Transforming supply chains to create sustainable value for all stakeholders

Promoting sustainability in business operations requires that products, processes as well as the entire supply chain (the system) is designed and operated taking account of not only economic benefits but also environmental and societal implications. Creating value along these three dimensions-that is sustainable value-to all stakeholders is not easy because it requires companies to deliver value to shareholders (one group among the many stakeholders) without transferring value from other stakeholders. From a supply chain perspective, economic value-added has long been used as a measure to evaluate supply chain performance. However, to generate sustainable value to all stakeholders it becomes necessary to also address environmental and societal impacts/benefits as those are two areas through which value is gained or lost for other stakeholders. This chapter presents the concept of sustainable value creation and why the scope of conventional supply chain management processes must be broadened to generate sustainable value, supported by a discussion of successful/disastrous case examples.