Hitt et al., 2001; Collins and Clark, 2003). Sustainable management takes the concepts from sustainability and synthesizes them with the concepts of management. Regardless of the pervasiveness of sustainability, a deeper understanding of sustainable operations management is still needed. Based on Pagell and Wu’s (2009) findings that most exemplars in sustainable supply chain management are just beginning to address creating true closed loop systems (in general not just for returns of products) we expect this research area to continue to grow and to become better linked to the rest of the sustainable supply chain management literature. The key difference between traceability and transparency is that with transparency the buying firm is demanding to know the profitability of every supplier in the chain, with the explicit goal of ensuring that chain members at origins... made enough of a profit to do more than just subsist.”. Sustainability encourages businesses to frame decisions in terms of environmental, social, and human impact for the long-term, rather than on … 2004). Leaders in sustainable supply chain management discuss environmental and social issues as part of their daily conversation surrounding the management of the business, as opposed to treating these issues as something to be discussed occasionally or in isolation. Behavioral operations management. Continuously improving a production system via the elimination of waste is a fundamental component of well run operations. This commitment must be translated into training employees to pursue sustainability goals (Starik and Rands, 1995), and then creating incentives for employees to use the training (Daily and Huang, 2001; Pagell and Wu, 2009). Nau Is Then. This page has been accessed 25,314 times. Sustainability is part of the daily conversation. Creating sustainable chains requires innovation in numerous areas, including rethinking the supply chain itself. Teuscher, Gruniner and Ferdinand, 2005). Traceability and transparency are often linked to supplier certification, but can also play a role in supplier development and supplier collaboration. Exemplars in sustainable supply chain management have to redefine what the entire supply chains does (Pagell and Wu, 2009) often via a move to a more service oriented strategy (Sharma and Henriques, 2005). ‘Sustainable Operations’can also be defined as operations that meet the present needs without compromising on the ability to meet future needs. Operations management is the administration of business practices aimed at ensuring maximum efficiency within a business, which in turn helps to improve profitability. The content on MBA Skool has been created for educational & academic purpose only. In the sustainable supply chain management literature this can be evidenced in the discussions of supplier continuity (Pagell and Wu, 2009; Pagell, Wu and Wasserman, 2009) which is an explicit concern for the well-being of suppliers and the communities where suppliers operate. This article has been researched & authored by the Business Concepts Team. reduce or eliminate environmental pollution. Sustainable Operations Management perspective endure. Sustainable supply chain management is a subset of sustainable development focused on the development and management of the supply chain. Pagell and Wu (2009) identify two types of information sharing that are directly linked to sustainable supply chain management; traceability and transparency. What is the relationship between economic performance and environmental performance – or does it pay to be green? Most supply chains are not sustainable, therefore creating a chain that is sustainable, or at least more sustainable than the industry norm requires at a minimum changes in product and process design. The social component of sustainable operations has generally been under-studied (e.g. In the realm of sustainable supply chain management, certification is used to assess the risk of suppliers using banned or dangerous inputs, violating environmental or labour laws, not following a code of ethical conduct and so on. ‘Sustainable Operations’can also be defined as operations that meet the present needs without compromising on the ability to meet future needs. Making these collaborations successful will require incentives to reduce the suppliers’ risk from engaging in what will be seen as new or novel activities (Goodman, 2000; Pagell, Wu and Wasserman, 2009). Kleindorfer, et al., 2005). Sustainable operations management: recent trends and future directions. Certification is a tool that has traditionally been used to assess suppliers to reduce the risk of supplier non-conformance in areas such as quality and delivery. With the notable exceptions of (Starik and Rands, 1995; McDonough and Braugart, 2000) there is little theoretical research that helps link creating closed loops to the larger notion of creating sustainable supply chains. What is Sustainable Operations? We wrote this article at … And there are now numerous case studies of leading organizations in the quest to become sustainable (e.g. Theoretical discussions of sustainability tend to cover all three elements of the triple bottom line. 2005). These businesses create economic value and contribute to healthy ecosystems and strong communities. Sustainability is then well developed theoretically ,but robust and generalizable simultaneous examinations of all three elements of the triple-bottom-line are generally absent. Hence it is no surprise that supplier development is also a key sourcing practice for sustainable supply chain management (Wu, Pagell and Wasserman, 2009). and Rynes, S.L. Quizzes test your expertise in business and Skill tests evaluate your management traits. Pagell and Wu (2009) propose that the following four activities are fundamental for creating and maintaining commitment. 2008) posits that protecting and enhancing employee well-being through improved health and safety will improve the operational performance, suggesting that at least some efforts at improving the social performance of the supply chain will have positive benefits for the chains economic performance. In addition to numerous models of reverse flows, the literature is clear that closed loop supply chains will require changes in product design (Krikke, Blanc and van de Velde, 2004) as well as relationships with other members of the chain (Pagell, Wu and Murthy 2007). Retrieved from: This page was last modified on 21 October 2011, at 04:18. This linkage is explicated in the stream of research on [total quality environmental management] (TQEM). But this data gathering and assessment often occurs via supplier certification, which is clearly an existing practice. The economic and non-economic elements of sustainability need to be aligned. While we would not expect there to be tests of the relationship between just environmental and social performance in the business literature, it is still disappointing that the only test we are aware that examines all thee elements of the triple bottom line, albeit in a limited fashion, is Pagell and Gobeli (2009). Hoffman, Gillespie, Moore, Wade-Benzoni, Thompson and Bazerman, 1999, Kleindorfer, Singhal and Van Wassenhove, 2005, Handfield, Melnyk, Calantone and Curkovic, 2001, Curkovic, Melnyk, Handfield and Calantone, 2000, http://www.scholarpedia.org/w/index.php?title=Sustainable_Operations&oldid=91840, Mark Pagell, Stephen A. Dobson and Iuri Gavronski, Creative Commons Attribution-NonCommercial-ShareAlike 3.0 Unported License. Still these results are intriguing because they suggest that high performance on all three dimensions of the triple bottom line is possible, which is another way of saying that organizations can truly be sustainable. Increasingly, organisations are interested in managing corporate social responsibility (CSR) and sustainability as part of their operations management (OM). The initial intent of gathering this information, especially traceability is often risk reduction. Sustainability must be integrated into the heart of what organizations do. Pagell and Gobleli (2009) find that social performance and environmental performance interact significantly with operational performance (see figure one). What In order to be sustainable, portfolios, programs, and projects should adhere to the following six principles: 1. What is the relationship between economic performance and social performance? They define traceability as “an internal practice of sharing information among chain members about materials and methods (toxins, use of child labor, type of solvents used and so on) to optimize noneconomic chain performance and minimize risks.” Transparency is a related activity where buyers demand “information on the flow of money through their entire chain. The second reason for treating closed loops separately is that rather than being viewed as part of a larger research stream in sustainability, this research is often treated as its own unique literature stream that deals mainly with technical issues (Pagell and Wu, 2009). Environmental performance is operationalized as emissions from the focal plant. The aim is to create supply chains that perform well economically, socially, as well as environmentally. Supplier development is also a best practice in traditional supply chain management, and one well suited to helping suppliers in environments where expectations are changing. The final way that organizations are re-conceptualizing their supply chains is based on who is in the chain. First, this is an area that has received a great deal of research interest both from an empirical and analytical perspective (e.g. This is a conscious choice based on the following: There is a developed body of literature that theorizes as to why sustainability is important (e.g. Dobose, 2000; Farrow, 2000; Goodman, 2000; Maslennikova, 2000). This trending research area studies the impact of human behavior, especially non-rational decision-making, on the discipline. And while direct evidence does not exist at the operational / supply chain level of analysis, the literature (Brown et al.2000, Das et al. (2000). and Prussia, G.E. Sustainability is generally measured using a triple-bottom-line conceptualization of performance that includes social and natural dimensions along with the traditional bottom line of profits (Elkington 1999; Kleindorfer et al. This question is difficult to answer precisely for two reasons. 2. Collaboration with other members of the supply chain, especially suppliers, is a fundamental traditional best practice, that is also a tool for creating more sustainable supply chains (Carter and Carter, 1998; Zhu and Sarkis, 2004). Certification is one of the few areas where social issues such as the use of sweat shop labour, are addressed explicitly in the literature (e.g. Therefore, we examine what we do know about the interrelationships between the elements of the triple-bottom-line. 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