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Procedia - Social and Behavioral Sciences 40 (2012) 631 – 635

The 2012 International (Spring) Conference on Asia Pacific Business Innovation and
Technology Management

A theoretical framework for strategy development to

introduce sustainable supply chain management
Suk-Ho Kanga*, Bokyoung Kanga, Kwangsup Shina, Daeyoung Kima, Jihee Hana
a
Department of Industrial Engineering, Seoul National University, Seoul, Republic of Korea, 151-742

Abstract

The paper discussed on the managerial and research implications of sustainable supply chain management. We
analyzed current researches about the sustainability and its introduction into the supply chain. And then, based on the
necessity and requirements of sustainable supply chain management, we argued about what kind of strategies the
company should conduct to obtain the sustainability in its supply chain. Finally, from the viewpoint of the company
having the not-sustainable supply chain, we established the framework for strategy development to construct the
sustainable supply chain, which could help the company in making a practical application, as well as could be
suggested as research directions of future works to support it.

© 2011 Published by Elsevier Ltd. Selection and/or peer-review under responsibility of the Asia Pacific
© 2012 Published by Elsevier Ltd. Selection and/or peer-review under responsibility of the Asia Pacific
BusinessInnovation
Business Innovationand
andTechnology
Technology Management
Management Open
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Society access under CC BY-NC-ND license.
(APBITM).”

Keywords: supply chain, sustainability, sustainable supply chain management

1. Introduction

This paper presents a literature review and a theoretical framework for strategy development to adopt
Sustainable Supply Chain Management (SSCM), Based on reviews on existing approaches that have been
discussed research issues about the sustainability of supply chain, we aim at deriving what kind of
procedure a company should conduct in order to integrate the sustainability with its operations in SCM.
In business environment, the Sustainability is mainly defined as a capability to have and hold a
continuous competitiveness. After introducing its concept into the industries in the mid-90s, companies
have adopted SSCM as their core business paradigm over the entire corporate management. Consequently,
diverse strategies and frameworks have been developed to establish the sustainability on their supply
chain. However, while it has been adopted by only a few leading companies, most of those, specifically
small and medium-sized businesses, are merely concerned with it. Particularly, some of them adopted it
institutionally by government-initiated policies with respect to the sociological, economic, and

* Corresponding author. Tel.: 822-880-7173; fax: 822-889-8564

E-mail address: shkang@snu.ac.kr

1877-0428 © 2012 Published by Elsevier Ltd. Selection and/or peer-review under responsibility of the Asia Pacific Business Innovation and Technology
Management Society Open access under CC BY-NC-ND license.
doi:10.1016/j.sbspro.2012.03.241
632 Suk-Ho Kang et al. / Procedia - Social and Behavioral Sciences 40 (2012) 631 – 635

environmental aspect. Although there is much attention towards the adoption of SSCM, there is little
research or guideline to understand how to adopt SSCM along with what kind of procedure. The
introduction strategy is usually divided into following three perspectives. By investigating and analyzing
previous researches about such the strategies, we propose directions of future researches about the
implementation of the framework for strategy development to introduce SSCM.
• A strategy to correspond to the external factors of supply chain with respect to the social and
environmental aspects
• A strategy to correspond to the internal factors of supply chain with respect to the variations of
participations and their collaborations
• A strategy to implement the framework of SSCM to operate the process management system so as to
perform the internal and external business processes more flexibly

2. Sustainable Supply Chain Management

SCM is ultimately a management methodology to improve an efficiency of tasks in supply chain by

composing a chain with connections of traditional tasks of firms and developing the functions of
individual firms participated in chain [1]. The objective is to generate values such as products or services
for customers by interconnecting production and transportation components in the network [2]. The
recent studies about SCM are approached in various ways such as design, planning, execution, control,
and monitoring of the chain. These studies have been expanded to an approach to manage the globalized
supply chain efficiently which is distributed and larger as growth of value creation, competency,
management of supply and demand, performance evaluation, and inventory management.
The common standard to decide the function of traditional SCM is to achieve a profit through cost
reduction. However, there have been various changes about customer demand and increase of
environmental cost according to the trends of changing business. Therefore, the importance of
sustainability has been highlighted as a standard of performance evaluation. The economic meaning of
sustainability is that how consistently the profit generated from human, nature, and society could be kept.
Therefore, the sustainability in supply chain can be defined as an efficiency of utilizing the limited
sources to be flexible to changeable business environment and be agile to new customer demand. The
firms and organizations are exposed to many elements of change and risk and these elements are
categorized into economic, environmental, and social areas so that we discussed about the corresponding
elements of SSCM in terms of following three aspects.
(Economic element) Single companies are hard to get their own competencies as the economy varies.
In addition, acquired competencies are hard to keep consistently when they are exposed to natural
disasters or management deterioration. To mitigate this, the collaboration between firms is getting
important way to get their sustainability. The collaboration provides the firms an opportunity to be
flexible to changes by sharing the cost and profit of supply chain.
(Environmental element) The problem of environmental cost has been highlighted with rapid changes
all over the world. In addition, spread recognition about environmental protection has dominated whole
society with paradigm of green growth and requested the eco-friendly sustainability to firms. The design
of products and process to increase recycle can be an example of a sustainability approach to respond to
these environmental elements. Government regulation about pollution also can be a threat to firms.
(Cultural element) Supply chain should be coexisted with the culture and regional society not for the
goals of firms. Especially, it is responsible for balanced development of society through society welfare
and return. In addition, the paradigm can be changed according to the change of social environment.
Furthermore, requirements of participants in society can be a reason for supply chain because they are
customer and participants. Especially, the elements of environment and society are linked to the firmĜs
responsibility. It was led by government or organizations according to social practices and paradigms in
past, but currently, the firms have an initiative and lead the change.
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As above, the supply chain has been exposed to various risks as the change of business environment
and it leads to the company for requesting the sustainability. Furthermore, its necessity has been
important in that the speed of change has been faster with the change of technical improvement and social
practices. The studies about SCM were mostly mathematical approach started from academic business
and engineering, and these focus on the maximization of profit through supply chain by satisfying both
low cost and high quality with a design of supply chain, production, transportation management. After
that, with the change of paradigm and environment, the concern about sustainable supply chain has been
increased. However, the related studies are in the background of the concept of traditional supply chain.

3. Research Issues on SSCM

Current studies of SCM has been focused on a pursuit of low cost and high quality through the design
of supply chain, production, transportation management and on maximization of profit through optimized
SCM. On the other hand, the interest of SSCM is increased with respect to the changes of environment
and social paradigm. SSCM researches began in the risk management of SCM, but the research ranges are
expanded in large qualified SCM. And SSCM researches are the secure of sustainability to adapt and
respond to quickly in social and environment changes. Fig. 1 illustrates the research scope about SSCM
with a standard for supply Chain Operations Reference model (SCOR) by supply chain council [3].

Fig. 1. Research domains related to SSCM in SCOR model by [3]

The scope of SSCM corresponds to domains including Transportation Management, Supply Chain
Configuration, Regulatory Configuration and Supply Chain Risk Process. The definition of Sustainability
ranges from macro-ecological to micro-economic operations perspectives [4]. The point of view SCM,
the goals of SSCM influence on supply chain component selection, supply materials, manufacturing,
distribution and recycling decision. Therefore, in order for a company to apply a sustainability agenda to
the market, they consider a wide range of marketing functions and focus on value among all the supply
chain components interaction [5]. Closs et al. defined the range of sustainability depending on the
company’s end-to-end value chain. And they evaluated how the initiatives of sustainability could be
applied [5]. Company’s sustainability can be compared to the operational robustness in terms of
probability and costs. Sustainability indicators were developed to measure the supply chain process,
fragility, and so on [4]. Economic value of SSCM was measured by evaluating how sustainability could
affect financial risk of customers and employees against lean production system [6].
There have been researches of SSCM that recognize the importance of strategic collaboration in inter-
organization level, and apply this to the ways to take competitive advantage. The main strategies of
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SSCM can be divided into environmental lead, strategic purchasing and supply, supply chain capabilities,
product-based green supply, and greening the supply process. And many researches focused on external
elements rather than considering firm’s internal elements such as resources and capabilities [7]. Unique
organizational capabilities emerge only when firms integrate social and environmental issues into their
corporate behaviour. Effective sustainable supply chain management that can be managed the pressure of
changes in the external environment, requires more flexible interaction between all firms involved. And
also requires long-term and culturally grown partnerships between companies, mutually dependent on one
another for much of their business [8,9]. Strategic purchasing and supply emphasize the cooperative
relationships between the suppliers. And in order to solve the environment problem, it develops cross-
organizational cooperation strategies such as environmental planning and cooperative problem solving [7].
Supply chain risk management system is developed to integrate risk dynamic model into a SSCM
process framework. Risk dynamics model describes the dynamic behaviour of the system from the
viewpoint of risk structure model. And the changes are the way to illustrate the relationships between
state nodes of structure model and function of attributes [10]. Related to the partner selection and
production planning, a robust supply chain network design problem is devised in an agile manufacturing
setting. And for this problem, the optimization of logistics and production costs associated with the
supply chain members is considered [11, 13]. For the automated industry, sustainable supply chain
management strategy such as outsourcing to low cost country are developed and evaluated based on the
theoretical model [12]. Applying the expansion sustainable supply chain of existing supply chain risk
management techniques reaches the limits.

4. Directions for Future Research

Thus far, we discussed related works about SSCM and their implications with respect to the concept,
research scopes, and approaches to strategy development. From these previous works, we derived the
following framework for strategy development to introduce SSCM, which is illustrated in Fig. 2.

Fig. 2. Framework for strategy development to introduce SSCM

First of all, the definition and value of the sustainability should be analyzed from the internal and
external contexts of the supply chain. From the both of business management and economical
perspectives, the signification of sustainability should be derived. Then, by comparing research
methodologies to measure the sustainability quantitatively and qualitatively, the indicators should be
categorized into common index and respective index differentiated to industry sections and its own
supply chain so that the economic value of sustainability could be evaluated. Introduction strategy also
should be differentiated according to the characteristics of supply chain. To support the sustainability, the
strategy should be derived to cope with internal and external environment, collaboration between
 Suk-Ho Kang et al. / Procedia - Social and Behavioral Sciences 40 (2012) 631 – 635 635

participants, and implementation of information technology system. Previous strategies to adopt

sustainability can provide practical and applicable implications. It can be helpful for the company to
derive its own introduction process by comparing best practices according to industrial sections.
The realization of SSCM should be conducted by considering the following five perspectives:
Leadership for knowledge sharing, Innovation of product and process corresponding to the lifecycle of
sustainable supply chain, Integration of operations by the supply chain and its components, Improvement
along with the management lifecycle of process, Compliance of socioeconomic requirements and
governmental regulations.

5. Concluding Remarks

This paper proposed the framework visualizing what kind of factors from SCM context the company
should analyze and what kind of implementation strategies the company should enact and carry out, in
order to establish SSCM by attaching the sustainability on the original supply chain of the company. A
study on the research methodology corresponding to each scope in the framework also can be suggested
as the directions for future works. We suggested implications about the strategy development for the
supply chain to cope with the rapidly changing business environments.

Acknowledgements

This work was supported by the National Research Foundation of Korea (NRF) grant funded by the
Korea government (MEST) (No. 2011-0016160).

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