SUSTAINABLE SUPPLY
MANAGEMNET
Lectures and Mandatory readings
TILBURG UNIVERSITY
TiESM
,Contents
Lecture 1: Supply management and supply chain sustainability.........................................................2
Mandatory reading: Shareholder Value Effects of Ethical Sourcing: Comparing Reactive and
Proactive Initiatives.........................................................................................................................6
Mandatory: MAKING SUSTAINABILITY SUSTAINABLE......................................................................8
Lecture 2 Sustainability standards for selecting, evaluating, and developing suppliers....................11
Mandatory reading Supplier development for sustainability: contextual barriers in global supply
chains............................................................................................................................................15
Lecture 3: Global sourcing and supply chain sustainability risk MSc Supply Chain Management
Sustainable Supply Management.....................................................................................................18
Mandatory reading L3 : A systematic review of sustainable supply chain management in global
supply chains. Journal of Cleaner Production...............................................................................23
Lecture 4: Managing sustainability in extended supply network......................................................27
Mandatory reading A More Sustainable Supply Chain..................................................................29
Lecture 5: Contracting & Managing Sustainable Supply...................................................................31
Mandatory reading:......................................................................................................................35
Alliance Governance Mechanisms in the Face of Disruption........................................................35
Inter-organizational governance: a review, conceptualisation and extension...............................38
Lecture 6: Supply Management for the Circular Economy................................................................40
Mandatory readings.....................................................................................................................44
1. Product design and business model strategies for a circular economy.....................................44
Lecture 7: A network approach to sustainability..............................................................................48
Mandatory readings:....................................................................................................................54
Diffusion of environmental business practices: A network approach...........................................54
Sustainable purchasing and supply management: a structured literature review of definitions
and measures at the dyad, chain and network design..................................................................56
Lecture 8: Supply Management Ethics..............................................................................................59
Mandatory readings.....................................................................................................................63
Environmental purchasing and supplier management (EPSM): Theory and practice...................63
Ethical issues in international buyer–supplier relationships: a dyadic examination......................64
Lecture 9: Agricultural supply chains................................................................................................65
Mandatory readings.....................................................................................................................68
Toward Resilient Agriculture Value Chains: Challenges and Opportunities...................................68
Lecture 10: Medicine Supply Chain...................................................................................................71
Mandatory readings.....................................................................................................................77
Short of drugs? Call upon operations and supply chain management..........................................77
1
,Lecture 1: Supply management and supply chain sustainability
Slide 3 Sustainable supply Management
Supply management Purchasing strategy
Management, acquisition, positioning, and The transactional process of acquiring goods
identification of inputs and supplier and services, including payment of invoices.
relationships
Procurement Sourcing
Developing and implementing strategies to The activities within the procurement process
manage an organization’s spend portfolio to concerned with identifying and evaluating
contribute to the organization’s overall goals potential suppliers, engaging with selecting the
best value suppliers.
Slide 4 Objectives of supply management
1. Ensure timely availability of resources
2. Identify assess and mitigate supply chain risk.
3. Reduce TCO
4. Enhance quality of resources
5. Access technology and innovation from suppliers
6. Foster sustainability in upstream supply chains
Slide 5 Reduce TCO (not just purchase price)
TCO = all the costs incurred before, during and after a purchase is made.
When the costs occur Type of Costs
Before the transaction Time spent and costs of searching for, visiting,
evaluating and certifying suppliers
During the transaction Purchase price and costs of ordering,
transporting, expediting, receiving, inspecting
and following up.
After the transaction Costs of inventory, supply risk, production
downtime, defects in finished goods,
warranties, safety recalls, replacements, repairs,
lost sales, liability and damaged reputation.
Slide 6 video what Procurement managers do?
Slide 7 Supply management process
1. Specifying 2. Selecting 3. Contracting 4. Ordering 5. Expediting 6. Evaluating
Slide 8 Specifying / specifications are required to:
1. Communicate to the purchasing department
2. Communicate requirements to suppliers
3. Establish tangible goods and intangible services to be provided
4. Establish standards for quality checks
5. Balance goals of different functions
2
, Detailed specifications Functional specification
- Specifies the product/service with no - Provides an overall global
ambiguity specification
- Avoid misunderstanding but can - Leaves details to suppliers
discourage supplier innovation - Can encourage supplier innovation
but may create misunderstanding
Slide 9 Specification: important of internal alignment
- Quality assurance
- CEO
- Operations
- Accounting / Finance
- R&D engineering
- Legal
- Marketing
Slide 10 Ordering
1. PO a document issued by the buyer to a supplier indicating the type, quantities and agreed
prices for products or services the supplier will provide to the buyer.
- Sending a PO does not constitute a contract until it is accepted by the supplier/seller
- Blanket PO PO that covers a period, used for recruiting needs for expendable goods.
- Open-end PO Addition of items and/or extension of time.
Slide 12 Expediting
Follow-up routine order tracking to ensure the delivery follow up may be built into the electronic
system for low-value purchases
Expediting : application of pressure on supplier to meet the delivery date, deliver ahead of schedule
or speed up delivery of delayed order
Use of expediting should be subject to costs and benefit analysis
Recurring use of expediting may suggest that the buyer’s purchasing process needs
improvements
Slide 13 Specialization within the supply management function
1. Sourcing and commodity management supplier selection and management contract
negotiation
2. Materials management ensuring supplier performance and materials service flows
3. Administration handles purchase documents department budget, data, reports
4. Supply research data analytics,, new materials supply market, supply process,
benchmarking
3
,Slide 15 Typical supply management organization structure
Slide 17 What does sustainability mean?
Meeting the needs of the present without compromising the ability of future generations to meet
their own needs (UN Brundtland Commission)
Slide 19 Corporate sustainability and the Triple bottom line
Corporate sustainability meeting the triple bottom line / economic, environmental, and social
goals/ Equal importance on three goals.
Slide 20
Economic issues Social issues Environmental issues
Job creation Creating a diverse base of Emissions to air
competitive suppliers
Achieving value for money Fair employment practices Releases to water and land
Supporting SMEs Promoting workforce welfare Sustainable use of resources
Reducing barriers to entry Supporting skilling and Energy and water conversion
development and management
Ensuring business viability to Community benefits Minimization of waste and by-
provide stable employment products
Ensuring supplier agreements Fair trade and ethical sourcing Minimization of impacts
are fair practices
Slide 21 Why should firms care about sustainable supply?
Legislation
Stakeholder pressure ----- > Sustainable supply management
Commercial advantage
Slide 22 Legislative initiatives
1. Dodd-Frank Act: Disclosing the use of conflicting minerals companies need to disclose the
use of conflict minerals
2. California Transparency in SC Act retailers and manuf. Must disclose efforts to stop human
trafficking
3. UK Modern Slavery Act companies with revenue > 36 mil must report in human trafficking
4. EU ban on CO2 emitting cars
Slide 23 Stakeholder pressure
4
, Slide 24 Commercial advantage
- Reinforce the value chain
- Supplier performance improvement
- Psychological benefits to investors and consumers
- Brand and reputation
Slide 25 Is the triple bottom line approach really sustainable?
Current sustainability logic Ecologically dominant logic
Relationship among All are equal – efforts that The three are nested. Need to
environmental, social, and create shared value or which satisfy environment, then
economic are less unsustainable are social, prior to economic
acceptable
Time horizon Short Long term
Practical reality Satisfying customer wishes Does no harm while satisfying
while doing the least harm customer wishes
Outcome Organized irresponsibility / Integrated sustainable supply
tragedy of the commons chains
Cognition – managers If its not profitable then do not If it harms environment or
do it society you do not do it
Cognition researchers Does it pay to be green How to be profitable while
Looking for win-win outcomes doing no harm
Efficiency gross domestic Conservation
products Well-being (gross domestic
happiness)
Slide 26 Need for an ecologically dominant logic
When trade-offs are inevitably encountered the priority is to protect the environment, the society
and then to consider profits.
Slide 27 Sustainability through an ecologically dominant logic
Instrumental Logic Cognitions
Narrow range of Practices optimized to
Inside-out decision stakeholders and maximise profit P4
making ( economics, outcomes P2 Unsustainable supply
environment, society) Meet customer Short time horizons P5 chains P6
P1 demands while doing
minimal harm P3
Ecologically dominat logic Cognitions
Wide range of Practices optimized to
Outside-in stakeholders and minimize harm P4
(environment, society, outcomes P2 Sustainable supply
economics) Decision Meet customer Long term horizons P5 chains P6
making P1 demands only after
satisfying
environmental and
social constraints P3
5
MANAGEMNET
Lectures and Mandatory readings
TILBURG UNIVERSITY
TiESM
,Contents
Lecture 1: Supply management and supply chain sustainability.........................................................2
Mandatory reading: Shareholder Value Effects of Ethical Sourcing: Comparing Reactive and
Proactive Initiatives.........................................................................................................................6
Mandatory: MAKING SUSTAINABILITY SUSTAINABLE......................................................................8
Lecture 2 Sustainability standards for selecting, evaluating, and developing suppliers....................11
Mandatory reading Supplier development for sustainability: contextual barriers in global supply
chains............................................................................................................................................15
Lecture 3: Global sourcing and supply chain sustainability risk MSc Supply Chain Management
Sustainable Supply Management.....................................................................................................18
Mandatory reading L3 : A systematic review of sustainable supply chain management in global
supply chains. Journal of Cleaner Production...............................................................................23
Lecture 4: Managing sustainability in extended supply network......................................................27
Mandatory reading A More Sustainable Supply Chain..................................................................29
Lecture 5: Contracting & Managing Sustainable Supply...................................................................31
Mandatory reading:......................................................................................................................35
Alliance Governance Mechanisms in the Face of Disruption........................................................35
Inter-organizational governance: a review, conceptualisation and extension...............................38
Lecture 6: Supply Management for the Circular Economy................................................................40
Mandatory readings.....................................................................................................................44
1. Product design and business model strategies for a circular economy.....................................44
Lecture 7: A network approach to sustainability..............................................................................48
Mandatory readings:....................................................................................................................54
Diffusion of environmental business practices: A network approach...........................................54
Sustainable purchasing and supply management: a structured literature review of definitions
and measures at the dyad, chain and network design..................................................................56
Lecture 8: Supply Management Ethics..............................................................................................59
Mandatory readings.....................................................................................................................63
Environmental purchasing and supplier management (EPSM): Theory and practice...................63
Ethical issues in international buyer–supplier relationships: a dyadic examination......................64
Lecture 9: Agricultural supply chains................................................................................................65
Mandatory readings.....................................................................................................................68
Toward Resilient Agriculture Value Chains: Challenges and Opportunities...................................68
Lecture 10: Medicine Supply Chain...................................................................................................71
Mandatory readings.....................................................................................................................77
Short of drugs? Call upon operations and supply chain management..........................................77
1
,Lecture 1: Supply management and supply chain sustainability
Slide 3 Sustainable supply Management
Supply management Purchasing strategy
Management, acquisition, positioning, and The transactional process of acquiring goods
identification of inputs and supplier and services, including payment of invoices.
relationships
Procurement Sourcing
Developing and implementing strategies to The activities within the procurement process
manage an organization’s spend portfolio to concerned with identifying and evaluating
contribute to the organization’s overall goals potential suppliers, engaging with selecting the
best value suppliers.
Slide 4 Objectives of supply management
1. Ensure timely availability of resources
2. Identify assess and mitigate supply chain risk.
3. Reduce TCO
4. Enhance quality of resources
5. Access technology and innovation from suppliers
6. Foster sustainability in upstream supply chains
Slide 5 Reduce TCO (not just purchase price)
TCO = all the costs incurred before, during and after a purchase is made.
When the costs occur Type of Costs
Before the transaction Time spent and costs of searching for, visiting,
evaluating and certifying suppliers
During the transaction Purchase price and costs of ordering,
transporting, expediting, receiving, inspecting
and following up.
After the transaction Costs of inventory, supply risk, production
downtime, defects in finished goods,
warranties, safety recalls, replacements, repairs,
lost sales, liability and damaged reputation.
Slide 6 video what Procurement managers do?
Slide 7 Supply management process
1. Specifying 2. Selecting 3. Contracting 4. Ordering 5. Expediting 6. Evaluating
Slide 8 Specifying / specifications are required to:
1. Communicate to the purchasing department
2. Communicate requirements to suppliers
3. Establish tangible goods and intangible services to be provided
4. Establish standards for quality checks
5. Balance goals of different functions
2
, Detailed specifications Functional specification
- Specifies the product/service with no - Provides an overall global
ambiguity specification
- Avoid misunderstanding but can - Leaves details to suppliers
discourage supplier innovation - Can encourage supplier innovation
but may create misunderstanding
Slide 9 Specification: important of internal alignment
- Quality assurance
- CEO
- Operations
- Accounting / Finance
- R&D engineering
- Legal
- Marketing
Slide 10 Ordering
1. PO a document issued by the buyer to a supplier indicating the type, quantities and agreed
prices for products or services the supplier will provide to the buyer.
- Sending a PO does not constitute a contract until it is accepted by the supplier/seller
- Blanket PO PO that covers a period, used for recruiting needs for expendable goods.
- Open-end PO Addition of items and/or extension of time.
Slide 12 Expediting
Follow-up routine order tracking to ensure the delivery follow up may be built into the electronic
system for low-value purchases
Expediting : application of pressure on supplier to meet the delivery date, deliver ahead of schedule
or speed up delivery of delayed order
Use of expediting should be subject to costs and benefit analysis
Recurring use of expediting may suggest that the buyer’s purchasing process needs
improvements
Slide 13 Specialization within the supply management function
1. Sourcing and commodity management supplier selection and management contract
negotiation
2. Materials management ensuring supplier performance and materials service flows
3. Administration handles purchase documents department budget, data, reports
4. Supply research data analytics,, new materials supply market, supply process,
benchmarking
3
,Slide 15 Typical supply management organization structure
Slide 17 What does sustainability mean?
Meeting the needs of the present without compromising the ability of future generations to meet
their own needs (UN Brundtland Commission)
Slide 19 Corporate sustainability and the Triple bottom line
Corporate sustainability meeting the triple bottom line / economic, environmental, and social
goals/ Equal importance on three goals.
Slide 20
Economic issues Social issues Environmental issues
Job creation Creating a diverse base of Emissions to air
competitive suppliers
Achieving value for money Fair employment practices Releases to water and land
Supporting SMEs Promoting workforce welfare Sustainable use of resources
Reducing barriers to entry Supporting skilling and Energy and water conversion
development and management
Ensuring business viability to Community benefits Minimization of waste and by-
provide stable employment products
Ensuring supplier agreements Fair trade and ethical sourcing Minimization of impacts
are fair practices
Slide 21 Why should firms care about sustainable supply?
Legislation
Stakeholder pressure ----- > Sustainable supply management
Commercial advantage
Slide 22 Legislative initiatives
1. Dodd-Frank Act: Disclosing the use of conflicting minerals companies need to disclose the
use of conflict minerals
2. California Transparency in SC Act retailers and manuf. Must disclose efforts to stop human
trafficking
3. UK Modern Slavery Act companies with revenue > 36 mil must report in human trafficking
4. EU ban on CO2 emitting cars
Slide 23 Stakeholder pressure
4
, Slide 24 Commercial advantage
- Reinforce the value chain
- Supplier performance improvement
- Psychological benefits to investors and consumers
- Brand and reputation
Slide 25 Is the triple bottom line approach really sustainable?
Current sustainability logic Ecologically dominant logic
Relationship among All are equal – efforts that The three are nested. Need to
environmental, social, and create shared value or which satisfy environment, then
economic are less unsustainable are social, prior to economic
acceptable
Time horizon Short Long term
Practical reality Satisfying customer wishes Does no harm while satisfying
while doing the least harm customer wishes
Outcome Organized irresponsibility / Integrated sustainable supply
tragedy of the commons chains
Cognition – managers If its not profitable then do not If it harms environment or
do it society you do not do it
Cognition researchers Does it pay to be green How to be profitable while
Looking for win-win outcomes doing no harm
Efficiency gross domestic Conservation
products Well-being (gross domestic
happiness)
Slide 26 Need for an ecologically dominant logic
When trade-offs are inevitably encountered the priority is to protect the environment, the society
and then to consider profits.
Slide 27 Sustainability through an ecologically dominant logic
Instrumental Logic Cognitions
Narrow range of Practices optimized to
Inside-out decision stakeholders and maximise profit P4
making ( economics, outcomes P2 Unsustainable supply
environment, society) Meet customer Short time horizons P5 chains P6
P1 demands while doing
minimal harm P3
Ecologically dominat logic Cognitions
Wide range of Practices optimized to
Outside-in stakeholders and minimize harm P4
(environment, society, outcomes P2 Sustainable supply
economics) Decision Meet customer Long term horizons P5 chains P6
making P1 demands only after
satisfying
environmental and
social constraints P3
5
