Business Implications of Sustainability Practices in Supply Chains

Abstract

This chapter explores the various ways in which supply chains are or could approach sustainability by answering three questions all managers will need to answer as part of their sustainability strategy. First, what has to change in our supply chain to reach true sustainability? Second, how have previous decisions enhanced or limited our options? Third, how will the decisions we make today limit our options in the future? To answer these questions the chapter covers what we know about how supply chains pursue sustainability, and then details the four path dependent trajectories that supply chains follow when addressing sustainability; the wait and see trajectory, the balanced trajectory, the focused trajectory and the opportunity first trajectory. The guiding assumption of this chapter is that it is the series of decisions managers make that determines the supply chain’s sustainability trajectory. Every new process, decision to switch to less harmful materials, or redesign of products will not only have operational implications in terms of waste, risk and innovation, but will also affect and be affected by the chain’s strategic trajectory. This chapter uses a number of examples to detail how a series of path dependent decisions underpins the strategic trajectory of today’s leaders and laggards in sustainable supply chain management.