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pollution. These businesses have lack of awareness that how their activities impact on the life
of people. Nowadays, every business has to align with the sustainable approach and fulfil the
requirements of government in their operations to minimise the waste production and
increase CSR activities. Where as 80% of business trade comes through global supply chain
which has strong integration of procurement. Evolution of procurement is highly linked with
sustainability but there are many challenges that business faces to implement successful
strategies of sustainability in their operations (google,2022). High cost is one of the barrier
that poses many barriers in sustainability and non-compliance of rules by the overseas
suppliers is another key issue that business face. Developing countries have flexible supply
chain system that let suppliers free to use resources without considering triple bottom
approach.whereas, procurement helps business to choose among the best suppliers who keep
consider the triple bottom approach and integrate green approach in the business
(Knudsen,2003).
Role of sustainability
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transport. Ship and air routes have become very uncertain due to risk of damage, recent
incident in the Suez Canal route, one of the busiest trade routesin the world, was halted by the
activity of Japan ship which affected all other ships to unload their supplies. This incident
costed billions to the business itself and other firms were unable to resume their production,
more specifically, car manufacturingwas affected due to pending supplies hanged in the
ships. Uncertainty in logistics generates more business cost and businesses increase cost of
their products to increase profit margin a bit. Management of products become difficult and
storage cost also adds more challenges in the supply chain(Roy et al.,2018)
Political conflicts
Major challenges also come from political issues, government increase tariff rate and impose
additional fees that increase pressure on global supply chain. Companies’ refuse to supply
raw material to their neighbor countries due to political clashes. This additional cost increase
delays in the process of transportation and creates long pauses that breaks supply chain and
production becomes more delayed. Political conflicts impacton the trade system of businesses
and their target of optimum production is not achieved (Roy et al.,2018)
Innovative disruption
Nowadays, continuous change in technology requires rapid adaption of new trends in the
product development. Prototyping in the products and trial testing requires new supplies that
also increase the business pre-commencement cost. Fast implementation
of technology creates uncertainties in the procurement process. Sudden need of new
technology such as expensive software tools and hardware’s demand more money and staff.
Therefore, with the changing pace in the technology business firms are facing many
challenges in their supply chain.
Inventory management
Above all, inventory management is one of the difficult tasks in the supply chain that
business faces, there is abundance of raw material that business purchases in advance to meet
higher demand in the market. But the risk associated with the inventory management requires
skillful staff. Theft, fire and higher storage cost has increased more risk to manage the
inventory. Demand for consumers is not predicted in advance and business faces sudden need
of new inventory in their operations.
Global hike in prices( Tassabehji and Moorhouse, 2008).
Changing cost structure of supply chain increases prices of raw material that makes the
production and manufacturing process more expensive and business charge premium cost to
their products to generate revenue and avoid loses. Ultimately, burden falls on the consumers
who bear the brunt of huge cost and are disappointed by the decisions of businesses. Prices
also decrease the overall global demand and increase the supply that create in-balance in the
supply chain.
Higher labor cost
Higher labor cost is also another challenge that manufacturesface in their supply chain.
Increasing inventory requires more workers to offload and load the heavy machinery
equipment. More workers are needed for the warehouse to take care of inventory from theft
and uncertain situations that may lead to huge cost and risks (Tassabehji and Moorhouse,
2008).
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Challenges and Issues of sustainability
There are many issues of implementing the green management in the business,
different cultures have different business framework, come countries follow more green
approach of utilizing the natural resources that does not harm the environment while other
countries tradeoff triple bottom approach and do business operations at the cost of society and
environment as a whole.
Another challenge is heavy-industry that faces issues of sustainability because it affects
safety issue of humans and create pollution in the society. Heavy machinery causeschemical
radiation and creates hazardous situation for the workforce and environment both.
Therefore, sustainability is difficult to achieve by the industries. Complex supply chain of
heavy industries is difficult to manage by the business. According to research, around 80% of
the green gas emission comes from the achieve supply chain of manufacturing and heavy
industries that create drastic situation in the environment. One of the major hurdles in
adapting the sustainable approach is cost barrier, huge cost creates barrier to save some
money and go green in the business operations. In short tern, there is huge cost that will be
incurred when business decides to adapt sustainability.
Complex supply chain of smartphone industries brings more hurdles in the way of
sustainable approach. These companies have myriad of raw material for a single product that
requires different mix of material from different places. AT every stage, company requires to
monitor the operation of this complex process and requires more efforts and time.
Government compliance put huge pressure on the brands to adapt sustainability in their
products. This creates challenges for overseas suppliers who supply from developing
countries and have very little value for the compliance and regulation of sustainable
approach. In this way, there is clash of responsibilities between suppliers and manufacturers,
former does not comply with the sustainable approach due to lack of government regulations
and weak structure leave them free to break triple bottom approach.
Selection of suppliers in global outsourcing
In global sourcing, selection of suppliers is not only important for the successful business
operations but it has strong link with the customer expectations in the competitive
market. There are important dimensions of suppliers selection in the global outsourcing, from
providing quality rawmaterial to rapid delivery of services, from fair prices to the
commitment with the business, all these dimensions make the selection of suppliers more
easy and smooth. Suppliers build relationship between buyers and business itself. Other
factors include time, lead, product development, capabilities of suppliers to choose right
material, and flexibility in the process. There is huge competition and every business want to
choose the suppliers that can match their production (Dos Santoset Al.,2022).
and manufacuting cpaabilities. Following stratetgies are used to select the right supplier in the
global sourcing.
Identify the current suppliers and compare their performance with the past suppliers. Use of
scorecard is one the method to select the best suppliers and rank them according to price,
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quality and delivery factors. Final step is to negotiate with the top suppliers business
choose, it will help building strong link with the suppliers and choose the suppliers that are
better and competitive than your rival firms are using. In the end, creating contract with the
suppliers is the commitment that suppliers seek
Selection of suppliers is also a crucial part of sustainability in the procurement. Suppliers
should be selected on the basis of cost leadership, low cost from suppliers is required for
the raw material that can increase profit margin. Suppliers should be based on extensive
network, reliance on single supplier will not optimize the process and delays will take place
in the procurement process. Suppliers should deliver the raw materialon market competitive
prices and delivery should be rapid. Enormous financial resources are invested on suppliers
so the evaluation of how suppliers are performing to accomplish business goals is
necessary. One of the major objectives of selecting the suppliers is to build a strong
relationship between the buyers and suppliers and reducing the risk of not meeting the
demand of former.
Choosing suppliers underlines different factors, some of them are, price,
quality, delivery and rapid response of suppliers. They should have knowledge of changing
market trends for the commodities and their raw material. Suppliers should also know the
changing demand of buyers and their preferences. They should be tech-oriented and
innovation should be placed before anything else when comes to business operations.
Comparing the potential suppliers is one of the key advancesthat will lead business to choose
the best suppliers. Like for some suppliers, their location may be near to business but their
quality of products and services will be poor. While other suppliers may have good quality
and far location. The right decision will be based on the strategic approach (Pereira et
Al.,2014).
In nut shell, business faces many challenges to use sustainable approach and their cost is very
high. To overcome these challenges, business has to incorporate cost leadership approach and
use the right suppliers that can provide them risk free and pollution free material. However,
business may increase their profit margins too by keeping care of cost and triple bottom
approach.
References
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Fayezi, S., Zomorrodi, M., & Bals, L. (2018). Procurement
sustainability tensions: an integrative
perspective. International Journal of Physical Distribution
& Logistics Management.
Roy, V., Charan, P., Schoenherr, T., & Sahay, B. S. (2018). Ensuring supplier participation
toward addressing sustainability-oriented objectives of the mid-day meal supply chain:
Insights from The Akshaya Patra Foundation. The International Journal of Logistics
Management.
Dos Santos, E. B., da Costa Maynard, D., Zandonadi, R. P., Raposo, A., & Botelho, R. B. A.
(2022). Sustainability Recommendations and Practices in School Feeding: A Systematic
Review. Foods, 11(2), 176.
Tassabehji, R., & Moorhouse, A. (2008). The changing role of procurement: Developing
professional effectiveness. Journal of purchasing and supply management, 14(1), 55-68.
Pereira, C. R., Christopher, M., & Da Silva, A. L. (2014). Achieving supply chain resilience:
the role of procurement. Supply Chain Management: an international journal.
Google.com.(2022)https://www.google.com/amp/s/amp.theguardian.com/business/
2021/dec/18/global-supply-chain-crisis-could-last-another-two-years-warn-experts.
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