Supply Chain Management for Sustainable Development: Perspective from the Greater Pearl River Delta (China)

Abstract

This thesis investigates the application and implications of supply chain management as a modern management model in regulating corporate outsourcing activities within the Greater Pearl River Delta. Globalisation has accelerated the application of supply chain management as a mechanism to enhance corporate performance. At the same time this rapid economic development has also accelerated the destruction of environmental and social conditions in these areas, and this has resulted in a lot of media and public attention. This thesis contributes to the debate on how principles and concepts of sustainable development can be put into modern business practice. Society also expects corporations to play an essential role in creating economic, environmental and social prosperity.

The literature integrates the concepts of corporate social responsibility and environmental management into the core supply chain management activities within the wider framework of sustainable development. The environmental and social challenges are investigated since there is a growing recognition that development should go beyond economic growth. Whilst most research in the west has focused on the environmental approaches of supply chain management, this thesis seeks to understand, integrate, evaluate and find other options to improve conditions in suppliers’ factories. There is comparatively less literature discussing the social approach and implication to SCM with respect to this region. Perhaps more importantly social issues such as human rights and labour issues in relation to the physical environment are gaining momentum and are particularly important in this region because of strong media and western consumer pressure resulting from sweatshop activist group campaigns in the west. The four-tier methodological approach is structured within an action research model to achieve the research objectives.

The first and second primary studies confirm that both suppliers’ and retailers’ knowledge are inadequate in terms of the establishing and publishing their environmental and social policies and procedures such as implementing internal and external controls for employees and workers. Their traditional and conservative mindsets is linked to their unwillingness to make a change despite the economic restructuring is rapidly taking and China’s accession into the WTO.

In particular, codes of conduct is commonly existing literature embedded with environmental and social criteria as an important policy imposed by the multinational buyers to improve both environmental and social conditions within the supply chain. But how effective are such policies? Specifically, the effectiveness of the code of conduct approach is evaluated in the third study by social compliance audits at ground level in the garment industry. It is found that workers’ awareness of the code of conduct is low. The barriers include a lack of continuous training, human resources or systems present to tackle specific problems. Key challenges are found in the areas of excessive working hours, unfair pay to the workers and health and safety issues that coincide with the detailed interview results.

This thesis concludes that the code of conduct approach is inadequate to improve workers’ conditions in the long term and asks what can be done next to contribute to the pursuit of sustainable development goals. The expert interviews from the fourth study explain the obstacles of the code of conduct approach. It is found that no long-term commitment and trust from multinationals is built on this relationship. The detailed interviews indicate that stakeholders’ approaches seem to be the most effective mechanism. In addition national government intervention in enforcing existing legislation and developing multi-party partnerships through trust programmes, whereby proper training from top management down to the workers and strong public involvement can help to achieve the desires long -term sustainability down the supply chain.