Enforcing sustainable sourcing: A framework based on best practices

University essay from Högskolan i Jönköping/IHH, Marketing and Logistics; Högskolan i Jönköping/IHH, Marketing and Logistics

Abstract:

Problem– Companies are increasingly focusing on sustainability issues in response to internal and external pressure. Research on sustainable performance of focal companies is vast; however there is a lack of guidelines for managing sustainability in extended supply chains. Scholars claim a need for additional research on intra- and inter-organizational diffusion of best sustainable practices. Besides, the outcomes of sustainable sourcing practices are still uncertain. The gap between potential benefits of sustainable sourcing and actual performance is attributed to lack of capabilities, instruments, and efficient processes.

Purpose– The purpose of this paper is to explore existing sustainable sourcing practices which are used by leading multinational companies. Based on the obtained knowledge we aim to develop a framework that will suite as a guideline for enforcing sustainable sourcing practices.

Method – The research has been conducted through the method of grounded theory, enabling the researchers to constructively interpret data from documentary primary data and semi-structured interviews. This approach was utilized in order to explore what are the most common practices of managing sustainable sourcing applied by the companies awarded as Industry leaders by the Dow Jones Sustainability Index.

Conclusion We found that a commonly accepted approach towards managing and enforcing sustainable sourcing is absent both in theoretical discourse and practice. However, the most frequently mentioned tools and approaches were defined. They include the adoption of suppliers’ code of conduct, establishment of dedicated sustainability departments, procurement personnel training, suppliers’ capability building, risk assessment and categorization of suppliers, IT platforms for information sharing, supplier self-assessment, audit, joint projects with suppliers, meetings and conferences, and suppliers’ scorecards.

Finally, we developed a Sustainable Sourcing Enforcement framework which could serve as a guideline to enforce supplier’s commitment to act sustainably. The framework consists of five chronologically connected pillars: Objectives alignment, Commitment creation, Supplier selection, Ongoing development and Work with stakeholders.

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