Abstract
Supply chain management has been around for several decades; however, the concept of sustainability is relatively new to Saudi Arabian companies. Saudi Arabian government does not pressure firms to adopt sustainable business practices. As a result, the country’s companies are reluctant to adopt sustainable supply chains. Most of the companies manufacture various goods in different industries, which contributes to a high carbon footprint. Consequently, it is essential to comprehend the importance of sustainable supply chain management and its obstacles. The study proposes that it is necessary to explore the challenges that hamper sustainable supply chain management among Saudi Arabian firms. The study answers the question of why implementing sustainable supply chain management practices into businesses may fail. The study will use existing literature to determine potential barriers to Saudi Arabia and conduct research using interviews and surveys.
Introduction
It is hard to separate the environment, society, and an organization from one another since there is mutual dependence between the three dimensions. In the contemporary business world, being a profit-oriented business is not enough anymore. Saudi Arabian companies have to resolve the negative impacts of their actions on the environment and be responsible for the attitudes of their suppliers towards pollution, safety, child labor, and health. Sustainability encompasses three dimensions: economic, social, and environmental, and is being adopted in companies more. Climate change limited natural resources corporate social responsibility, and wealth inequality have caused an increased interest in enhancing firms’ environmental and social performance (Medabesh and Khan, 2020, p. 9). Whereas sustainability has been integrated into supply chain management, it faces critical challenges. Therefore, it is essential to evaluate the challenges facing sustainable supply chain management in Saudi Arabia.
The concept of sustainability is necessary for Saudi Arabian businesses due to two significant reasons. Firstly, sustainability is important because it helps companies to accomplish competitive advantage through increased reputational gain, cost reduction, and operational efficiency. When a firm invests in sustainability initiatives, it will remain profitable and competitive in the long run. Managing relationships between supply chain partners and an organization determine how customers perceive a business (Medabesh and Khan, 2020, p. 10). Secondly, organizations participate in sustainable practices to obtain societal legitimacy and fulfill the needs of different stakeholders. The concept of sustainable supply chain management (SSCM) has not gained much attention in Saudi Arabia; therefore, managers are unaware of it.
Study Background
Saudi Arabia’s economy has grown exponentially in the last ten years. As a result, many industrial processes have increased, leading to increased carbon emissions and climate changes. In the last decade alone, there has been increased concern over climate change and carbon footprint around the globe. Most countries have implemented sustainability practices and measures, including Saudi Arabia. The country ranks in the 10th position in the world’s carbon emissions. Saudi Arabia’s emission per capita increased by 19.44 tons from 1960 to 2019 (Medabesh and Khan, 2020, p. 11). Water recycling in Saudi Arabia is at a significantly low rate, which necessitates the need for Saudi Arabian companies to incorporate (SSCM) in their operations.
Saudi Arabia has a reasonably good performance in achieving carbon mitigation objectives. The country has developed a more sustainable and greener economic infrastructure, which aids companies in SSCM. The largest company in the country, Saudi Aramco, enhanced its engineering standards with performance guidelines to facilitate environmental assessments, water recycling and air quality procedures, noise-control regulations, and standards for managing landfill emissions. Prominent Saudi Arabian companies have implemented effective SSCM; however, local companies or enterprises fail to follow sustainability regulations in their supply chains. The Saudi Arabian government does not pressure companies to adhere to environmental regulations. Additionally, there are no environmental groups in Saudi Arabia, making companies unserious about implementing sustainable business practices (Medabesh and Khan, 2020, p. 7). SSCM is not widely used by local enterprises since it is only adopted by foreign multinational companies such as Intel and Shell.
Research Objectives
The long-standing objective of SSCM is to surge the returns through customer service, market share, and sustainability. The main idea of the research study is to evaluate the barriers that affect SSCM. The topic of sustainability and supply chain management in Saudi Arabian companies is under-researched. Therefore, there is a need to identify the research objectives to help realize the primary aim. The study aims to identify the factors that hinder sustainable supply chain practices among Saudi Arabian companies. Exploring the different factors that act as barriers to SSCM in Saudi Arabian firms is critical to businesses (Sajjad, Eweje, and Tappin, 2020, p. 644). The identification of the factors will involve the evaluation of existing literature.
Furthermore, the study aims to increase the understanding of the evolution and need for SSCM in Saudi Arabian firms. When business managers understand the role that SSCM could play in their firm, they can easily accept SSCM adoption. The supply chain process can increase profits in the long run and have devastating impacts on the environment. Finally, the research study aims to evaluate how the barriers to effective SSCM affect Saudi Arabian companies. The study will show the sustainable supply chain management barriers to understand the relationship between the factors and companies. In addition, the study aims to briefly examine whether the Saudi Arabian government has tried to help promote sustainability in supply chains.
Contribution to Knowledge
The research study provides more knowledge regarding the implementation of the supply chain in multiple ways. For instance, it adds the number of research articles that investigate SSCM in Saudi Arabia. There are limited research articles that explore the practice of sustainable supply chains in Saudi Arabian businesses (Sajjad, Eweje and Tappin, 2020, p. 644). As a result, the limited literature should prioritize more research in SSCM in Saudi Arabia This proposal exposes the need for researchers to focus on the barriers affecting SSCM in the Middle East, specifically Saudi Arabia.
In addition, the study offers various managers the knowledge of the challenges that hinder the implementation of SSCM, increasing experienced managers who can successfully create sustainable supply chains. Furthermore, the study provides essential knowledge on how SSCM has evolved, which helps businesses understand sustainability and supply chain management changes. Finally, the study explains how Saudi Arabian firms can benefit from SSCM (Sajjad, Eweje and Tappin, 2020, p. 644). All the knowledge developed from this research study can help businesses to integrate SSCM into their business practices.
Statement of Significance
The study educates businesses, governments, and society on the effect of sustainable supply chains. Saudi Arabian companies and managers lack the awareness to implement sustainable supply chain policies. Consequently, this study will be necessary for various businesses and managers in Saudi Arabia. It provides a framework to analyze the problems that hamper the sustainable development of supply chain management (Sajjad, Eweje and Tappin, 2020, p. 643). Most academic literature focuses on SSCM in other countries and limits the number of studies focusing on Saudi Arabia. As a result, the study seeks to reduce the research gap in the topic.
In addition, the study is critical because it provides crucial information regarding the barriers that affect SSCM. The implementation and integration of SSCM into business processes has been slow, and when it happened, it was hampered by several challenges. Therefore, this study plays the role of providing crucial information on SSCM integration into business practices in Saudi Arabia (Sajjad, Eweje and Tappin, 2020, p. 595). If managers become aware of SSCM and understand the challenges that affect SSCM implementation, they can avoid failures associated with lacking knowledge and skills in effective supply chain management.
Literature Review
High Financial Costs
The impacts that packaging has on the environment are significant considering the levels of pollution associated with packaging materials. Implementing environmentally friendly packaging can help control or reduce the hazardous impacts of packaging products (Sajjad, Eweje and Tappin, 2015, p. 594). However, there are high costs associated with facilitating environmentally friendly packaging, making it challenging for industries to adopt. In retrospect, the total investment needed for sustainable methodologies like green manufacturing and green design is exceptionally high (Sajjad, Eweje and Tappin, 2020, p. 602). Furthermore, a lack of well-defined benefits, such as the inability to predict the investment return, forms a barrier to SSCM implementation (Oelze, 2017, p. 1435). In addition, since the SSCM strategy adoption requires expensive supply chain systems, processes, and infrastructure, some companies may struggle to participate in SSCM practices.
Lack of Commitment from Top Management
The commitment and support of high-level management are critical to the introduction of SSCM into a business. Lack of dedication from leadership to create and adopt sustainable policies in the supply chain is a significant obstacle to SSCM implementation (Narayanan, Sridharan and Kumar, 2019, p. 940). In addition, top management may fail to accept changes and resist needed transitions in supply chain management may cause ineffective SSCM practices (Govindan et al., 2014, 558). As a result, effective SSCM methods cannot be implemented since the top management may be simply disinterested in supply chain efforts.
Lack of Knowledge and Intrinsic Motivation
The main aim of being a more sustainable company requires suppliers and buyers to have enough knowledge. Noticeably, when a supplier or buyer lacks knowledge at a particular stage in the supply chain, a company’s capacity to effectively resolve sustainability issues can be impeded. Consequently, companies should strive to reduce information asymmetries that may affect SSCM (Mabrouk, Omri and Jarraya, 2020, p. 571). Some suppliers lack intrinsic motivation; therefore, they are often unwilling to comply with sustainability standards (Baig et al., 2020, p. 1841525). Such suppliers and importers do not commit to being sustainable by becoming certified.
Regulation
Government regulations have a huge role in encouraging firms to align their supply chain practices with sustainability. Governments can ensure that an organization streamlines its environmental and social effects in SSCM processes. However, lack of government interest or inadequate regulation may decelerate sustainable supply chains at international and national levels. For instance, if a firm engages in corporate social responsibility alone in its industry, financial expenses may become high, driving profits down. Such increased costs happen because other competitors do not have an obligation to follow government regulations in supply chains (Narimissa, Kangarani‐Farahani and Molla‐Alizadeh‐Zavardehi, 2020, p. 255). New government regulations may often favor sustainable supply chains; however, unfavorable governmental rules and regulations can hamper the sustainable development of supply chains.
Poor Organizational Culture and Limited Control and Monitoring
The top management at different organizations must adopt and create a culture that continually practices sustainable business processes. Management has the responsibility of persuading employees to practice SSCM in daily business operations. However, failure to create such a culture forms a huge barrier that hinders the successful adoption of SSCM practices. Proper control and monitoring from the governmental bodies are needed to ensure effective SSCM implementation (Movahedipour et al., 2017, p. 1831). Nevertheless, a lack of control and monitoring initiatives undermines the ability of firms to create and successfully adopt SSCM practices.
Methodology
The study’s primary objective is to prioritize the barriers that hamper sustainability in supply chains in the Saudi Arabian economy. In the earliest phase, a literature review will be carried out to determine the most dominant challenges affecting SSCM worldwide. Then, the research will evaluate the barriers that affect sustainable supply chains in Saudi Arabian companies. Qualitative study approaches effectively identify mechanisms through which data can be collected from primary and secondary sources (Sajjad, Eweje and Tappin, 2020, p. 646). Secondary sources may include company sustainability reports, while primary sources can be interviews and surveys. Qualitative study approaches give detailed descriptions of the participants. In addition, qualitative research facilitates a deeper understanding of primary data, experiences, and context. Furthermore, it allows researchers to ask questions that cannot be explained easily through quantitative means.
Data Collection
Data needed for the current research will entail the evolution, importance, and barriers of SSCM in Saudi Arabian companies. A significant part of the sources used will be secondary and primary sources. The data will be collected from relevant and credible secondary sources. SSCM in Saudi Arabia is hardly covered by previous research. Therefore, the study will use peer-reviewed journals from 2010 to 2021 except for information on evolution. In addition, government and company sustainability reports can be used. Afterward, the study will produce hypotheses from the most prevalent factors in literature affecting SSCM to investigate whether similar factors affect the Saudi Arabian economy. Finally, the data collection will be done through interviews and focus group discussions. The first-hand experiences of supply chain professionals and employees in Saudi Arabia will provide crucial information on the topic.
Ethical Considerations
Ethics is an integral part of conducting research studies since most people may not participate in interviews if they want to be anonymous. Therefore, the study will incorporate the highest standards of confidentiality and anonymity. Some interviewees may not reveal sensitive information about sustainable supply chain challenges if their employers may find out. As a result, the participants in the study will be assured of confidentiality and informed consent. Additionally, the study will attribute and acknowledge all sources to any ideas borrowed from other studies.
Study Limitations
The study will face multiple limitations in data collection and application of knowledge gained from the study. First, the research uses secondary sources in the data collection, which are associated with some challenges such as limited sample size and the concentration of some studies in specific locations. For instance, the analysis of barriers to effective implementation of SSCM in India’s textile industry may not apply to other countries since each nation has different economic environments. Thus, while the findings of the study may apply to businesses in the nation, they may not be relevant to other countries with different economic systems, such as the United States (Sajjad, Eweje and Tappin, 2020, p. 646). Second, qualitative interviews in data collection rely on the credibility and accuracy of respondents, who may be stressed due to emotional strain providing inaccurate information.
Reference List
Baig, S.A., Abrar, M., Batool, A., Hashim, M. and Shabbir, R., 2020. ‘Barriers to the adoption of sustainable supply chain management practices: moderating role of firm size’, Cogent Business & Management, 7(1), p.1841525.
Govindan, K., Kaliyan, M., Kannan, D. and Haq, A.N., 2014. ‘Barriers analysis for green supply chain management implementation in Indian industries using analytic hierarchy process’, International Journal of Production Economics, 147(1), pp.555-568.
Mabrouk, N., Omri, A. and Jarraya, B., 2020. ‘Factors influencing the performance of supply chain management in Saudi SMEs’, Uncertain Supply Chain Management, 8(3), pp.569-578.
Medabesh, A. and Khan, S.M.F.A., 2020. ‘Sustainability management among enterprises in United Kingdom and Saudi Arabia’, Academy of Strategic Management Journal, 19(2), pp.1-13. Web.
Movahedipour, M., Zeng, J., Yang, M. and Wu, X., 2017. ‘An ISM approach for the barrier analysis in implementing sustainable supply chain management: an empirical study’, Management Decision, 55(8), pp. 1824-1850.
Narayanan, A.E., Sridharan, R. and Kumar, P.R., 2019. ‘Analyzing the interactions among barriers of sustainable supply chain management practices’, Journal of Manufacturing Technology Management, 30(6), pp. 937-971.
Narimissa, O., Kangarani‐Farahani, A. and Molla‐Alizadeh‐Zavardehi, S., 2020. ‘Drivers and barriers for implementation and improvement of Sustainable Supply Chain Management’, Sustainable Development, 28(1), pp.247-258.
Oelze, N., 2017. ‘Sustainable supply chain management implementation–enablers and barriers in the textile industry’, Sustainability, 9(8), p.1435.
Sajjad, A., Eweje, G. and Tappin, D., 2015. ‘Sustainable supply chain management: motivators and barriers’, Business Strategy and the Environment, 24(7), pp.643-655.
Sajjad, A., Eweje, G. and Tappin, D., 2020. ‘Managerial perspectives on drivers for and barriers to sustainable supply chain management implementation: evidence from New Zealand’, Business Strategy and the Environment, 29(2), pp.592-604.