes are supported by all supply chain members and other stakeholders.
Second, strategic planning plays an important role in sustainable supply chain because it can improve understating of sustainable practices of supply chain partners. Organizational strategies, tactic and operations must be planned towards 3Ps (Kytle & Ruggie 2005).
Organizations and partners are sometimes challenged by identifying means to achieve sustainability and resources that need to be devoted to sustainable activities. To solve the problem, 3Ps must become intrinsic parts of strategic planning, allowing organizations and other partners to create policy aligned with sustainability objectives (Walton, Handfield &
Melnyk 1998).
Third, the objective of gaining competitive advantage simultaneously with social and environmental sustainability is important for strategic planning. The incentives provided by competitive advantage encourage top management to create new strategy that aims to consume fewer natural resources and ensure minimal environmental and social impacts, which in turn decreases operation costs (Faisal & Akhtar 2011).
Fourth, as Robert (2003) stated above, the involvement of partners is critical. Faisal and Akhtar (2011) argued that working collaboratively with supply chain partners can enhance sustainability performance. In terms of risk management, Kovacs (2008) stated that the most efficient approach towards preventing potential pressure from downstream stakeholders is establishing a collaborative relationship with wholesalers, retailers, and customers in order to collaboratively work towards sustainability issues. However, Brandenburger and Nalebuff (1998) argued that collaboration between competitors can enhance the boundaries of sustainable supply chain. This is because they can share complementary and substitute resources when aiming to achieve the same objectives. Thus, collaboration between competitors can potentially enhance sustainability performance.
Fifth, developing trust between supply chain partners is critical to sustain long-term collaborative activity. Unfortunately, opportunistic behavior will occur during collaborative agreement that lacks trust. Thus, in order to develop and sustain collaborative relationships, knowledge and information sharing, and support from firms are necessary (Hall 2000). This
32 leads to the sixth and seventh enablers (information sharing) of sustainable supply chain.
Information sharing is critical in ensuring that vertical and horizontal supply chain partners are behaving sustainably. Information regarding sustainable practices, therefore, must be shared along the supply chain. Information sharing also allows partners to share knowledge and information pertaining to product development, new technologies, inventory, production forecast and planning, and distribution scheduling to assure the effectiveness of sustainable activities. Moreover, support from the focal firm is necessary for achieving sustainable supply chain and collaborative relationship development. Support activities include joint planning, joint problem solving, and information and knowledge sharing pertaining to sustainability practices. Thus, information sharing and support from the focal firm is critical for trust development (Vachon & Klassen 2006). In conclusion, firms must identify sustainable supply chain enablers in order to accomplish the successful sustainability.
Growing interest in sustainability in supply chain and logistics management has resulted in the increase in research conducted in many parts of the world. (See Table 3.1) As seen from this small sample of extant studies, practitioners and academics are increasingly interested in sustainability dimensions implicit in supply chain and logistics management. However, there are very few literatures concerned sustainability in SCM and logistics in Thailand context. For example, Setthasakko (2007) studied on keys determinants for achieving corporate sustainability as well as barriers that obstruct its development in Thai frozen seafood processors context. Setthasakko (2009) specifically studied on primary barriers to implementing corporate environmental responsibility in Thailand’s seafood supply chain.
Kantabutra & Siebenhuner (2011) studied on factors for achieving corporate sustainability in Thai organizations context. As presented, literatures in Thai context overlooked the concept of co-opetition, freight consolidation and collaborative freight distribution simultaneously for achieving sustainability in freight distribution. (See Table 3.2) Thus, knowledge in these areas of sustainable supply chain in Thailand should be further extended.
Table 3.1 and 3.2 present the research methods employed in previous studies in this field.
Postal questionnaire survey and structural equation modelling was successfully used in a number of empirical studies in the area of sustainable supply chain in Spain, South-East Asia, and Thailand. Therefore, it is appropriate for this research to employ survey method to capture perceptions of Thai respondents.
33 Table 3.1: Sustainability in SCM context
Author Country Research Methods Findings
Hall (2006) United Kingdom
- Qualitative - Case study
- Sphere of influence Model
- Environmental management in the supply chain and logistics is critical to improving suppliers’
environmental initiative and customer satisfaction.
Bansal (2005) Canada - Qualitative - Interview
- Resource-based and institutional pressure influence forestry industry, as well as oil, gas and mining industry in Canada to invest in sustainable supply chain and logistics development.
González- Benito and Gonzalez- Benito (2006)
Spain - Quantitative - Postal questionnaire
- Customers, suppliers, employees, shareholders, financial institutions, social groups, non-governmental organizations, competitors and media can influence an
implementation of environmental logistics practices.
Miao, Cai, and Xu (2011)
China - Quantitative - Postal
questionnaire
- Pressures from suppliers,
regulation, organizational culture, and business ethics are the main factors in enabling corporate social responsibility in logistics.
Rao and Holt (2005)
South East Asian
- Quantitative - Postal
questionaries and structural equation modeling (SEM)
- Penetration of sustainability dimensions in every stage of supply chain can generate long-term competitive advantage and improve economic performance.
Carter &
Dresner (2001)
United States - Qualitative - Interview
- Drivers, barriers and techniques to overcoming barriers of successful environmental projects
Andersen &
Skjoett-Larsen (2009)
Sweden - Qualitative - Case study
- Corporate social responsibility should be embedded into entire firm to achieve sustainable supply chain
34 Maloni &
Brown (2006)
United States - Qualitative - Literature review
- Proposed a corporate social responsibility framework in food supply chain
Table 3.2: Sustainability in SCM in Thailand context
Author Country Methods Findings
Setthasakko (2007)
Thailand - Qualitative - Case study, interview and site observation
- Top management leadership, government, local communities, and customers can influence an integration of social and
environmental responsibility into firm’s supply chain strategies and practice.
Barriers are including limited holistic view of seafood supply chain, inefficient knowledge about sustainable business practices and high production cost.
Setthasakko (2009)
Thailand - Qualitative - Interview and site observation
- The lack of a system perspective on sustainability, the lack of top management commitment, and absence of culture diversity are barriers to implementing corporate environmental responsibility Kantabutra &
Siebenhuner (2011)
Thailand - Quantitative
- Postal questionnaire and structural
equation modeling (SEM)
- Perseverance, geosocial development, broad stakeholder focus, resilience and moderation are factors that can influence corporate sustainability