Research notes

Aspects of sustainable supply chain

management (SSCM): conceptual framework
and empirical example
Göran Svensson
Oslo School of Management, Oslo, Norway

Abstract
Purpose – The objective of this paper is to describe and illustrate aspects of sustainable supply chain management (SSCM).
Design/methodology/approach – The terms of first-, second- and n-order supply chains are introduced. A first-order supply chain denotes that a
substantial part of it is based on the use of non-renewable and non-recycled resources, while the following n-order ones (e.g. second-order) are based on a
larger share of renewable and/or recycled resources. The conceptual discussion goes across industries, but the empirical example is limited to the clothing
industry.
Findings – One aspect addressed is that first-order supply chains of brand new clothing go beyond the traditional point of consumption. Another
aspect raised is that second- and n-order supply chains should be considered in business practices from the point of origin in the first-order supply
chains in order to enhance corporate efforts of SSCM.
Research limitations/implications – The dilemma with most of the current research and literature in the field of SCM is that they overlook the
connection between first-, second- and n-order supply chains. The author argues that it is not enough to simply match the supply and demand between
the points of consumption and origin in first-order supply chains in efforts of SSCM, but that an explicit extension of the boundaries towards second-
and n-order supply chains will be necessary in the future.
Practical implications – The scarce non-renewable resources that businesses are confronted with nowadays, and the increasing scarcity of these
resources in the future, will strengthen the need to search for renewable and recycled resources from other first-, second- and n-order supply chains in
order to address genuine aspects of SSCM.
Originality/value – The author contends that the aspects of SSCM described and illustrated in this paper make a contribution to theory, and assist in
expanding the boundaries of theory in SCM. The author also launches a quest for further conceptual descriptions and empirical illustrations to develop
theoretical frameworks of SSCM.

Keywords Supply chain management, Economic sustainability, Distribution channels and markets

Paper type Conceptual paper

Introduction consumption refers to consumers, customers or end-users in a

Supply chain management (SCM) has been growing in
importance since the early 1990s, although the approach, or
rather the concept, was introduced back in the early 1980s
(Oliver and Webber, 1982). The approach of SCM is derived
from the fact that there are dependencies between levels in
channels from the point of origin to the point of consumption
(Lambert et al., 1998; Håkansson and Snehota, 1995; Stern,
1969; Alderson, 1957, 1965; McCammon and Little, 1965;
Weld, 1916). Usually in SCM, the point of origin refers to
suppliers or manufacturers (e.g. Carter et al., 1995; Ellram and
Cooper, 1993; Novack and Simco, 1991), while the point of
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supply chain (e.g. Min and Mentzer, 2000; Lambert et al.,
1998; Jones and Riley, 1985). Bowersox and Closs (1996)
define the channel construct as the structure of inter-company
units and extra-company agents and dealers, wholesale and
retail, through which a commodity, product, or service is
marketed. Dependence refers to there being a link, a tie, or a
bond between one echelon in relation to another echelon or
echelons in channels (Lambert et al., 1998; Håkansson and
Snehota, 1995). Svensson (2002) divides the dependence
between levels in channels into three principal categories (i.e.
time-dependence, relational-dependence, and functional-
dependence) and three sub-categories (i.e. uni-directional/bi-
directional, direct/indirect and vertical/horizontal).
Concerns about the appropriateness of the current theoretical
and managerial boundaries of SCM may be raised. Arguments
to extend it have been proposed (e.g. Cooper et al., 1998;
Svensson, 2002). Levitt (1960) introduced the concept of
“marketing myopia” and discussed the danger of applying a
narrow view of the environment. Stock (2002) revisited the
concept of marketing myopia and discusses some lessons to be
learned for logistics that the potential of the discipline in SCM

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 Aspects of sustainable supply chain management
Göran Svensson
might not be fully realized. Confronting the risks and dangers of
a myopic view to SCM, and the benefits of applying a broader
approach to SCM, may make a fruitful contribution to achieve
sustainable SCM (SSCM) over time and across contexts. This
paper seeks to make a contribution to this end. The objective of
this paper is to describe and illustrate certain aspects of SSCM.
Supply chain management defined
SCM might be seen as a business philosophy that strives to
integrate the dependent activities, actors, and resources between
the different levels of the points of origin and consumption in
channels. This means that SCM comprises different kinds of
dependencies in, between and across companies in channels
from manufacturers/suppliers to customers/consumers. Mentzer
et al. (2001) argue that the definitions of SCM can be classified
into three categories, namely:
1 a management philosophy;
2 the implementation of a management philosophy; and
3 a set of management processes.
SCM used to be simple compared to what it is today (Levy
and Grewal, 2000). More recently, a broader approach of
SCM has been addressed in order to incorporate other
business functions. For example, Mentzer et al. (2001) define
SCM as a systemic, strategic coordination of the traditional
business functions and the tactics across these business
functions within a particular company and across businesses
within the supply chain, for the purposes of improving the
long-term performance of the individual companies and the
supply chain as a whole. With this definition, the focus of
SCM is still on the different levels and the business operations
within the channel from the point of origin to the point of
consumption. Explicit reference to other channels has rarely
been addressed in the academic literature. However, Svensson
(2002) argues that SCM is a business philosophy that
simultaneously should address the overall bi-directional
dependencies of activities, actors, and resources on an
operational, tactical, and strategic level, from the point of
origin to the point of consumption in and between channels.
Conceptual framework
As stated previously, SSCM requires a broadened approach of
SCM. It should emphasize economic, ecological and social
aspects of business practices and theory. Traditionally, there
are restricted point of origin and end boundaries in
descriptions of supply chains in literature. What tends to be
addressed are similarities and distinctions between supply
chains of brand new products or second-hand products, or
supply chains dedicated to recycling or waste of the same
products. Normally, they are interpreted as being or
belonging to different supply chains. The author contends
that this is an unfortunate interpretation that distorts a
genuine understanding of SSCM. Furthermore, it nurtures
myopic views in the literature. They may be views that govern
and are appropriate in current business practices, but not
necessarily in the future or from a theoretical standpoint.
The author believes that the recent UN report, Climate
Change 2007: The Physical Science Basis (IPCC WGI, 2007)
will sooner or later force global society (e.g. the United
Nations, the European Union, regional trade agreements and
governments) to impose sustainable practices across many
different areas (i.e. private, public and business sectors). It
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may be a matter of our survival on this planet. Currently,
there are a number of more or less isolated and to some extent
replicated views in the literature that strive to address aspects
of sustainable business practices and theory, such as:
.
corporate social responsibility (e.g. Dyllick and Hockerts,
2002);
.
sustainable supply network management (e.g. Young and
Kielkiewicz-Young, 2001);
.
supply chain environmental management (e.g. Lippman,
1999);
.
green purchasing strategies (e.g. Min and Galle, 1997);
.
environmental purchasing (e.g. Zsidisin and Siferd, 2001);
.
green marketing (e.g. Crane, 2000);
.
environmental marketing (e.g. Sheth and Parvatiyar, 1995);
.
environmental marketing management (e.g. Peattie, 1995)
and environmental product differentiation (e.g. Reinhardt,
1999);
.
reverse logistics (Zikmund and Stanton, 1971);
.
sustainability labelling schemes (e.g. De Boer, 2003);
.
environmental management (Hoffman, 2000); and
.
life-cycle assessment (Welford, 1999), and ISO 14000-
certifications (International Organisation for
Standardisation, 2007).
Other generic aspects connected to sustainable business
practices and theories are:
.
product returns;
.
source reduction;
.
recycling;
.
material substitution;
.
reuse of materials;
.
waste disposal;
.
refurbishing;
.
repair; and
.
re-manufacturing (Stock, 1998).
The common denominator is that they all require an extended
approach beyond the restricted point of origin and end
boundaries in descriptions of supply chains in literature.
Therefore, this paper relates to these different aspects of
sustainability and provides a conceptual framework of SSCM
that may be a fundament to glue them together. At the end of
the day, it aspires to contribute to the stakeholder value in a
broad sense (Freeman, 1984; Fineman and Clarke, 1996;
Banerjee et al., 2003; Waddock et al., 2002). Stakeholder value
is a broad concept and implies that a company has
responsibilities and commitments to many different
stakeholders, not just investors or owners of the company, but
also employees, customers, suppliers, societies and the
environment (Mathur and Kenyon, 1997). So, this paper may
make a contribution to the interfaces between purchasing,
logistics, physical distribution, marketing and environmental
theories. For this purpose, the approach of traditional SCM is
broadened to highlight aspects of SSCM. Principally, it is
limited to vertical aspects, while the horizontal aspects should
not be ignored from a business point of view.
There is an inherent interconnection in and between supply
chains derived from a set of generic components and interfaces.
In the first place, there are components such as actors, activities
and resources. In the second place, there are interfaces such as
interaction, co-ordination, co-operation and competition.
SSCM involves the inter-connection between components
and interfaces across supply chains. One way of approaching
the complexity of SSCM is by dividing it into consecutive
 Aspects of sustainable supply chain management
Göran Svensson
sections, where traditional definitions of supply chains will
reflect one section and the other are consecutive ones.
A few generic terms are introduced to address SSCM based
upon the degree of renewable/non-renewable and recycled/non-
recycled resources used. For example, one section is a first-
order supply chain that denotes that a substantial part of it is
based upon the use of non-renewable and non-recycled
resources, while the following section of n-order (e.g. second-
order) is based upon a larger share of renewable and/or recycled
resources (Figure 1). In extension, there will be more and more
second-order supply chains (even third- and fourth-order
supply chains and so forth) in the future as scarce resources will
force actors to manage sustainable activities.
SCM has evolved towards a strong vertical emphasis on the
different levels within supply chains. The horizontal levels in
other supply chains are generally ignored in SCM.
Furthermore, SCM tends to focus on the connection of
levels from the point of origin to the point of consumption
(see Figure 1). This means that the boundaries and extensions
of channel levels in SCM resemble the classic and traditional
structure of levels in distribution/marketing channels (e.g.
Alderson, 1957, 1965; Weld, 1916). They could be labelled as
first-order supply chains.
The business activities prior to the point of origin (e.g. actors
and activities of renewable, non-renewable, and recycled
resources) and those business activities following the point of
consumption (e.g. actors and activities of renewable, non-
renewable and recycling resources) are rarely acknowledged.
These prior and posterior business activities may be labelled as
part of second-order supply chains. Consequently, the extension
that the second-order supply chains provide to the first-order
ones is not usually highlighted or acknowledged in SCM; they
are addressed as separate supply chains. Furthermore, the points
of origin and consumption are not usually seen as repetitive.
The second-order supply chains are often left in the dark, not to
mention the potential third- and fourth-order ones. In fact, not
much is known about them from the academic literature.
In an effort to explore SSCM, greater consideration needs to
be given to the connection between first-, second- and n-order
supply chains and the components and interfaces thereof.
Accordingly, the supply chain should be seen as not ending at
the point of consumption, but at another (or a new) point of
origin, as shown in the empirical illustration in the next
paragraph. So what? Well, move away from views of single
supply chains towards consecutive supply chains – preferably
multiple ones in a broad sense. One might say that they may all
be connected to each other – i.e. the butterfly effect – though it
is not directly, but indirectly. All supply chains are connected to
each other? It is a far-fetched thought that goes beyond the scope
of this paper, which is only aiming at connecting single supply
chains to be consecutive supply chains in order to be within
feasible reach of consideration to practitioners and researchers.
Figure 1 First- and n-order supply chains
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Empirical example
In order to illustrate the importance of SSCM, the international
clothing industry and consumer market is taken as an example.
The points of origin in the clothing industry – in a broad
sense – are the designers and marketing departments in fashion
companies, where characteristics and specifications of materials,
style, target segments, market positioning etc. are outlined and
determined. This is illustrated as the point of origin (A1) in
Figure 2. Once it is decided how and what the characteristics
and specifications of the clothes are, it is next decided where to
manufacture them (i.e. B1). Once placed in production, the
manufactured clothes are then distributed to a number of
continental or regional wholesalers that are either independent
or retail-owned (i.e. C1). Then the merchandise is once again
distributed in smaller quantities to retailers in the marketplace
(i.e. D1). At the retail level, the consumers purchase and use the
procured clothes (i.e. E1). This is referred to as the point of
consumption. The different interfaces between the point of
origin and the point of consumption are usually interconnected
by transport intermediaries, such as 3PL companies.
Currently, most research in the field of SCM is dedicated to
the components and the interfaces between the points of origin
and consumption in first-order supply chains. In addition, these
research efforts stop at the so-called point of consumption
rather than being extended to the second-order supply chains.
However, consumer behavior and business practices in the
marketplace continue beyond this point. For example, there are
second-order supply chains that are dedicated to satisfying the
second-hand market and/or disposal of clothing, which are
usually not addressed in the literature.
The second-hand clothes market in Sweden has expanded
strongly in the last decade. Nowadays, three-quarters of
Swedish consumers give away cast-off clothing to charity
organizations (A2 in Figure 2), such as the Salvation Army,
Red Cross, or other organizations (Ohlsson and Svensson,
2003). It is a form of consumer behaviour that cuts right
across different social classes, professions, residential areas
and income levels in society (Hasselqvist, 2006). Some argue
that it is a form of behaviour that follows ongoing trends in
society, and becomes a way of showing resistance to the
“throw-away mentality” of current consumption behaviour
(Ringskog Ferrada-Noli, 2006). The charity organizations
could be seen as new points of origin in second-order supply
chains. There are traditional second-hand shops for charity
purposes in Sweden, but there are also shops that focus on
specific fashions and brands, as well as shops that
complement their assortment with second-hand clothes
(Hermele, 2004). The large majority of clothes thus given
away are mostly transported to other continents, such as
Africa, Asia and South America (Hall and Persson, 2006).
Eighty per cent of the population in Kenya buys second-
hand clothes. This could be due to monetary reasons, but also
Figure 2 Illustration of first-, second- and n-order supply chains
 Aspects of sustainable supply chain management
Göran Svensson
because second-hand clothes have a good reputation in terms
of quality, style and uniqueness. So, it is not only a buying
behaviour of the poorest consumers, even though they
dominate the marketplace, but also of less poor consumers,
who also perceive the second-hand market to be attractive.
Retailers and merchants offering second-hand clothes are
visible in many places in cities and the countryside. It is a
fairly organized marketplace following the traditional channels
of distribution. For example, there are three markets in
Nairobi that offer second-hand clothes, namely Gikomba,
Adams and Sunbeam. They are different in terms of price,
assortment and target customers.
Gikomba market is the largest, cheapest and the least refined
market, where bales of clothes are offered mainly to wholesalers
(B2 in Figure 2). It is at this market, for example, that second-
hand clothes from Sweden arrive. The next level is a somewhat
more structured and refined market called Adams market (C2).
This is a market where the wholesalers/retailers purchase their
clothes from Gikomba, but they now limit their assortment to
style and special kinds of clothes, such as focusing on jeans,
dresses, shirts, blouses, gender or children for Nairobi
consumers (D2). Another market is Sunbeam, where each
retailer their own shop outlet. The clothes at this market are
exhibited as in normal fashion shops. Some of them mix the
second-hand assortment with brand new clothes. In fact, there
are Chinese manufacturers that produce brand new clothes that
look like second-hand clothes, and are appealingly priced.
Another level is merchants buying clothes to be transported to
other cities where the clothes will again change owners to
merchants travelling to the countryside and offering them to
other consumers (E2).
Based upon the example provided, the author contends that
SSCM should at least comprise first- and second-order supply
chains. In fact, business practices and research may
experience n-order supply chains (e.g. third- and fourth-
order) in the future, as non-renewable resources become more
and more scarce. For example, what may follow after the
second-order supply chain of clothes is a third-order supply
chain (An, Bn, Cn, . . .) which may be one dedicated to waste
disposal. The clothes may also enter the second-hand market
again – that is, recycled second-hand products. Forthcoming
business practices and research may also experience more and
more first-order supply chains being based upon an increasing
share of renewable and recycled resources. Then the question
arises – where do these resources come from? And n-order
supply chains will gain attention.
Concluding comments
One aspect addressed in the previous conceptual framework
and empirical example of SSCM is that the first-order supply
chain of brand new clothing goes beyond the traditional point
of consumption. This point of consumption connects
thereafter into the point of origin in the second-order
supply chain, namely the second-hand clothing market.
Another aspect raised is that the second-order supply chains
should really be considered in business practices from the
point of origin in the first-order supply chains. For example,
this is to some extent considered in the automotive industry
when it comes to the increasing number of materials and
components used in vehicles that go into second-order supply
chains after the vehicles are scrapped. These could be second-
hand spares and the recycling of plastics, rubbers, metals and
so forth. In fact, more and more products in the marketplace
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are not made completely out of non-renewable resources any
more, but consist of renewable and recycled resources, even
though the products themselves are considered brand new.
The scarce natural resources that business practices are
confronted with nowadays, and the forthcoming scarcity, will
strengthen the need to search for the residual value from other
first- and second-order supply chains in order to address
SSCM. In other words, the future scarcity of natural
resources will force business practices and research to
acknowledge the circumstances and the conditions derived
from non-first-order supply chains based upon renewable
and/or recycled resources. The price of non-renewable
resources will increase as their scarcity increases, and will
place renewable and recycled resources progressively on the
business agenda, which may also increase interest in waste
management to new levels before it is disposed of.
The dilemma with most of the current research and literature
in the field of SCM is that there is not sufficient emphasis and
connection described between first-, second- and n-order
supply chains. They are interpreted as separate supply chains.
The authors argue that it is crucial that this is brought up in
discussions on SSCM. Consequently, it is not enough to simply
match the supply and demand between the points of
consumption and origin in first-order supply chains, but that
an explicit extension of the boundaries of SCM towards second-
order supply chains is necessary. Accordingly, it is not
sustainable to just optimize the first-order supply chain, but it
should be synchronized with the at least second-order ones (and
by extension n-order ones, etc.). Best business practices tend to
be more and more aware and skilful in this respect. The authors
contend that the aspects of SSCM described and illustrated in
this paper make a contribution to theory, and that the
conceptual framework assists in expanding the boundaries of
theory in SCM. The author launches a quest for further
conceptual descriptions and empirical illustrations to develop
the additional aspects of SSCM.
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Corresponding author
Göran Svensson can be contacted at: goran.svensson@
set.hh.se