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Sustainability is an important aspect of business in modern society where environmental pollution, economics, efficiency, effectiveness, and conservation of energy are issues of concern. As a distribution network that organizations rely on distributing their diverse products, the supply chain has a significant impact on the environment. In this view, the supply chain should be sustainable for it to serve varied organizations optimally and experience growth in the competitive markets. According to Chapman, Arnold, Gatewood, and Clive (2017), sustainability is beneficial to the supply chain because it reduces costs, decreases wastage, improves efficiency, saves energy, and enhances competitive advantage. Governments and customers also increase pressure on the supply chain to adopt strategies that are sustainable to protect not only the environment but also encourage prudent use of available resources. Ulas (2016) states that recycle, reuse, reduce, and recover are the four principles, which promote sustainability of operations in the chain supply. In essence, the sustainability of the supply chain is central to improving the performance and growth of logistics operations. Therefore, the research paper examines the application of the triple bottom line approach and green strategy in the supply chain.
The Triple Bottom Line
The triple bottom line (TBL) is a performance assessment framework, which offers a comprehensive assessment of the supply chain. Bals and Tate (2016) state economic, environmental, and social aspects are the three elements of the triple bottom line of the supply chain. These three elements have expanded sustainability and provided a holistic view of sustainability.
The economic element of the triple bottom line approach covers numerous aspects regarding the economic sustainability of the supply chain. In competitive markets, the supply chain should be economically sustainable for it to grow and remain competitive. Economic sustainability implies robust profitability ratios such as profit margin, return on equity, return on assets, and net profit margin. Profit margin is an integral profitability ratio, which shows the percentage of profit a company makes out of the total sales made. For the supply chain to be economically sustainable, the profit margin should be considerably high. As investors acquire shares of the supply, return on equity should be lucrative and favorable to not only retail investors but also attract others, resulting in the growth and sustainability of the supply chain in stock markets. The supply chain also should have a high return on assets and a lucrative net profit margin. In essence, robust profitability ratios imply that the supply chain is sustainable.
The supply chain employs some strategies to ensure economic sustainability. Golinska-Dawson and Kolinski (2016) assert that the improvement of efficiency is a major strategy of ensuring that the supply chain is economically sustainable. Improvement of efficiency entails the optimization of distribution networks and logistic operations to eliminate redundant ones, which do not add considerable value to the supply chain. Usually, redundant networks and operations increase wastage and costs, resulting in unsustainable logistic processes. In undertaking a sustainability study of the supply chain, Galal and Moneim (2016) highlighted value addition, the number of delivered products, and diversification as three pertinent economic indicators of sustainability. The supply chain should add value to products as it distributes among its warehouses and centers. In essence, the value of the products should change considerably when transported from manufacturers and suppliers to consumers. The supply chain needs to have adequate amounts of products to deliver, and thus, optimize the use of available resources. Diversification is a strategy for it ensures optimization of the supply chain, for it reduces the risks of single products and seasonal changes in the demand and supply.
Given that the supply chain has a huge impact on the environment, the triple bottom line approach considers environmental sustainability as an integral aspect of the supply chain. The increasing environmental pollution has necessitated the reduction of non-renewable energy sources such as coal and fossil fuel because they emit carbon dioxide, which is a major greenhouse gas (Ray, 2016). To protect and conserve the environment from pollution, the supply chain has to use alternative sources of energy that have minimal pollution and aid in the mitigation of pollution in the environment. Additionally, a sustainable supply chain reduces the use of non-renewable sources of energy and increases the use of renewable forms of energy. The renewable energy indicator, which is the proportion of renewable sources of energy used, determines the environmental sustainability of the supply chain (Galal & Moneim, 2016). The higher the renewable energy indicator, the more sustainable is the supply chain. Overall, the supply chain should protect the environment from pollution or mitigate pollution and utilize renewable forms of energy.
To promote the sustainability of the environment, the supply chain needs to adopt a lean strategy in its logistics operations. The lean strategy reduces wastage and optimizes the utilization of resources in a sustainable manner. According to Chapman et al. (2017), reducing, reusing, and recycling materials are key strategies that promote the environmental sustainability of the supply chain. Moreover, the reduction of wastages in transport and storage conserves energy and improves its sustainability. The manufacture of durable packages, racks, and containers reduces their disposal and increases their use in the supply chain (Ray, 2016). To protect the environment and reduce wastage, the supply chain should encourage the use of reusable materials in packaging and transporting products. Since some materials are reusable, the supply chain needs to have a way of recycling them to prevent their accumulation in the environment.
The supply chain has an immense impact on the people in a given society or community. Social sustainability comprises society, labor practices, human rights, fair business practices, and customer care (Belvedere & Grando, 2017). The supply chain owes the society corporate social responsibility because it uses human resources and exploits natural resources in a given environment. To benefit society, the supply chain employs local workers, sponsors social events, supports local charities, and boosts local economies. In the aspect of labor practices, the supply chain should adopt and apply good labor practices, which offer gender equity, career development, safe working conditions, social protection, and training of employees (Dubey, 2017). In a civilized society, human rights have become the basic regulations in the workplace. In this view, the supply chain has a responsibility of ensuring that it complies and advocates for the protection of human rights regarding equality, relationships, freedom, and conflict resolution in the workplace. The supply chain also has a noble responsibility of ensuring that its operations are in line with business practices promoting fairness. The supply chain needs to adhere to property rights, employ competitive strategies, and dissociate from corrupt practices. Consumer care entails the provision of elaborate customer care services, which protect data and privacy, expedite resolution of disputes and complaints, educate and create awareness, and guarantee health and safety. Thus, the social element of the triple bottom line plays a central role in promoting the sustainability of the supply chain among populations, communities, and societies it serves.
The Green Supply Chain
The evolution of the supply chain and the need to promote sustainability has led to the emergence of the green supply chain. The green supply chain incorporates activities that protect the environment and assess the effects of logistics operations and products on the environment. Silvestre (2016) asserts that green supply chain supports activities, such as product design, supply, manufacture, storage, distribution, and consumption, which protect the environment. The green supply focuses on green production activities, including mitigation of environmental effects, optimization of material usages, conservation of energy, and preservation of scarce resources. In essence, the green supply chain promotes and supports green business practices to improve the sustainability of the environment. Chapman et al. (2017) add that the green supply chain encompasses green reverse logistics, which is a chain that provides for the collection and delivery of materials and products to manufacturers and suppliers so that they can repair, recycle, remanufacture, or discard. According to a study, green supply chain management has beneficial impacts on corporate performance because it boosts the economic and social performance of the supply chain (Younis, Sundarakani, & Vel, 2016). Thus, the green strategy does not only support the environmental sustainability of the supply chain but also advocates for green business activities along the chain.
The growth of the supply chain in modern society had necessitated the establishment of a sustainable supply chain, which ensures that there are perpetual use and production of resources. Analysis of the approaches to sustainability in the supply chain indicates that there are numerous strategies. The core strategies of promoting the sustainability of the supply chain are the use of the triple bottom line approach and the green supply chain. The triple bottom line strategy focuses on economic, environmental, and social sustainability while the green supply chain focuses on environmental sustainability.
Bals, L., & Tate, W. (2016). Implementing triple bottom line sustainability into global supply chains. Sheffield, London. Greenleaf Publishing.
Belvedere, V., & Grando, A. (2017). Sustainable operations and supply chain management. Hoboken, NJ: Wiley.
Chapman, S., Arnold, J., Gatewood, A., & Clive, L. (2017). Introduction to materials management (8th edition). New York, NY: Pearson Education.
Dubey, R. (2017). Strategic management of sustainable manufacturing operations. Hershey, PA: IGI Global.
Galal, N., & Moneim, A. (2016). Developing sustainable supply chains in developing countries. Procedia CIRP, 48(1), 419-424. Web.
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Golinska-Dawson, P., & Kolinski, A. (2016). Efficiency in a sustainable supply chain. New York, NY: Springer.
Ray, N. (2016). Business infrastructure for sustainability in developing economies. Hershey, PA: IGI Global.
Silvestre, B. (2016). Sustainable supply chain management: Current debate and future directions. Gestao Producao, 23(2), 235-249. Web.
Ulas, A. (2016). Ethics and sustainability in global supply chain management. Hershey, PA: IGI Global.
Younis, H., Sundarakani, B., & Vel, P. (2016). The impact of implementing green supply chain management practices on corporate performance. Competitiveness Review, 26(3), 216-245. Web.