Incorporating Sustainability into Supply Chain

Logistics: Evolution and Future Opportunities

Hui-Nee AuYong

Universiti Tunku Abdul Rahman

(auyonghn@utar.edu.my)

Suhaiza Zailani

Azmin Azliza Aziz

University of Malaya

(shmz@um.edu.my)

(aazliza@um.edu.my)

Volume 23, Number 4

December 2017, pp. 267-294

Evolving consumer awareness has led to academic and corporate interest in

establishing sustainable supply chain logistics. Yet, this area is still in its

infancy with various potentials. This study aims to briefly review the literature

of the sustainable supply chain logistics over the last decade based on the

triple bottom line approach. A number of common challenges have been

identified. Opportunities are also highlighted in disciplines such as logistics

and occupational safety and health management. This study emphasizes the

importance of sustainable supply chain logistics. It is hoped that this study

able to provide platform for proposing future research opportunities.

Keywords: Economic, Environment, Occupational Safety and Health, Social,

Supply Chain Logistics (SCL), Sustainability

1. Introduction Globalization and competition have forced many companies to revisit their supply

chain logistics strategies. The ideologies of logistics and supply chain have been

influenced in the last few decades. Firms are increasingly replacing the traditional

objectives of their supply chain which focused on reducing costs, time and quality to

newer concepts which include responsiveness, agility and leanness (Norrman and

Jansson, 2004). According to Williams, Esper and Ozment (2002), the importance of

partnerships and strategic alliances have changed, as the industry migrates from the

traditional supply chain management approach to the e-supply chain management

(eSCM) perspective. Moreover, the focus on leadership style also provides potential

of leadership changes to reap fully the benefits of operating in the eSCM

environment. In recent years, there has been increasing awareness of the

sustainability of supply chain logistics, in which enterprises compete based on

multiple competitive performance objectives such as quality, price, responsiveness,

flexibility, and dependability. Sustainability could be referred as ability of

organizations to satisfy the needs and expectations of customers and other

stakeholders including shareholders, employees, supply chain partners and society

over the long term in a balanced way (ISO, 2009).

With various firms involved in supply chain and logistics processes, differing

quality and standards may exists, leading to conflicts in maintaining sustainability.

For instance, failure to maintain appropriate temperature and abusive storage

conditions resulting from inconsiderate actions of supply chain partners may lead to

268 International J. of Opers. and Quant. Management

safety issue in the food industry (Soosay, 2008). Hence, providing suppliers with

training on sustainability issues or partnering with them in developing sustainability

management system such as health and safety conditions might be able to reduce the

risks of poor quality or production disruptions (United Nations Global Impact, 2010).

As the field of supply chain logistics has an inherent connection to sustainability, it is

necessary for researchers to continue to enhance the extant body of knowledge to

offer theoretical and pragmatic insights to facilitate supply chain managers to meet

these challenges. As management principles and theories linked to sustainable supply

chain logistics continue to develop, there is a need to evaluate our existing position

and where we should be going as we move forward.

While various studies have been focusing on integrating the idea of sustainability

and supply chain (Seuring & Muller, 2008; Srivasta, 2007; Mollenkopf, Stolze, Tate

& Ueltschy, 2010; Winter & Knemeyer, 2013), there is little work done to explore

the role of logistics as a supply chain function towards sustainability. The annual

logistics costs of the world‘s gross domestic product was estimated at 12 per cent

and this supply chain function was ranked as second to the costs of goods sold for

most firms (Dey et al. 2011). Beyond the monetary costs, logistics process also

appears to produce up to 75 per cent of a firm‘s carbon footprint, implying a

substantial impact on the environment (The Council of Supply Chain Management

Professionals, 2008). More recent studies such as Kucukvar et al. (2016) showed that

onsite and upstream supply chains found to have over 90% of total energy use and

carbon footprint. In other words, as the findings of Silva, Fritz and Nunes (2015),

the research on sustainability is focusing on the environmental dimension while the

research on supply chain management is focusing on the economic dimension. The

combination of economic and environmental costs contributed by logistics to supply

chain management makes it a key area, creating a need to explore opportunities to

boost the logistics performance.

There are many review studies reported in the past. Hervani, Helms and Sarkis

(2005) provide an integrative framework for study, design and evaluation of green

supply chain management performance tools. Vanany, Zailani and Pujawan (2009)

suggest that supply chain risk management is a relatively ―immature‖ issue with

rapid growth of interest, therefore future research should explore collaborative risk

management and strategies could for a resilient or robust supply chain. Some

researchers focused on theory-building efforts. According to Tseng, Lim and Wong

(2015), the top-ranking aspect to consider in sustainable supply chain management is

the stakeholders. On the other hand, Seuring (2013) suggests the three dominant

approaches on the modeling side as equilibrium models, multi criteria decision

making and analytical hierarchy process. Touboulic and Walker (2015) observed that

theory-building efforts in sustainable supply chain management remained scarce,

where the predominance theories applied were macro theories, i.e. resource-based

view, stakeholder theory and institutional theory. Some others emphasized practical

relevancy. Jonsson and Holmström (2016) highlighted the four components of

practically relevant supply chain planning (SCP) theory, i.e. context, intervention,

mechanism, and outcome (CIMO). Their research concluded that past literatures

have been identifying enablers and antecedents for outcomes without reference to

implementable practices and practical contexts, which were considered insufficient

for relevancy to practice. According to Witt struck and Teuteberg (2011), signaling,

information provision and the adoption of standards are pre-conditions for strategy

AuYong, Zailani, Aziz 269

commitment, mutual learning, the establishment of ecological cycles and the critical

success factors of SSCM. Specifically, Giunipero, Hooker and Den slow (2012)

indicated that top management initiatives and government regulations drive

purchasing and supply management sustainability while investments in sustainability

and economic uncertainty are a hindrance. Nevertheless, Silvestre (2016) describes

four promising avenues for future sustainable supply chain management

investigations, namely (i) Sustainable Supply Chain Drivers and Barriers, (ii)

Sustainable Supply Chain Genesis, (iii) Sustainable Supply Chains and Innovation,

and (iv) Supply Chain Sustainability Trajectories.

Moreover, while various studies have been conducted in diverse areas of

sustainability encompassing green purchasing, ethical sourcing, carbon footprint and

reverse logistics, much of these researches focused solely on individual element,

such as environmental. Hence, this study aims to provide a review on the

development of research focusing on the integration of sustainability and the area of

logistics in the supply chain in a broader picture, based on the triple bottom line

approach. It is expected that this study able to provide platform for proposing future

research opportunities.

2. Supply Chain Logistics Elements Supply chain logistics (SCL) is better understood within the context of end-to-end

supply chain (Metro Vancouver, 2009). It could be referred as a part of the chain that

plans, implements and controls the efficient, effective forward and reverse flow and

storage of goods, services and related information between the point of origin and

consumption in order to meet the customers‘ needs (Zakaria et al. 2010). These

various activities imply that managing logistics processes in supply chains can be

complex and difficult. Moreover, with intense globalization, firms are increasingly

expanding global sourcing of materials, equipment and finished goods, leading to

huge logistics and distribution challenges, which requires a greater degree of

coordination ever before. A retailer purchasing goods from international markets for

instance need reliable partners to ensure products are delivered in a timely manner.

Continuous flow of supplied inputs is not only crucial at the final stage, yet it is also

critical in the production stage, in which shortages of raw materials could lead to

underutilization of capital intensive processing facilities and labor. Some of the

common problems arising from inefficient logistics and distribution process include

delayed product and service delivery, high product damage rate and supply

disruptions.

Figure 1 Supply Chain Logistics Functions within an End-to-End Supply Chain

Source: Sustainable Supply Chain Logistics Guide (Metro Vancouver, 2009)

270 International J. of Opers. and Quant. Management

At the heart of these issues is the fact that businesses along the supply chain need

to reconfigure their logistics operations to gain and sustain their competitive

advantage. The logistics operation has been positioned as an area in which firms

could gain strategic advantage over their competitors. The focus has been

transformed from cost effective to enhanced quality and timely production and

delivery, responsiveness, agility and leanness (Norrman and Jansson, 2004). A new

and expanded role of logistics function will be required in the new extended

manufacturing enterprises, as a firm‘s success will increasingly depend on its ability

to coordinate and integrate the production activities at geographically dispersed and

distinct locations with its logistics operations, of which this new enterprise logistics

will place a high priority on both inter-firm and intra-firm integration of logistics

activities for sustainable commercial success. This is pertinent as the integration of

sustainability concepts into logistics concerns not only diverse business activities and

processes across functional silos within an individual business entity, yet also

involve cooperation between parties across the network of relationship that form a

supply chain. For instance, Hasan (2013) reported that companies which are working

together in measuring supplier performance, developing alternative methods of

supply and increasing the recyclable content of products able to increase logistics

efficiency and serve customers better.

Figure 2 Key Focus Areas within Logistics and SCM

Source: Adapted from Kearney (1999) by Norrman and Jansson (2004)

3. Sustainable Elements The term sustainability could be defined as using resources to meet the needs of the

present without compromising the ability of future generations to meet their own

needs (The World Commission on Environment and Development, 1987). This

definition implies the necessity of firms to not only focus on meeting economic

goals, but also concentrate on the sustainment of nature‘s resources and the societies

served (Elkington, 2004). Morana (2013) also introduces a framework for

sustainable development of supply chain management (Figure 3) with details about

every aspects using the balanced scorecard (BSC) as a strategy performance

management tool.

The economic dimension is well understood, developed and widely used as a basis

to measure organizations performance e.g. profitability (Guide Jr. & Van

Wassenhove, 2009). It was found that the green supply chain management practices

lead to better performance in economic, environmental, operational, and social

AuYong, Zailani, Aziz 271

performance (Geng, Mansouri and Aktas, 2017). The environmental element

includes a set of organizational goals that deals with aims to promote greater

environmental responsibilities and encourage development of environmental friendly

technologies and business processes (Klasses, 2001). The social dimension refers to

organizations‘ ethical responsibility that may encompass activities that are not

necessarily codified into law, but nevertheless are expected of business by societal

members.

Figure 3 Sustainable Supply Chain Management (SuSCM) (Morana, 2013)

Researchers also scrutinise into the practical outcomes of these three dimensions.

Dalé, Roldan and Hansen (2011) concluded that the economic pillar is the most

important one, while the environmental pillar is becoming more relevant, and the

social one is still incipient. Ashby, Leat and Hudson-Smith (2012) suggest that the

environmental dimension and social dimension are treated separately in the literature

with limited integration, and the sustainability research provides limited practical

outputs. Varsei (2016) found that the literature has predominantly dealt with one or

two dimensions, while sustainability has been misinterpreted as green or

environmental practices with the general oversight of the social dimension.

Nevertheless, Adetunji, Price and Fleming (2008) suggest that the SSCM is

considered from the perspective of green procurement/purchasing in the construction

sector, and they observed a high culture of health and safety and environmental

consciousness due to the sector‘s high exposure to environmental, health and safety

issues. Furthermore, the results from Pereseina et al. (2014) show that intensified

international collaboration on environment and traffic safety can help sustainable

supply chain management, and the results from Chacón Vargas and Carlos Eduardo

(2016) suggest that environmental and social responsibilities are increasingly

important issues for the stakeholders of focal companies in emergent economies.

Despite the less prevalent of social and environmental elements in business practice,

these dimensions are characterized as essential business operations that could

provide economic benefits. For instance, re-organization of production process for

improved environmental performance may create opportunities for firms to innovate,

with less energy used and lower waste handling costs may be reaped (Mohezar and

Zailani, 2014).

272 International J. of Opers. and Quant. Management

Within the context of supply chain logistics, the increased outsourcing of activities

across globe and growing concerns on societal and environmental impact of

production and consumption led to renewed interest in sustainability. The business

processes which cut across different functions within a firm and across other firms

within the supply chain provide direction as to future research opportunities focused

on the integration of sustainability and supply chain logistics. For instance, the

procurement trend of U.S. apparel industry which manufactures most of their

products in developing countries presents a number of pertinent social issues

including the provision of clean and safe working conditions within suppliers‘

factories and maintenance of fair rates of pay for workers and contractors employed

by suppliers (Dargusch and Ward 2010) which have raised the importance of

sustainability concept. This concept has been put forward by NGOs, government and

multilateral institutions as a step in limiting the negative impact of firms‘ production

on society and environment. Organizational practices that lead to more sustainable

supply chains are found to be a mixture of best practices in traditional supply chain

management and also new proactive behaviours towards sustainable practices, with

the three elements aligned adequately (Pagell and Wu, 2009). Concurrently, logistics

performance of a firm depends greatly on the company‘s supply chain management

strategy and sustainability approaches such as waste elimination, supply chain risks

management and cleaner production (Govindan et al. 2014; Green, Whitten and

Inman 2008). In summary, the field of sustainable supply chains has evolved from a

perspective and investigation of standalone research in social and environmental

areas; through a corporate social responsibility perspective; to the beginnings of the

convergence of perspectives of sustainability as the triple bottom line (Carter and

Easton, 2011).

4. Research Methodology In order to establish the current state and identify opportunities for future research on

sustainable supply chain logistics, an extensive literature review was conducted. The

assessment period for the study is between the years of 1995 and 2016, representing

a 22-year time horizon for the analysis. The year of 1995 was used as a starting point

as at this time the intersection between sustainability and SCM began to appear in

literature (Seuring, 2004). Various databases including EBSCO, Emerald, Taylor and

Francis, Science Direct and Wiley Inter-Science were utilised to identify relevant

articles. Among the journals selected are

Applied Energy

California Management Review

Corporate Social Responsibility and Environmental Management

European Journal of Operational Research

IIMB Management Review

International Journal of Physical Distribution and Logistics Management

International Journal of Production Economics

Journal of Cleaner Production

Omega

Resources, Conservation, and Recycling

Supply Chain Management: An International Journal

Transportation Research Part E: Logistics and Transportation Review

AuYong, Zailani, Aziz 273

In selecting the articles, a decision was made to focus on three different

disciplines. They were logistics/SM, operations/production management and

social/environmental management. Over one hundred articles were reviewed and

they were classified based on the triple bottom line approach. Under the economic

sustainability, all literature dealing with economic applications such as financial

performance, cost reduction, competitive advantage and economic benefits were

placed. All literature that concern with carbon footprint, green logistics, recycling

and emission reduction were grouped as under the environmental classification.

Social approach consists of literature that highlights issues such as fair trade, human

rights, social responsibility and labor practices.

5. Findings and Discussions Our findings indicate that the number of publications in the domain of sustainable

logistics supply chains is growing with years, implying that more researchers are

undertaking research in this area. Nevertheless, most of the articles that were

examined were published in the single domain with more focus were given on

environment and economic dimensions, rather than sustainability as a holistic

integrated concept. This is expected with the heightened consumers concern on

environmental issues relating to product-and-process derived pollution. For instance,

a regulation was implemented globally over relatively short timeframe to phase out

chemicals with Ozone Depleting Potential during 1990s (Linton, 2007). A steady

increase on public recognition of global warming as environmental issue could also

represent the on-going development in this area of sustainability. Yet, an increasing

number of recent publications were found to posit sustainability issue on holistic

perspective, suggesting the arising of subtle movement towards a broader

examination of sustainability in the literature.

Table 1 Classification of Sustainable SCL Research

Category Author

Internal: Economic Factors

Norrman & Janss on (2004), Kleind or fer & Saad (2005), Narasimhan &Talluri (2009)

External: Environmental

Factors

Wu & Dunn (1995), Enarsson (1998), Guide & Srivastava (1998), Beamon (1990) ,

Walton et al. (1998), Hand field et al. (2002), Arena et al.

(2003), Sarkis (2003),

Vachon & Klassen (2006b), Matos & Hall (2007), Srivastava

(2007), Vachon (2007),

de Brito & van der Laan (2010),Gold et al. (2010), Sarkis et al.

(2010)

External: Social Factors Cantor (2008), Hutchins & Sutherland (2008), Halldorsson et al.

(2009)

5.1 SCL Sustainable Economically

Literatures on SCL sustainable economically are mainly focus on supply chain risks.

Since supply chains involve hundred if not thousands of companies over several

tiers, there are significant risks inherited owing to the failure of environmental or

social performance and disruptions of operational processes. In line with this, several

studies in this dimension had attempted to categorise the supply chain risks. For

274 International J. of Opers. and Quant. Management

instance, Johnson (2001) divided supply chains risks between supply risks (e.g.

capacity limitations, currency fluctuations and supply disruptions) and demand risks

(e.g. seasonal imbalances, volatility of fads, new products). From the other point of

view, Zsidisin et al. (2000) focused on supply risks related to design, quality, cost,

availability, manufacturability, supplier, legal, and environmental, health and safety.

According to Chopra and Meindl (2007), all supply chains were subject to some

amount of risk, including supply disruptions and delays, demand fluctuations, and

price fluctuations; while Narasimhan and Talluri (2009) characterised supply chain

risk as a disruption or negative outcome triggered by unpredictable and/or uncertain

events. A more recent study conducted by Vilko and Hallikas (2012) analyzed the

risk impacts in terms of delays in the supply chain.

Within the supply chain context, a second category of literature focus on

discussing ways to mitigate the risks associated with sustainable SCL practice.

Braithwaite and Hall (1999) emphasized that the relationship between corporate

strategy, risk and the implications for supply chain management are poorly

understood and in need of further exploration. Building on this perspective, Souter

(2000) and Christopher et al. (2002) further stressed that companies should not only

focus on their own risks: they must be able to identify and assess the potential causes

or sources of those risks at every significant link along the network. Conventional

strategic management, which focuses on individual firm as the competitive unit in

the industry, is no longer a key to a sustainable competitive advantage. Achieving

competitiveness and excellent firm performance requires a supply chain which is

able to respond quickly to any fluctuations in customer demands and uncertainty

occurring along the network. Therefore, successful supply chain logistics

management requires a transformation; from managing individual functions to

coordinating and integrating key business processes with chain members.

Christopher and Peck (2004) argued that as supply chains become more complex

as a result of global sourcing, supply chain risk increases. Hence, the challenge to

business was to mitigate that risk through creating more resilient supply chains. In

this perspective, resilience implied flexibility and agility, and its implications on

supply chain extend beyond process redesign to fundamental decisions on sourcing

and the establishment of more collaborative supply chain relationships based on far

greater transparency of information. A number of focal firms for instance have

introduced supplier evaluation schemes, in which suppliers are assessed on how they

deal with environmental and social issues. This approach serves as a guarantee that

the supplier will act according to the standard, thus help avoiding related sustainable

risks. This was highlighted in 37 papers, in which environmental and social

performance were seen as the prerequisites for suppliers to be included as part of the

supply network. Several authors have reported that in the textile industry, producers

offering organic cotton products had to ensure that they had such supplier before

entering the business. This prompted producers to allocate considerable investments

at partner locations as a means to develop supply structure and help improve

production facilities and processes, leading to reduced supply risks. Notwithstanding

this, there seems to be a need for deeper information flow along the supply chain, in

which suppliers have to obtained detailed insights into subsequent stages of life-

cycle.

Bhamra, Dani and Burnard (2011) identified areas for advancing resilience

research, in particular: the relationship between human and organizational resilience;

AuYong, Zailani, Aziz 275

understanding interfaces between organizational and infrastructural resilience. With

regard to supplier management, the result from Harms, Hansen and Schaltegger

(2013) reveals that Germany companies mainly implement risk-oriented sustainable

supply chain management (SSCM) strategies. Furthermore, Mensah, Merkuryev,

Longo (2015) developed a supply chain resilient strategy with appropriate strategies

and tools namely, six sigma practices, lean production, flexibility and a strong

corporate culture, while Hohentein, et al. (2015), and Ansari and Kant (2017) argued

that most research has been qualitative. Authors such as Brandenburg et al. (2014)

evaluated developments and directions of sustainable supply chain management, and

has provided a content analysis on quantitative, formal models that address this

research area.

On the other hand, Kleindorfer and Saad (2005) used operations principles, such as

supply chain optimization, supply chain agility, contingency planning, collaborative

sharing of information in the supply chain, flexibility and modularity, and total

quality management (TQM) as the building blocks to effectively manage disruptive

risk in a supply chain. Christopher and Lee (2004) suggest that the element to

mitigate supply chain risk is improved ‗end-to-end‘ visibility. Ghadge, Dani and

Kalawsky (2012) identified future research agenda in supply chain risk management

include behavioural perceptions, sustainability factors, risk mitigation through

collaboration contracts, visibility and Traceability, risk propagation and recovery

planning, industry impact and holistic approach.

Another stream of research in economic dimension focusing on the discussion of

supply chain logistics performance. According to Spekman, Kamauff Jr and Myhr

(1998), firms must select both partners and supply chain strategies carefully. This is

due to coordination and collaboration are different which require different levels of

trust and commitment, hence different outcomes, while information technology is

key to the development of an integrated supply chain. Findings from Skjoett-Larsen

(2000) concluded that third party logistics (3PL) were not merely a means to cost

efficiency, but also as a strategic tool for creating competitive advantage. The result

of Pradabwong et al. (2017) highlights the role of intra- and inter-organizational

practices, and clearly demonstrates the joint role and impact of business process

management (BPM) and supply chain collaboration (SCC) respectively.

Three aspects relating to risks were commonly mentioned in the literature as

barriers for implementing sustainable supply chain logistics - higher costs,

coordination efforts and complexity, and missing communication along the network

(Seuring and Miller, 2008). Number of studies has demonstrated a link between

sustainability in SCL with lower costs (e.g. Roa and Holt 2005). Yet, extending the

supply chain to include issues such as recycling and refurbishing adds new level of

complexities which in turn could increase costs at least in the short term. Issues such

as the uncertainty associated with the recovery process with regards to quality,

quantity and timing of returned products as well as the collection and transportation

of these products, containers, pallets and packaging reflect increase costs from

society to supply chain partners. Despite that the relationship between economic

performance and environmental are observed, long-term studies are not yet existed to

provide a comprehensive insights. Performance of the logistics function has often

been mentioned in the context of common indicators such as quality, speed,

dependability, flexibility and cost. The impact of social dimension on economic

performance is further rarely addressed in the literature.

276 International J. of Opers. and Quant. Management

Table 2 Economics Initiatives Based on Sustainable SCL Research

Category Author

Transparency of Information Christopher & Lee (2004), Christopher and Peck (2004)

Total Quality Management (TQM) Kleindorfer and Saad (2005)

Supply disruptions and delays Chopra and Meindl (2007)

Demand Fluctuations Chopra and Meindl (2007)

Price Fluctuations Chopra and Meindl (2007)

SC Risk Narasimhan and Talluri (2009), Vilko and Hallikas (2012), Harms, Hansen and

Schaltegger (2013)

Key drivers: Selection of partners / strategies,

role of intra- and inter-organizational

practices

Spekman, Kamauff Jr and Myhr (1998),

Skjoett-Larsen (2000), Pradabwong et al.

(2017)

5.2 SCL Sustainable Environmentally

During the last two decades, purchasing and supply chain managers have seen the

integration of environmental issues embedded in related standards into their daily

tasks (Aronsson and Brodin, 2006). Such triggers have increased interests in green

supply chain management (GSCM) literature. Srivastara (2007) defined green supply

chain management (GSCM) as integrating environment thinking into supply chain

management, including product design, material sourcing and selection,

manufacturing processes, delivery of the final product to the consumers, and end-of-

life management of the product after its useful life. As for the key driver that

promote green supply chain, manufacturers in UK perceive the greatest pressure to

improve environmental performance is through legislation (Holt & Ghobadian,

2009).

Within this area of research, several key themes have emerged including the

concepts of green design, green operations, reverse logistics, waste management and

green manufacturing (Guide, and Srivastava, 1998; Srivastava, 2007). Several

authors have discussed techniques such as life cycle assessment in assisting firms to

design products that are able to minimize environmental impact over its useable life

and afterwards (Arena et al. 2003; Beamon 2008; De Carvalho, 2012;

Khiewnavawongsa and Schmidt, 2008). This field of research however, are found to

be interfacing with the engineering and reverse logistics while considering resource

depletion as environmental impacts. The management of sustainability through eco-

design has avoided depletion of resources and increased the value created by

individual products. For instance, Lee and Lam (2012) suggest that the use of

information system and technology for reverse logistics enhances the customer's

business process and provides value-added process for customer retention. Yet, the

challenge for the producer of the product is to develop offerings that enable them to

capture more of the product value. The degree to which a product can be reused,

remanufactured, recycled, incinerated or dispose of depends greatly on the product

design. For instance, high lead content in cathode ray tube and electronic products

results in difficulties for disposal process owing to the toxicity of lead (Linton et al.

2007). Such issue has been discussed by several authors (e.g. Gold et al. 2010; Ryan,

2010; Vachon, 2003; Sarkis et al. 2010; Rahman and Subramaniam, 2011).

AuYong, Zailani, Aziz 277

Ruamsook and Thom chick (2012) suggest that the most visible and

environmentally damaging element of supply chains and logistics activities is freight

transportation, and the two issues pertinent are greenhouse gas emissions and their

dependence on finite petroleum resources. In line with these research, substantial

number of papers have also focused on the carbon footprint issue as an ecological

impact (Ngo and Mohanta, 2010; Srivastava, 2008; McKinnon, 2010; Hsu, et al.

2013, Hogget 2014). A carbon footprint could be defined as the total set of

greenhouse gas emission in the form of CO2 that are produced directly or indirectly

by an individual, event, organization or product (Carbon Trust, 2007). Wu, Dunn and

Forman (2012) suggest that energy efficiency, fuel efficient, and fuel saving are

among the most mentioned in green supply chain. Rossi et al. (2013) put three

bodies of knowledge, i.e. logistics service providers, eco-efficiency and logistics

innovation into a single framework of eco-efficiency innovation. Furthermore, study

from Byrne, Ryan and Heavy (2013) shows though many organizations are willing to

implement sustainable logistics practices to address the environmental impact, there

are concerns of hidden costs and risks associated with the implementation.

Another stream of literature focused on green purchasing. In particular, Malian et

al. (2012) found that environmental purchasing and sustainable packaging has a

positive effect on economic, social and operational performance. In this respect, the

integration of sustainability concepts into supply chain logistics has also been

discussed in the literature from regulatory and monitoring aspects (Hadfield et al.

2002; Zhu, Saris & Gang, 2005; Tunic, 2006; Cabana, Ramudhin & Paquet, 2012)

discussed environmental regulations. Changes in policy might force manufacturers to

explore new opportunities and change existing practices as a means to improve the

sustainability of supply chain logistics function. Often, multinational corporations

(MNCs), large retailers and brand name firms play a significant part in controlling

and taking the responsibility of their partners' environmental practice, enabling them

to monitor the supply chain logistics function over long distances without owning the

firm. Management systems play a pertinent role in this regard and could serve as the

minimum performance required. They mainly center on environmental management

systems namely ISO 14001. Mamic (2005) for instance had gained insights on how

such standards are implemented in the multinational corporations and their suppliers

firms in the retail industry. Building on this idea, comprehensive supplier audits are

thus required in green purchasing, which might again trigger further partnering as an

effort to joint process improvement. In a more recent study, Pimenta and Ball (2015)

found that the diffusion of environmental sustainability practices across

manufacturing supply chain is sharply related to the purchasing, performance

assessment and collaboration. The upstream supply chain logistics management

activities are better designed with careful considerations of environmental aspects in

regards to the products and processes. Glover et al. (2014) suggest that cost

reduction is the dominant logic to pursue a sustainable agenda. Particularly, the

results from Liu and Chang (2017) show that both closed-loop orientation (CLO) and

green supply chain management (GSCM) have positive effects on the environmental

performance and economic performance and that CLO positively impacts the level of

implementation of GSCM.

Nevertheless, Amol and Ashish (2016) suggest that to achieve environmental

sustainability, behavioural issues need to be addressed, while, practices of reverse

logistics, closed-loop supply chain management and waste management need special

278 International J. of Opers. and Quant. Management

focus. Others studies focused on environmental risk management. For example,

Manuj and Mentzer (2008) looked into the applicability of six risk management

strategies with respect to environmental conditions in a global manufacturing supply

chain context, namely postponement, speculation, hedging, control/share/transfer,

security, and avoidance. Specifically, Wong, Wong, and Boon-itt (2015) identified

four green supply chain integration (GSCI) practices in internal, supplier, customer,

and stakeholder.

Table 3 Environmental Initiatives Based on Sustainable SCL Research

Category Author

Green / Eco- Design

Eltaeb and Zailani (2009)

Green Purchasing Enarsson (1998), EltaebandZailani (2009), Zailani et al. (2012)

Reverse Logistics

Byrne and Deeb (1993), Shih (2001), Geyer and Jackson (2004),

Nagorney and Toyasaki (2005), Min et al. (2006), Srivastava and

Srivastava (2006), EltaebandZailani (2009), Sarkis et al. (2010), Rahman and Subramaniam (2011)

Life-cycle analysis Schmidt (2008), Matos and Hall (2007)

Green Marketing Shang et al. (2010)

Resource /

Transaction Costs

Wu and Dunn (1995), McKinnon (1998), Rodrigue, Slack and

Comtois(2001), Seuring(2001), Rosen et al. (2002), Vachon (2003), Gold

et al. (2010), Ryan (2010), Glover et al. (2014)

Environmental

Impacts /

Waste management

Murphy et al. (1994), McKinnon (1998), BearingPoint (2008), Srivastava

(2008), Ngo and Mohanta(2010), Wu, Dunn and Forman (2012), Hsu, et

al. (2013), Hoggett (2014)

Environmental risk

management Manuj and Mentzer (2008)

Key drivers Holt and Ghobadian (2009), Wong, Wong, and Boon-itt (2015), Amol and

Ashish (2016)

5.3 SCL Sustainable Socially

Being a socially responsible organization requires a firm not to only concern on

improving profits, yet to also maximize societal welfare, by participating in activities

that are not necessarily codified into law, but nevertheless are expected by

community. Example of such activities includes educational support, economic

development, job training, employees volunteering, healthcare and housing. For

instance, in the transportation sector, Deakin (2001) has introduced sustainable

transportation concept, which focusing on meeting the mobility needs while

preserving and enhancing human and ecosystem health, economic progress and

social justice of existing as well as future. Carter and Jennings (2002) has further

explored the notion of sustainable warehousing, which include activities such as

proper storing and disposing of hazardous materials, donation of excess inventory to

local people and safety training of forklift operations. Specifically, Hutchins and

Sutherland (2008) further proposed four social performances that businesses should

establish. Firstly, labor equity expresses the distribution of worker compensation

within a company. Secondly, health care was needed to characterize a corporation‘s

role in providing or helping the health care of companies‘ staff as well as their

families. Safety refers to the safety of the workplace within a company. Lastly,

AuYong, Zailani, Aziz 279

philanthropy described financial support that companies offer to community and to

greater community.

Within this area of research, few studies have been conducted to explore

antecedents of socially sustainable supply chain logistics. The starting points are

external force and incentives established by different groups, with stakeholders form

the widest category. Motivation to satisfy the stakeholder demands emerge from the

fact that addressing stakeholder needs can be correlated with a firm‘s survival,

economic well-being and competitive (Mitchell et al. 1997). León and Juan (2014)

argue that the increasing sustainability awareness within society is pressuring

Logistics and Transportation (l&t) companies to integrate CSR principles into their

strategies and policies. For instance, De Brito, Carbone and Blanquart (2008) pointed

stakeholders' concern for consumers' health as prerequisite for sustainable logistics

solutions. They advocated that certified retailers selling organic cotton products need

to explicitly advertise traceability function along the chain to assure customers that

their products do not contain genetically modified cotton, which is associated with

health hazards. In an earlier study, McIntyre (2003) suggested that those firms that

could respond to sustainability issues would generally be more proactive and are able

to meet changing customer requirements and market forces, hence capable of

creating an innovative and distinctive value chain. Notwithstanding these, all modes

of government control in a form of legislation or economic incentive are of great

relevance. Castka and Balzarova (2008) argued that organizations would adopt the

social responsibility agenda for strategic, altruistic or coercive reasons, as this will

facilitates firms in avoiding fines, penalties and public protest campaigns, leading to

higher likelihood of long-term survival. Community has been highlighted as one of

the main social issues in sustainable supply chain (e.g. Maloni and Brown, 2006;

Borrella et al., 2012). Specifically, Marshall et al. (2015) identify different types of

social and environmental supply chain practices, and uncover measures that bringing

in new stakeholders into the decision-making process.

Since a failure of social responsibility aspect will not only affect individual firm,

focal companies often passes the pressure on to suppliers. Some key actors,

commonly consisting of multinational corporations (MNCs), large retailers and

brand-name firms take control and responsibility of environmental and social

practices of their suppliers and third party logistics providers in determining what

should be produced, how and by whom (Anderson and Skjoett-Larsen, 2009). In

return, Soosay (2015) suggests that it is the downstream players that reap most of

these benefits and enhanced reputation. In a similar vein, Cantor (2008) urged the

importance of firms across all echelons of the supply chain to improve their safety

practices. This is reflected by study conducted by Kiathulthorn and Sathapornwanit

(2012), which demonstrated that all Third Party Logistics (TPL) providers are

subjected to comply with the buying company‘s code of CSR conduct laid down.

Andersen and Skjoett-Larsen (2009) suggest that practising CSR in supply chains

requires that it is embedded within the entire organization. Specifically, Carter and

Jennings (2002) argued that the third party logistics providers should take their

drivers‘ quality of life into account, such as operating schedules that permit drivers‘

adequate time at home, and paying adequate salary; where safety issue is also

concerned such as adequately maintained vehicles as well as properly cleaned trailers

and tankers. Furthering these thoughts, Andersen and Skjoett-Larsen (2009) argued

that embedment of CSR within the focal firm and its suppliers required employee

280 International J. of Opers. and Quant. Management

training and sharing of experience, training of key personnel at the supplier level,

positive incentives for suppliers in the form of long-term contracts and enlarged

purchasing orders, and regular auditing of suppliers‘ performance. Particularly, the

importance of supply chain talent management issues have been emphasized by

Stank, Dittmann and Autry (2001), and Hohenstein, Feisel and Hartmann (2014).

Table 4 Social Initiatives Based on Sustainable SCL Research

Category Author

Labor Equity Carter (2004), Hutchins and Sutherland (2008), Van Horne Institute(2014)

Health Care Hutchins and Sutherland (2008)

Safety Carter (2004), Hutchins and Sutherland (2008)

Philanthropy Hutchins and Sutherland (2008)

Community Maloni and Brown (2006)

Key drivers Stank, Dittmann and Autry (2001), Andersen and Skjoett-Larsen (2009),

Hohenstein, Feisel and Hartmann (2014), Marshall et al. (2015)

5.4 Discussion

The examination and classification of the extant literature illustrate that there is

sufficient activity and on-going development in the domain of sustainable logistics

supply chain. As such it is imperative and valuable for researchers to periodically

evaluate the progress and identify any additional opportunities. As firms are faced

with pressures to proactively tackle the sustainability issues in their logistics

activities, it is pertinent for researchers to continue seeking ways to support this

managerial effort.

Despite the rigorous development of sustainability issues in logistics operations,

the discussion is still in its early stage. One may argue that it is premature. While

there have been many examples of environmental and public health concerns,

consumers remain sceptic around the sustainability issue with the suspicion that so-

called ―green washing‖ is commonplace. Although consumers declare that

sustainability in products is important to them, there is little evidence that associate

this element with buying habits (Harrington, 2011), offering a major avenue for

future research. One implication of sustainability for researchers therefore is to assist

firms in developing new estimation tools that could be adapted to existing techniques

as an effort to address the new questions of sustainability in supply chain logistics.

Total costs for instance, must include the effects of resource depletion and the

generation of by-products that are neither captured nor used. While it is apparent that

integrating sustainability into supply chain logistics would provide a broad range of

strategic benefits and may not necessarily reflect in financial gains, only few studies

examine firm performance from this perspective. For instance, companies that

reduce the packaging not only achieve savings in cost but also embrace sustainability

into branding. And the fact that sustainability advances quickly become

commoditized is a positive driver for innovation (Harrington, 2011). Establishing the

missing link to the economic dimension therefore would seem to be imperative in

assuring a long-term view towards the integration of sustainability in logistics

operations. Similarly, there is also value for increasing understanding as to how the

three dimensions - social, economic and environment interact and support each other

AuYong, Zailani, Aziz 281

in the pursuit of economically viable and sustainable supply chain logistics,

highlighting opportunities for taking a more holistic approach.

The literature review highlights that there is growing recognitions of the role

played by external pressures and incentives established by different groups as

influencing factors that trigger firms to embrace sustainable SCL. Changes in policy

and legislation introduced by many countries and jurisdiction that address

sustainability issues have become influential proponent for manufacturers and

researchers to explore the sustainability across logistics operations. Yet, the

transformation could also flow in the opposite direction. Research and practice in

this area could also impact policy development by presenting alternative scenarios

for the expansion of sustainable SCL. For instance, the high lead content in cathode

ray tube and electronic products which has resulted in complicated disposal

decisions, have led to special regulations being introduced (Linton et al. 2007).

Policies have been developed to divert these products from being disposed at

municipal landfills to the reused and remanufactured process with the intent of

integrating led used into new products. Having illustrated the effects of integrating

sustainability in SCL on policy, desired outcomes are not only affected by policy, but

also requires changes in the policy, creating a need for researcher to consider looking

into this issue.

Based on the analysis on the classification matrix, much of the academic

discussion in the research area point towards the need for cooperation among supply

chain partners in addressing sustainable supply chain logistics issues. The focus on

optimising operations through the development of sustainability has moved from a

particular firm to the entire supply chain. Specifically, there appears to be an

opportunity for researchers to examine this issue beyond focal firms' perspectives to

include external parties. For instance, apparel manufacturers such as Nike and

Adidas have been blamed for inhumane working conditions and contaminations of

the local environment, problem occurring during the production of their clothing at

suppliers' plants. Behavioural issues such as trust for instance, is crucial across all

members in the network and must be guaranteed from the input suppliers until the

end customers in pursuit if sustainable development.

Table 5 Major Research Strands Representing the Causal Linkages

to the Future Research Scope

Issues Opportunities / Constraints

Need Managerial Measurement and

Control Opportunities to Develop new Estimation Tools

Growing Influence of Legislation Opportunities to offer New Products or Services

Need Cooperation among Supply

Chain Partners

Constraints of Talent Management of behavioural

issues to be addressed

6. Conclusions Increasing consumers' interests in environment-friendly product lifecycle and

societal concerns has led to the integration of sustainability in managing business

operations. Nevertheless, research that attempts to discuss sustainable SCL is rather

limited. Within the existing literature, researchers have studied different angles to

sustainable SCL. The industry has developed beyond internal aspects of risk controls

282 International J. of Opers. and Quant. Management

that ensure economical interest, to intense attention on environmental sustainability,

and currently focuses on social aspects such as occupational safety, labor equity,

freedom of association, anti-corruption or CSR. These approaches are expected to be

further analyzed. Specifically, it is imperative to understand the types of sustainable

SCL, and the appropriate initiatives. As the sustainable SCL research is growing

rapidly, we see continual progress in building knowledge and insight. Despite the

abundant theories, concepts and practices of sustainable SCL available in the

literature, this issue still remains inconclusive, due to the theoretical and

methodological aspects identified in the literature. This paper highlights several

general as well as more specific opportunities for future research-based on a

literature-based classification matrix built on the three sustainable dimensions. In the

areas of sustainable supply chain logistics, there is growing role played by external

parties, on top of inclination towards cooperation among supply chain partners.

Nevertheless, Logistics Bureau (2017) gives alerts of the 6 supply chain trends

cannot be ignored, namely (i) Warehouse Robotics in the Supply Chain, (ii)

Autonomous Road Transportation, (iii)The Blurred Line Between Logistics and

Technology Services, (iv) The Appeal of Supply Chain Social Responsibility, (v)

The Race for the Last Mile, and (vi) The Rise of the Virtual Logistics Team.

Specifically, based on Accenture‘s Strategy Supply Chain Workforce Research 2016,

supply chain executives believe digital advances will augment the supply chain

workforce, most significantly in the following areas: 65%: More forward looking,

strategic decisions to support business goals, 51%: More data-driven decision

making requiring more analytical skills, and 46%: More automation of transactional

activities and exception handling (Kreutzer, Meyer and Puertas, 2017). Hence, the

influence of disruptive technology to sustainable supply chain management is crucial

in the coming decade, not only in terms of efficiency but survival of the fittest.

Social responsibilities to the community are increasingly important issues in these

days of technology that is changing the global workplace rapidly, and as artificial

intelligence (AI) causes job losses and threatening the workforce, very likely the

government will have to provide a guaranteed basic income to the affected people. It

is hoped that through the understanding of existing literature and suggested research

opportunities presented, researchers are better equipped to proactively conduct future

sustainable SCL research, which would greatly facilitate firms and society in

addressing such issue.

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About Our Authors

Hui-Nee AuYong achieved her Bachelor of Science (Hon.) at Universiti Putra

Malaysia, MA at University of Tsukuba and Ph.D. at University of Science

Malaysia. She is an Assistant Professor and Dean of the Faculty of Business and

Finance, Universiti Tunku Abdul Rahman. She was certified safety and health officer

and a Member of the Malaysian Institute of Management. She is author of more than

60 peer-reviewed conference and indexed journal papers. Her research topics include

economics and operations management.

Suhaiza Zailani has received her MSc and PhD in Management Science from

Lancaster University. She is a Professor of Supply Chain with University of Malaya,

and Director of the University Malaya Entrepreneurship Centre. She has published

more than 100 papers in various citation indexed journals on Operations

Management. Her current ISI H-Index is 7, Scopus H-Index is 12 and GS H-Index is

18. She has won USM Sanggar Sanjung 2012. She has 74 MBA, 3 MA, 2 DBA and

16 PhD students successfully completed their dissertations under her supervision.

Azmin Azliza Aziz has received her Bachelor of Science (Industrial Mathematics)

from Universiti Teknologi Malaysia, Master of Applied Statistics from Macquarie

University and Ph.D. in Operations Research from University of Warwick. She is a

Senior Lecturer at University of Malaya. She is author and reviewer of more than 20

peer-reviewed conference and indexed journal papers. Her research interest includes

the area of transportation optimization, quantitative analysis and recently working on

halal logistics. She has 6 master students successfully completed their dissertations

under her supervision and currently supervising 5 PhD students.