Sustainable Supply Chain Management: Indian Context

Abstract:

This paper covers important aspects of Supply Chain Management (SCM) clubbed together with sustainability, the need of the hour. Previously, supply chain management used to be looked upon as a way to improve an organization’s financial position. The recent change in rational amongst people has led to increase in sustainable initiatives started in order to take into account the social and environmental factor into consideration apart from the conventional economical aspect. The Indian context does not differ from the rest of the world as sustainability has been increasingly important with the growing awareness on global warming. Furthermore, various organisations are very serious when it comes to Corporate Social Responsibility. Companies are striving to operate in a more sustainable manner. The future of Indian market with respect to sustainable supply chain management is a key part of this article. Various Indian companies have started opting for ways to integrate with newer techniques so as to make it feasible for all events. 1. Introduction

The history of supply chain management dates back to World War II when it all started as a solution to logistics problems. The focus then was on how to start using machines to replace the labour intensive work of material handling. The logistics and supply chain industry emerged rapidly. However, the situation has changed now and the focus has shifted yet again, this time to sustainability.

In brief, supply chain starts with strategic sourcing of raw materials followed by supplier, manufacturer, distribution, retail, and finally the end customer. This flow is flexible and can change with change in product.

Controlling the movement of products is a key task in any domain to better manage demand and keep the costs to a minimum. Nowadays, there are advanced strategies and software to take care of variables such as anticipating risks, warehousing, profits, customer demand, amount of raw material, etc.

Sustainability as a necessity

Supply chain management is a tool used by managers for a number of reasons. The primary reason has always been to maximize profit by reducing logistics costs. Today, the society demands a new outlook from them so as to take a step forward towards sustainability. Numerous new methods have been created, such as, reverse logistics, sustainable operations, sustainable logistics, and closed loop supply chain. The evolution of such advanced techniques and software is a direct result of requirement of sustainable methods in the industry. The motive behind Sustainable Supply Chain Management (SSCM) is not just to increase the speed and improve customer satisfaction, but also to lower waste production and adhere to policies in favour of environment.

Sustainable Supply Chain Management can be generalised in three important aspects, also known as triple bottom line (TBL).

• Social inclusion
• Economic development
• Environmental performance

While economic viability is necessary for an organization to survive, it is not sufficient for the organization to sustain in the long run if it causes irreversible damages to the ecosystem by emitting greenhouse gases and toxic wastes and depleting non-renewable resources or it fails to ensure security, safety, indiscrimination, dignity, healthcare, minimum wage, and better working conditions for its employees, the community and the society in general. Therefore, it has become important for any organization to behave in a socially and environmentally responsible manner while trying to achieve its economic goals.

The Indian Context

A country with the highest number of engineers and managers, India, is the hub of logistics related activities in the world. Being a developing nation, and the rate at which we are progressing, speaks a lot about the expectations from us. India is a country which can unite at any time during difficulties. Although we have initiated sustainability in most of the fields, it is not enough. SSCM needs more promotion in India. Furthermore, techniques such as reverse logistics is a perfect fit for Indian market considering the reusability part which will reduce wastage and improve the overall efficiency.

Over the last few years, e-commerce is driving the increasing popularity of third-party logistics (3PL) and last-mile delivery vendors. Such vendors provide heavy capital and labour intensive services such as transportation, warehousing, inventory management, freight forwarding, cross-docking and packaging. Within the e-commerce space especially, it becomes increasingly cost-efficient for online players to use a 3PL vendor to provide end-to-end delivery solutions for everything from food, electronics, beauty products, branded apparel and footwear at cheaper rates.

India’s online and mobile shopping boom shows no signs of slowing down with a recent study estimating B2C transaction value topping US$100 billion by 2020, while B2B value is expected to hit US$700 billion[ ]. With an increase in the number of online transactions, the online logistics space will continue to flourish, with consolidation around four to five prominent players (for example, Delhivery, Vulcan, E-Kart).

A key approach is systems thinking – visualizing problems, defining boundaries, setting goals, and simulating policies to predict their effects. A methodology to tackle these issues should involve all stakeholders in the supply chain, i.e., consumers and governments, as well as the product lifecycle, which includes mining, refining, power generation, processing, assembly, logistics, sales, maintenance, and recycling. Even if one sector reduces the environmental load, the activities might significantly increase the environmental load in other sectors. Other management aspects are the time, where policy and technological developments work in the reverse direction from specific goals within a time frame, and space, which is increasingly global.

Future

In future, we can expect a supply chain management technique that synthesizes relevant data and uses analytics to forecast customer purchase behaviour, and then it works its way back up the supply chain to meet that expected demand. In addition to this, use of big data, predictive analytics, internet of things (IoT), autonomous vehicles will revolutionise the field of supply chain.

An example for the future prospect would be self-driving trailer trucks doing the logistics part and robots managing the warehousing effectively.

Conclusion

In this paper, I have presented a brief introduction of supply chain management and linked it with sustainability. This is followed by the present Indian scenario for which sustainable supply chain management is a must. To add to it, the e-commerce sector in our country will be the leader in innovation in SSCM for others to follow. The future is bright for our country and we should learn to adapt to modifications.