Skip to main content
SpringerLink
Log in

Improving Social and Environmental Performance in Global Supply Chains

  • Chapter
  • First Online:
Sustainable Supply Chains

Part of the book series: Springer Series in Supply Chain Management ((SSSCM,volume 4))

Abstract

The rise of global supply chains has delivered many benefits for consumers and firms. Yet concurrently, social, environmental, and ethical problems have arisen and continue to persist, despite government, private sector, and nongovernmental efforts to address them. What are effective methods for global firms, or buyers, to gain an understanding of problems in the supply chain and to address them? We examine strategies using a sense and response framework, and find various approaches within this framework to be associated with improved performance. In particular, research suggests that using a collaborative, proactive approach with suppliers and providing meaningful incentives can be effective. There exists an opportunity to cascade these efforts to second tier suppliers and beyond, where some of the greatest impacts and opportunities to affect change lie. In this chapter, we discuss supply chain practices associated with improved social, environmental, and in several cases, economic performance. We discuss how leading firms are building upon compliance programs, which remain important, to increase their emphasis on building shared value for various actors along the supply chain.

This is a preview of subscription content, log in via an institution to check access.

Access this chapter

Log in via an institution
Chapter
USD 29.95
Price excludes VAT (USA)
  • Available as PDF
  • Read on any device
  • Instant download
  • Own it forever
eBook
USD 89.00
Price excludes VAT (USA)
  • Available as EPUB and PDF
  • Read on any device
  • Instant download
  • Own it forever
Softcover Book
USD 119.99
Price excludes VAT (USA)
  • Compact, lightweight edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info

Tax calculation will be finalised at checkout

Purchases are for personal use only

Institutional subscriptions

Notes

  1. 1.

    Originally based on Motorola’s work to eliminate quality defects, the Six Sigma process is a management process used by many companies such as Motorola, GE, and others. For an introduction to Six Sigma, see Harry and Schroeder 2000.

  2. 2.

    The Lean production process was championed by Toyota, and has been widely adopted by companies as a way to eliminate waste, improve productivity, and increase the efficiency of production systems.

  3. 3.

    The materials in the case were drawn from Lee (2008).

  4. 4.

    On average, Starbucks pays about $1.20 per pound of coffee (FY04 CSR Report).

  5. 5.

    The materials for this case were drawn from Rammohan (2013).

  6. 6.

    The materials on this case were drawn from Rammohan (2008).

  7. 7.

    The materials in this case were drawn from Melvin (2015).

  8. 8.

    The materials of this case were drawn from Pelleg and Lee (2013).

  9. 9.

    The materials of this case were drawn from Lee et al. (2015).

References

  • Awaysheh A, Klassen RD (2010) The impact of supply chain structure on the use of supplier socially responsible practices. Int J Opera Prod Manag 30(12):1246–1268

    Article  Google Scholar 

  • Bloom N, Eifert B, Mahajan A, McKenzie D, Roberts J (2013) Does management matter? Evidence from India. Q J Econ 128(1):1–51

    Article  Google Scholar 

  • Bowen FE, Cousins PD, Lamming RC, Faruk AC (2001) The role of supply chain management capabilities in green supply. Prod Oper Manag 10(2):174–189

    Article  Google Scholar 

  • Chen L, Lee HL (2015) Sourcing under supplier responsibility risk: the effects of certification, audit and contingency payment (December 2, 2015). Stanford University Graduate School of Business Research Paper No. 15–61.

    Google Scholar 

  • Corbett CJ, Klassen RD (2006) Extending the horizons: environmental excellence as key to improving operations. Manuf Service Oper Manag 8(1):5–22

    Article  Google Scholar 

  • Cotte J, Trudel R (2009) Socially conscious consumerism: a systematic review of the body of knowledge. Network Bus Sustain. http://nbs.net/wp-content/uploads/NBS_Consumerism_SR_Researcher.pdf

  • Cousins PD, Lamming RC, Bowen F (2004) The role of risk in environment-related supplier initiatives. Int J Oper Prod Manag 24(6):554–565

    Article  Google Scholar 

  • Derwall J, Guenster N, Bauer R, Koedijk K (2005) The eco-efficiency premium puzzle. Finan Analyst J 61(2):51–63

    Article  Google Scholar 

  • Distelhorst G, Hainmueller J, Locke RM (2015) Does lean improve labor standards? Management and social performance in the Nike supply chain. Watson Institute for International Studies Research Paper No. 2013–09; Management Science, Forthcoming; Watson Institute for International Studies Research Paper No. 2013–09; Rotman School of Management Working Paper No. 2337601

    Google Scholar 

  • Distelhorst G, Locke RM, Pal T, and Samel HM (2015) Production goes global, compliance stays local: private regulation in the global electronics industry (June 8, 2015). MIT Political Science Department Research Paper No. 2012-1; Regulation & Governance. 9(3): 224–242.; MIT Political Science Department Research Paper No. 2012-1; Watson Institute for International Studies Research Paper No. 2014–13.

    Google Scholar 

  • Earthwatch Research Report (2007). http://earthwatch.org/corporate-partnerships/corporate-partnership-case-studies/starbucks. Accessed 13 June 2015

  • Economist (2015) Modern slavery (everywhere) in supply chains. http://www.economist.com/news/international/21646199-how-reduce-bonded-labour-and-human-trafficking-everywhere-supply-chains. Accessed 18 June 2015 (March 14, 2015)

  • Fair Labor Association (2011) Annual public report. http://www.fairlabor.org/sites/default/files/documents/reports/2011_annual_report.pdf. Accessed March 27, 2016

  • Friedman TL (2005) The world is flat: a brief history of the twenty-first century. Farrar, Straus and Giroux, New York

    Google Scholar 

  • Gillai B, Rammohan SV, Lee HL (2015) Supply chain’s new role in protecting your IP. Supply Chain Manag Rev:34–39 (January/February 2015)

    Google Scholar 

  • Gimenez C, Tachizawa EM (2012) Extending sustainability to suppliers: a systematic literature review. Supply Chain Manag 17(5):531–543

    Article  Google Scholar 

  • Haeckel SH (1992) From “Make and Sell” to “Sense and Respond.”. Manag Rev 81(10):3–9

    Google Scholar 

  • Handfield RB, Walton SV, Seeger LK, Melnyk SA (1997) Green value chain practices in the furniture industry. J Oper Manag 15(4):293–315

    Article  Google Scholar 

  • Harry M, Schroeder R (2000) Six sigma. Random House, New York

    Google Scholar 

  • Hoyt D, Lee HL, Tseng M (2008), Not safe for children: Mattel’s toy recalls and supply chain management. Stanford Business School case GS-63. https://cb.hbsp.harvard.edu/cbmp/product/GS63-PDF-ENG. Accessed March 27, 2016

  • Intel and BSR (2013) Accelerating supplier sustainability: from compliance to maturity and collaboration

    Google Scholar 

  • IPE (Institute of Public and Environmental Affairs) (2012) Sustainable apparel’s critical blindspot. http://www.ipe.org.cn/en/about/notice_de_1.aspx?id=10860

  • Kapoor S, Bhattacharya K, Buckley S (2005) A technical framework for sense-and-respond business management. IBM Syst 44(1):5–24

    Article  Google Scholar 

  • Klassen RD, McLaughlin CP (1996) The impact of environmental management on firm performance. Manag Sci 42(8):1199–1214

    Article  Google Scholar 

  • Krause DR, Handfield RB, Scannell TV (1998) An empirical investigation of supplier development: reactive and strategic processes. J Oper Manag 17(20):39–58

    Article  Google Scholar 

  • Krause DR, Calantone RJ, Handfield RB (2000) A structural analysis of the effectiveness of buying firms’ strategies to improve supplier performance. Decis Sci 31(1):33–55

    Article  Google Scholar 

  • Lahiri T (2012) Can mobile phones improve factory safety? Wall Street J Ind (24 Dec 2012)

    Google Scholar 

  • Lee HL (2008) Embedding sustainability: lessons from the front line. Int Commerce Rev 8(1):10–20

    Article  Google Scholar 

  • Lee HL (2010) Don’t tweak your supply chain—rethink it end to end. Harvard Bus Rev 88(1):62–69

    Google Scholar 

  • Lee HL, O’Marah K, John G (2012) The chief supply chain officer report - 2012. SCM World :1–52

    Google Scholar 

  • Lee HL, Over K, Tang C (2015) Creating shared value at Nestle, Stanford University and UCLA Case

    Google Scholar 

  • Levi Strauss & Co. (2014). http://www.levistrauss.com/wp-content/uploads/2014/01/Addressing-Forced-Child-Labor-in-Cotton-Harvesting_Uzbekistan.pdf

  • Lewis TR, Fang L, Song JS (2012) A dynamic mechanism for achieving sustainable quality supply. Fuqua School of Business, Duke University, Durham

    Google Scholar 

  • Locke RM, Romis M (2006) Improving work conditions in a global supply chain. MIT Sloan Manag Rev 48(2):54–62

    Google Scholar 

  • Locke RM, Qin F, Brause A (2007) Does monitoring improve labor standards? Lessons from Nike. Ind Labor Relat Rev 61:3–31

    Article  Google Scholar 

  • Locke RM, Rissing BA, Pal T (2013) Complements or substitutes? Private codes, state regulation and the enforcement of labor standards in global supply chains. Br J Ind Relat 51(3):519–552

    Article  Google Scholar 

  • Melvin S (2015) Everything is connected: a new era of sustainability at Li & Fung. Stanford University Case, GS-87

    Google Scholar 

  • Mozur P, Dou E (2013) Chinese activist accuses apple supplier of polluting. Wall Street J, August 2, 2013

    Google Scholar 

  • Newman JC, Breeden KM (1992) Managing in the environmental era: lessons from environmental leaders. Columbia J World Bus 27:210–221

    Google Scholar 

  • O’Rourke D (2014) The science of sustainable supply chains. Science 344(6188):1124–1127

    Article  Google Scholar 

  • Pande P, Neuman R, Cavanagh R (2000) The six sigma way: how GE, Motorola and other top companies are honing their performance. McGraw Hill, New York

    Google Scholar 

  • Pelleg B, Lee HL (2013) Esquel Group: a vertically integrated apparel manufacturer, Stanford University case

    Google Scholar 

  • Plambeck E, Lee HL, Yatsko P (2012) Improving environmental performance in your Chinese supply chain. Sloan Manage Rev 53(2):43–51

    Google Scholar 

  • Porteous AH, Rammohan SV (2013) Integration, incentives and innovation: Nike’s strategy to improve social and environmental conditions in its global supply chain. Stanford University Global Management Supply Chain Forum

    Google Scholar 

  • Porteous AH, Rammohan SV, Lee HL (2015) Carrots or sticks? Improving supplier social and environmental compliance through incentives and penalties. POM 24(9):1402–1413

    Google Scholar 

  • Porter ME, Kramer M (2011) Creating shared value. Harvard Bus Rev 89(1):62–77

    Google Scholar 

  • PwC (2010) Value of sustainable procurement practices, PwC, EcoVadis, INSEAD Social Innovation Centre. http://www.pwc.com

  • Rammohan S (2008) Business benefits to Hewlett-Packard suppliers from socially and environmentally responsible (SER) practices in China—a case study. Stanford Global Supply Chain Management Forum

    Google Scholar 

  • Rammohan S (2013) McDonald’s India: optimizing the french fries supply chain. Stanford University Graduate School of Business Case, GS-79

    Google Scholar 

  • Rao P, Holt D (2005) Do green supply chains lead to competitiveness and economic performance? Int J Oper Prod Manag 25(9):898–916

    Article  Google Scholar 

  • Scholten K, Fynes B (2017) Risk and uncertainty management for sustainable supply chains. In: Bouchery Y, Corbett CJ, Fransoo J, Tan T (eds) Sustainable supply chains: a research-based textbook on operations and strategy. Springer, New York (Chapter 19)

    Google Scholar 

  • Schwartz A (2013) Can mobile phones prevent more factory deaths? Fast Company (9 Jan 2013)

    Google Scholar 

  • Securities and Exchange Commission (2012). http://www.sec.gov/rules/final/2012/34-67716.pdf

  • Seuring S, Muller M (2008) From a literature review to a conceptual framework for sustainable supply chain management. J Cleaner Prod 16(15):1699–1710

    Article  Google Scholar 

  • Shao M, Yatsko P (2010) Ma Jun and IPE: using information to improve China’s environment. Stanford University Graduate School of Business Case, SI-115

    Google Scholar 

  • Sodhi MS, Tang CS (2017) Social responsibility in supply chains. In: Bouchery Y, Corbett CJ, Fransoo J, Tan T (eds) Sustainable supply chains: a research-based textbook on operations and strategy. Springer, New York (Chapter 21)

    Google Scholar 

  • Vachon S, Klassen RD (2006) Extending green practices across the supply chain: the impact of upstream and downstream integration. Int J Oper Prod Manag 26(7):795–821

    Article  Google Scholar 

  • van Weele A, van Tubergen K (2017) Responsible purchasing: moving from compliance to value creation in supplier relationships. In: Bouchery Y, Corbett CJ, Fransoo J, Tan T (eds) Sustainable supply chains: a research-based textbook on operations and strategy. Springer, New York (Chapter 11)

    Google Scholar 

  • Westervelt A (2012) How international regulations are changing american supply chains. Forbes. http://www.forbes.com/sites/amywestervelt/2012/05/10/how-international-regulations-are-changing-american-supply-chains/. Accessed 18 June 2015 (May 10, 2012)

  • Wu Z, Pagell M (2011) Balancing priorities: decision-making in sustainable supply chain management. J Oper Manag 29(6):577–590

    Article  Google Scholar 

Download references

Acknowledgements

We thank Angharad Porteous for her significant contribution to the paper cited in Sect. 20.4. Elements of the paper were used throughout this chapter.

Author information

Authors and Affiliations

  1. Graduate School of Business, Stanford University, Stanford, CA, 94305, USA

    Hau L. Lee & Sonali V. Rammohan

Authors
  1. Hau L. Lee
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Sonali V. Rammohan
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Hau L. Lee .

Editor information

Editors and Affiliations

  1. Axe Logistique Terre Mer Risque, Ecole de Management de Normandie, Le Havre, France

    Yann Bouchery

  2. Anderson School of Management, University of California Los Angeles, Los Angeles, California, USA

    Charles J. Corbett

  3. School of Industrial Engineering, Eindhoven University of Technology, Eindhoven, The Netherlands

    Jan C. Fransoo

  4. School of Industrial Engineering, Eindhoven University of Technology, Eindhoven, The Netherlands

    Tarkan Tan

Rights and permissions

Reprints and permissions

Copyright information

© 2017 Yann Bouchery, Charles J. Corbett, Jan C. Fransoo, and Tarkan Tan

About this chapter

Cite this chapter

Lee, H.L., Rammohan, S.V. (2017). Improving Social and Environmental Performance in Global Supply Chains. In: Bouchery, Y., Corbett, C., Fransoo, J., Tan, T. (eds) Sustainable Supply Chains. Springer Series in Supply Chain Management, vol 4. Springer, Cham. https://doi.org/10.1007/978-3-319-29791-0_20

Download citation

Publish with us

Policies and ethics

Search

Navigation