Global Sourcing and Sustainable Supply Chain Management

Table of Contents

List of Abbreviations .............................................................................................................i

List of Figures and Tables......................................................................................................ii

1 Introduction.................................................................................................................1

1.1 Problem Definition.........................................................................................1

1.2 Purpose and Objectives of the Review..........................................................2

2 Methodology...............................................................................................................3

3 Results.........................................................................................................................5

3.1 Theoretical Background of CSR and SSCM...................................................5

3.2 Challenges and Opportunities of Global Sourcing on Sustainable Supply Chain...............................................................................................................6

3.2.1 External Drivers for SSCM - Chance or Risk....................................6

3.2.2 Sustainability and PSM on a Global Base..........................................7

3.2.3 Balancing Economic, Environmental, and Social priorities...............9

4 Conclusion................................................................................................................12

Reference List.......................................................................................................................13

List of Abbreviations

CO2 - Carbon Dioxide

CSR - Corporate Social Responsibility

WMC - Western Multinational Corporation

PSM - Purchasing and Supplier Management

SCM - Supply Chain Management

SSCM - Sustainable Supply Chain Management

SSD - Sustainable Supplier Development

SGSM - Sustainable Global Supplier Management

TBL - Triple Bottom Line

TQEM - Total Quality Environmental Management

List of Figures and Tables

Table I: Keywords.................................................................................................................4

Figure 1: Sustainable Supply Chain Management.................................................................6

1 Introduction

1.1 Problem Definition

Sustainability and corporate social responsibility (CSR) have become increasingly pivotal to a plethora of facets in the society. As an example, it is difficult to read magazines or newspapers without descrying articles featuring carbon dioxide emissions or alternative solutions for energy. The rising eminence of sustainability issues has heavily impacted the decision-making of the organizations, since stakeholders (e.g. clients, regulatory organizations, NGOs and employees) progressively demand that firms shall address and manage ecological and social impacts of their operations. In particular, the punishment and reward reactions from the stakeholders play a decisive role on management's long-term strategy.

Indeed, supply chain management (SCM) possesses a particularly crucial position to influence positively or negatively the ecological and social performance of a firm, for instance, through location and distance decisions, suppliers' selection, evaluation, and development or packaging choices (Carter & Easton, 2011; Reuter et al., 2010). Due to globalization coped with increasing competition and cost pressure in sales markets, organizations ever more establish on a global supply base to gain competitive advantage (Krause, Pagell, & Curkovic, 2001; Reuter, Foerstl, Hartmann, & Blome, 2010). This focus on cost reduction strategy redesigned the traditional supply chains into truly global supply chains (Trent & Monczka, 2003; Steinle & Schiele, 2008), particularly the purchasing and supplier management (PSM) has become ever-increasingly important in assuring sustainable production (Reuter et al., 2010). Being exposed to the uncertainity that is associated with global sourcing, the buying company has to face new risks and opportunites at outsourcing (Craighead, Blackhurst, Rungtusanatham, & Handfield, 2007; Monczka, Trent, & Petersen, 2008). As a consequent, active risk management becomes a necessity (Kamauff & Spekman, 2008; Manuj & Mentzer, 2008).

Hence, due to the dynamic and vast nature of global sourcing process and the recent emergence of prominent sustainability issues, it becomes imperative for the firms not only to consider the economic benefit of outsourcing (e.g. low material and labor cost), but also to contemplate the environmental and social perspectives of sustainability. Sustainable supply chain management (SSCM) draws evermore attention from the supply chain managers, which will be discussed in detail in course of this paper. For the purpose of this paper, I define the notion "sustainability" in accordance with Elkington's (1998) triple bottom line framework which simultanouesly accounts for all three dimensions (i.e. social, ecological and economic) of sustainability (Carter & Rogers, 2008).

1.2 Purpose and Objectives of the Review

While global sourcing strategies and the environmental view of sustainability has been widely discussed independently in the literature, the investigation of risks and chances stemming from global sourcing in terms of violations or