School of Innovation, Design and Engineering

Achieving enhanced
integration of sustainability
into supply chain through
implementation of effective
strategies in environmental,
economic, and social fronts
Master thesis work
30 credits, Advanced level
Product and process development
Production and Logistics

Heor Aula

Tutor (university): Staffan Andersson

Examiner: Antti Salonen
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.

Keywords: Globalization, Sustainability, Supply chain network, firm performance,

Governance gaps, Innovative sustainable strategies, Integration
ACKNOWLEDGEMENTS

I want to express my profound gratitude and thanks to Mr. Staffan Andersson, my supervisor at
Mälardalens University for his help and advice during the thesis.
Contents

ABBREVIATIONS.................................................................................................................................................... 5
LIST OF FIGURES ................................................................................................................................................... 6
1. INTRODUCTION............................................................................................................................................ 1
1.1. BACKGROUND ........................................................................................................................................... 1
1.2. PROBLEM FORMULATION .......................................................................................................................... 2
1.3. AIM AND RESEARCH QUESTIONS ............................................................................................................... 3
1.4. PROJECT LIMITATIONS............................................................................................................................... 3
2. RESEARCH METHOD .................................................................................................................................. 4
2.1. RESEARCH METHOD.................................................................................................................................. 4
2.2. SYSTEMIC LITERATURE REVIEW ............................................................................................................... 5
2.3. DATA ANALYSIS ....................................................................................................................................... 8
2.4. VALIDITY AND RELIABILITY ................................................................................................................... 12
3. THEORETIC FRAMEWORK..................................................................................................................... 13
3.1. SUPPLY CHAIN MANAGEMENT ................................................................................................................. 13
3.2. SUSTAINABILITY IN MANUFACTURING INDUSTRY .................................................................................. 15
3.3. SUSTAINBLE SUPPLY CHAIN MANAGEMENT ........................................................................................... 15
3.4. SUSTAINABILITY ORIENTED INNOVATIONS ............................................................................................. 19
4. ANALYSIS ..................................................................................................................................................... 21
4.1. GOVERNANCE IN GLOBAL SUPPLY CHAIN NETWORK ............................................................................... 21
4.1.1. Geographical gaps ................................................................................................................................. 22
4.1.2. Information and Knowledgde gaps ........................................................................................................ 23
4.1.3. Communication gaps ............................................................................................................................. 24
4.1.4. Compliance and Implementation gaps................................................................................................... 24
4.1.5. Power gaps............................................................................................................................................. 25
4.2. SUSTAINABLE STRATEGIES IN PRACTICE ................................................................................................. 27
4.2.1. Operational Optimization: Digitization of Logistics ............................................................................. 27
4.2.2. Organizational transformation: GSCM, GHRM and Integrated approach .......................................... 29
4.2.3. System Building: Industry Symbiosis ..................................................................................................... 32
5. DISCUSSIONS ............................................................................................................................................... 38
6. CONCLUSION AND RECOMMENDATIONS ......................................................................................... 42
7. REFERENCES............................................................................................................................................... 45
 ABBREVIATIONS

GSCM - Green Supply Chain Management

GHRM - Green Human Resource Management

HRM - Human resource Management

IoT - Internet of Things

NGO - Non-Government Organizations

SSCM - Sustainable Supply Chain Management

SCM - Supply Chain Management

SOI - Sustainability Oriented Innovations

SOIS - Sustainability Oriented Innovative Strategies

TBL - Triple Bottom Line

WOS - Web of Science

 List of Figures

Figure 2.1. Criteria for Literature review, based on (Bryman & Bell, 2003) .............................. 4
Figure 2.2. Scheme of the search results and shortlisting criteria ................................................ 6
Figure 2.3. Papers collected against the publishing year ............................................................. 7
Figure 2.4. Graph plotted against chosen themes and corresponding publications reviewed ...... 8
Figure 2.5. Thematic analysis used for thesis (Safsten & Gustavsson, 2020) ............................. 9
Figure 2.6. Steps in qualitative data analysis, based on (Miles, et al., 2019)............................. 11
Figure 3.1. Four levels of supply management, modified from (Harland , 2002). .................... 14
Figure 3.2. Common three-ring sector view of Sustainability, based on (Barton, 2000;
Giddings, et al., 2002) ................................................................................................................ 17
Figure 3.3. House of Sustainable Supply Chain Management (modified from Teuteberg &
Wittstruck, 2010) ........................................................................................................................ 18
Figure 4.1. Three contexts of SOIS (Adams, et al., 2016). ........................................................ 27
Figure 4.2. Sustainable digital logistics ecosystem (Kayikci, 2018) ......................................... 29
Figure 4.3. Sustainbility efforts vs Firm performance (Schrettle, et al., 2014).......................... 37
Figure 6.1. Relation between governance gaps, innovative strategies, and the post
implementation effect ................................................................................................................. 43
Figure 6.2. Road map towards sustainability in Manufacturing industries ................................ 44
1. INTRODUCTION

This section of thesis presents the background of the problem, the aim of the study, formulated
research questions, scope, and limitations of the research.

1.1. Background

Over the past decades, manufacturing industries have adopted internationalization of operations
to reach their customers and realize the benefits of cost advantage in emerging economies
(Koplin, et al., 2007; Carter, 2005). Globalization of supply chains has increased the operations
with a lot of suppliers across the globe for raw materials or semi-finished products. These tier-
one suppliers further depend on a multitude of supplier chains to procure materials for their own
production. Globalization has increased the complexity of supply network structure
incorporating both horizontal and vertical supplier structures. A complex supply chain network
as such makes it difficult for a manufacturing firm to manage, measure, and control the
operations of a complete network (von Corswant & Frederiksson, 2002; Koplin et al., 2007). The
inability of a firm to govern the operations in its supply network can lead to a generation of waste
at various stages in its network which results in environmental and social burden. The usage of
the word ‘waste’ in this thesis is the by-products that are generated from operations in a supply
chain network and are not included in the product portfolio of the manufacturing firm. For
example, by-products can be packaging material, chemical waste from paint shops, emissions
from logistic operations, etc. The focal companies usually manufacturing firms/manufacturers
adapt the globalization strategy and are held responsible for the waste generated. The firms face
pressures internally from stakeholders and externally from local government regulations, Non-
government organizations (NGOs) (Carter & Jennings, 2002; Kovacs, 2004).

A manufacturing company’s role in its supply chain network would usually revolve around,
controlling and governing the supply chain, maintaining direct contact with customers,
designing, and developing the product or service offered (Schary & Skjott-Larsen, 2001). The
increased awareness of environmental protection, global warming trends, and limited availability
of valuable natural resources has resulted in strict and stringent regulations imposed on
manufacturing firms by local governments and pressure from NGOs to adopt new strategies to
eliminate the wastes generated along with the firm’s supply operations. A few examples of such
are, firms like Nike, Disney, Adidas, and Levi Strauss were criticized for the waste and disposal
strategies adopted, inhumane working conditions, and contamination of local environment by
various forms of pollution (Preuss, 2001; Graafland, 2002; Seuring, 2001). The pressure was also
laid on the Automotive industries. However, manufacturing industries play a major role in
economic wealth creation with their wide range of products and services, they directly or
indirectly impact the natural and human environment, along its supply chain as well as various
stages of the product’s life cycle (Commission of the European Communities, 2002).

Manufacturing firms have realized the need for incorporating sustainability approaches in their
supply chain network and devised new strategies to ensure the regulations are met and they
remain competitive in the market. These approaches have transformed the traditional supply
chain operations into Sustainable supply chain management (SSCM) (Srivastava, 2007). Though
SSCM started by focusing on environmental aspects of the supply chain operations labeling it as
green supply chain management, further research in academia has realized the potential
application in areas such as supplier development (Busse, et al., 2016), decision making
(Brandenburg, et al., 2014), sustainable supply chain risks (Hofmann, et al., 2014) and socially
sustainable supply chain (Moxham & Kauppi, 2014). Integrating sustainable approaches into

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supply chain operations has received increased attention due to worsening environmental
conditions which has become the main focus of strategic changes (Aragon-Correa, et al., 2008).
Along with environmental awareness, manufacturing firms have started realizing the ecological
effects of their products and production process which has led to adopting innovative practices
such as cleaner production (Schiederig, et al., 2012), ecological design perspective (Huber,
2008), and sustainability-oriented innovations (SOI) (Klewitz & Hansen, 2014; Schaltegger &
Wagner, 2011).

Sustainable development has witnessed increased popularity in supply chain research both in
academia and in practical application due to the increased awareness of the effects of corporate
actions on the environment and society (Mani, et al., 2018). The term sustainable development
was first coined at the United Nations conference on Human environment in 1972 and is defined
as a strategy that ensures that the current demands of consumers are met without compromising
on the ability of the future generation of consumers to meet their own needs (WECD, 1987). In
the manufacturing context, (Dyllick & Hockerts, 2002) defined sustainable development as
ensuring the need of the firm’s direct and indirect stakeholders are met without compromising
the firm’s ability to meet the needs of future stakeholders.

1.2. Problem formulation

Dynamically changing market conditions coupled with advancements in technology and

transportation, manufacturing firms have expanded their operations across the globe taking the
cost advantage of the developing economies and reaching out to a multitude of customers
resulting in globalization. Suppliers, focal companies, and customers who are the major
stakeholders in a supply chain network are interconnected by information, material, and capital
flows (Seuring & Muller, 2008; von Corswant & Fredriksson, 2002; Carter, 2005). Globalization
has brought the possibility of working with a multitude of suppliers and customers across the
globe, increasing the complexity of managing, measuring, and controlling the overall supply
chain network (Koplin, et al., 2007). Consequently, the lack of control over operations has
triggered the generation of various wastes from the different stages of the supply chain network.
The generated wastes have had adverse effects on the environment and society holding the
manufacturer responsible (Boström, et al., 2015). Countries across the globe have realized the
adverse effects of industrial waste on the environment and their population. Local governments
have laid stricter regulations on the firms to control the waste generated, focus on the betterment
of working conditions, and mitigation of risks (De Rosa, et al., 2013).

The stringent regulation employed by countries and NGOs has pressured manufacturers to
transform their operations into more environmentally, economically, and socially responsible by
implementing improved strategies and adopting sustainable policies (Koplin, et al., 2007). The
increasing demand for environmental protection and preservation of natural resources has forced
manufacturing firms to adopt new business strategies and restructure their supply chain
operations (Wu & Pagell, 2011). The change is also noticed in consumer behavior towards
purchasing products from the brands which are committed to environmentally responsible
production practices. Countries under the European Union have vowed to enforce strict
regulations to ensure the collection and disposal of electrical and electronic equipment which
needs to be performed by either manufacturing firms or other recycling firms (Neto, et al., 2008).
To adapt to the changing regulations and consumer behavior, manufacturing firms needed to
incorporate the sustainability factor in devising their business strategies, long-term goals, and
policies.

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Although academia presents a multitude of applications of sustainability across various
operations involved in the supply chain, real-time industry integration seems to be still evolving,
currently fragmented (Gopalakrishna, et al., 2012) and compartmentalized (Srivastava, 2007)
missing the broader scope of its applicability (Stindt, 2017). The research in this thesis focuses
on providing a roadmap to manufacturing industries in integrating sustainability across their
global supply chains and fulfilling the gap in achieving a broader application of sustainability
initiatives.

1.3. Aim and Research questions

The aim of this research work is to analyze the need for integrating sustainability into supply
chain networks and their operations, through implementing innovative strategies and providing
the manufacturing industries with a framework to transform their supply chain operations into
more sustainable. To achieve this aim, the thesis analyses data on current strategies implemented
in manufacturing industries within three fronts of sustainability: Environmental, economic, and
social. The analysis is performed based on the collected literature and with the aim of answering
following are the research questions:

RQ1: What are the gaps in achieving sustainability integration into a supply
chain network in manufacturing?

RQ2: What are the innovative strategies to achieve sustainability in supply chains
pertaining to manufacturing industry?

RQ3: How can the innovative strategies support the integration of sustainable
supply chain in manufacturing industry?

1.4. Project limitations

The field of this research is focused on integrating sustainable approaches into supply chain
operations of manufacturers. The research utilizes a qualitative approach, and the data is gathered
from the web sources such as Scopus, Web of science, and Science Direct. Also, this thesis does
not contain experiments involved with quantitative research approaches. However certain
quantitative data is obtained from the literature of other researchers from their respective focus
areas of research. The study investigates different innovative strategies implemented by various
manufacturing industries to achieve a desired level of sustainability. A literature study is done
on the probability of improving the efficiency of supply chain operations through adopting SOI
in environmental, economic, and social fronts in order to supply insight to the readers about a
multitude of available approaches to improve their sustainable supply chain management.

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2. RESEARCH METHOD

This section presents the research methodology consisting method of data collection, research
process applied to understand, analyze, and evaluate the collected data in order to fulfill the aim
and answer the formulated research questions.

2.1. Research Method

Gathering information systematically and scientifically on a topic of interest, to answer and

support a specific claim in the chosen topics is briefly referred to as research. Traditionally,
scientific research has two ways of approaches, qualitative research, and quantitative research.
The choice of research approach is based on the objective of research and the usage of research
findings (Bryman, 2002). A Literature review approach is chosen to perform this thesis as the
focus is on performing an evaluative study of the existing research in form of scholarly articles,
books, and other relevant sources on sustainability in the supply chain area. In this thesis, a
literature review approach is implemented to analyze the scope of achieving enhanced integration
of sustainability into the supply chain through implementation of effective strategies in
environmental, economic, and social fronts. The research is backed by the diverse research work
done by researchers in the field of sustainable supply chain management and sustainable
strategies adopted by manufacturing industries.

According to Ramdhani, et al., (2014), a Literature review is designed to achieve an overview of

information from various sources that have been explored in the chosen area of research and
demonstrate the collected data to the reader on how the research fits in the current field of study.
The demonstrated overview usually includes what the author wants to say, who are the key
writers, what are the prevailing theories and hypotheses, and what gaps are addressed in the area
of study. See fig. 2.1. The reason behind opting for a literature review is to bring the reader up
to date on sustainability in manufacturing industries and form a basis to highlight the need for
integrating sustainable thinking into supply chain operations and management.

Figure 2.1. Criteria for Literature review, (based on Bryman & Bell, 2003)

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The thesis revolves around the concept of sustainability in supply chain and its integration into
supply chain operations. Adaption and implementation of modern strategies by manufacturing
industries to achieve a desirable level of sustainability in three fronts namely: environmental,
economic, and social fronts have been explained briefly by gathering information from the
various research literature. The analysis is carried out by understanding and correlating the
collected data from various researchers who focused their efforts on analyzing the concept of
integrating sustainability into supply chain management. The data is collected to answer the
formulated research questions. Finally, the thesis was concluded, and recommendations were
provided to take forward the research to achieve the enhanced integration, reap the benefits of
adapting sustainable strategies and remain on par with the changing regulations laid by different
economies.

2.2. Systemic Literature Review

The systemic review was chosen as the research method for this thesis. According to Williamson
(2002), a systemic review approach involves identifying, gathering, and analyzing the current
literature to understand the depth of research work done on the chosen topic and searching for
existing gaps. The purpose of choosing a literature review approach is to achieve a holistic
perspective on the selected area and analyze the collected information to provide the necessary
support to the research topic. The area of focus for the thesis is done by performing preliminary
research in sustainable supply chain management. Next, the problem formulation and aim of the
study are defined, which paves a path for analyzing the gathered information. Finally, the
limitations for the focus area are identified to make sure that the research is directed towards
answering the research question, and gathered information lies between the opted limitations and
fulfills the objective of the study.

A systemic review consists of research literature, relevant data, ideas, and evidence collected
with a definitive perspective on a specific topic (Williamson, 2002). The approach should have
a determined aim and provide a brief idea of how the objective should be achieved. The
information is gathered from a range of literature which includes articles, reports, books,
conference proceedings, and industry reports. This literature study was started by choosing
Scopus, Web of Science, and Science Direct as databases with various search strings. The search
string comprises the key terms required to obtain research literature about the selected topic. The
search results of the individual search strings are presented in figure 2.2. Also, the search was
limited to engineering as the field of research. For the articles to be credible and relevant, the
paper ought to have a double-digit citation. Later, the documents are shortlisted by reading the
abstracts from the search and marked such that all the documents are within the field of study
and then a CSV file is exported from the Scopus, WOS, and Science Direct databases.
Furthermore, the articles are downloaded and analyzed for data and an excel file is used to sort
out the data from the articles for ease.

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 Figure 2.2. Scheme of the search results and shortlisting criteria

The scrutiny process mentioned above has resulted in the reduction of the total number of
potential papers to approximately 300 which could be utilized for research. Further screening of
the 328 research literature where the potential papers were skimmed to obtain a brief idea of the
focus area, methodology implemented, results presented, compared, and discussed and issues
resolved in the papers. This screening process has brought down the number to 157. See figure
2.2.

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 Table 1.1. Relevancy assessment criteria (based on Wong, et al., 2012)
Sections in thesis Level of Relevancy
Absence Low Medium High
Introduction The article does The paper adds The paper adds a The paper adds a
Theory not provide little to the contribution of highly significant
Methodology enough Body of limited contribution to
Analysis information to knowledge in this importance to the the
assess this area body of body of
criterion. knowledge knowledge

From the selected 157 papers, a quality criterion was applied based on the standard procedure
called systemic literature review which involves, assessing the contribution of collected
literature into theory, methodology, and data analysis sections of the thesis. The systemic
literature review process divides the collected literature into levels of relevancy: Absence, low,
medium, and high relevancy. The division also provides an individual contribution of each
collected paper to the specific sections in the thesis; see table 2.1.

Figure 2.3. Papers collected and their publishing year

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 2.3. Data Analysis

Several analysis methods are in practice to analyze the data obtained through the literature review
approach. The aim of analyzing the collected data is to obtain a higher quality of results that are
to be achieved without any prejudice and present evidence of alternative interpretation (Yin,
2014). According to Safsten & Gustavsson (2020), data analysis specific to engineering science
can be carried out using three general techniques: thematic analysis, content analysis, and a
hybrid technique combining various other techniques which are called qualitative data analysis.

The thematic analysis consists of identifying, analyzing, and presenting patterns/themes in the
collected data. This technique involves the development of themes from the collected data which
represents the content and comprises the essential data required to correlate the research to
formulated research questions of the study. The researcher is responsible to make appropriate
decisions over what constitutes a theme. Further in thematic analysis, the themes are identified
inductively or deductively. The inductive thematic analysis deals with identifying themes for the
research without any predefined framework and is data-driven. Whereas the deductive thematic
analysis is guided by the researcher's theoretical understanding of the study (Safsten &
Gustavsson, 2020). This thesis is analyzed using deductive thematic analysis. Figure 2.4 and
figure 2.5 presents the actual steps in the thematic analysis as well as the interpretation made for
this thesis.

Figure 2.4. Graph plotted against chosen themes and corresponding publications reviewed

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 Figure 2.5. Thematic analysis used for thesis (modified from Safsten & Gustavsson, 2020)

Content analysis deals with systematically describing the contents of the collected data using
specific codes. The codes used in the content analysis are specific words or text which describe
and relate to the topic under study. Statistics are applied to check the frequency of occurrences
of the codes, expressions, or themes in the collected data (Braun & Clarke, 2006). In this thesis,
a specific content analysis technique called conventional content analysis is applied. See table
2.2. Under this technique, the researcher has existing knowledge about the chosen topic and the
analysis begins by collecting and reading all the data to obtain an overall picture. The analysis
of the collected data is guided by the formulated research questions (Safsten & Gustavsson,
2020).

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 Table 2.2. Research papers classified under specific themes depending on the data relevancy.

Themes utilized Source of articles References

(Banerjee, 2001) (Bansal & Roth, 2000) (Bush, et al., 2015) (Delmas & Toffel, 2004) (EC,
Sustainability 2015) (Graafland, 2002) (Gupta & Palsule-Desai, 2011) (Hart & Milstein, 2003) (Khalid, et
Management al., 2015) (Kleindorfer, et al., 2005) (Kovacs, 2004) (Locke, 2013) (McGee, et al., 1998)
(Mol, 2014) (Pagell & Shevchenko, 2014) (Said-Allsopp & Tallontire, 2014) (WECD, 1987)

Sustainability and (Almeida & Correia, 2016) (Baas & Boons, 2004) (Carter, 2005) (Carter & Easton, 2011)
Manufacturing (Commission of the European Communities, 2002) (Maxwell & Van Der Vorst, 2003)
(Schary & Skjott-Larsen, 2001) (Smith, et al., 2005)

(Ansari & Qureshi, 2015) (Arshinder & Deshmukh, 2008) (Ashby, et al., 2012) (Beske,
2012) (Deakin, 2001) (Egels-Zanden, et al., 2014) (Fabbe-Costes, et al., 2014) (Giannakis &
Papadopoulos, 2016) (Giddings, et al., 2002) (Govindan & Cheng, 2011) (Handfield &
Sustainability and Nichols, 1999) (Harland , 2002) (Harland, et al., 1999) (Jain, 2012) (Koplin, et al., 2007)
SCM (Pagell & Wu, 2009) (Preuss, 2001) (Ramudhin, et al., 2009) (Seuring , 2001) (Seuring &
Muller, 2008) (Simchi-Levi, et al., 2008) (Teuteberg & Wittstruck, 2010) (Wu & Pagell,
2011) (Zsidisin & Siferd, 2001)
Scopus
Web of Science
Science Direct (Barton, 2000) (Carter & Jennings, 2002) (Carter & Rogers, 2008) (Elkington, 2004)
Sustainability and (Hofmann, et al., 2014) (Lenox & King, 2004) (Longoni, et al., 2014) (Meixell & Luoma,
Integration 2015) (Neutzling, et al., 2018) (Rebitzer, et al., 2004) (Sancha, et al., 2016) (Sarkis, 2003)
(Seuring , 2004) (Srivastava, 2007) (Stindt, 2017) (Vachon & Klassen, 2006) (Vachon &
Klassen, 2007) (Vickery, et al., 2003) (Winter & Knemeyer, 2013)

(Boström, et al., 2015) (Brandenburg, et al., 2014) (Börjeson, et al., 2014) (Dyllick &
Hockerts, 2002) (Ellinger & Ellinger, 2014) (Evans, 2017) (Helin & Babri, 2014) (Luchs,
Sustainability and et al., 2010) (Moxham & Kauppi, 2014) (Ones & Dilchert, 2012) (Ponte, et al., 2011)
Drivers (Seuring, 2013) (Seuring & Gold, 2013) (Van Wassenhove & Besiou, 2013) (Wade-Benzoni,
et al., 2007) (Wheeler, et al., 2003) (Wolf, 2014) (Wong, et al., 2012)

(Adams, et al., 2016) (Ayuso, et al., 2011) (Boons & Ludeke-Freund, 2013) (Chkanikova &
Lehner, 2014) (De Rosa, et al., 2013) (Dekker, et al., 2012) (Dreyer, 2009) (Gebler, et al.,
Sustainability and 2014) (Grant & Baden-Fuller, 2004) (Huang & Shih, 2009) (Huber, 2008) (Jabbour, et al.,
Innovation 2010) (Jabbour & Santos, 2008) (Jackson & Soe, 2010) (Jackson, et al., 2014) (Klewitz &
Hansen, 2014) (Lengnick-Hall, et al., 2013) (Lichtenthaler & Lichtenthaler, 2009) (Melville,
2010) (Mylan, et al., 2014) (Renwick, et al., 2013) (Schaltegger & Wagner, 2011)
(Schiederig, et al., 2012)

(Ahi & Searcy , 2013) (Behera, et al., 2012) (Busse, et al., 2016) (Chertow, 2007) (Chertow,
Sustainability and 2000) (Chertow & Lombardi, 2005) (Costa & Ferrao, 2010) (Gabor, et al., 2018) (Geng &
Practical Initiatives Cote, 2002) (Herczeg, et al., 2018) (Jacobsen, 2006) (Kayikci, 2018) (Kumar, et al., 2014)
(Miller, 2014) (Neto, et al., 2008) (Park, et al., 2016) (Rebitzer, et al., 2004) (Ubeda, et al.,
2011) (van Marwyk & Treppte, 2016) (von Corswant & Frederiksson, 2002) (Wang, et al.,
2016)

(Aragon-Correa, et al., 2008) (Corbett & Klassen, 2006) (Etion, 2007) (Hassini, et al., 2012)
(Jabbour, et al., 2013) (Jacobs, et al., 2010) (Labuschange, et al., 2005) (Lii & Kuo, 2016)
Sustainability and (Mangla, et al., 2016) (Mani, et al., 2018) (Molina-Azorin, et al., 2009) (Paille, et al., 2014)
Performance (Pullman, et al., 2009) (Ramanathan, et al., 2010) (Rao & Holt, 2005) (Rennings, et al., 2006)
measurement (Schaltegger & Burrit, 2014) (Schrettle, et al., 2014) (Turker & Altuntas, 2014) (Yang, et
al., 2013) (Yusuf, et al., 2013) (Zhu, et al., 2008)

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Qualitative analysis consists of three sub-steps: data display, data reduction, and drawing
conclusions based on the collected data. These sub-steps are performed iteratively and
continuously in a cyclic manner, simultaneous to the data collection (Miles, et al., 2019). See
figure 2.6. The current thesis utilizes the qualitative data analysis technique with its sub-steps
modified as per the requirement of the study. The data reduction step deals with making the data
more manageable which is done by collecting the relevant data from the articles through specific
codes and initial pattern analysis. The second step, data display involves visualizing the data
which is done in an excel sheet making a structured matrix against the article and its level of
relevancy in specific sections of the thesis. The data is also structured under specific codes made
up of a string of words that describe and relate to the study. The third step summarizes and
categorizes the collected data into a meaningful flow to answer the formulated research questions
and fulfill the aim of the study.

Figure 2.6. Steps in qualitative data analysis, (based on Miles, et al., 2019)

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 2.4. Validity and Reliability

In order to achieve a higher level of quality in research, the researcher needs to evaluate the
reliability and validity of the obtained results (Jacobsen, 2015). The assessment of validity and
reliability becomes vital in a positivistic approach of research (Winter, 2000). Reliability
involves the process of checking whether the study would produce similar results when
performed multiple times. The process also allows the assessment of conditions that caused the
change in obtained results from multiple studies. The data and information obtained for this thesis
are collected from credible sources and the articles selected are of high citation creating more
reliability in the data used to analyze.

Validity is the process of checking whether the obtained results from the research apply to the
real world and are practically possible. Validity is divided into internal and external validity
internal validity is to check if the researcher’s observations are in line with the theoretical
findings which can also be described as the result of the study being an exact representation of
reality. This thesis complies with internal validity through analyzing practically applied
strategies and linking them to the theoretical literature. Additionally, data utilized in this thesis
is obtained from sources focusing their research on different industries under the manufacturing
sector providing the research with a wider application. External validity is defined as the
generalization of results obtained from the research. This thesis complies with external validity
by providing a road map that is applicable to global and local manufacturing industries. It is to
check whether the results from the research can be applied to other situations and social
environments (Bryman, 2008).

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3. THEORETIC FRAMEWORK

In this section, theory supporting the research topic is presented. The collected literature is
analyzed under the themes supply chain management, sustainability in the manufacturing
industry, SSCM, SOI, and introducing strategies adopted by manufacturing industries in fronts
of environmental, economic, and social to provide a theoretical foundation to the chosen topic.

3.1. Supply chain management

The term supply chain contains all the interlinked activities which are involved in the flow and
transformation of goods from raw materials into a finished product until it reaches the end
customer as well as associated information flow. The flow of material and information takes
place both up and down the supply chain. Supply chain management ensures unhindered flow
among the activities and maintains a proper integration to achieve efficient relationships and
obtain a competitive advantage (Handfield & Nichols, 1999; Seuring & Muller, 2008). To
achieve effective management of supply chain activities, efficient and structured supply
strategies and processes need to be adopted. The strategies can be inter-organizational as well as
external involving the suppliers of the focal company. Recent supply chain strategies and policies
have seen increased incorporation of sustainable perspective to reduce the negative effect of the
supply chain activities on the environment achieving green SCM (Seuring, 2004).

According to Harland (2002), supply chain management can be categorized into four levels
which helps in effectively structuring the activities and processes involved. See figure 3.1.

The first level involves developing a supply policy for a firm that contains the overall framework
and supply chain issues to be addressed focusing on medium, and long-term effects. Depending
on the firm’s philosophy and strategy, the supply policies define basic rules and working
conditions for purchasing and selling goods or services. Usually developing a supply policy
requires the firm to take normative judgments to optimize various supply chain issues. In recent
years, incorporating environmental and ethical perspectives into policy decisions has
experienced increased focus in manufacturing firms, such as restricting the export and import of
goods or services to countries and corporations which fail to provide safe working conditions to
their employees and exploit child labor. However, this can affect the policy to achieve the lowest
possible manufacturing cost by establishing the firm’s operations in developing economies. The
optimized decisions made in setting a firm’s policy becomes the foundation for the following
levels (Seuring, 2001; Seuring, 2004).

The second level contains setting supply strategies that provide a direction for the firm aiming to
achieve a desired position in its supply chain issues. The developed supply strategies need to be
in synchronization with other corporate strategies to support and achieve the overall firm’s
mission (Harland, et al., 1999). Effective synchronization can be a key element to achieve a
competitive advantage in the market. The supply strategies act as directional pointers for
realizing improvements in operational performance. Strategies focusing on the environmental
performance of a firm ensures that its processes produce the desired results without
compromising on environmental and social standards.

13
The third level deals with managing and monitoring supply activities through planning and
control. Usually, this level includes the design and implementation of plans and control which
ensures the availability of resources at the right time and right place. The planning and control
maintains the pool of its suppliers for sourcing various materials required to produce the products
or services. The improved focus on sustainability in the firm’s policies directs planning and
control to source materials that are produced through environmentally sound practices and ensure
that its pool of suppliers fulfills such requirements(Seuring, 2001).

The fourth level involves the operational level of supply chain management where the actual
physical operations are performed pertaining to day-to-day business activities. Decisions are
made on daily activities such as purchasing goods and services from the suppliers and making
sure the raw materials are available at the right place and time. The day-to-day operational
activities and the decisions made are guided and constrained by the above presented three levels.
The four levels are interconnected and changes introduced in any level can affect the other levels
and vice-versa. Effective synchronization among the different levels of SCM results in a
structured working environment with ease in flow and provides a competitive advantage
(Seuring, 2001; Seuring, 2004).

Figure 3.1. Four levels of supply management, (modified from Harland , 2002).

14
 3.2. Sustainability in Manufacturing industry

In recent decades, the manufacturing sector has witnessed various firms and its stakeholders
consider sustainability challenges as a key factor in devising their policies and management
agenda due to increasing global warming and rapid depletion of important resources (Schrettle,
et al., 2014). According to Wu & Pagell (2011), the need for environmental protection, increasing
demand for natural resources and rapidly depleting nonrenewable sources of energy have forced
the manufacturing firms to reconsider their business strategies and restructure their supply chain
operations. From a manufacturing industry perspective, Dyllick & Hockerts (2002), have defined
sustainability as fulfilling the needs of a firm’s direct and indirect stakeholders without
compromising on the ability to fulfill the needs of future stakeholders. Though, sustainability is
a rather broad field, in the manufacturing industry a triple bottom line approach namely
environmental, economic, and social aspects have been implemented (Hart & Milstein, 2003).
The increasing awareness of sustainability created a significant impact on the decision-making
process of manufacturing firms in devising their policies and strategies and to fulfill the
sustainability challenge, current operational and management practices are to be revisited and
improved to integrate sustainable practices (Schrettle, et al., 2014).

The choice of adopting a sustainability approach by a manufacturing firm is driven by two

mechanisms: Exogenous and Endogenous. Exogenous drivers are the pressure from external
entities such as mandatory legislations laid by countries and NGOs that makes manufacturing
firms start sustainability initiatives in order to prevent sanctions and penalties. Research shows
that there are three dominant external drivers: 1)Environment regulations, 2)Societal values and
norms, 3)Market drivers. First, the Environmental policy and regulations laid by governments
and multinational organizations are considered the most critical sustainability drivers. Failure to
comply with these regulations can lead to severe sanctions and legal consequences for the firm.
Global awareness of sustainability has further created a negative effect of damage to a firm’s
reputation and image (Delmas & Toffel, 2004). The imposition of regulations has resulted in a
positive effect on manufacturing firms’ sustainability approach through the implementation of
new technologies and the creation of environment-specific targets which contributes to the firm’s
growth and profitability (Banerjee, 2001; Etion, 2007). Second, the societal values and norms
represent the expectations levied by certain interest groups such as NGOs, media, local
community groups, and consumer organizations on the manufacturing firm’s approach towards
sustainability (Wade-Benzoni, et al., 2007; Wheeler, et al., 2003). Failure in meeting the
expectations can cause severe public pressure and considerable effect on a firm’s reputation. It
is vital for the firm’s decision-makers to be aware of the expectations and formulate sustainable
manufacturing strategies accordingly (Wheeler, et al., 2003). Finally, the market drivers shape
the market overview in which the firms are trying to fulfill the demand. Consumers, suppliers,
competitors, and shareholders are the critical stakeholders in market drivers (Rivera-Camino,
2007). Increased awareness on sustainability among the consumers has changed their
consumption behavior, by inclining toward purchasing products or services based on the
manufacturing firm’s sustainable approaches (Delmas & Toffel, 2004). If the focal company has
a poor sustainability compliance strategy, it can push its stakeholders to make adverse decisions
such as suppliers could discontinue supply of material in fear of losing reputation, investors could
withdraw their capital and competitors can take the advantage of the market by adopting
sustainable initiatives (Rivera-Camino, 2007).

Endogenous drivers are the internal forces within the manufacturing firm and can be divided into
three groups: 1)Strategy 2)Culture and 3)Resource base. The first group, the manufacturing
firm’s strategy is a framework that provides a direction to achieve a desired position or a targeted

15
goal. Incorporating a sustainability approach into manufacturing firm strategy has posed a major
challenge to strategy makers (Labuschange, et al., 2005; Etion, 2007). According to Ramanathan,
et al., (2010), few manufacturing firms have incorporated sustainability by making minimal
changes to their processes in order to fulfill the regulations, and a majority of the firms have
chosen a proactive approach through self-regulation by adopting sustainable innovations into
their processes. The firm’s culture is influenced by motivation, flow of information, management
commitment, and long-term policy pertaining to sustainability (Schrettle, et al., 2014). Bansal &
Roth (2000), in their research, have stated that sustainability in manufacturing firms is driven by
three motivations: competitiveness, legitimation, and ecological responsibility. Research has
shown that having an accurate and timely information flow has a positive effect on integrating
sustainability into manufacturing processes. Firm managers can use this information flow to
effectively implement sustainable innovations across various divisions of the firm (Etion, 2007;
Lenox & King, 2004). Finally, the resource base group indicates the effective and adequate usage
of available resources to drive firms' operations integrated with sustainable approaches
(Schrettle, et al., 2014). Presents a resource-based view concept with a perspective of an
ecological strategy. The sustainable innovations done under the concept tend to provide a
competitive edge over longer periods (McGee, et al., 1998). Resources for a manufacturing firm
is usually comprised of physical capital resources such as technology, equipment, and human
resource. Along with physical assets, a specific set of skills and capabilities become vital in the
successful implementation of sustainability initiatives (Huang & Shih, 2009; Lichtenthaler &
Lichtenthaler, 2009; Melville, 2010).

3.3. Sustainble Supply Chain Management

A sustainable supply chain management (SSCM) is defined as the management of material,

information, and capital flows along with proper synchronization among the stakeholders
throughout the supply chain, with a set of common goals formulated in all three fronts of
sustainability. Usually, these goals are derived from the customer requirements, external
regulations, and stakeholder requirements (Seuring & Muller, 2008). Ansari & Qureshi, (2015)
in their research have described SSCM as maintaining optimal balance among social
responsibility of the firm, environmental footprint, and economic viability throughout its supply
chain, improving the performance in a long-term perspective as well as meeting the customers'
demand, competitively all along the life cycle of a product or service. Schaltegger & Burrit,
(2014) presents a broader perspective of SSCM by defining it as economic value creation with
minimal negative social and environmental impacts. Carter & Rogers, (2008) defined SSCM as
strategic, transparent integration of sustainability perspective into a firm’s supply chain through
systemic coordination of key inter-organizational business processes to achieve social and
environmental goals along with improvement of long-term economic performance. Early
research efforts on SSCM were majorly focused on the technical and operational perspective of
the supply chain network. The domains identified in this approach could be broadly divided into
the following: 1) Production planning and control, 2)Inventory management, and 3)Reverse
logistics (Gupta & Palsule-Desai, 2011). Researchers in academia and industry have been
focusing on SCM majorly on improving operational efficiency throughout the supply chain
(Simchi-Levi, et al., 2008).

Years later, the research in the SSCM field has directed its focus on environmentally conscious
manufacturing, where the environmental impacts are taken into consideration while developing
and producing a new product or service including design, material selection, manufacturing
process, end-customer delivery, and end of life management of the product (Sarkis, 2003;
Srivastava, 2007; Seuring & Muller, 2008; Yang, et al., 2013). Recently, researchers and

16
industrial managers have realized the potential of integrating sustainability into a multitude of
aspects in SCM. This led to the removal of marginalization in sustainability research and the
difference between conventional SCM research and sustainability-based research has been
slowly disappearing (Ahi & Searcy, 2013; Pagell & Shevchenko, 2014). Barton, (2000) and
Giddings, et al., (2002) have presented three dimensions of sustainability as interconnected rings
which they named as ‘Common three-ring sector view of sustainable development. The focus of
this concept is to highlight the intersection of environmental, economic, and social fronts. See
fig. 3.2. a few years later, the concept of the triple bottom line (TBL) approach was introduced
by Elkington (2004), which has become a prominent concept for research in the sustainability
domain as it focuses on three fronts equally. Both concepts have served as triggers for the
development of SSCM framework in manufacturing industries (Carter & Rogers, 2008, Carter
& Easton, 2011). Though the TBL approach has a multitude of potential benefits and fulfills
various sustainability objectives, there could be possible trade-offs among the three dimensions
(Winter & Knemeyer, 2013).

Figure 3.2. Common three-ring sector view of Sustainability, (based on Barton, 2000; Giddings, et al.,
2002)

Ramudhin, et al., (2009) has reviewed the various elements of sustainability in supply chain and
stated that SSCM can be achieved by implementing innovative approaches such as green design,
inventory management, production planning and control for remanufacturing, product recovery,
reverse logistics, waste management, tracking energy use and emission reduction. Teuteberg &
Wittstruck, (2010) proposed the “House of Sustainable Supply Chain” which is built on laws and
regulations, risk and compliance management as the foundation, and the three dimensions of
TBL as the key pillars. Upon the pillars, organization culture, establishment of values and ethics
coupled with efficient and flexible green IT environment to ensure proper resource and
information flow. On the top lies the corporate strategy focusing on sustainable development.
Strong adherence to the approach ensures effective protection of the supply chain network
against environmental and social threats and risks. See Fig. 3.3.

17
 Figure 3.3. House of Sustainable Supply Chain Management (modified from Teuteberg & Wittstruck,
2010)

Additionally, many researchers have proposed a multitude of sustainability-oriented innovative

approaches focusing on various stakeholders and operations involved in supply chain networks.
Carter & Jennings, (2002) in their research have proposed a logistics social responsibility
approach where they have examined various processes involved in purchasing, packing,
warehousing, and reverse logistics. The research has divided logistic social responsibility into
six topics – environment, ethics, diversity, working conditions, and human rights. In addition,
they have discussed a sustainable warehousing approach, involving activities such as terminal
and warehouse location, proper storing and disposal of hazardous materials, and proper training
for employees in operating equipment. Zsidisin & Siferd, (2001), have worked on combining
traditional purchasing activity with environmental management resulting in an Environmental
Purchasing approach. Deakin, (2001) Has focused on the Sustainable transportation concept,
which ensures that mobility needs of the supply network are met without compromising on the
preservation and enhancement of employee and ecosystem health, firm’s economic progress now
and in the future. Further research has brought advanced concepts to achieve SSCM through
innovative approaches in areas such as supplier development (Busse, et al., 2016), decision
making (Brandenburg, et al., 2014), sustainability reporting (Turker & Altuntas, 2014), socially
sustainable supply chain (Moxham & Kauppi, 2014), sustainable supply chain risks (Hofmann,
et al., 2014).

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 3.4. Sustainability Oriented Innovations

In order to stay competitive in the changing market conditions and increasing focus towards
sustainability in manufacturing, the firms had to adopt new strategies and approaches while
contributing to sustainable development. One such approach is to adopt and implement
sustainability-driven innovative practices in their operations and working environments
(Paramanathan, et al., 2004; Schaltegger & Wagner, 2011). Moreover, the growing concern
towards excessive consumption of non-renewable resources, environmental degradation through
improper industrial waste disposal practices, and increasing social inequity have brought up a
need for a transformation towards a more sustainable society and economy (Adams, et al., 2016).
The organizational level definition of corporate sustainability is defined as the systemic efforts
laid by management to balance the environmental, ecological, and social goals of the
manufacturing firm in order to reduce harmful impacts, utilize the benefits of adopting
sustainable approaches and increase focus towards improving working environment and societies
(Dyllick & Hockerts, 2002). Traditionally, innovation in a manufacturing context is defined as
the implementation of a new or significantly improved product, service, process, marketing
method, or organizational strategy in the workplace, business practice, or external entities of a
manufacturing firm. A innovation does not necessarily need to be a new invention. It is vital to
ensure that innovations are not constrained at the inception level but a proper implementation of
innovation takes place in order to successfully utilize the benefits and achieve a significantly
improved position from the current state (OECD, 2005). Innovations focused on improving the
firm’s performance in environmental, economical, and social dimensions have a significant
contribution towards achieving the firm’s sustainability policy (Hansen, et al., 2009; Schaltegger
& Wagner, 2011).

The term sustainable development was first introduced at the United Nations Conference on
Human Environment in 1972. The aim of introducing the concept is to shed light on the
importance of creating, redesigning, and adapting to sustainably viable technologies and
processes (Hall, et al., 2010). A sustainable development approach can be implemented on the
three dimensions of sustainability i.e., the TBL approach presented by Elkington, (2004). The
increasing environmental concerns have become the driving force behind strategic changes
focusing on reducing the firm’s impact on the environment(Aragon-Correa, et al., 2008).
Research and development departments in the manufacturing sector have realized the need for
considering ecological factors in their product and service innovations. Few such eco-
innovations currently in use are cleaner production, life cycle assessments, and eco-design
(Schiederig, et al., 2012; Huber, 2008). Though the eco-innovation concept started with a focus
on ecological factors, soon due to increased research on SOIs, it has evolved into a broader focus
considering environmental, economic, and social dimensions (Schaltegger & Wagner, 2011;
Paech, 2007; Wustenhagen, et al., 2008). The purpose of SOIs is to provide a direction towards
attaining sustainability in environmental, ecological, and social aspects through deliberate
integration into manufacturing operations such as designing and developing new products,
processes, and organizational structures (Paech, 2007; Hansen, et al., 2009).

According to Klewitz & Hansen, (2014) SOIs can be classified into three general types based on
the focus area: Process innovations, Organizational innovations, and Product innovations.
Process innovations are improvements focused on the production processes of goods and services
throughout the supply chain. The improvements are targeted at increasing the eco-efficiency and
eco-effectiveness of the processes involved in the entire supply chain network (Huber, 2008).
Further, the innovations can be focused on implementing the end of line solutions and cleaner
production strategies. Currently implemented strategies usually involve effective usage of

19
resources, and manage critical processes through innovative approaches such as closed-loop
production and industry symbiosis focusing on improving the eco-efficiency of the operations of
the organization (Altham, 2007). Product innovations are majorly focused on either improving
the current or developing new products and services. Usually, innovations such as eco-design are
implemented to improve the eco-effectiveness of the products by opting for sustainable materials
with high durability and low energy consumption in the production of raw material (Hart &
Milstein, 2003; Klewitz & Hansen, 2014). Organizational innovations are targeted at
restructuring within the manufacturing firm and setting up new forms of management. The aim
of restructuring is to improve the integration of sustainability approaches into day-to-day work
as well as organizational policy (Rennings, et al., 2006).

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4. ANALYSIS

In this chapter of thesis, the collected research literature is analyzed and presented to answer
the following research questions.

RQ1: What are the gaps in achieving sustainability integration into a supply chain network in
manufacturing?

This section discusses the existing governance gaps in supply chain networks which hinder the
operations to be performed in a sustainable way. The research question is answered by analyzing
the collected data on sustainability and supply chain networks. The analysis perspective is
focused on connecting the sustainability approaches in practice to the operations performed in
the supply chain in order to realize the benefits of implementing these approaches. The analysis
is aimed at incorporating sustainability thinking into supply chain networks and eventually
achieving integration between both paradigms. Integrating sustainability means incorporating
sustainable objectives into the operations and management of the supply chain network. This
integration is usually made possible by implementing sustainable innovations in processes,
products, and services ensuring sustainably responsible practices are used in manufacturing
(Neutzling, et al., 2018). Successful integration relies on three major factors: resource
investment, collaboration, and governance mechanisms (Boström, et al., 2015; Seuring, 2013).

The globalization of supply chain networks by manufacturing industries has reshaped the
underlying operations of production and supply. This globalization has resulted in the
consumption of raw materials by manufacturing firms and the availability of finished or semi-
finished products by consumers across the globe irrespective of their point of origin.
Multinational brand companies act as the focal point in the entire network managing key
activities such as product design, devising strategies, policymaking, marketing, and brand
management, while repetitive and low skill manufacturing and supply chain operations are
outsourced to lower economic countries with high availability of cheaper labor (Boström, et al.,
2015). Consequently, globalization has triggered a change in responsibilities and boundaries of
the firm in terms of operations and their impact on its surroundings which involve society and
natural environment. Due to increasing environmental awareness across the world and realizing
the adverse effects of irresponsible manufacturing operations, the firms are facing constant
pressure to reduce their emissions throughout the supply chain network (Kumar, et al., 2014).

Manufacturing companies are continuously pressured by consumers, NGOs, local governments,

and international legislations laid by group of countries to reform their conceptions towards the
environment by taking up the responsibility to transform from a narrowminded financial
perspective into a sustainability perspective within their operations as well as beyond
organizational borders (Boström, et al., 2015). The external pressures from society, competitive
market, and government legislations have shifted the manufacturing firm’s attention toward
environmental and social effects of its supply chain operations. In order to mitigate these
pressures, firms are trying to incorporate sustainability into their operations through different
strategies such as environmental management systems, green manufacturing, eco-effectiveness,
etc., (Seuring, 2013; Luthra, et al., 2016; Mangla, et al., 2016). Failure to comply with the
regulations and irresponsible behavior has led to adverse risks such as backlash in form of media
reports, name and shame campaigns, product boycotts by consumers, huge fines from legislation
bodies, and hesitation from external stakeholders to invest capital in the company (Meixell &
Luoma, 2015; Sancha, et al., 2016).

21
In order to mitigate these risks, manufacturing firms have realized the importance of adopting
evolved business practice known as SSCM which also acts as a differentiator to achieving a
competitive edge in the market (Giannakis & Papadopoulos, 2016; Jain, 2012). Academia has
witnessed increased attention from practitioners and researchers in the area of implementing
sustainable strategies in the supply chain context (Carter & Easton, 2011; Wu & Pagell, 2011).
In recent years, a proactive approach by manufacturing firms to incorporate sustainable practices
into operations is considered to be a basic requirement to sustain in the market and has become
a critical success factor (Wolf, 2014). Companies like Subaru and Toyota have proactively
adopted sustainable initiatives aiming at realizing the ideal zero-waste facilities (Hassini, et al.,
2012) and ideal zero-emission warehouses (Dekker, et al., 2012). However, to proactively
implement SSCM strategy, it is vital for the manufacturing companies to integrate a
sustainability approach into their operations. A global supply chain network involves numerous
operations performed simultaneously or in a chronological order which are spread over multiple
departments within an organization and its subdivisions both upstream and downstream. These
subdivisions could be spread out in different locations across the globe. To integrate
sustainability into supply chains, it is important for the firm to properly coordinate its underlying
operations. According to Vickery, et al., (2003), supply chain coordination is achieved by
effective synchronization of both upstream suppliers and downstream customers as well as
coordinating various internal functions. Coordination doesn’t only mean synchronization among
production, transportation, and inventory but synchronizing the front end of the network,
customer demand to its backend, production part of the network. Introducing any new change in
an improperly coordinated supply chain network can create repels in the system and the effect
keeps on increasing throughout the chain resulting in a bullwhip effect (Simchi-Levi, et al.,
2008). Lii & Kuo, (2016), in their research, presented supply chain coordination in three
divisions: customer coordination, supplier coordination, and internal coordination. They have
suggested a few activities such as sharing information on customer demand with suppliers,
sharing production plans with suppliers, sharing inventory status with suppliers and coordination
among all internal functions to be readily responsive to the changing needs of customers,
maintaining adequate inventory for future customer needs, etc. to ensure effective coordination
in supply chain network.

4.1. Governance in global supply chain network

Ensuring effective coordination among different functions in a supply chain network facilitates
a platform for easy integration of sustainability objectives. Among the majority of manufacturing
firms, the initial impulse to integrate sustainability into their supply chain network is realized by
external pressures such as stringent regulations and from stakeholders: customers, competitors,
and NGOs. This pressure is spread from the focal companies to its suppliers affecting the
complete ecosystem (Pagell & Wu, 2009; Beske, 2012). Integration of sustainability into the
supply chain results in SSCM which has become an important area of focus in the modern study
of operations management. However, this being a fairly new concept, still there is a persistent
gap between the theoretical diffusion of SSCM and its practical implementation (Ashby, et al.,
2012). The gap is largely created due to a lack of guidelines on how to measure, pursue and
practically integrate sustainability into operations and achieve SSCM (Van Wassenhove &
Besiou, 2013; Fabbe-Costes, et al., 2014). Boström, et al., (2015), in their research state that, the
above-mentioned gap is due to inefficient governance over the global supply chain activities of
an organization. Economic globalization and outsourced production strategies implemented by
manufacturing firms are fuelling the inefficiency in governance. They define governance as the
regulations and coordination activities planned by the manufacturing firm based on policies,

22
guidelines, external rules and laws, norms, determined standards, monitoring and verification of
processes, and providing financial incentives. According to Bush, et al., (2015) governance can
be achieved at different levels of the supply chain network, pointing toward the multi-
institutional nature of supply chain governance. The internal governance set up in a certain node
of the supply chain network can be influenced by surrounding external actors.

Boström, et al., (2015), presents five types of gaps in governance and state that the gaps have
significant interdependency.

4.1.1. Geographical gaps

Geographical gaps, as its name signifies the magnitude of reach for the global supply chains.
With globalization, the manufacturing firms have shortened the distance between the
consumption of products and its actual production, making them conveniently available to the
customers. This convenience comes with a fair share of adverse effects on the environment and
society which are ignored in the public debate. Governance in a global supply chain usually
involves managing from a distant location. There have been continuous efforts in the industry to
create more governable supply chains. These include reduction of geographical distances by
shortening supply chains which is possible by opting for local alternatives, introducing eco-
branding to products that involve sourcing agriculture products directly from local farms,
eventually reducing the complexity of supply chains and having greater traceability of suppliers
(Chkanikova & Lehner, 2014). But introducing this change is not as easy as it seems especially
in the manufacturing industry due to the magnitude of globalization. In a manufacturing scenario,
governance is made possible through indirect and distant interactions between the supply chain
actors through advanced ways of information flow about product/production status and new ways
to facilitate communication. However, inefficiencies in communication have a greater chance of
facing sustainability risks. One such instance could be improper communication of standards that
should be adhered to. There are generic global standards and as well could vary in different
economies creating a global vs local gap (Ponte, et al., 2011).

4.1.2. Information and Knowledgde gaps

Information and Knowledge gaps resulted due to increased geographical distances among supply
chain actors. This increase has created a need for reliable, comprehensive, credible, and verified
information about the impact on sustainability due to products and production processes from
various links in the chain. Usually, obtaining this information is a strenuous and time-consuming
task due to information asymmetry among the actors along the chain as they have varying needs
to be fulfilled by the information and perceive the same information differently depending on the
need (Helin & Babri, 2014; Börjeson, et al., 2014). It is vital to achieve transparency in
sustainability information among the supply chain actors which can be achieved by proper
training through certification programs, instilling a code of conduct among the actors, and
developing product information systems that can capture the sustainability footprint of the
products and production processes. However, unmonitored transparency of sustainability
information can lead to chaos. Decisions have to be made on what and to whom the information
should be revealed, what information should be kept in a closed circle, how and by whom these
decisions are to be made, and who is in charge of monitoring, managing, and verifying
information transparency (Mol, 2014; Egels-Zanden, et al., 2014).

23
4.1.3. Communication gaps

The communication gap is considered the consequence of other gaps which leads to a severe
impact on the collaboration and communication among the various actors of the supply chain.
Sustainability literature argues that to ensure a more sustainable and reliable supply chain, it is
vital to maintain proper collaboration and communication among the actors (Seuring & Muller,
2008; Seuring & Gold, 2013). However, there is a multitude of challenges such as finding the
right tools, systems, and strategies to bridge the geographical distances involved in achieving the
desired level of communication. Manufacturing firms facilitate enhanced communication
through standard information systems, but these systems are hindered by issues of language,
trust, costs, differences in expertise, and cultural code of conduct. The complex global supply
chain networks make it difficult to maintain an end to end communication, as well as
communication among the supplier pool, further complicating the collaboration and
communication (Börjeson, et al., 2014). Eco-innovations approach presented by Mylan, et al.,
(2014), showed that it is possible to enhance collaboration and communication among the
supplier groups through benchmarking, standardizing, and implementing best practices by the
focal company creating socio-cognitive coordination with shared meanings, aligned policies,
roadmaps, and common work frames.

4.1.4. Compliance and Implementation gaps

Compliance and Implementation gap discusses the gap between planned sustainability strategies
and policies to the actual implementation of initiatives. In manufacturing industries, this gap is
predominantly observed. Though there are formulated standards, defined principles, norms,
regulations, and established sustainability guidelines, the manufacturing sector is still lacking the
actual implementation and adherence to the regulatory norms (Boström, et al., 2015). There have
been multiple auditing systems in place which make sure the sustainability guidelines are being
fulfilled. But, external pressure from these systems is not sufficient to close the compliance gap.
One such example of an auditing system is the Fair Wear Foundation, which audits the code of
conduct for worker rights in the supply chain of industries. The auditing is focused on inspection
of production facilities, interviews with management and production line workers, along with
inspection of documentation. The results of various manufacturing firms have been statistically
analyzed and the results showed that there are varying obstacles that obstruct the improvement
of current working conditions over time and the actual change is only visualized in a few extreme
obstacles such as child labor, safe and healthy working condition. Some obstacles like freedom
of association, gender discrimination, and racial discrimination are still evident in the
manufacturing sector (Locke, 2013). Helin & Babri, (2014), in their research, have analyzed the
interaction between a Swedish multinational company and its supplier in China. The analysis
was focused on compliance with corporate-driven code of ethics and the result showed that the
level of compliance is largely dependent on the negotiations and agreement among the buyers,
suppliers, and auditors.

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4.1.5. Power gaps

Power gaps are considered the fundamental dimension in assessing the level of sustainability and
responsibility in a supply chain network and they highlight the obstacles, prerequisites, and
outcomes. The power gap is not perceived actually as a gap but as a core vs periphery approach
which gets more complex in reality. Achieving the level of symmetrical or more or less equal
power distribution across the supply chain actors becomes a vital factor in reaching the desired
level of responsible and sustainable governance in supply chain networks (Miller, 2014). In the
sustainability initiatives front, idea inception and implementation need resources like, time,
personnel, expertise, social network, and execution power along with an innate commitment from
the actors to be responsible and improve the social and environmental issues of the supply chain
(Börjeson, et al., 2014; Helin & Babri, 2014). The initiatives implemented by the firm can be
highlighted to the market through third-party certification from auditing boards, which can help
the buyers, customers, and retailers to choose sustainable alternatives from a pool of suppliers
and producers (Chkanikova & Lehner, 2014). From the supplier’s perspective power gap can be
perceived as a lack of flexibility and accessibility to retrieve information on sustainability
standards set by buyers and make productive use of the available sustainable initiatives. The
standards laid by focal companies, usually in partnership with the NGOs, are often in line with
the cultural norms in developed countries, but these may or may not fit with the production
environment in developing countries and small-scale suppliers. Moreover, these standards
shouldn’t narrow down the operating flexibility of distant suppliers. Focal companies should
direct their resources in investing, and providing training and personnel to the suppliers to
improve their capability in fulfilling the standards (Locke, 2013; Bush, et al., 2015; Mol, 2014).
Said-Allsopp & Tallontire, (2014), focused their research on understanding the power gap
relating to gender discrimination and association. They state that the power gap created cannot
be closed just by adhering to equal wages, working hours, or provision of safe working conditions
but by actually providing a space to involve women in new initiatives, brainstorming sessions
and provide rights to organize, obtain decent and stable employment.

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RQ2: What are the innovative strategies to achieve sustainability in supply chain networks
pertaining to manufacturing industry?

This section analyses the practically implemented innovative strategies and how they can be
utilized to achieve the sustainability goals. Manufacturing industries have seen increasing
concern about over-consumption of resources, environmental degradation due to production
processes that have been active for a long time, and social inequity in the workplace which have
resulted in a dire need to transform their operations into more sustainable (Adams, et al., 2016).
The transformation requires encouragement of new ways of thinking, incorporating innovative
thinking through new knowledge, and training of management and employees (Neutzling, et al.,
2018). Manufacturing firms have shifted their interest towards implementing sustainable
strategies through innovative developments in their products, processes, organizational
structures, and approach to customers which are directed toward achieving the positive outcomes
in environmental economic, and social fronts of sustainability. Moreover, tackling sustainability
in the triple bottom line approach has resulted in positive transformation where, improving
environmental consciousness in operations is recognized as a source for strategic change,
improving ecological factors led to the adoption of innovative methods such as cleaner
production, eco-design, and life cycle assessments in supply chain operations (Klewitz &
Hansen, 2014). Implementation of innovative strategies is usually incremental, transforming the
traditional production system gradually improving throughout the supply chain, and achieving
targeted sustainability performance (Neutzling, et al., 2018). Though manufacturing firms have
profound knowledge of what drives the sustainability change at an organization level, there are
still gaps in implementing innovative sustainable strategies across the inter-organization
relationship of a supply chain network creating a win-win situation among the actors. There is a
need to bring sustainability awareness across the entire system and transform the business model
to extend implementation of innovative strategies for both upstream suppliers and downstream
customers (Boons & Ludeke-Freund, 2013).

Adams, et al., (2016), in their research stated the importance of sustainability oriented innovative
strategies (SOIS) which includes introducing intentional changes in organizational philosophy
and policy along with its products and processes, in order to transform themselves into creating
socially, environmentally, and ecologically responsible supply chain network. The SOIS can be
divided into three main contexts depending on the level of its reach in implementation:
Operational optimization, Organizational transformation, and System building. See fig. 4.1.
Operational optimization involves incremental implementation of sustainable innovations in
firm’s products and processes with an objective to utilize internal capabilities, reduce impact of
operations involved at the ground level and align all the firm employees to achieve the
sustainability goals. Under organizational transformation, the strategies are focused on
transforming the mindset of supply chain actors into a more sustainable perspective and efforts
are made to further embed sustainability into the firm’s culture through engagement and
collaboration of internal and external stakeholders (Ayuso, et al., 2011; Khalid, et al., 2015).
Finally, under System building, the innovative strategies are focused on shifting the business
thinking into a more holistic approach, where various firms work together to drive co-created
value propositions where strategies are built on collective skills and resources to solve complex
sustainability-related problems benefiting all the involving businesses (Boons & Ludeke-Freund,
2013).

26
 Figure 4.1. Three contexts of SOIS (based on Adams, et al., 2016).

4.2. Sustainable strategies in practice

In this thesis, a few sustainable strategies researched in academia and implemented in

manufacturing firms are analyzed to support the research question. The strategies to be analyzed
are chosen based on the three context divisions of sustainable strategies introduced by Adams,
et al., (2016).

4.2.1. Operational Optimization: Digitization of Logistics

Under Operational optimization context, the impact of digitization in logistics on sustainability

performance of a manufacturing firm is analyzed. The logistics operation in supply chain
networks has witnessed an accelerated pace of digitization with Industry 4.0 which has
transformed the way operations are being performed and contributed to the dynamic behavior of
market demand. Digitization has resulted in the rapid development of manufacturing and
logistics processes as well as the scale of operations has been enormously increased (Almeida &
Correia, 2016). Introduction of digitization into logistics operations is to make use of advanced
information systems such as Internet of Things (IoT) to achieve a better integration among the
different processes, effective decision making, flexible, efficient, and green logistics networks
without compromising on quality and cost (Wang, et al., 2016). Digitization in logistics has
turned out to be an important instrument in realizing the sustainable goal of a manufacturing firm
in achieving a sustainable future transport system through adoption of smart and connected

27
digital technologies such as mobile and cloud connectivity, data analytics, and IoT which have
enhanced traceability and integration among supply chain partners. This adoption has created a
need for transforming the business models which can accommodate a connected, smart, highly
efficient, and sustainable digital logistic ecosystem that is fully transparent and accessible to all
the involving stakeholders. To understand the scale of impact on the environment, researchers
have quantified the effect of logistics operations on the environment. Though transformation of
raw materials, energy, and resources is converted into goods, services, waste, and ambient
emissions, the manufacturing sector has contributed to immense economic wealth, along with
increased human interference with the earth’s biosphere. This interaction can be quantified as,
industrial operations contribute to 22% of total final energy consumption (Gebler, et al., 2014)
and 20% of global carbon dioxide emissions (Kayikci, 2018). Researchers predict that
digitization has a great potential to reduce emissions from logistics operations by up to 10 to 12%
by 2025 and help in decarbonization efforts of global economies, realizing the aim of a future
sustainable digital logistics ecosystem, transforming the current supply chain into more
sustainably responsible and achieve an optimized level among the three fronts of sustainability
(Evans, 2017; van Marwyk & Treppte, 2016; Kayikci, 2018).

Introducing digitization into logistics can transform the operations partly or completely,
creating an internal value for the manufacturing firm as well as for stakeholders depending on
the focal company. Digitized logistics networks offer improved flexibility, responsiveness, a
higher degree of resiliency, and adherence providing firms with a competitive edge with
customers ensuring most efficient and transparent delivery. Digitization also provides advanced
data collection and analytical tools such as hyperconnectivity, Big data analytics which help to
collect and analyze complex large scale logistics data which can be used to benefit the firm in
terms of improved cost savings, increase margins, more efficient and ecofriendly operations
(Stuermer, et al., 2017). According to Kayikci, (2018), digitization in logistics is characterized
by six factors: Cooperation, connectivity, adaptiveness, integration, autonomous control, and
cognitive awareness. Along with six characteristics, implementation of digitization is enabled
by four dimensions: digital technology enablers, logistic process enablers, organization
enablers, and knowledge enablers. The characteristics and enablers work in synchronization to
provide significant benefits to realize the sustainability goals of a manufacturing firm. See Fig
4.2. A sustainably responsible logistics network can be achieved through reaping the benefits
of a digitally enabled logistics ecosystem. The sustainability goals are represented in three
dimensions. The economic dimension represents a logistic ecosystem that operates efficiently,
offering collaborative solutions in goods transport choices and supporting local economies. The
environmental dimension represents a reduction of greenhouse gas emissions, pollution, and
industrial waste along with, minimized consumption of non-renewable resources through
opting for alternative energy choices and implementing reuse and recycling techniques. The
social dimension represents the fulfillment of basic needs of individuals and communities
through providing a safe and supportive working environment along with equity within and
between genders.

28
 Figure 4.2. Sustainable digital logistics ecosystem (based on Kayikci, 2018)

4.2.2. Organizational transformation: GSCM, GHRM and Integrated approach

Under organizational transformation, the synchronization and integration of two paradigms

Green Supply Chain Management (GSCM) and Green Human Resource Management (GHRM)
is analyzed. These two concepts are gaining popularity in the research focusing on human
resources and operations management, but the efforts are still disconnected, establishing a new
line of research (Jackson & Soe, 2010; Ones & Dilchert, 2012; Jackson, et al., 2014).
Sustainability has been an area of great focus for researchers in operations management, and
concepts such as GSCM are becoming predominantly important for manufacturing firms to
achieve a competitive edge in the market (Sarkis, 2003; Seuring & Muller, 2008; Govindan &
Cheng, 2011). The introduction of ISO14001 legislation pertaining to environmental
management systems in manufacturing industries has driven firms to become more sustainably
responsible (Jabbour & Santos, 2008). The GSCM practices are classified into internal and
external where the internal practices revolve around internal environmental management,
ecodesign, and investment recovery, and external practices include green purchasing and
cooperation with customers (Zhu, et al., 2008). To transform into a greener organization, the
firms have realized the need for support to human resources through training focusing on
sustainability and rewards for appreciating the implementation of green practices. Though there
have been efforts by firms to incorporate sustainability thinking into their employees, they
remained nameless. The term GHRM has been put into the limelight by researchers Jackson &
Soe, (2010); Renwick, et al., (2013); Jackson, et al., (2014). GHRM deals both traditional human
resource practices like recruitment, selection, performance evaluation, training, and rewards
which are aligned with the sustainability goals and strategic decisions of the organization.
GHRM also imparts a change in organizational culture, promoting teamwork and employee
empowerment (Jabbour, et al., 2013; Longoni, et al., 2014).

The efforts of an organization to transform their supply chain operations with a sustainability
perspective becomes the cornerstone to integrate GSCM and GHRM. Further, the dependency

29
of a successful SCM on effective HRM becomes a vital factor in supporting the integration
(Ellinger & Ellinger, 2014; Lengnick-Hall, et al., 2013). The intrinsic drive to impart
organizational culture change with support from top management to transform the operations
according to the firm’s sustainability policy, values is the most relevant factor in the efforts to
become more sustainable (Jabbour, et al., 2010). Once a sustainability culture is set up in the
firm, it is vital to provide employees with proper team building and empowerment training to
ensure efficient and effective decision-making on complex problems in SCM (Jackson & Soe,
2010). The internal GSCM practices can be strengthened by forming green teams and
empowering these teams with the necessary resources to tackle the problems encountered while
improving the internal operations. The employees assigned into green teams are encouraged to
consider waste management, pollution prevention, eco-efficiency, and investment recovery
while working on the improvements. The external GSCM practices are supported by arranging
collaborative workshops and meetings with suppliers and customers on the recent
advancements and standards available on sustainability (Jabbour, et al., 2013; Paille, et al.,
2014). A table comparing the individual GSCM and GHRM practices with an integrated
approach is presented below. See table 4.1.

30
Table 4.1. Comparision between GSCM, GHRM practices and Integrated approach (Jackson, et al., 2014; Jackson
& Soe, 2010).
GSCM Practices GHRM Practices Integrated approach
Internal environmental management Human resources are critical for SCM supported by HRM eliminates
pratice requires strong commitment inception, implementation and the implementation barriers and
and support from management and maintenance of environmental mitigate its adverse effects resulting
involvment from employees mangement systems of a in a successful implementation
manufacturing firm sustainability initiatives

Green Purchasing – refers to Intrinsic drive among the employees Human resource professional provide
environmentally conscious to achieve sustainable supply chain training sessions, teamwork building
purchasing strategy which aims at network is fundamental for adopting sessions and capability enhancement
reducing sources of waste, promote advanced environmental practices activities to employees to obtain a
recycling, reduction or elimination of deeper understanding on the impact
hazardous items and developing of sustainability on firm’s success
supplier pool to be more sustainable

Ecodesign – involving enivornmental Development of products with Among the main obstacles to
concerns at different stages of product minimal to zero environmental ecodesign that can be mitigated by
development to ensure, no use of impact requires human resources with GHRM – reduction of gap between
toxic substances, minimizing energy proper knowledge and experience in the creators and implementers of
and resource consumption, reduction ecodesign approaches ecodesign projects, reduced
product weight and volume, organizational complexity through
developing products with longer life improved cooperation among
cycle and easily repairable and departments & areas, efficient
recyclable. communication of environmental
goals and visions in projects.

Cooperation with customers – Employees with proper training on Three main activities for cooperation
collaboration activities include joint sustainable standards and practices with customer: Educating customers
brainstorming and planning session provide a competitive edge to the using environmental awareness
related to environmental impact of the manufacturing firm in the future seminars; Supporting customers with
products, combining resources for industry teams in the development of
waste reduction in logistics environmental programs; and Joint
processes. ventures - such as implementing
green technologies and green product
projects.

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4.2.3. System Building: Industry Symbiosis

Under System Building, the concept of Industry symbiosis is analyzed. The idea behind industry
symbiosis is to build industrial ecosystems with symbiotic interrelationships among the
independent firms usually located in a relatively close geographical proximity. The foundation
for this concept is that a by-product or a waste generated from one industry can become raw
material for another industry which will eventually optimize the consumption of material and
energy, reducing the disposal of wastes into the environment and better utilization of resources
(Chertow, 2000). The aim of establishing an industry symbiosis is to achieve mutual benefit
among the involving companies through access to cheaper sourcing, avoiding disposal costs,
capitalizing on by-products, environmentally responsible resource consumption, and waste
disposal from the supply chain processes (Jacobsen, 2006; Chertow & Lombardi, 2005). From
an SCM and operations point of view, industrial symbiosis has brought new supplier-buyer
relationships, building a more collaborative supply chain network among industries. However,
the supplier-buyer relationships are different from traditional approaches because the traded
products are usually by-products that are outside the actual product portfolio of the supplier
company. The new relations require mutual trust, information sharing, shared sustainability
strategic visions, and collective decision-making (Baas & Boons, 2004; Chertow, 2007).
Moreover, industrial symbiosis can be a vital strategy for manufacturing firms in reaching their
sustainability policy. The concept can be extended into three dimensions of sustainability. The
European Commission which works on developing a Circular Economy in Europe aiming at
achieving the desired level of sustainability and developing a resource-efficient economy
identified industrial symbiosis as an efficient strategy. They have announced revised European
Regulation of waste disposal to facilitate effective use of by-products through industrial
symbiosis and help to create a level playing field across Europe (EC, 2015).

Collaboration among manufacturing firms is based on combining resources towards mutual

goals, developing processes or products, and sharing cost investments and risks. Research shows
that collaboration is usually distinguished between operational and organizational aspects.
Operational aspects aim at maintaining mutual relationships through material and resource
exchanges. Organization aspects aim at achieving mutual strategic goals (Gabor, et al., 2018). In
industry symbiosis strategy, collaboration among manufacturing firms is majorly focused on
achieving mutual sustainability goals. Operation aspects of collaborative sustainability initiatives
usually include the recycling and reusing process of by-products from each involving actors.
Organizational aspects involve taking steps toward transforming business models and
organizational culture toward collective sustainability initiatives such as regional synergies and
eco-industrial parks (Chertow, 2007; Geng & Cote, 2002). Over the decades' multiple
sustainability initiatives were undertaken in various already existing industrial parks across the
globe transforming the traditional economic relations between the co-located firms to more
sustainably responsible relations resulting in eco-industry parks. Industrial parks, such as in
Kwinana, Australia, and Ulsan, South Korea can be transformed into eco-industrial parks by
implementing an industrial symbiosis strategy (Behera, et al., 2012). In a few cases, an industrial
symbiosis strategy is initiated by the local country’s government. The National Eco-Industrial
Park Development Program in Korea and National Industrial Symbiosis Programme in the UK
are a few examples (Park, et al., 2016). In industrial symbiosis, along with the co-located
companies, other stakeholders are also involved or impacted. In Kalundborg, Denmark industrial
symbiosis, the local municipality is an important stakeholder as it fulfills a share of its residential
heating requirement from the network (Herczeg, et al., 2018). Regulatory bodies are also
important stakeholders. Strict regulations and sanctions are placed on manufacturing firms,
especially on landfills, excessive energy usage, and improper waste management practices.

32
Pressures from regulatory bodies have been the driving forces behind eco-industrial parks in the
USA, Australia, and Asia (Chertow & Lombardi, 2005; Behera, et al., 2012).

Although, Industrial symbiosis has potential benefits to offer, implementation and achieving the
desired level of collaboration comes with its fair share of challenges. Herczeg, et al., (2018) have
classified these challenges into two sections: Organisational challenges and Operational
challenges, and also suggested ways to tackle the obstacles. Though collaboration in industry
symbiosis ensures mutual long-term sustainability benefits through strategic and incentive
alignment, long-term commitment has its equivalent risks. Moreover, in reality, the
interdependencies in an industry symbiosis are mostly asymmetric often higher stakeholders are
large scale companies such as power plants, water supply treatment units, and chemical industries
as they produce a large amount of by-products. In this scenario, if the higher stakeholder decides
to pull out of the network, it leads to a potential risk to the network (Chertow, 2000; Behera, et
al., 2012). Organizational challenges can be tackled by creating a collective problem definition
environment through organized meetings among the co-located companies where an interface
can be created to develop sustainable solutions. These meetings can also serve as a platform to
attract new companies, present ideas, exchange project experiences, understanding regulations,
and establish sustainable relations with local communities and government bodies (Costa &
Ferrao, 2010; Behera, et al., 2012). Operational challenges in industry symbiosis usually
concerns with the management of production, transportation, and usage of by-products in the
supplier-buyer network. Before usage, the by-products might need to go through value-adding
processes such as mixing, separation, or some chemical reactions. The new by-product usage
might require changes in the current processes because it is different from previous raw materials
(Duflou, et al., 2012). Moreover, the availability of by-products is directly proportional to the
supplier’s demand, resulting in variability in supply to the buyer. To deal with these fluctuations,
the buying firm needs to set up storage and disposal processes. Operational challenges can be
tackled by setting up production and delivery systems that require implementation of local by-
product collection and delivery systems along with integrated by-product treatment, storage, and
reuse processes. Efficient information systems for aggregated data sharing on by-products among
the current and potential stakeholders (Herczeg, et al., 2018).

33
RQ3: How can the innovative strategies support the integration of sustainable supply chain in
manufacturing industry?

The research question analyses the post-implementation effect of innovative sustainable

strategies on the manufacturing industries by measuring the potential firm performance Since the
realization of adverse effects of global warming and depleting natural resources needed for the
functioning of the manufacturing sector, the firms have prioritized sustainability challenge as a
key point in their management agenda (Wu & Pagell, 2011). Manufacturing firms have adopted
the triple-bottom-line approach to integrate sustainability into their supply chain operations and
achieve the targetted level of sustainability through the implementation of innovative strategies
across the network. Developments in the sustainability paradigm have a significant effect on
strategic decision-making process of the firm as the implementation of SOIs requires revision of
current operational and management practices. Firm management has to keep track of changes
in market conditions in terms of sustainability and assess the current level in the firm,
competencies, and capabilities required and define short-term and long-term goals to develop the
sustainability strategy (Schrettle, et al., 2014). The sustainability challenge is relatively new
which has motivated the firms to rearrange their priorities and adopt new business models. These
changes are influenced by the drivers of sustainability which trigger new strategic initiatives.
The drivers are usually classified into exogenous and endogenous drivers (Rivera-Camino, 2007;
Etion, 2007). Simultaneously, firms need to make decisions over opting for a best-suited
sustainability initiative and assess the investments required to implement the initiative. Firms
that have built-in competencies in the area of sustainability initiatives find it easier to implement
various initiatives with minimum obstacles. Whereas firms with inadequate or no knowledge of
sustainability would end up incurring heavy investments (Schrettle, et al., 2014). The level of
capability and competence in sustainability in a firm is also a factor impacting strategic decision-
making process. When a firm decides to transform itself into a more sustainable supply chain
network, acquiring current knowledge on sustainability initiatives becomes vital. Competence in
the sustainability area plays a key role in a firm’s ability to adopt newer technologies and obtain
a competitive edge. Knowledge of updated regulations and external pressures is particularly
important for the firm in the fast-changing environment (Huang & Shih, 2009; Lichtenthaler &
Lichtenthaler, 2009).

For the manufacturing firms to achieve their goal of sustainability, different customized measures
are researched in academia and industry. According to kleindorfer, et al., (2005) and Schrettle,
et al., (2014) sustainability in the manufacturing industry is focused into three themes:
1)Adoption of new manufacturing technologies and sustainable processes, 2)Design and
development of products with a sustainability perspective, and 3)Integration of sustainable
practices into logistics network. Decisions on sustainable initiatives in these three themes can
follow an ad-hoc or a strategic perspective depending on the choice of implementation, usually
incremental or radical. An ad-hoc decision-making process pressurizes the firm to bring
immediate changes in the operations. On the other hand, radical changes in the firm's operations
and management require a strategic approach with a focus on long-term benefits (Winter &
Knemeyer, 2013). For a successful implementation of initiatives, it is vital for the firm to focus
on long-term goals and try not to reap short-term benefits (Dyllick & Hockerts, 2002). Often
from realizing benefits from sustainability initiatives, firms take a proactive approach to
sustainability by going beyond what regulations expect, the faster and smoother introduction of
SOIs which result in gaining the competitive edge (Rivera-Camino, 2007; Ramanathan, et al.,
2010).

34
Adoption of advanced manufacturing technologies has always proven to be a competitive
advantage for global manufacturers to become flexible and fulfill the increasing demand for
product customization. However, the incorporation of sustainable thinking into manufacturing
has become dominant creating the need for operations to become more environmentally
responsible. Moreover, sustainability has shifted the customer requirements, introduced stringent
regulations on products, and adoption of effective business models to achieve sustainable
industrial systems. Research shows that adopting advanced manufacturing technologies and
green operations management had a positive impact on the financial performance of
manufacturing industries and provides effective leverage in sustainability enhancement (Molina-
Azorin, et al., 2009). On the other hand, efficient sustainable operations do not only revolve
around increasing resource productivity but also include the development of sustainable products
and services that maximizes consumer value without squandering environmental resources. For
example, Sustainable Product and Service Development (SPSD) approach supports firms to
transform their products and services into more sustainable throughout their life cycle from
inception to end of life (Maxwell & Van Der Vorst, 2003). Similar to SPSD approach, Rebitzer,
et al., (2004) proposed the Life cycle assessment framework which monitors the phases from
production, usage, and end of life ignoring the initial idea inception and development stage as
the overall environmental effect in the initial phases is negligible compared to later phases.
Further, Dreyer, (2009) has developed upon the existing framework, proposing an environmental
life cycle assessment that focuses on the environmental impact of the production system by
identifying all the underlying processes and assessing their individual impacts. However,
implementation decisions over sustainable products and services can be both ad-hoc as well as
strategic (Schrettle, et al., 2014). Furthermore, decisions over sustainability can be viewed with
a holistic perspective focusing on the entire supply chain network of the firm and aligning the
goals with various stakeholders to minimize the environmental impact and build a collaborative
advantage rather than a competition (Vachon & Klassen, 2006; Etion, 2007). Ubeda, et al., (2011)
presented an example where suppliers and sourcing companies came jointly on working and
solving the issues to achieve a more environmentally friendly transport mode making the
logistics network greener without compromising on efficiency objectives.

In order to successfully initiate, implement and track the sustainability initiatives, firms need to
maintain a certain knowledge base. This collation of knowledge consists of organized context on
what kind of resources are available, how are they being utilized, and recording the interactions
between firm and environment. An effective knowledge management capability has a direct
effect on overall firm performance. Knowledge management can facilitate firms with a platform
to learn through experimentation and repetition which enables the task to be performed
efficiently and effectively (Smith, et al., 2005). Research literature has divided the benefits of
knowledge management into two paradigms: exploration which searches for new possibilities
and developments available and exploitation which deals with recording old certainties and
drawing effective conclusions from the collected data. In other words, exploration is learning
through knowledge creation and exploitation is learning through applied knowledge (Grant &
Baden-Fuller, 2004). Lichtenthaler & Lichtenthaler, (2009) stated that efficient knowledge
management and its related capacities will ensure superior innovation performance and overall
firm performance. But this development becomes stagnant overtime where the collected
knowledge is not sufficient to maintain the desired level of sustainability performance. To
overcome this stagnation, it is vital for the firm to consider the market dynamics and engage
more in exploration and exploitation activities to adjust their knowledge base to meet the
changing market conditions and be on par with the developments in manufacturing research.

35
Researchers have been investigating the relation between sustainability management and overall
firm performance. When multiple parameters are measured mixed results were obtained. The
financial investment for implementing sustainability initiatives reduces the overall profitability
while increasing the environmental efficiency and leading to new opportunities and competitive
advantage. When the relationship between sustainability management and financial performance
in the stock market is measured, it has resulted in a positive effect on the firm (Jacobs, et al.,
2010; Schrettle, et al., 2014). Rao & Holt, (2005), in their research, stated that employing
greening techniques across different phases of a supply chain network has led to increased
competitive advantage and improved economic performance aligned with new market
opportunities, increase in profit margins, sales, and market share. Focusing on GSCM, there have
been multiple studies measuring the environmental performance with financial performance.
Zhu, et al., (2008), stated that GSCM not only leads to improved environmental performance but
also superior economic performance. Molina-Azorin, et al., (2009) have reviewed and analyzed
approximately 30 research studies that focus on the effects of environmental management on a
firm’s financial performance. Though the analysis has resulted in mixed results, the majority of
the evidence proved that there is a positive impact on financial performance. Additionally, the
analysis also proved that employing green manufacturing technologies has a positive effect on
firm operational performance measured in cost, quality, delivery, and flexibility parameters.
Adherence to the environmentally responsible processes comes with its fair share of unexpected
benefits in terms of waste reduction and efficiency gains in operations (Corbett & Klassen, 2006).

On the other hand, when the customer's willingness to pay for sustainable alternatives is
analyzed, ambiguous results are obtained. The ambiguity is explained by Luchs, et al., (2010),
through their study on the impact of product sustainability on consumer preferences. In their
research, they have presented that, sustainable characteristics of a product do not always be
perceived as the best alternative. Especially when customers are focusing on the strength and
endurance parameters of a product and the sustainable alternative is obtained at the expense of
product’s strength parameter, customers tend to opt for a reliable product than a sustainable
alternative. In order to effectively utilize the benefits of sustainable approaches, it is essential for
the firm to revisit customer preferences in their product market. It is also important for the firm
to ensure the trade-off between additional costs incurred due to sustainability efforts and benefits
realized from the efforts. Firms need to make sure that investments in sustainable manufacturing
technologies have a certain degree of payoff in terms of improved efficiency and resource savings
and additional cost always lies inside the marginal benefits. Literature also shows that firms that
take a very proactive approach to sustainability integration often tend to over-invest in green
initiatives exceeding the optimal effort vs performance rate. The level of proactive sustainability
approach should be based on the costs of technology implemented as well as consumer
preferences for sustainability and the effort vs resulting performance rate. Mathematically, the
relationship between sustainability efforts and firm performance is a function of customers'
preferences and the cost of technology. Graphically, the relationship has an inverted U-shaped
curve with the tip of the curve as the threshold limit (Schrettle, et al., 2014). See fig. 4.3.

36
Figure 4.3. Sustainbility efforts vs Firm performance (Schrettle, et al., 2014)

37
5. DISCUSSIONS

This section presents a summary on the chosen area of research and highlights discussion points
for the formulated research questions from the analysis of collected literature.

The summary of the analyzed literature for the first research question “What are the gaps in
achieving sustainability integration into a supply chain network in manufacturing?” is that
globalization of supply chain operations by manufacturing industries is aimed at achieving
mutual benefit from the local economy through consumption of resources required to produce
final products or services simultaneously optimizing the logistic operations and providing work
opportunities and developing the surrounding society. Usually, the globalization approach is
implemented by firms from developed countries acting as focal points which manage vital
activities such as devising strategies, policy-making, and brand management. The branches in
lower economic countries perform the actual operations of converting raw materials into finished
products. This approach has helped firms to reach a vast area of customers which would be
impossible without opting for globalization. However, globalization has its fair share of
drawbacks, especially in terms of overall supply chain network management and governance. In
recent decades, many countries across the globe have realized the increasingly adverse effects
on the environment due to the irresponsible and unmonitored activities of manufacturing
industries. To prevent the adverse effects and instill environmental responsibility into
manufacturing firms, NGOs, local governments, and consumers have laid a set of regulations
that are applicable internationally and few tailor-made laws specific to local economies have
come into existence.

For the manufacturing firms to comply with these regulations, they had to transform their
operations into more sustainably responsible. The transformation is made possible by integrating
sustainability thinking into strategy making and policy decisions which resulted in adopting
evolved business practices such as SSCM, GSCM, zero-waste facilities, zero-emissions
warehouses, etc. For a successful transformation, it is vital for the firms to ensure effective and
efficient coordination of activities in the supply chain network and align them with the
sustainability objectives. Though there has been a considerable volume of research being
performed on the sustainability integration in manufacturing activities, there are still gaps in
practical implementation resulting in not being able to achieve the desired level. Research shows
that the gaps are caused due to lack of guidelines on how to identify, measure, pursue, and
practically implement the sustainability initiatives to make the integration possible. Moreover,
globalization has made it close to impossible for the focal company to exert the level of
governance required to ensure integration. Researchers have been working on quantizing these
governance gaps and pointed out that there are five types of gaps that are fuelling the
inefficiencies in governance. Assessment of these gaps in the manufacturing environment and
implementing effective strategies to fulfill these gaps is a vital step in realizing the integration of
sustainability in supply chain network.

The second research question “What are the innovative strategies to achieve sustainability in
supply chain networks pertaining to manufacturing industry?” summarizes as for successful
integration of sustainability into supply chain networks requires the adoption of certain
innovative strategies focused on transforming the traditional approaches into more sustainably
responsible. These innovative strategies are aimed at the firm’s products, processes, people, and
organizational structures. Though several innovative strategies are being researched and
recommended by academia, there are still gaps in practically implementing these strategies in a

38
cross-functional atmosphere of a global supply chain network due to varying capabilities,
competencies, and goals among the involving actors. This thesis focuses on analyzing the
inception and implementation of SOIS in three fronts and supports each front with strategies
already implemented and used in manufacturing industries. In operational optimization front, the
impact of digitization in logistics networks is analyzed with a focus on sustainable outcomes
from implementation. Research showed that logistic network has witnessed a geometrical
increase in the use of advanced technologies such as IoT, cloud connectivity, mobile
technologies, real-time package tracking, etc., transforming the underlying operations into more
resource-effective and flexible. Real-time control over the operations has given the firm’s
management to decrease or eliminate process wastes such as overconsumption of resources,
disposal of packaging material, repeated or wrong shipments due to mismatches in
communication, and landfill of by-products along the supply chain. The thesis also introduces
six characteristics and four enablers for the implementation of digitization with an aim to achieve
a sustainably responsible logistic ecosystem.

In the organizational transformation front, the thesis analyses the concept of the integrated
approach of GSCM and GHRM which focuses on incorporating the ideology of sustainability
into daily activities and transforming the management and employees of the manufacturing firm
towards being more sustainably responsible. Individually the concepts of GSCM and GHRM
have been used in manufacturing industry for a long time, but there is truly little application of
the integrated approach. The analysis suggests that an integrated approach can efficiently tackle
the sustainability challenge in the manufacturing industry, by allocating its employees with
sufficient resources, training, team building sessions, and capability enhancement focused on the
new advancements and regulations in sustainability. The integrated approach also highlights the
need to educate the firm’s customers in making decisions over sustainable alternatives. In the
system building front, the thesis analyses the Industry symbiosis concept which involves building
industrial ecosystems for achieving sustainability goals and reaping mutual benefits through inter
usage of bi-products and consolidation of resources for waste disposal. These relations are based
on mutual trust, a shared sustainability vision, and responsibility towards the environment.
Implementation of this approach has resulted in improved waste disposal methods and resulted
in circular economy creating a collaborative environment. However, this collaboration requires
efforts from the involving actors to iron out the rough edges in creating co-existing and
interdependent sustainability operations. Moreover, as this collaboration is only limited to the
sustainability front of the manufacturing firms, the level of information sharing, mutual trust,
pooling of resources, and volume of by-products generated play a vital role.

The third research question “How can the innovative strategies support the integration of
sustainable supply chain in manufacturing industry?” summarizes the effect of implementing
the sustainable innovative strategies on the manufacturing industry by monitoring the firm’s
performance. Integrating sustainability in manufacturing does not only involve implementing
innovative initiatives but also assessing the potential performance enhancements after
implementation. This helps firms in making effective decisions over the choice of the best-suited
initiative and its corresponding capital and resource requirements. The key resources in assessing
a sustainable initiative are the firm’s capability and competence in advanced sustainability
concepts as well as knowledge management of the current regulations. Maintaining a knowledge
base consisting of either data on initiatives implemented in the past or the information obtained
through exploration of current sustainable strategies or both is particularly important for the firms
to take a step towards sustainability. Firms need to continuously engage in more exploration and
exploitation activities in order to improve their knowledge base and implement new strategies
that meet changing market conditions. However, the analysis of literature has concluded that

39
implementing innovative strategies does not always result in a positive impact. There are few
parameters in firm performance such as customer willingness to pay, exponential increase in
profit margin, and return on investment on initiatives, have shown mixed results. The analysis
can be summarized as the sustainability efforts laid by a firm have had a positive effect on the
firm’s performance and kept on improving until a threshold. After the threshold, increased
sustainability efforts resulted in negative effects on firm’s performance. This is due to the fact
that rigorous efforts only make the supply chain operations very rigid and sustainably over-
responsible. In a dynamic market environment of a manufacturing sector will require the firm to
be more agile and flexible to adapt to the changing demand. This negative effect on firm’s
performance has the possibility of fueling the gaps that are already causing difficulties in
implementing sustainable strategies. By creating mistrust for sustainable goals and adherence to
implemented strategies and policies made by the manufacturing company.

Furthermore, the innovative sustainable strategies suggested and analyzed in the thesis have
direct and indirect effects on the governance gaps. Effective implementation of innovative
strategies has proven to mitigate the gaps. The strategies are analyzed in a way to understand the
potential effects of mitigating the gaps and are presented in the table.5.1.

40
 Table 5.1. Consolidated table interlinking the governance gaps and innovative sustainable initiatives.
Digitization of Logistics Integrated approach Industry Symbiosis
(GSCM and GHRM)
Digitization can bridge the Creating a sustainable A bi-product, or a waste
physical gaps between supply organizational culture through generated from one industry can
chain actors through establishing training, joint brainstorming and become raw material to another
a transparent, fast, and reliable planning sessions related to industry.
information flow. sustainability impact of the
Geographical Excessive digitization can hinder products, processes and Benefiting the organization with
gaps its sustainability benefits due to combining resources for bi- access to cheaper sourcing,
varying information sharing product reuse in logistics with avoiding disposal costs,
standards across different the stakeholders by practicing capitalizing on by-product.
economies which restrict the environmentally conscious
intended use of collected data purchasing strategy, choosing
sustainable reliable suppliers
Need for reliable, comprehensive, Integrating approach can This strategy requires mutual trust,
credible, and verified information mitigate by improving information sharing and shared
on sustainability impacts cooperation among departments, sustainability strategic visions and
processes from various links in efficient communication of collective decision making.
the chain. environmental goals and visions These requirements cannot be
Information in projects. achieved without having mutual
and Knowledge Creating information flow that sustainable goals, developing
gaps enhances traceability and Educating customers using processes, sharing cost
integration among supply chain environmental awareness investments and risks.
partners and effective decision seminars, competence building Industry symbioses can be difficult
making technologies that help sessions and capability to achieve without proper
with creating flexible and efficient enhancement activities knowledge management.
and green logistics networks
Communication enhanced by Competently trained staff in the Opting for an industry symbiosis
digitization increases the speed of field of sustainability will strategy can mitigate
information flow, traceability, increase the organizations communication gaps due to
and transparency. capabilities of conducting and geographical distances, language
supporting stakeholders in issues and trust.
Challenges such as language sustainable projects.
Communication
issues, trust, cost of However, trust is still a large
gaps implementation, varying expertise Communication gap still requirement in order to achieve
and cultural code of conduct requires proper information industry symbiosis and that can be
hinders the use and development management technologies where achieved if all the stakeholders
of this operational strategy stakeholders might not have the see mutual benefits in
capital to invest in such cooperation.
technologies
Digitization can enhance An integrated approach can It is vital for the stakeholders to
compliance among the support the alignment of adhere to the agreed terms in an
stakeholders in supply chain by standards, defined principles, industry symbiosis since the
supporting information systems in norms, regulations, and strategy is based on achieving
Compliance determining if a supplier fulfils sustainability guidelines. mutual benefits.
predetermined sustainable
and
standards norms and goals The compliance gap can hinder However, the potential scenario
implementation that manufacturing efforts of exists where a large scale
gaps However, it needs to be implementing an integrated companies that produce major
considered that all stakeholders approach across the entire number of by-products to pull out
are not prepared for the cost of supply chain in order to achieve of a longtime commitment of the
implementing and it requires a lot their sustainability goals. ecosystem, resulting in risking the
of trust among stakeholders. entire network
Increasing the transparency for all Gaps can be caused due to Gaps can be mitigated by
stakeholder and share information supplier’s lacking in achieving equal power
in order to create a good accessibility to information and distribution among the firms
knowledge base resulting in a flexibility in order to be on par involved in an industry symbiosis
more even power sharing sustainability standards set by network.
dynamic productive use of the the manufacturer
available sustainable initiatives. However, in reality the power
Power gaps However, in order to mitigate distribution in such ecosystem is
However, the standards set by this gap, it requires execution unequal, because smaller firms
manufacturing companies in power along with commitment source their by-products from
developed countries might not be from actors to be responsible and higher stakeholders which are
in line with developing countries improve the social and large scale companies
and small scale suppliers making environmental issues of the
it difficult to achieve the supply chain.
sustainability goals.

41
6. CONCLUSION and RECOMMENDATIONS

In conclusion, integrating sustainability into supply chain operations has proven to provide a
great competitive edge to the manufacturing companies in various fronts, along with improved
financial, and economic performance and brings in new market opportunities without
compromising on the adverse effects on the environment and society. However, there is still a
noticeable difference between research theory and actual industrial application. The difference
arises due to the fact there are gaps in resource investments, a lacking knowledge, and
governance mechanisms that need to be tackled specific to the gap. There are innovative
sustainable initiatives in practice and new ideas are rapidly coming up to ensure effective supply
chain operations and transform the manufacturing companies towards sustainably more
responsible. However, there is large scope for research that need to be carried out on integrating
sustainability into the supply chain not just in global companies but also in small and medium-
sized firms.

The research questions are formulated in an order where the first question, introduces the concept
of integrating sustainability into supply chain network, along with highlighting the existing gaps
which are hindering the practical integration. These gaps are individually researched and
analyzed to understand the root causes resulting in gaps. Analyzing the gaps has concluded that
implementing innovative and effective strategies specific to each gap will result in improved
governance, management, and control over the operations in a supply chain network and
transforming them into sustainably more responsible. Consequently, the second research
question is formulated to introduce the existing innovative strategies in manufacturing industries.
Under the RQ, innovative sustainable strategies are categorized into three sections and a specific
strategy is taken as an example to be analyzed. The analysis is performed in a way to assess the
possibility of closing the gaps mentioned in the first RQ. Analysis of three strategies: digitization
of logistics, Integrated approach of GSCM and GHRM, and Industry symbiosis have concluded
that effective implementation of these strategies in supply chain network can overcome the
communication, knowledge and information, compliance, and implementation gaps to a greater
extent and can provide a start to closing the power and geographical gaps. However, more
innovative strategies are to be analyzed in order to understand the individual effects of strategies
and quantize the results to provide a reference to future firms who are attempting to become
sustainably responsible.

Further, into the thesis, the third RQ is formulated in a way to understand and compare the
potential performance improvements in a manufacturing firm that would implement innovative
sustainable strategies. Firm performance is measured in various forms such as environmental
performance, financial performance, and economic performance. The analysis has highlighted
the need for effective knowledge management which involves the collection of information on
sustainability through exploration and exploitation approaches. For successful initiation,
implementation, and tracking of sustainability strategies it is vital to maintain an effective
knowledge base containing the data on past strategies incepted or implemented by the firm as
well as data on existing and future sustainable strategies developing in the manufacturing world.
Analyzing the collected data combined for three research questions highlights an important point
regarding the level of sustainability efforts put forth by firms and a resulting improvement in
firm performance. The analysis concluded that when a graph is plotted between sustainability
efforts and corresponding firm performance it turned out to be an inverted U shape which shows
that, with increasing efforts, the firm performance only increases until a certain threshold. After
the threshold, further efforts would only lead to negative effects resulting in reduced firm

42
performance. This concludes that firms need to ensure effective usage of efforts and should base
their sustainability decisions on an effective knowledge base and not squander resources trying
to become more sustainable than required.

In conclusion, the governance gaps presented in this thesis stifle the implementation of
sustainable strategies. In turn, these strategies can also mitigate some effects the gaps have on
governance. Firms need to also maintain a proper knowledge base to successfully implement
sustainable strategies to reap its benefits. This knowledge base needs to be updated regularly and
might result in the adoption of new strategies through exploration and exploitation. With a focus
on being updated with current market conditions and maintaining a desired level of sustainability
performance. However, firms need to be vary with taking a very proactive approach since it does
not always result in a positive impact and has the possibility of fueling the gaps, resulting in a
negative effect. Fig.6.1. summarizes the findings.

Figure 6.1. Relation between governance gaps, innovative strategies, and the post implementation effect

In brief, the research is directed toward educating researchers and industry practitioners on the
holistic perspective of how manufacturing industries should handle their transformation towards
becoming more sustainable and highlighting the potential obstacles along the journey. This
research also helps with providing suggestions on how and what kind of strategies need to be
adopted based on the range of their effect through analyzing the practically implemented
innovative strategies. All these combined together serve as a road map for the manufacturing
industries in achieving their sustainability goals. See figure 6.2.

43
 Figure 6.2. Road map towards sustainability in Manufacturing industries

This research can be further taken forward by focusing on quantizing the firm performance with
the implementation of sustainability strategies and devise an effective approach to understand
the threshold of sustainability efforts. Also, the analysis of sustainability concepts needs to be
extended into small and medium-size enterprises to ensure greater reach and integration of
sustainability.

44
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