Sustainable Supply Chain Management. Case studies in the consumer electronics industry E-Book

Christian Brockmann

• Herausgeber: GRIN Verlag
• Sprache: Englisch

Veröffentlichungsjahr: 2015

Beschreibung

Bachelor Thesis from the year 2014 in the subject Engineering - Industrial Engineering and Management, grade: 1,7, Wilhelm Büchner Hochschule Private Fernhochschule Darmstadt (Fachbereich Ingenieurwissenschaften/Informatik/ Wirtschaftsingenieurwesen und Technologiemanagement), language: English, abstract: The purpose of this thesis is to examine the application of Sustainable Supply Chain Management (SSCM) in the growing industry of consumer electronics. The research intends to look for patterns in respect to the implementation of SSCM programs within selected consumer electronics focused businesses using a case study analysis. The aim of this paper is to investigate which concepts of implementation and design of SSCM are available in the consumer electronics industry and to analyze how they can be classified. The primary sources for the main analysis of this paper are the sustainability reports from the four companies: Dell, Philips, Samsung and Sony. These companies were selected based on their location, size and ranking within the industry and the method of selection is explained herein. Following a first look at the data, a process-oriented approach was chosen for the study, and a careful analysis leads to the formation of a model describing the process of achieving supply chain sustainability in the consumer electronics industry: The ‘Sustainability Achievement Process’ comprises eight phases: (1) Acknowledgement, (2) Vision and Strategy, (3) Communication, (4) Assessment, (5) Goal Setting, (6) Goal Achievement, (7) Expanding the Reach and (8) Maintaining the Success. The model is refined and substantiated in the subsequent cross-case analysis by illustrating the distinctive features of each phase within each company. Furthermore, the author identifies indicators and keywords for every phase which permit the unambiguous association of statements to levels of sustainability achievement for easy classification. Critical cases are recognized, examined and solved during the research in order to provide a framework for a real world application. Overall, the derived model provides the foundation for the evaluation of a corporation’s progress concerning different aspects of sustainability. The thesis concludes by proposing a series of approaches for future research to increase the verification of the model and advance it, potentially extending the applicability of the model to SSCM in general.

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Abstract

The purpose of this thesis is to examine the application of Sustainable Supply Chain Management (SSCM) in the growing industry of consumer electronics. The research intends to look for patterns in respect to the implementation of SSCM programs within selected consumer electronics focused businesses using a case study analysis. The aim of this paper is to investigate which concepts of implementation and design of SSCM are available in the consumer electronics industry and to analyze how they can be classified. The primary sources for the main analysis of this paper are the sustainability reports from the four companies: Dell, Philips, Samsung and Sony. These companies were selected based on their location, size and ranking within the industry and the method of selection is explained herein. Following a first look at the data, a process-oriented approach was chosen for the study, and a careful analysis leads to the formation of a model describing the process of achieving supply chain sustainability in the consumer electronics industry: The ‘Sustainability Achievement Process’ comprises eight phases: (1) Acknowledgement, (2) Vision and Strategy, (3) Communication, (4) Assessment, (5) Goal Setting, (6) Goal Achievement, (7) Expanding the Reach and (8) Maintaining the Success. The model is refined and substantiated in the subsequent cross-case analysis by illustrating the distinctive features of each phase within each company. Furthermore, the author identifies indicators and keywords for every phase which permit the unambiguous association of statements to levels of sustainability achievement for easy classification. Critical cases are recognized, examined and solved during the research in order to provide a framework for a real world application. Overall, the derived model provides the foundation for the evaluation of a corporation’s progress concerning different aspects of sustainability. The thesis concludes by proposing a series of approaches for future research to increase the verification of the model and advance it, potentially extending the applicability of the model to SSCM in general.

Keywords: Supply chain management, sustainability, case study research, consumer electronics industry, holistic approach, theory building

Table of Contents

1 Introduction

2 Theoretical Foundation

2.1 Sustainability and Supply Chain Management

2.2 Environmental Aspect

2.3 Social Aspect

2.4 Economic Aspect

2.5 Consumer Electronics Industry

2.6 Research Question

3 Methodology

4 Case Selection

4.1 Single Case Review

4.1.1 Dell

4.1.2 Philips

4.1.3 Samsung

4.1.4 Sony

4.2 Cross-Case Comparison

5 Pattern Finding

5.1 Entering the Field

5.2 Crafting Instruments

5.3 Data Analysis and Theory Building

5.3.1 Sustainability Achievement Process

5.4 Refining the Model

5.4.1 Acknowledgement

5.4.2 Vision and Strategy

5.4.3 Communication

5.4.4 Assessment

5.4.5 Goal Setting

5.4.6 Goal Achievement

5.4.7 Expanding the Reach

5.4.8 Maintaining the Success

5.5 Comparison with other Literature

5.6 Discussion

6 Conclusions and Outlook

References

List of Abbreviations

Table of Figures & Tables

1 Introduction

Along with the enormous economic growth worldwide during the recent decades international trade and transport intensity have significantly increased (Christopher 2011: 245). In addition, new markets have constantly been opened while resources were exploited in remote areas of the world. At the same time little attention has been paid to the impact on climate change due to increasing consumption of fossil fuels and emissions of greenhouse gases and other pollutants (Christopher 2011: 244). This issue is particularly prevalent in the consumer electronics industry where most products are made up of a variety of different raw materials. As a consequence, global sourcing has become an important and integral determinant of the supply chains in this ever-growing industry (Mentzer et. al 2007: 3f). Supply chains in the consumer electronics industry are characterized by their high complexity and are often not managed and controlled as such by the leading multinational enterprises (MNEs) from the point of resource extraction to the final customer (Cetinkaya et al 2011). However, the extended media coverage on the environmental consequences of current and forecasted consumer behavior as well as the depletion of naturally occurring resources has led to a greater environmental awareness in society (Nikbakhst 2009: 197f). As MNEs in the consumer electronics industry have been manufacturing more frequently in low-wage countries, social aspects, such as working conditions, child labor and human rights violations across the whole supply chain have become another major concern (Abele 2008: 30f). These and other factors have led the ever conscious consumers and in turn, businesses to an intensified focus on the application of sustainable practices in all sectors of the economy (Christopher 2011: 241). Applying the concept of sustainability to supply chain management (SCM) led to the emergence of sustainable supply chain management (SSCM) and has rapidly developed as a popular topic in academic literature and business-related publications (Seuring et al. 2008b: 2f). The ongoing growth as well as the unique characteristics of the consumer electronics industry constitute the great relevance of research in this field regarding the implementation of more sustainable practices in SCM.

The aim of this thesis is to investigate which concepts of implementation and design of SSCM are available in the consumer electronics industry and to analyze how they can be classified.

First, the theoretical foundation for the subsequent research is laid by predefining the basic terminology and reviewing the major aspects of sustainability and its implementation with SCM. Prior to the explanation of the case selection the methodology of this thesis will be determined in order to guide the research. The developed procedures for the data analysis and construction of a theory will provide the scientific framework. The within-case analysis of each sustainability report will involve the identification and distinction of different phases regarding the process of achieving sustainability which will lead to the proposition of a model. In the next step, the model named the Sustainability Achievement Process will be refined and further substantiated using a cross-case analysis. The author’s intent is to provide a framework not only for scientific application but for practical use in the evaluations of companies’ progress in achieving sustainability concerning particular sustainability issues. Finally, the findings will be compared to related literature and discussed regarding their implications, limitations and further development in ensuing research.

2 Theoretical Foundation

2.1 Sustainability and Supply Chain Management

The idea of sustainable development was conceived and formalized for the first time at the beginning of the 18th century by Hans Carl von Carlowitz, a German accountant and mining administrator, in the context of forestry (Bader 2008). However, the term did not become popular and widely used until 250 years later. In 1987, the World Commission on Environment and Development (also referred to as the Brundtland Commission) published their report, defining sustainable development as a “development that meets the needs of the present without compromising the ability of future generations to meet their own needs.” In 1992, at the first United Nations Conference on Environment and Development, sustainability became a formal political principle and it was further substantiated augmenting the environmental protection aspect by economic and social considerations. With the intention of highlighting the strong interrelatedness of the three fields of sustainability in 1997 the EU developed the ‘three-pillar model of sustainability’ (Bader 2008). Elkington (1997) introduced a similar idea for the implementation of sustainability in the business world suggesting the concept of the ‘triple-bottom line’, which is also referred to as the 3Ps: profit, people and planet. The intention of this model is to measure and furthermore control the financial, social and environmental performance of organizations as a part of a balanced scorecard, in order to achieve sustainably responsible behavior (Savitz 2006). Due to the relationship between the three pillars being rather controversial (Bader 2008) the weighting across the dimensions as well as the configuration and setting of priorities within the company remains up to the management and stakeholders of corporations and supply chains. Consequently there is a stringent necessity for understanding the conflicting and supporting relationships between the different objectives and linking them to “the overall corporate goals and vision, regardless of possible specific trade-offs” (Cetinkaya 2011: 31). Adhering to non-materialistic values and managing environmental and social issues can have a great impact on the economic performance of a company. Several cases have shown that it is not only crucial to a company’s economic success but to its well-being and very existence (Schaltegger and Wagner 2006: 2). Particularly on a political level the environmental component is seen more and more as the necessary foundation for economic and social development (Bader 2008). Therefore, the long term benefits of committing to environmental and social projects completely outweighs the short term downfalls, and should be brought to managers’ attention and also be included in company performance measuring (Cetinkaya 2011: 31, 32).

The supply chain is commonly defined as “a set of three or more entities (organizations or individuals) directly involved in the upstream and downstream flows of products, services, finances, and/or information from a source to a customer” (Mentzer et al. 2001: 4). So, as sustainability is of interest for any organization wishing to stay competitive and in public favor the aspects of these management practices should naturally extend into each company’s supply chain. SCM is defined as “the systemic, strategic coordination of the traditional business functions and the tactics across these businesses within the supply chain, for the purpose of improving the long-term performance of the individual companies and the supply chain as a whole” (Mentzer et al. 2001: 18). Therefore, with the supply chain being the framework for efficient and effective business operations it should be the focal point for improving sustainability in all linked companies (Christopher 2011: 242). Over time a combination of external pressures and incentives from governmental authorities, customers and other stakeholders, such as media, Non-Governmental Organization (NGOs), the scientific community or interest groups, and supply chain internal forces lead to the development of SSCM as an established management concept through the synergy of sustainability and SCM (Seuring et al. 2008b: 9). SSCM is defined as “the management of material, information and capital flows as well as cooperation among companies along the supply chain while taking goals from all three dimensions of sustainable development, i.e., economic, environmental and social, into account which are derived from customer and stakeholder requirements” (Seuring & Müller 2008a: 2). Yet, a modern understanding of sustainable entrepreneurship goes beyond the level of compliance and seeks an active engagement in systematically identifying and addressing potential and actual issues in the social, environmental and economic realm of a corporation (Schmidpeter 2014: 131).

2.2 Environmental Aspect

This section aims to outline the main characteristics of the environmental pillar of sustainability, as well as introduce some major concepts for its implementation.

The environmental aspect of sustainability in SCM, also often referred to as Green Supply Chain Management (GrSCM), has been a popular topic in companies as well as in related research since the 1990s (Seuring et. al 2008b: 20). With the rise of environmental protection as a topic in society, managers in companies started to apply the tools of Life Cycle Assessment to evaluate their products’ impacts on the environment. Using an alternative approach managers also looked at optimizing processes throughout the supply chain mainly in order to cut energy consumption and save resources (Nikbakhst 2009: 197f). For concepts facilitating the preservation of the environment two main goals can be derived from the described development. The first main goal is reducing the pollution of the environment, be it harmful gases, liquid toxins or solid wastes. The second major objective is targeting the reduction of energy and resource consumption, foremost fossil fuels and scarce commodities. It is important to note though that for many projects financial or strategic advantages are the primary selling point necessary for them to be implemented in a supply chain.

The above goals are closely linked and interdependent. Therefore, the following comprehensive overview of major concepts roughly follows the product life cycle instead of categorizing them at this point. The Supply Chain Operations Reference -model (SCOR-model) provides a SCM framework commonly used to understand and optimize environmental factors throughout the product life cycle starting with the design, next the processes of sourcing, making and delivering the products and ultimately aspects of return logistics (Nikbakhst 2009: 210ff).