Supply Chain Uncertainty and Environmental Management
Read this article, which examines the impact of supply chain uncertainty on environmental management spending in manufacturing. Focus on the sections of Supply Chain Uncertainty and Linking Supply Chain Uncertainty to Environmental Management. What is your definition of uncertainty in supply chain management?
Introduction
One of the fundamental questions related to corporate environmental management remains "does it pay to be green?". While the results in the literature mainly support the premise that it does pay to be green, the literature also suggests that the business and industrial contexts as well as the type of environmental initiatives matter in driving organizational performance.
For instance, significant value can be created by adopting pollution
prevention technologies and practices rather than pollution control.
Pollution prevention usually take the form fundamental changes to a
product or a process that eliminate pollution at the source. Several
waste reduction and energy efficiency programs aligned with that kind
reduction at the source mindset. In contrast, pollution control involves
proper management of pollution after it is generated. End-of-pipe
technologies and remediation projects are often associated with
pollution control. Interestingly, the most recent Canadian data on
environmental expenditures indicate that manufacturers spent more in
pollution control in a ratio of 2.2:1 when compared to pollution
prevention.
Why is that the case? Is there an operating context more conducive to
adopt preventive approaches as opposed to control approaches?
Building on the attention-based view of the firm (ABV), this paper proposes that supply chain uncertainty
is an important factor in (i) allocating organizations' resources to
environmental management, and (ii) the type of environmental initiatives
adopted (i.e., prevention vs. control). Because environmental
management can be perceived as a non-core or 'peripheral' activity,
higher level of supply chain uncertainty increases the likelihood that
limited managerial attention will be diverted away from environmental
management and more towards core activities. Put another way, with less
predictability in the supply chain, managers' attention span is less
likely to fully cover green issues within their operations, hence,
spending less time and resources on environmental management.
Furthermore, a less predictable supply chain is more complex to manage,
which results in favoring environmental technologies and methods that
are less disruptive such as end-of-pipe technologies or abatement
systems.
By developing the linkage between supply chain uncertainty and
environmental management, this paper provides a better understanding of
the contextual elements that can be driving environmental management
decisions. By gaining a better appreciation of supply chain uncertainty
as a contextual variable, this paper contributes theoretically and
conceptually to the literature. The empirical development and subsequent
analysis also can have managerial implications as supply chain
uncertainty can be mitigated by addressing variability at the source
(e.g., six sigma projects) or by building buffers – hence affecting
environmental management decisions.
This paper first provides a definition of supply chain uncertainty in Supply Chain Uncertainty section. This definition is then linked to environmental management in Linking Supply Chain Uncertainty to Environmental Management section where two hypotheses are proposed using ABV. Methodology section describes the research methodology and the variables measurement used for the empirical analysis presented in Empirical Analysis section. The empirical results are discussed in Discussion and Concluding Remarks section where the paper's limitations and future research avenues are also discussed.