This document discusses sustainable supply chain management. It begins by defining sustainability and outlining some basic concepts. It then discusses implications of sustainability for business strategies and its potential to drive innovation. Impacts on supply chain management are explored, including how sustainability can be implemented in phases within a supply chain. Key enablers, drivers and barriers to sustainable supply chain management are identified. Finally, a sustainability scorecard for measuring performance across economic, environmental, social and other dimensions is proposed.

1. Sustainable
Business : Impressions,
Implications and Impacts
Dr S G Deshmukh
Director,
ABV-Indian Institute of Information Technology & Management
Gwalior
deshmukh.sg@gmail.com
National Conference
Emerging Challenges for Sustainable Business
1 June 2012 at DOMS, IIT Roorkee

2. Credits..
• Credits: This presentation is based on the
doctoral work of Mr Apratul Shukla
• Apratul Shukla, 2011, Critical Analysis of
Supply Chain Management in Indian
Context: A Case of Suitability, Scalability
and Sustainability, Unpublished Ph D
Thesis, IIT Delhi
6/11/2013 2

3. 3
Outline of the Presentation
• Introduction & Motivation
• Impressions : Sustainability
defined
• Implications
• Impacts on Supply Chain
Management
Closing Remarks

4. Opening quote….
“We do not inherit the earth from our
ancestors, we borrow it from our children…
Native American Proverb
Source:
http://www.drury.edu/multinl/story.cfm?ID=11595&NLID=259www

5. Impression 1 : Sustainability
Sustainable Development (SD)
Meeting the needs of the present generation
without compromising the ability of future
generations to meet their own needs
-- Brundtland Commission, 1987 –

6. Impression 2 :
Basic Concepts of Sustainability
Our common responsibility
(Eco-)Systems Thinking
Carrying fullest capacity of the planet
to absorb waste and support life
Social Capital
Equity, Dignity, Sense of Justice
All Stakeholder voices
Economic, Environmental, Social/Cultural
responsibilities of business to act as a
Responsible CORPORATE CITIZEN !

7. Impression 3: Sustainability
Economic Aspects
Good Jobs
Fair wages
Security
Infrastructure
Fair Trade
Social Aspects
Enabling working
conditions
Inclusive education
Community & Culture
Equitable justice
Environmental Aspects
Zero Pollution &
Waste
Energy Conservation
Minimum disturbance to
Mother Nature
Source: Willard B, 2009, “The business case for sustainability”, Green innovations
conference, www.sustainabiltyadvantage.com

8. Sustainable Company Pyramid
Intangibles
Nonfinancials
Reputation
Concern for Earth
Tangibles
Financials
20%
80%

9. Implications..
• Interpretation of sustainability –
Addressing key business issues
• Linking global and local issues, trends and
developments with business strategy and
activities
• Engage and partner with stakeholders
• Make connections & integrate
sustainability within and across our
business

10. Implications :
Sustainability … a driver for innovation?
• if sustainable development is about change,
then we need to be the masters of change,
with innovations in place …
• Driving for No waste, Doing Less Bad
• Doing Good, Beyond Zero
• New sustainability derived business models;
not just doing what we’ve always done – but
with some improvement; rather doing
something altogether different, etc. =
Sustainable Business Model

11. Impact
Sustainable Supply Chain Management (SSCM)
• SSCM is all encompassing, strategic set of
actions taken by collaborating partners and
stakeholders of an ultimate supply chain to
improve chain’s profitability along with
mitigation/elimination of the detrimental impacts
of all business activities spanning across the
chain on the environment, society, culture,
values, health and safety of all stakeholders and
thereby ensuring the continuity of operations in
the larger interests of all stakeholders.
• *Apratul Shukla, Ph D thesis, IIT Delhi , 2011

12. Sustainability in the context of Supply Chain
• Deteriorating environmental condition in Indian subcontinent
• Role of complex, long and global supply chains in deterioration of the
environment needs investigation.
• Growing interest as managers are forced to deal with social and
environmental issues, related to supply chain (Vachon and Klassen,
2006).
• Every product generated, transported, used and discarded causes
impact on the environment, (Greenen et al., 2006).
• 3Ps and Triple bottom line (Elkington, 1994 )
• Climate change and Supply chains activities are related.
Corporate social
responsibility
Sustainable supply network
management
Supply chain environmental
management
Green purchasing strategies
Environmental purchasing
Green marketing
Environmental marketing
management and
environmental product
differentiation
Reverse logistics
Environmental management
Life-cycle assessment
ISO 14000- Certifications

13. Environment (Flora, Fauna, Bio diversity, Atmosphere, Water Bodies, Ecology, Climate)
Society (People, classes, castes, ethnic groups, habitats, employment, health, institutions, socio-economic status)
Scope and Spread of Sustainability in Supply Chain Management
Reverse supply chains
Forward supply chains
Raw Materials, Minerals, Farm produce, Fisheries, Fuel, Energy, Natural resources like air, water and forest produce
)
Infrastructure (Transportation, communication, warehouses, cold storages, power plants, utilities)
Solid and liquid waste, Heat, Noise, GHG emission, Toxic substance, Disruption, Dislocation, Nuisance, congestion
Warehousing and
Distribution
Management
Supplier
Supplier
Supplier
Manufacturer
Retailer
Retailer
Retailer
Customers
Depletion
Erosion
Contamination
Extinction
Health hazards,
Pollution,
Climate change,
Global warming
Unsafe
Disposal
damaging
Unsustainable
consumption
Micro,
small and
medium
firms
Imbalance,
Class differences,
Discrimination,
Unrest and Riots
Health and safety of farmers, miners, workers and all people in surroundings
Reverse supply chains
Society (People, classes, castes, ethnic groups, habitats, employment, health, institutions, socio-economic status)
Environment (Flora, Fauna, Bio diversity, Atmosphere, Water Bodies, Ecology, Climate)

14. 14
Sustainable Supply Chain Activities
Primary
Industry
Production Finished
products
distribution
Retailing
Greener forms
and factories
Soil, water, air
contamination
Health and
safety
Fair wages
Local
community
Waste mgmt.
Prevention of
bio-diversity
Emissions and
working
conditions
Energy
efficient
processes,
technology,
lighting and
buildings
Inbound
distribution
Green fuel
based vehicles
Full truck
loads
Congestion
Vehicular
pollution
Cold storage
Frozen and
cold vehicles
Leaks and
emissions
during
transport
Avoidance of
child labour
Packaging
waste
Fare wages
Equality for
women
workers
Design for
sustainability
(DfS)
Life cycle cost
analysis
Green and clean
process
technology
Eco-friendly
packaging
Waste
management
Energy efficient
machines and
processes,
buildings
Labour welfare
Health and safety
Wages
Lean
manufacturing
Material usage
Water, soil and
air pollution
Consolidated
loads
Reusable
pallets and
trays
Recycling of
packaging
material
Green fuel
based vehicles
Reverse
logistics
Energy
efficient
warehouses
and cold
storages and
vehicles
Emission and
leak control
Safety in
material
handling
Sustainable
product
selection
Sustainability
as
differentiator
Proper
lebelling
Conformance
to standards in
storing and
packaging
Energy
efficient
storages and
buildings
Information
sharing with
customers
Health and
safety
Carrier bags
and packaging
Responsible
Consumer
Recycle and
reuse of
products and
packaging
Judicious use
of product
Avoid over
consumption
Energy saving
devices
Use of take
back system
Return of
packaging
material
Waste
disposal
Change in
habits and
attitude
Social
responsibility

15. Our Research : Sustainable Supply Chain
Management
• Apratul Shukla, 2011, Critical Analysis of Supply
Chain Management in Indian Context: A Case of
Suitability, Scalability and Sustainability, Ph D
Thesis, IIT Delhi

16. Impact
Enablers, Drivers and Barriers for SSCM*
*Apratul Shukla, Ph D thesis, IIT Delhi , 2011
Enablers
• Commitment of top
management
• Adopting sustainability
as business strategy
• Strong partnership with
stakeholders
• Sustainable sourcing
• Information and
knowledge sharing
• Committed employees
• Resource competence
• Clean technological
capabilities
• Sustainable product
and process design
• Product stewardship
• Using sustainability as
product differentiator
• Environmental and
social management
system certifications
• Awareness about SSCM
Drivers
• Global concerns
about climate change
• Demographics
• Customer awareness
• Pressure from
stakeholders
• Government
regulations and
policies
• Organization’s
reputation and image
• Potential
improvement in
economic
performance
• Sense of corporate
responsibility
• Rising cost of energy
and depleting natural
resources
• Local environmental
and social condition
Barriers
• Difficulty in integrating
sustainability as corporate
strategy
• Focus on short term
benefits
• Lack of sustainable
suppliers and service
providers
• Fear of not meeting cost
targets
• Lack of Resource
• Non availability/cost
ineffectiveness of
innovative technology
• People’s mindset, habits
and attitude
• Insufficient training,
education, and rewards
systems
• Difficulty in measuring the
sustainability performance
• Lack of support from focal
firms and government
agencies

17. Phases of SSCM implementation
• Phase I Awareness
– Need, Opportunity, Scope, Threats, and Benefit assessment
• Phase II Involvement
– Willingness to adopt and adaptation,
– Participation in sustainability drive.
– Early measures initiation
• Phase III Active Participation
– Accepting sustainability as strategic level
– Full scale involvement in SSCM activities
– Adopting clean technology
– Commitment towards 5 pillars of SSCM
• Phase IV Sustainability Excellence
– Energy and environment efficient practices across supply chains
– Adopting and devising best practices
– Technological innovation
– Performance measurement system for sustainability
– Trendsetter and knowledge hub
– Promoter of sustainability
– Reputation and image building
– Corporate social responsibility
– *Apratul Shukla, Ph D thesis, IIT Delhi , 2011

18. Phases of SSCM
*Need,
Opportunit
y
Scope,
Threats,
and Benefit
assessment
* Willingness
to adopt and
adaptation,
* Participation
in sustainability
drive.
*Early
measures
initiation
* Accepting
sustainabilit
y as
strategic
level
* Full scale
involvement
in SSCM
activities
* Adopting clean
technology
* Commitment
towards 5
pillars of
SSCM
* Energy and environment
efficient practices
across supply
chains
* Adopting and devising
best practices
* Technological innovation
* Performance
measurement
system for
sustainability
* Trendsetter and
knowledge hub
* Promoter of
sustainability
* Reputation and image
building
* Corporate social
responsibility
Awareness Involvement Active Participation Sustainability Excellence
Sustainable
supply chain
management
Phases

19. House of SSCM
• While phases provide direction for road ahead but the building blocks of growth towards
SSCM are not explicitly shown. For this we have also proposed house of sustainability
– 6 major foundation stones
– Sustainable product development, life cycle costing and environmental and social auditing
– Innovative green and clean technology
– Information and knowledge Sharing
– Collaborative and coordinated efforts among networked organizations for sustainability
– Integration (Sustainable partner selection and development, Network design)
– Commitment at all levels for sustainability (Every individual in supply chain
– 5 pillars of inclusive performances
– Economic performance
– Environmental Performance
– Social Performance
– Health, safety and hygiene
– Cultural, ethnic and local aspects
– 3 Roof top stones
– Product stewardship
– Corporate social responsibility
– Using sustainability as product differentiator
– 1 Flag
– Aware, active, involved and satisfied customer

20. 20
House of SSCM
Sustainable Supply chains
Sustainable product development, life cycle costing and environmental and social auditing
EnvironmentalPerformance
Economicperformance
SocialPerformance
Health,safetyandhygiene
Cultural,ethnicandlocal
aspects
Innovative green and clean technology
Information and knowledge Sharing (Common ICT platform and real time true data sharing)
Integration (Sustainable partner selection and development, Network design)
Collaborative and coordinated efforts among networked organizations for sustainability
Product stewardship Corporate social responsibility
Commitment at all levels for sustainability (Every individual in supply chain)
Aware, active, involved
and satisfied customer
Using sustainability as product
differentiator

21. Insights
• Sustainable supply chains to become inevitable in
future.
• Threat to the existence of the mankind on planet has
provided an opportunity to revisit all business
processes.
• SSCM is new philosophy to prevent negative effects
of the supply chain.
• Reflects opportunities of using sustainability as
strategy, realign the supply chain to become more
competitive, efficient and effective and reposition in
market where customer is willing to pay additional
price for sustainable practices.

22. Performance Measurement for SSCM
• Based on the concept of a balanced score card , a
sustainability scorecard is proposed for identified 5
pillars of sustainability.
• This helps in identifying the contextual performance
measures from the developed list of metrics.

23. Impact: Sustainability Scorecard
Environmental performance
Social Performance
Economic Performance
Vision and
strategy for
sustainability
Cultural and ethnic Performance
Health and Safety Performance
Customer perspective
- Code of conduct and
ethical guidelines
Internal perspective
- Use of child labour
Learning and growth
perspective
-Social auditing
Financial Perspective
- Fare wage scheme
Customer perspective
- Increased pride
Internal perspective
- Employment to minorities
Learning and growth
perspective
- No of events arranged
Financial perspective
- Cost of culture conscious
initiatives
Customer perspective
- Increase in product safety
Internal perspective
- No. of accidents/
incidences/ year
Learning and growth
perspective
- Information transparency
Financial perspective
- % of revenue allocated
to H &S
Customer perspective
-Customer query time
Internal perspective
Inventory turn over
ratio
Learning and growth
perspective
Employee training yearly
Financial Perspectives
Return on Investment
Customer perspective
- Reduced packaging in %
Internal perspective
- Reduction in material usage
Learning and growth perspective
- EMS implementation
Financial Perspectives
- % recycled material used

24. Closing Remarks..
• Sustainability offers a challenger .. As a change driver,
as a stimulus for innovation
• A balanced scorecard need to be evolved
• Addressing social issues by creating shared value will
lead to self-sustaining solutions that do not depend on
private or government subsidies.
• When a well-run business applies its vast resources,
expertise, and management talent to problems that it
understands and in which it has a stake, it can have a
greater impact on social good than any other
institution or philanthropic organization.”
• “The Link Between Competitive Advantage and CSR” Michael E. Porter and Mark R. Kramer, Harvard Business
Review, December 2006

25. Useful resources
www.tomorrowscompany.com
www.sustainability.com
www.sustainabilityresearch.org (Research Network for
Business Sustainability)
• Shukla, A.C., Deshmukh, S.G. and Kanda, A. (2009),”
Environmentally Responsive Supply Chains: Learnings from Indian
Auto Sector” Journal of Advances in Management Research, Vol. 6,
No. 2, pp. 154-171.
• Shukla, A.C., Deshmukh, S.G. and Kanda, A. (2010), “Flexibility and
Sustainability of Supply Chains: Are They Together?” Global Journal
of Flexible Systems Management, Vol.11, Nos.1 & 2, pp 25-38.