A sustainable supply chain management framework for IT products: an exploratory study

Abstract

The way the business is done at present has undergone radical transformation due to globalization and outsourcing, intense competition and changing markets, use of technology and information sharing, and to address ever increasing expectations of consumers. The liberalization of economic policies across the globe and increased focus on environmental and social issues has made the business environment dynamic and complex. The focus has shifted from a single organization to a network of organizations collaborating together with a greater emphasis on managing their supply chains. However, the concept of SCM addressed the issues relating to exploiting of resources with efficiency and effectiveness to maximize gains; it did so with least concern for the ecological environment. Now when environment issues and harmful effect of their supply chain operations have become a global concern, organizations are forced to initiate green initiative in their supply chains in order to address legislative and societal pressures. Meanwhile, as the issues such as human rights, safety of the workers as well as of the society at large and concern for enhancing the quality of life have begun to appear centre stage in local, national the global scenario, organizations need to address them in their business operations. These ideas were embraced by the researchers and organizations started reporting their supply chains on triple parameters of economic, environment and social performance. The whole idea of integrating these three parameters in a more comprehensive manner was the motivation to develop a Sustainable Supply Chain Management (SSCM) framework, which reduces cost, protects environment and helps the society at large. Information technology (IT) industry in India has been instrumental in making India a major player in the global horizon. Supply chains of IT hardware industry are peculiar in nature and are influenced by the innovative nature of its products, reverse logistics procedures, green supply chain initiatives to handle amount of electronic waste (e-waste) generated due to the fast obsolescence, high level of customer intimacy and increased consumer expectations. In such an industry, a well-organized, economical, efficient, responsive and innovative supply chain is crucial for survival. The objective of the study is to identify the current issues in existing supply chains of Indian IT product companies and to develop a comprehensive sustainable supply chain management framework. It also explores the required metric for all xxiv supply chain partners and measures for IT product manufacturer. The study has also made an attempt to develop a sustainability index for the manufacturer. This research is an exploratory study and has used literature review to assimilate the emerging concepts of design and planning of Supply Chain Management (SCM), innovation, environment, social issues and performance measures in supply chains. Representative literature on the topic of sustainability frameworks were reviewed critiqued and synthesized with the help of integrative literature review. A total of six IT companies which are members of MAIT (Manufacturer’s Association of IT) and have manufacturing facilities in India were chosen size and turnover. The sustainability initiatives undertaken by the selected companies were studied and documented in the form of case studies. Insights from case studies and dimensions and sub-dimensions identified from literature were used to develop initial threedimensional (3-D) SSCM framework which was verified by academic experts in the supply chain area and senior practitioners from IT product industry. The present study has developed a three dimensional framework of SSCM comprising of Xaxis as supply chain actors, Y-axis as management (economic) and Z-axis as sustainability. The Y and Z axis have three levels each. The three levels of Y-axis are operational, tactical and strategic, while the Z-axis has innovation, environment and social. The sub-dimensions of these levels with respective dimensions are further detailed in terms of their specific linkages and interactions of economic and sustainability parameters with the supply chain actors. The developed 3-D SSCM framework ensures efficiency (economic) through Y-axis (operational, tactical and strategic levels) and sustainability through Z-axis (innovation, environment and social levels). Taking the idea to the next level, this study further develops the metric on all the dimensions of sustainable supply chain required to be focussed upon by the supply chain partners to achieve sustainability. Since the manufacturing organization is the focal firm in a supply chain, it develops performance measure for both economic and sustainability parameters of the supply chain. Based on identified sustainability measures, an index has been developed which will be helpful for IT product manufacturing organizations to score their supply chain on the parameters of sustainability. xxv The developed three-dimensional framework for SSCM and metric will be useful for organizations to conceptualize and (re)design their supply chain based on economic and sustainability parameters. The supply chain practitioners need to think at strategic, tactical and operational levels and delineate the activities that need to be performed at each level to manage the economic aspects of the supply chain, while they have to perform on innovation, environment and social aspects to make their supply chain sustainable. The measures may be utilized by the SCM practitioners to assess their supply chain on the parameters of economic and sustainability. The Sustainability Index for IT Product Company will be useful for the organization to calculate its scores and judge its own sustainability performance on annual basis. Sustainability performance of the manufacturers can be compared with the previous year’s data to measure the progress, and also identify the areas for improvement. The present study may be complemented with future research on developing measures for performance of other actors of the supply chain. An overall sustainability score of the entire supply chain may be arrived at by aggregating the indices of all supply chain actors. Further, research may be carried on developing indices, best practices and benchmarks for sustainable supply chain. The financial implications of adopting such a 3-D SSCM framework and its cost benefit analysis may also be undertaken as a scope of future research.