Achieving enhanced integration of sustainability into supply chain through implementation of effective strategies in environmental, economic, and social fronts

Abstract: Manufacturing industries have adopted globalization as a strategy to improve the reach of their products/services, bringing them closer to the customer and utilizing the cost advantage in emerging economies, better availability of resources such as raw materials, and cheaper workforce. However, with globalization came a fair share of obstacles in effectively managing the operations of a complex supply chain network spread across the globe. Failure of manufacturing firms in controlling their operations has led to a generation of wastes such as underutilization of resources, inefficient by-product disposal systems, and increased emissions from poorly managed logistics networks. Research on understanding the environmental impact of ineffectively managed supply chain networks shows that industrial operations contribute up to 20% of global carbon dioxide emissions creating a serious impact on the environment.  Realizing these adverse effects, many countries across the globe have taken steps to regulate and monitor the operations and by-products produced by manufacturing firms. Multiple countries and local governments have come together to become environmentally more responsible through encouraging sustainability initiatives. They have laid more stringent regulations to pressure the manufacturing firms to transform into more sustainable and reduce their carbon footprint. Moreover, the manufacturing firms are also experiencing pressure from local governments and private NGOs. With increasing awareness of sustainability, customers have also slowly started transforming towards sustainable products and boycotting products from firms that do not comply with sustainability standards. Consequently, manufacturing firms have realized the need to become more sustainable in order to adapt to the changing regulations and customer needs. To achieve the level of sustainability in their supply chain operations, manufacturing firms have adopted innovative strategies and made changes in their policies making sustainability one of their prime goals. To achieve the desired level of sustainability, firms need to transform their current ways by incorporating a sustainability perspective into their operations. However, integrating sustainability at the operations level is not as easy as said due to existing governance gaps which are a result of ineffective control and management in global supply chain networks.  This thesis aims at identifying, understanding, and analyzing the gaps in integrating sustainability into supply chains and providing suggestions on how to fulfill these gaps. Through this research three innovative sustainability strategies which can be applied at operational, organizational, and system levels are analyzed, and conclusions are drawn on how successful implementation of these strategies would help in fulfilling the governance gaps. Further, the research also analyses the plausible effects of implementing the strategies by understanding and comparing the firm performance before and after implementation. The firm performance is measured in three categories: environmental performance, operational performance, and financial performance.