Sustainable Supplier Selection and Product Design: A case study of Scania : Towards achieving environmental sustainability

Abstract: The study examines how a select automobile company implement sustainablepractices in their supply chain management to achieve environmental sustainability.The focus of the study is on the two (2) most important aspects of the supply chainmanagement namely Supplier Selection and Product Design. Supplier selection isvital for 2 reasons; focal companies are increasingly being held account for theenvironmental impacts of their suppliers and more value is generated at the supplystage in the value chain. Product designs are vital because it helps reduce energyconsumption and emissions during the lifecycle (operational/use) of the vehicle.The study finds that the select automobile company has a robust procedure forsupplier selection & development using its Supplier code of conduct, SelfAssessment Questionnaires (SAQ) and a Sustainability Rating system for supplierselection and monitoring supplier compliance with environmental performancegoals.To achieve reduction in emissions from the company’s products in the use phase,the company has developed a range of products which focus on fuel efficiency,powertrains (engine) performance, renewable/alternative fuel sources andelectrified vehicles. These product designs are part of the company’sdecarbonization strategy to reduce emissions from its product use which accountsfor about 90% of the company’s carbon footprints (emissions). These products aredesigned with specific/set environmental goals/targets by working jointly with theScience Based Target Initiative (SBTi). An initiative (by WWF, CDP and WRI)which relies on the most recent climate science to help company achieve itsenvironmental goals while meeting its economic goals as well. The company’sdecarbonization strategy are directly linked to its supplier selection and productdesigns in order to achieve environmental sustainability.Overall, the study finds that the company’s practices are in line with existingliteratures on how to achieve environmental sustainability in Supply ChainManagement, for instance, the frameworks by Matthiavanan (2018) and Masoumi(2019) identified sustainable supplier selection & development, environmentalstandards, auditing suppliers, green/environmental purchasing, innovative productdesigns that reduce emissions & waste which are practices identified in the casecompany. Hence, the study reveals there is a strong link between theory and practicein the Case Company.This study has practical implications as insights provided can help other automobilecompanies address environmental sustainability challenges they face in theirsupplier selection process and product designs.