Industrial Issues and Research Objectives

Every company may be located at the junction of several Supply Chains (SCs) to meet the requirements of many different end customers. To achieve a sustainable competitive advantage

Figure 13 – Network Engineering: Methodology

stakeholders as well as its performance in terms of integrating its decision processes and its communication and information systems. The performance of a company is therefore highly dependent of its capacity to improve its internal processes (Lehmacher, 2013; Ravizza, 2012).

Furthermore, customers’ growing awareness of green and sustainable matters and new national and international regulations force enterprises to rethink their whole system (Wittenbrink, 2015).

Nowadays, the green concepts as well as the Corporate Social Responsibility (CSR) are ubiquitous. This may be effectively observed in daily businesses, where sustainable development became a major concern in the developed countries. Those new issues resulted in stricter regulations which mostly concern the impact of a product’s manufacturing process, its use, and end of life handling (Houe & Grabot, 2009). Formerly, a company’s ambition of improving its industrial competitiveness was mainly focused on minimising costs and on ensuring a certain service quality required by the customers (Raith, 2013). Today, besides the economical dimension, two new aspects need to be taken into account; i.e.: the ecological and the societal matters (Lehmacher, 2013). A company needs therefore to include the evaluation and the improvement of its economical, its ecological, and its societal issues into its performance evaluation models.

Actually, most of Kuehne + Nagel’s customers require detailed information concerning their produced Greenhouse Gas (GHG) emissions, as they want to improve their SCs in a way that causes less impact on the environment. It is striking that most customers are not aware of the complexity of such calculations. The emissions produced during the transportation of goods do not only depend on the transport mode, but also on the distance covered. The latter may be calculated either as a beeline, or in a more realistic manner via several distance calculation tools. For the details of this calculation, we refer to the PhD Candidate’s master thesis (Winter, 2012).

Many companies have only low visibility concerning the consequences of their ecological or societal performances, in contrast to their economical demeanours. The evaluation of added values, or the consequences of a more sustainable way of acting, is a highly sensitive issue due to the fact that enterprises need to newly develop their performance measurement systems. In a business point of view, the CO2 calculation seems being the most tangible part related to the whole sustainability concept. The NSCE found out that most customers are interested in improving their SCs in the sense of sustainability, but they only ask for CO2 calculations because this seems being the most tangible part of the whole concept. In addition, most of them have no idea of how these kind of calculations could be executed. In addition, they are unaware of the feasibility of evaluating a SC’s degree of sustainability, as they cannot imagine what the sustainability approach entails more than CO2

emissions. Today’s approaches are mostly based on reverse logistics or on the green purposes while the sustainability matters are much more complex (Nikolaidis, 2013; Schmid & Spengler, 2009). In most business peoples’ point of view, the evaluation of the degree of sustainability is only possible in theory since it is considered being too complex to be implemented on real cases. Some Kuehne + Nagel internal models consider the evaluation of the economic sphere, while others incorporate the evaluation of the company as a whole. This, however, cannot help the customer in evaluating his specific SC. Consequently the first research question of this work is:

 Question [1]: How to evaluate the overall sustainability performance of a Supply Chain?

Here, the overall performance is to be understood as the interaction of the sustainability concept’s inherent pillars as defined by Elkington (1997). The immense number of authors interested in this subject matter has defined sustainability in many different ways. It is of major importance to have a common understanding of this topic. Therefore, the sub-question arising is:

 Question [1.1]: How do we define sustainability?

The evaluation model and its inherent method need to be elaborated in a general point of view. The considered model needs hence to be relevant for every SC, regardless of the area it operates. In addition, since the SC is never executed by only one stakeholder the different indicators used within this model need to be both, inter- and intra-organisational, and the evaluation methods need to be conclusive with the specifications of every SC in any domain whatsoever. Accordingly, the further resulting sub-question is:

 Question [1.2.]: How to characterise a Sustainable Supply Chain (SuSC)?

When common understanding of a SuSC’s characteristics is guaranteed, it is important to know:

 Question [1.3.]: Why do companies need to evaluate their Supply Chains (SC)?

 Question [1.4.]: How to evaluate a SC?

The empirical model needs calculate the degree of sustainability by taking into account the three matters of sustainability (Elkington, 1997) as shown in Figure 14, by calculating:

𝑆𝑢𝑠𝑡𝑎𝑖𝑛𝑎𝑏𝑖𝑙𝑖𝑡𝑦 = 𝑓(𝐸𝑐𝑜𝑛𝑜𝑚𝑖𝑐; 𝐸𝑐𝑜𝑙𝑜𝑔𝑖𝑐; 𝑆𝑜𝑐𝑖𝑒𝑡𝑎𝑙)

Figure 14 – Sustainability as defined by Elkington (1997)

The final result, being the global degree of sustainability of a certain SC, needs to align with the three sustainability performances.

Since most companies act according to the continuous improvement concept, the evaluation

re-design topic presents many challenges and interesting research questions, which will partially be discussed within this work. However, a risk assessment analysis needs to be performed ex-post.

The second question arising and to be answered is therefore:

 Question [2]: What is meant by ‘redesigning’ a SC?

To answer this question, we first need to agree on the following sub-questions:

 Question [2.1.]: How to define ‘design’?

 Question [2.2.]: What is meant by design in a logistics perspective?

As the (re)design of a SC goes hand in hand with taking a wide range of decisions, it is of major importance to have a clear picture of the possible risks and uncertainties resulting from the retained options regarding the eventual changes. We therefore tend to respond to the question:

 Question [3]: How to evaluate eventual risks in the matter of sustainability, preceding a re-design process of a Supply Chain?

To guarantee shared perception of what is meant by risk, the doubts to be cleared are:

 Question [3.1]: How do we define risks?

The results provided via the aforementioned evaluation model will lead us to further sub- questions, namely:

 Question [3.1.]: How to identify potential risks?

 Question [3.2.]: How to evaluate potential risks?

The empirical model needs to quantify the identified potential risks, so that managers may take adequate decisions to have the continuing ability of satisfying customers’

requirements. The final results need hence to be analysed in accordance with the sustainability concept.

1.1.3 Research Methodology and Thesis Structure