Challenges in implementing sustainable supply chain

Proceedings of 8th International Conference on Supply Chain Management and Information Systems (SCMIS 2010) Hong Kong, China - 6-8 October 2010

Challenges in implementing sustainable supply chain within a collaborative manufacturing network Swee S. Kuik, Sev V. Nagalingam & Yousef Amer School of Adv. Manufacturing & Mechanical Engineering University of South Australia Adelaide, Australia Abstract—Collaborative manufacturing networks (CMN) are being adopted by numerous manufacturers as a strategy to reduce production cost, be proactive in satisfying customer demands, increase effectiveness and efficiency and gain worldwide distribution. In this paper, practical limitations and issues associated with current practice in a global supply chain that is involved with collaborative manufacturing activities in sharing their core competence is critically analysed and summarised within six key characteristics. As there is still limited research on addressing inter- or intra-organisational activities within a CMN in promoting economic and environmental practices in supply chain management, a framework of sustainable supply chain management for a CMN is proposed in this paper. Further, this paper aims to address these gaps by introducing this integrated framework for a CMN and help overcome these practical limitations in managing a global supply chain. Finally, this research paper discusses the practical implications and research limitations about this proposed framework. Keywords-sustainable supply chain management; Six Sigma benchmarking; collaborative manufacturing; organisational activities

I.

INTRODUCTION

Environmental issues are becoming the main concerns of many global supply chain practitioners in today’s world. In order to address these emerging environmental issues, the industry practitioners are keen to explore a total solution on the reduction of the waste generated from the current practices in a supply chain. Meanwhile, implementation cost that is needed to rectify these environmental issues plays a major part in their considerations in selecting an implementation strategy [1-4]. In view of this environmental consideration in a global supply chain, the old definition of supply chain management by Lambert and Cooper [5] who defined as “the integration of key business processes from end user through original suppliers that provides products, services and information that add value for customers and other stakeholders” may not reflect satisfactorily on the current practice of a supply chain. Recent studies by Linton et al. [6], Carter and Rogers [7], Kaynak and Montiel [8] and Sharma et al. [9], emphasised that sustainable supply chain development in terms of social, economic, and environmental benefits should be taken into consideration in a supply chain practice. More specifically, supply chain management can be defined as the integration of the social, economic, and environmental practices within a global supply chain that provide green products, excellent services

ISBN: 978-962-367-697-7

and accurate information sharing that beneficial to all employees, shareholders, business partners and the wider community. The intent of this research is to propose a conceptual framework to address the interactions of economic and environmental aspects within a collaborative manufacturing network (CMN). Firstly, the investigation focused on the generic supply chain framework that is being used by many practitioners. Then a summary of generic supply chain framework was drawn based on six distinct characteristics through an Ishikawa fishbone analysis. Secondly, based on these characteristics, an integrated sustainable supply chain framework for a CMN is proposed to overcome some practical limitations of the current practices in a global supply chain. Based on a detailed literature review and by consolidating the outcome of the review, this conceptual research paper is aimed at answering the following specific questions: • • • •

What are the distinct characteristics of the generic supply chain management frameworks used by many practitioners in industry? What are the limitations and drawbacks for the current practices in a supply chain? How the proposed supply chain management framework for a CMN will meet the practical limitations and drawbacks in a supply chain? What are the practical implications and research limitations of this supply chain framework? II.

RESEARCH BACKGROUND

In today’s business world, a supply chain consists of complicated global networks that constitutes the organisation’s dependent or independent business units to coordinate the collaborative tasks in achieving a mutual agreement [10, 11]. Due to the external pressures and drivers towards sustainable development initiatives from government regulatory systems and environmental awareness from the public [3], industry practitioners have to struggle to establish strategic plan in promoting sustainable supply chain initiative as currently there is no detailed guideline on incorporating this initiative into collaborative manufacturing strategy. In the following, a brief discussion of current supply chain practice and an analysis based on six distinct characteristics of generic supply chain management frameworks are summarised and presented. Then, Section

© Copyright 2010 The Hong Kong Polytechnic University

662


III introduces a conceptual framework and Section IV discusses some practical implications and research limitations of this framework. Finally, a conclusion of this research is drawn. A. Analysis of current supply chain practices Current practice in supply chain management utilises two generic supply chain management frameworks. There are: Global Supply Chain Forum (GSCF) framework [12, 13] and Supply Chain Operations Reference (SCOR) framework [14, 15]. Nevertheless, the nature of these frameworks are diverse in terms of its (i) centric focus, (ii) supply chain strategy, (iii) scope of organisational activities, (iv) value creation in a supply chain, (v) sustainability in a supply chain, and (vi) collaboration in a global partnership network as illustrated in Figure 1. The nature of generic frameworks of SCOR and GSCF and some other frameworks in literature is briefly discussed in this paper. This brief discussion is to explicitly highlight the limitations and practical issues of current generic supply chain management frameworks and classify them into six distinct characteristics as illustrated in Figure 1.

Figure 1. Essential characteristic of the generic supply chain frameworks

Both SCOR and GSCF frameworks are considered as the most widely used approaches by many supply chain practitioners. Despite these generic frameworks, there are numerous integrated supply chain management frameworks found in literature, such as collaborative supply chain management framework by Udin et al. [16, 17], collaborative partnership framework by Nagalingam and Fretes [18], and an integrative framework for supply chain

ISBN: 978-962-367-697-7

collaboration by Simatupang and Sridharan [19]. These frameworks still remain as standalone approaches by evaluating a specific view of the value chain, customer driven demand or managing a limited scope of internal or external business process interfaces. In such a scenario, they are not considered as holistic approaches. B. A summary of six distinct characteristics This section examines the distinct characteristics of the generic supply chain management frameworks in terms of its strengths and weaknesses. In addition, the diverse perspective of the generic frameworks is also highlighted. However, in reality, the global supply chain network is more complicated than a localised network due to many unforeseen practical issues within a CMN. Therefore, the proposed conceptual framework in this paper aims to address these limitations and practical issues in a global supply chain. Characteristic 1: Centric focus of the framework The centric focus of GSCF framework is concerned with the development of the relationship management [12, 20]. This relationship management covers the critical linkage for a successful supply chain management between the supplier and customer relationships management throughout the organisation [5, 21, 22]. Furthermore, Lambert et al. [13] claimed that the operational cost minimisation and profitability across the supply chain cannot be achieved without a strong relationships between suppliers and customers. Hence, the primary emphasis of this framework depends mainly on good business relationships and aims to increase the overall organisational strategic performance and competitive advantage of the organisation [5, 13, 22, 23]. For example, without a good relationship with a customer, demand order may be significantly reduced and will impact on the profitability of the organisation [20]. On the other hand, SCOR framework has also been considered a successful approach through its implementation in many global organisations [24]. Many practitioners believe that for a quickly resolved and predictable approach towards rectifying transactional problems in minimising operational cost, SCOR is more reliable and effective approach for their managerial requirements [25, 26]. This believe is due to the fact that many organisations have numerous transactional opportunities for improvement throughout their inter- or intra-organisational activities [25]. Pertaining to the operational quality issue within supply chains, SCC proposed a recent enhancement of SCOR v.9 framework by incorporating Lean Six Sigma methodology to improve transactional efficiency [14]. This convergence model is also called a coordinated approach that increases the reliability of the model and augments in continuous improvement [14]. In general, the significance difference for the centric focus of the generic supply chain management framework is between two distinct boundaries: i.e. (i) transactional efficiency and (ii) key relationship management. However, justification on current management status within business


663


practices and organisational requirements becomes an essential indicator for practitioners to decide first on either achieving transactional improvement or achieving a strategic improvement through key relationship management. Characteristic 2: Supply chain strategy In view of supply chain strategy, GSCF framework comprises of eight supply chain management processes that are aligned with the corporate strategy such that its actual functional strategy is developed based on the supplier and customer relationship management processes [22]. By developing appropriate key relationships (i.e. customers and suppliers), the growth of the business’s profit is assured [5, 12, 13, 21]. Hence, this framework emphasises the key relationship management to achieve a breakthrough improvement [23]. Meanwhile, an empirical study by Lambert et al. [5] proved that the relationship between customers and suppliers is relatively important factor in influencing the overall performance of a supply chain. On the other hand, SCOR framework is designed in such a way that its supply chain processes are based on the operational strategy [15, 25, 26]. Apparently, SCOR framework is not emphasising on key relationship and critical linkage between the operational strategy and the other functional strategies. However, most practitioners agreed that SCOR has a powerful capability in benchmarking analysis [26]. Furthermore, the exploratory study of SCOR framework by Lockamy and McCormack [24] showed that the supply chain management in SCOR planning practices is significantly important due to the impact on the overall supply chain performance. In a concise explanation, the diverse perspective of both generic supply chain frameworks in terms of supply chain strategy is between the operational strategy and the corporate strategy. GSCF framework is aligned towards corporate and functional strategies to develop organisational directions [5, 20]; but SCOR framework is more focused on the operational strategy based on benchmarking analysis for developing the organisational goals [15, 25, 26]. Characteristic 3: Scope of organisational activities An important aspect of generic supply chain frameworks is to consider the scope of organisational activities and involvement of the cross functional teams. SCOR framework is not designed to describe every business activities [14, 15]. Therefore some activities such as sales and marketing (demand generation), research and technology development, product development, and some elements of post-delivery customer support are excluded and beyond the scope of SCOR framework [14, 15, 23]. In addition, SCOR does not cover explicitly training, quality, information technology (IT) and administration issues [14, 15]. Generally, SCOR framework is more customer-oriented approach considering the interaction of customer’s order and demand fulfilment only [15]. To date, the scope of the SCOR framework is still not clearly defined in addressing the complete interaction of the inter- or intra-organisational or functional activities. In SCOR framework, cross

ISBN: 978-962-367-697-7

functional integration is only the involvement of three primary business processes: logistic, production and purchasing [15, 23]. This is relatively a simple framework for a corporate structure. However, its weakness is in limiting the optimisation of the global decision making process with just a few functional integration throughout an organisation, which may not be adequate [23]. This significant limitation of the SCOR framework may lead towards failed initiative in adopting within a CMN. Conversely, GSCF framework is designed for a wider scope of organisational activities in detail including the proposed interaction point of eight key supply chain management processes and the functional units within an organisation [22, 23]. Lambert et al. [5, 23] stressed that every activity needs to be arranged and managed in order to achieve a good business relationship between suppliers and customers in a supply chain network. Generally, this framework takes a bird’s eye view of the corporate, tactical, and operational goals of the organisation to establish a strong business relationship management. However, many practitioners are not clear on how an organisation implements such a broad and complicated view of supply chain management as proposed in a GSCF framework [20, 23]. Lambert et al. [23] suggested that implementation towards some organisational activities at a time is relatively sufficient to receive the enhanced performance, if the organisation is not able to interface with all functional units and eight key supply chain processes at the first instant. In addition, GSCF framework emphasises on key relationship management which does not draw a clear boundary on how the interaction of key supply chain management processes and functional units handle the differential structures in a collaborative partnerships’ environment. Particularly, the key collaborative elements of information sharing, incentive alignment, and decision synchronisation as mentioned by Simatupang and Sridharan [19, 27, 28] that involve collaborative manufacturing activities is not addressed clearly. This existing gap of the implementation issues within the context of a CMN still remains as challenges ahead for today’s globalised market. In general, involvement of cross functional members is considered to be an essential requirement in improving an overall supply chain performance. To a certain extent, these cross functional members can eventually provide their relevant expertise in their own functional role while assisting towards a globalised decision that can significantly be beneficial in a global supply chain network. Characteristic 4: Value creation in a supply chain In order to create a value creation that is associated with an organisation’s profitability, both frameworks have diverse perspectives for a supply chain. In SCOR framework, the primary objective is to achieve an excellent performance in operational efficiency [25, 26, 29]. For example, the initiation of operational cost reduction or any continuous improvement in asset utilisation programs help adding direct value in a supply chain [15]. Therefore, if an organisation has a low achievement in terms of operational


664


efficiency, implementation of SCOR would be a more feasible and practical approach.

within the current practices of GSCF’s return management process.

Due to the nature of GSCF framework that is aligned with corporate strategy [12, 21, 23], an implementation of GSCF framework is advantageous in meeting corporate strategy and thus in improving overall performance of the inter- or intra-organisational activities [21, 23]. This is true provided that the organisation has attained a high achievement of its operational efficiency in a supply chain. Therefore, by applying this framework, inter- or intraorganisational activities will be aligned towards the corporate strategy in improving the organisation’s relationship management [5, 22, 23].

However, an empirical analysis of Carter and Rogers [7] revealed that the supporting facets of inter-relationship in risk management, transparency, culture and strategy are crucial aspects to enhance the success of the implementation of sustainable initiatives.

Generally, the key managerial choice of whether to utilise a GSCF or SCOR frameworks is basically determined by value creation of the operational efficiency in a supply chain. Characteristic 5: Sustainability in a supply chain To date, there are many explanatory approaches to recommend a total environmental solution in a supply chain but there is still no standard for a sustainable supply chain yet. However, a recent enhancement of SCOR framework has taken into account environmental management initiatives by introducing five strategic metrics to measure environmental process performance of an organisation. There include: (i) carbon emissions, (ii) air pollutant emissions, (iii) liquid waste generated, (iv) solid waste generated and (v) percentage of recycle waste. This framework is named GreenSCOR [14]. Also SCC [14] stated that there are a few additional benefits that incorporate green aspects in the SCOR framework. For example, this framework can provide some guidelines to the practitioner on identifying the potential areas to analyse and resolve the problems. Due to the nature of the integrated green aspects in this framework, GreenSCOR has a strong linkage between various emissions and the originating processes. Even though GreenSCOR framework has been initiated by SCC [14], Carter and Rogers [7] in a recent paper, emphasised that a framework of sustainable supply chain management should make use of the triple bottom line as suggested by Elkington [30]. Further, inter-relationship risk management, transparency, culture and strategy are to be considered as the most important supporting facets that need to be integrated as the part of sustainable supply chain practices [7]. In GSCF framework, some environmental initiatives have been integrated into return management processes [22, 23]. Also, the GSCF group has been categorised this process into five distinct components such as consumer return, marketing return, asset return, product recalls and environmental returns [13]. Within the workflow of the return management, GSCF emphasised that implementation of avoidance, gate-keeping and disposition guideline are essential steps to assure the smooth deployment [23]. Nevertheless, the introduction of sustainable initiatives in GSCF framework that is related to the interaction of environmental and economic performance remains limited

ISBN: 978-962-367-697-7

Characteristic 6: Collaboration within a partnership environment One of the attempts by leading manufacturers in globalised markets is to establish the facilities outside their home country or near the focussed market in order to attain the competitive cost advantage [31]. This trend provides advantageous factors in terms of the cheaper labour and raw materials, increase market share in overseas and the additional funding from some of the host governments [31]. However, compared with a local supply chain network, turbulence and uncertainty are associated with a global supply chain network. Therefore, manufacturing investors need to consider potential risks such as supply risks, demand risks and operational risks (or process risk) in a global supply chain network [32]. As a recent development in the year of 2008, SCOR v9 has integrated the associated risk management within a supply chain [14]. For the plan process, it has included the investigations of sources risks, make risks, deliver risks and return risks [14]. To a certain extent, involvement of crossfunctional teams and supply chain business processes (e.g. plan, source, make, deliver and return) within the SCOR framework is limited [14, 15]. By considering only a few of the functional units to take charge for mitigating risks in a global supply chain such as logistics, production and purchasing functional units, this way may not be efficient in resolving an overall risk associated with the whole supply chain processes. Conversely, the essence of the GSCF framework is more focused on the involvement of the cross-functional teams and supply chain business processes [5, 13]. This includes interaction of eight business processes and cross functional teams [22]. This approach may be able to mitigate supply chain risks throughout a global network. However, involvement of cross functional teams pose further critical problem such as complicated interactions between business processes and all of the functional processes, which many practitioners need to overcome [22, 23]. In view of the collaborative supply chain study, Simatupang et al. [28] stated that the collaboration in a supply chain is very complicated when coordinating activities across the boundaries of an organisation. They summarised that the essential requirement for a collaborative supply chain can be classified into three exemplary aspects [27]: a)

Managing supply chain partners across distinct boundaries, which is very crucial to determine the overall performance of the supply chain management


665


b) Selecting appropriate levels for collaborative structure, which may enable to improve the supply chain performance c) Considering dynamic parameters such as external conditions in terms of competitive, environmental, social, economic and technological infrastructure factors within inter- or intra-organisational settings

management research, Table 1 summarises essential requirements for an integrated sustainable supply chain framework for a CMN. These requirements are complied based on the six distinct characteristics that are necessary to succeed in a highly competitive globalised market.

However, collaborative sustainable supply chain management in a global network is always difficult to analyse through a standalone conceptual model. A standalone conceptual model by Simatupang et al. [18, 19] related to the collaboration in supply chains was proposed with four key elements to achieve an efficient supply chain management. They considered performance systems for: (i) information sharing, (ii) decision synchronisation, (iii) incentive alignment and (iv) streamlined inter-company business processes [19]. This limited performance information may not be sufficient to reflect current global sustainable supply chain development through collaborative manufacturing activities. To a certain extent, the sustainability in terms of economic and environmental benefits should be balanced and aligned with the overall performance measure of the organisation. This practical limitation remains as one of the upmost challenges in a CMN.

In this section, an integrated sustainable supply chain management framework that is suitable for a CMN is proposed to overcome some limitations of current practices in a supply chain which were discussed in previous sections. This framework is derived based on six characteristics of the generic supply chain framework (see Table 1 and Figure 1).

C. Practical issues and limitations in current practice of a supply chain Through an Ishikawa fishbone analysis as shown in Figure 1, it was found that there is a limited focus on the inter- or intra-organisational activities within a CMN to address the importance of social, economic and environmental benefits in supply chain management. However, an integrated sustainable supply chain management framework is being developed to focus the consideration of economic and environmental aspects within a CMN that is able to meet the current market trend. Table 1. Six distinct characteristics of an integrated sustainable supply chain management framework for a CMN 6-characteristics SC Proposed framework Conceptual framework To achieve overall strategic 1 Centric focus of the framework improvement in a CMN To align with corporate, tactical, 2 Supply chain strategy and operational strategies in a CMN To include inter-relationship 3 Scope of organisational activities linkage of key supply chain processes and the business functional processes in a CMN To create value in a global supply 4 Value creation in a supply chain chain of a CMN 5 Sustainability in a supply To enforce for the implementation chain of economic, and environmental practices in a CMN To increase customer satisfaction 6 Collaboration in a partnership environment and speed-to-market in a CMN

Assessing the inter-relationship between inter- or intraorganisational activities within a CMN and including sustainable supply chain development, are considered as an area of concern within collaborative manufacturing activities. In order to fill this void in current supply chain

ISBN: 978-962-367-697-7

III.

CONCEPTUAL FRAMEWORK

A. Building an integrated and sustainable supply chain management framework for a CMN The proposed integrated sustainable supply chain management framework for a CMN consists of three main components (see Figure 2): (i) manufacturing management processes (i.e. source, make, distribute and control), (ii) collaborative management processes, and (iii) sustainable management processes. Since inter-relationship among participating organisations is considered as a critical success factor in achieving an improved sustainable supply chain within a CMN, an inter-relationship linkage is proposed. Apart from this linkage, consideration of sustainable supply chain development, which is associated with economic and environmental benefits also pose a challenge for collaborative manufacturing activities in a global network. However, top management involvement and their vision play a significant role in reshaping an organisation’s belief and orientation in achieving a strong foundation of trust, commitment, interdependency, organisation’s strategy and reducing conflicts in reaching agreements among collaborative partners in a CMN [18].

Figure 2. A framework of an integrated sustainable supply chain management for a CMN

The company A as shown in Figure 2 is considered as a focal company. This focal company can be treated as “mainstream producer” company to interact with two other companies B and C in order to produce a complete product to the end-user. In reality, there are many companies in a partnership network who work together towards mutual objectives to enhance customer satisfaction. These activities


666


are the essence of a CMN [18, 33]. The inter-relationship linkage between collaborative and sustainable management processes to support manufacturing management process is important in achieving an overall of economic and environmental benefits. B. A process model based on three distinct layers A formal collaboration mechanism within the manufacturing management process is expressed implicitly in some industries at the product design and development activity level or be part of a certain activity in a global supply chain [34]. To date, there has been less focus in addressing the inter-relationship linkage between collaborative and sustainable management processes. Many researchers [1, 16, 17, 19, 35] examined the problems with a standalone approach to cater a particular circumstance of the organisational activity. Lin et al. [36] developed a global decision support system for a CMN and in their work: decision synchronisation is considered as one of the features of a collaborative management process. Meanwhile, Vachon and Klassen [37] focused on inter-organisational interactions between supply chain members for joint environmental goals, shared responsibility in environmental planning, and reduction of waste in a supply chain. The scope of these standalone approaches in a supply chain is neglecting the interaction of economic and environmental practices within the context of a CMN. Therefore, a strategy layer of a process model (see Figure 3), which is derived from an integrated sustainable supply chain framework as shown in Figure 2, is required to be further developed to fulfil current practices in a supply chain for collaborative manufacturing activities.

other layers: domain layer and managerial guideline layer. The strategy layer defines the scope of the organisational directions within a CMN. All components within this layer can be decomposed into domain layers, for simplicity, only a domain layer of the performance measurement management system that is decomposed into process elements such as corporate, tactical and operational strategies, is illustrated in Figure 4 (e.g. product quality, waste reduction, return on investment, timely delivery, perfect order fulfilment, and etc.). Each component of the strategy layer (see Figure 3) can be justified and expressed based on their individual process elements (i.e. Collaborative management process: incentive alignment, decision synchronisation, information sharing and etc., Sustainable management process: operations & productivity improvement, waste reduction, and etc., Manufacturing management process: green sourcing, product flow and etc.). Finally, a managerial guideline layer is to introduce four supporting facets to ensure this proposed framework can be fully implemented in industries [31] as illustrated in Figure 5. There are: (i) Management responsibility: Higher degree of management commitment and leadership is very crucial for the implementation of an integrated sustainable supply chain management framework. Also, the organisational culture may have some contributing factors to the success or failure of any implementation strategy (ii) Management system: The fundamental management systems within organisation cannot be ignored or abandoned, e.g. ISO 9001:2008, ISO 14001:2004 and etc. (iii) Resource management: This is an essential requirement to provide for an interactive training programme to assist organisation in achieving an operational excellence such as employee development, infrastructure and work environment, and (iv) Technical scope & continuous improvement: The adoption of technology changes and differential capabilities may directly impact on the implementation strategy. Porter’s five forces Model is incorporated [38] as this model is useful when analysing competitors among other organisations within global supply chain networks and promoting competitive advantage.

Figure 3. Strategy layer: An integrated sustainable supply chain management framework for a CMN

Figure 4. Domain layer: Key process elements of a performance measurement management

Formulation of a strategy layer for CMN is to assist the top management to take an overview of the organisational directions towards collaborative manufacturing activities in a global network and help them improve CMN’s efficiency and effectiveness via a supply chain. This strategy layer is a key component of the process model, which consist of two

ISBN: 978-962-367-697-7

Figure 5. Managerial guideline layer: An integrated sustainable supply chain management framework for a CMN


667


IV.

DISCUSION OF THE PROPOSED FRAMEWORK

A. Practical implication This proposed integrated sustainable supply chain management framework has several implications for many practitioners in supply chain management. Aligning sustainable supply chain management with the corporate strategy and business performance concepts will assist practitioners to be more aware of the challenges in managing inter- or intra-organisational activities within a CMN. This paper has outlined several issues that should be considered when starting an implementation and managing sustainable supply chain within a CMN. The first feature of the framework is the inter- or intra-organisational activities towards achieving an improved performance of the sustainable supply chain management as follows: (i) Producer and supplier are responsible for green sourcing activities; (ii) Integrated logistics members are responsible for green distribution and reducing waste in transportation; (iii) Producer is required to be responsible for green product to be designed, re-manufactured and recycled through the coordination and communication with customers and suppliers or collaborative partners and (iv) All supply chain members in a global network are jointly responsible for achieving sustainable development in terms of economic and environmental practices Meanwhile, the second feature of the framework is focused on the key inter-relationship management with all supply chain members of a collaborative partnership environment in sharing all responsibilities to improve the economic and environmental performances of the entire supply chain. This proposed framework also recommends practitioners to incorporate customer orientated perspectives and Six Sigma benchmarking in a collaborative performance measurement system (e.g. improved timely delivery within Six Sigma margins). B. Research limitation As stated at the outset of this paper, the current literature of the generic supply chain framework to support the sustainable supply chain development within a CMN has limited investigation on the probable interaction or interrelationship among supply chain business processes, collaborative supply chain performance and corporate strategy. Furthermore, many industry practitioners are interested to know how to achieve sustainable supply chain among different entities within a CMN; but the answer to this question has remained unclear in current literature. This paper has attempted to resolve some of these limitations by introducing a new integrated sustainable supply chain framework for a CMN towards achieving environmentally conscious manufacturing and assessing economic benefits of return on investment. Currently, this framework has three significant weaknesses. Firstly, although collaborative processes and sustainability of economic and environmental practices are defined in this framework, future research is required to investigate various types of practical issues within CMN

ISBN: 978-962-367-697-7

processes and sustainability in supply chains that are included in this framework. Secondly, social aspects and impacts are not assessed in this framework, as this assessment is beyond our discipline focus. However, this important aspect will be addressed in future by a cross disciplinary research team. Thirdly, although this framework briefly discussed the interaction of a CMN and sustainability in supply chains, further research is needed to examine the level of responsibilities and the interrelationship management of the supply chain members within a global collaborative partnership. This paper also suggests that appropriate area to research would be the consideration of performance measurement management systems for assisting industry practitioners by conducting Six Sigma benchmarking analysis towards all interactions that are addressed in Figure 2 in this framework of sustainable supply chain management for a CMN. Several research questions are currently being raised on this problem to advance the understanding of sustainable supply chain in a CMN and then improve its practices. So far, the substantial integrated sustainable supply chain management research has been focussed more on the operational efficiency and manufacturing performance. Additional research is required to be conducted not merely at the level of single manufacturing and production system, but to take into account of multiple CMNs to achieve the overall performance in a sustainable supply chain. Pertaining to the practical issues for framework validation, an empirical analysis is actually required in order to investigate the underpinnings of sustainable supply chain in various industries. An expanding collaborative and sustainable management processes suggested in this framework can be highlighted from case studies. Two current research questions are raised as follows: (i) How the supply chain integration and overall business performance can be accurately reflected on the performance measurement management system for a CMN in this framework? (ii) Are these performance measurement management systems as defined in this research be the appropriate types in a sustainable supply chain within a CMN? V.

CONCLUSION

This paper provides a holistic view of the integrated sustainable supply chain management framework based on six distinct characteristics for a CMN. The inter-relationship linkage between collaborative and sustainable management processes within a CMN is considered as the essential requirements for developing an integrated sustainable supply chain management framework to address the shortcomings of the current practice in a supply chain. For the implementation of this integrated sustainable supply chain management framework, three layers of the process model (consists of strategy, domain and managerial guideline layers), is first developed for industry practitioners to understand the decomposition of three layers into key process elements that can fulfil the interactions of economic benefits associated with the return on investment and environmentally conscious manufacturing within intra- or


668


inter-organisational activities to improve sustainability in supply chains.

[20]

REFERENCES [1]

[2] [3]

[4] [5] [6] [7]

[8]

[9]

[10] [11]

[12]

[13]

[14] [15]

[16] [17]

[18]

X. Jia and L. Bai, "The enterprise application information system integration based on the green supply chain management," in International Conference on Information Technology and Computer Science, 2009. C. Reich-Wiser and D. Dornfeld, "Environmental decision making: Supply chain considerations," Transactions of NAMRI/SME, vol. 36, pp. 325-332, 2008. H. Walker, L. D. Sisto, and D. McBain, "Drivers and barriers to environmental supply chain management practices: Lessons from the public and private sectors," Journal of Purchasing and Supply Management, vol. 14, pp. 69-85, 2008. F. Zhou, "Study on the Implementation of green supply chain management in Textile enterprises," Journal of Sustainable Development, vol. 2, pp. 75-79, 2009. D. M. Lambert and M. C. Cooper, "Issues in supply chain management," Industrial Marketing Management, vol. 29, pp. 65-83, 2000. J. D. Linton, R. Klassen, and V. Jayaraman, "Sustainable supply chains: An introduction," Journal of Operations Management, vol. 25, pp. 1075-1082, 2007. C. R. Carter and D. S. Rogers, "A framework of sustainable supply chain management: moving towards new theory," International Journal of Physical Distribution and Logistics Management, vol. 38, pp. 360-387, 2008. H. Kaynak and I. Montiel, "The relationship between sustainable supply chain management and sustainable performance: An integrated framework," in Academy of Management Proceedings, 2009, pp. 1-6. A. Sharma, L. Gopalkrishnan R, A. Mehrota, and R. Krishnan, "Sustainability and business-to-business marketing: A framework and implications," Industrial Marketing Management, vol. 39, pp. 330-341, 2010. S. Chopra and P. Meindl, Supply chain management: strategy, planning and operation, 4th ed. Upper Saddle River, New Jersey: Prentine Hall, 2010. V. Kumar, K. A. Fantazy, U. Kumar, and T. A. Boyle, "Implementation and measurement framework for supply chain flexibility," Journal of Enterprise Information Management, vol. 19, pp. 303-319, 2006. M. C. Cooper, D. M. Lambert, and J. D. Pagh, "Supply chain management: More than a new name for logistics," The International Journal of Logistics Management, vol. 8, pp. 1-13, 1997. D. M. Lambert, M. C. Cooper, and J. D. Pagh, "Supply chain management: Implementation issues and research opportunities," The International Journal of Logistics Management, vol. 9, pp. 1-19, 1998. SCC, "Supply Chain Operations Reference Model: Overall of SCOR Version 9.0," Pittsburgh, PA: Supply Chain Council Inc., 2008. P. Bolstorff and R. Rosenbaum, Supply chain excellence: A Handbook for dramatic improvement using the SCOR model. New York: American Management Association (ANACOM), 2003. Z. M. Udin, M. K. Khan, and M. Zairi, "A collaborative supply chain management framework, Part 1: Planning stage," Business Process Management Journal, vol. 12, pp. 361-376, 2006. Z. M. Udin, M. K. Khan, and M. Zairi, "A collobrative supply chain management, Part 2: the hybric KB/gap analysis system for planning stage," Business Process Management Journal, vol. 12, pp. 671-687, 2006. S. V. Nagalingam and O. M. d. Fretes, "Integration of small and medium manufacturing enterprise through collaborative partnerships," in 7th ANZAM Operations, Supply Chain, and Service Management Symposium, 2009, pp. 312-325.

ISBN: 978-962-367-697-7

[19]

[21] [22] [23] [24]

[25]

[26]

[27] [28] [29]

[30] [31]

[32] [33] [34] [35]

[36]

[37]

[38]

T. M. Simatupang and R. Sridharan, "An integrative framework for supply chain collaboration," The International Journal of Logistics Management, vol. 16, pp. 257-274, 2005. D. Kane, "A global view of supply chain management," University of Auckland Business Review, vol. 10, pp. 31-35, 2008. K. L. Croxton, S. J. Garcia-Dastugue, and D. M. Lambert, "The supply chain management processes," The International Journal of Logistics Management, vol. 12, pp. 13-36, 2001. D. M. Lambert, "The eight essential supply chain management processes," Supply Chain Management Review, vol. 8, pp. 1826, 2004. D. M. Lambert, Supply chain management: processes, partnerships, performance, Third ed. Sarasota, Florida: Supply Chain Management Institute, 2008. A. Lockamy and K. McCormack, "Linking SCOR planning practices to supply chain performance," International Journal of Operations and Production Management, vol. 24, pp. 11921218, 2004. G. Stewart, "Supply Chain Operations Reference (SCOR): the first cross-industry framework for integrated supply chain management," Logistic Information Management, vol. 10, pp. 62-67, 1997. S. H. Huan, S. K. Sheoran, and G. Wang, "A review and analysis of supply chain management reference (SCOR) model," Supply Chain Management: An International Journal, vol. 9, pp. 23-29, 2004. T. M. Simatupang and R. Sridharan, "The collaborative supply chain," The International Journal of Logistics Management, vol. 13, pp. 15-30, 2002. T. M. Simatupang and R. Sridharan, "Benchmarking supply chain collaboration: An empirical study," Benchmarking: An International Journal, vol. 11, pp. 484-503, 2004. S. H. Huang, S. K. Sheoran, and H. Keskar, "Computer-assisted supply chain configuration based on supply chain operations reference (SCOR) model," Computer and Industrial Engineering, vol. 48, pp. 377-394, 2005. J. Elkington, "Enter the triple bottom line," in The triple bottom line: Does it all add up?, A. Henriques and J. Richardson, Eds. London: Earthscan, 2004, pp. 1-16. S. S. Kuik, S. V. Nagalingam, Y. Amer, and Y. P. Saw, "Implementation of six sigma methodology to improve supply chain network in the context of Malaysian manufacturing industries," in 8th International Conference on Supply Chain Management and Information Systems Hong Kong, 2010. C. Tang and B. Tomlin, "The power of flexibility for mitigating supply chain risks," International Journal of Production Economics, vol. 116, pp. 12-27, 2008. M. McClellan, Collaborative manufacturing using real-time information to support the supply chain. Boca Raton: CRC Press, 2003. S. Vachon, "Green supply chain practices and the selection of environmental technologies," International Journal of Production Research, vol. 45, pp. 4357-4379, 2007. I. Cil, O. Alpturk, and H. R. Yazgan, "A new collaborative system framework based on a multiple perspective approach: InteliTeam," Decision Support Systems, vol. 39, pp. 619-641, 2005. H. W. Lin, S. V. Nagalingam, and M. Chiu, "Development of a collaborative decision making model for a network of manufacturing SMEs," in 18th International Conference on Production Research, 2005, pp. 1-6. S. Vachon and R. D. Klassen, "Environmental management and manufacturing performance: The role of collaboration in the supply chain," International Journal of Production Economics, vol. 111, pp. 299-315, 2008. M. E. Porter, Competitive strategy: Techniques for analysing industries and competitors. New York: The Free Press, 1980.


669