WEEK 10 Supply chains and sustainability in IB

What is a supply chain?

• A Supply chain is the network of organizations that are involved, through upstream and downstream linkages, in the different processes and activities that produce value in the form of products and services delivered to the ultimate consumer (Christopher 2011)

• A ‘network of multiple suppliers and, indeed, suppliers to suppliers as well as multiple customers and customers’ customers (Christopher 2011)

What is a global supply chain?

A global supply chain is a:

• Network of firms and functions spanning multiple countries

• Coordinating material, information, financial, and reverse flows

• To meet consumer demand while balancing cost, speed, and compliance

• Includes suppliers, manufacturers, logistics providers, warehouses, retailers, and end-users

• “A global supply chain consists of a network of interdependent firms that operate across multiple countries to source, transform, and distribute goods and service” (Mentzer, Myers & Stank, 2007).

What are the supply chain functions?

• Procurement (e.g., contract negotiation, supplier selection and evaluation)

• Logistics (inbound and outbound)

• Operations (Production & transformation process), 

• Order fulfilment (e.g., demand management, order processing, and order delivery)

• After-sale service (e.g., warranty, repairs, returns, and recalls).

What are the traditional objectives of a global supply chain? 

“Cost reduction by moving production to low-cost countries is typically mentioned among the top reasons for a supply chain to become global” (Chopra, 2019, p.154)

1. Cost efficiency through global Sourcing

2. Quality standardisation across countries

3. Gain global competitive advantage

Built on a linear “Take–Make–Use-Dispose” model. However, these objectives rely on linear TAKE-MAKE-USE-DISPOSE supply chain model, which ignores social & environmental consequences such as pollution, resource depletion and  labour exploitation

Linear supply chain model

1. They extract resources (take)

2. Manufacture products (make)

3. Dispose of them after use (dispose)

Examples of irresponsible GSC practices

1. Shein

• Fast production cycles rely on cheap labour and high-volume output (overproduction and overconsumption)

• Large quantities of textile waste due to low-quality, short-lifespan products (disposal-focused system)

2. Apple minerals DRC

• Extraction of conflict minerals for electronics manufacturing (resource-intensive, extractive “take” stage).

• No closed-loop mechanism for materials; devices eventually become e-waste shipped to developing countries

3. Rana Plaza (Primark, Walmart)

• Outsourcing to low-cost factories with minimal oversight (cost-driven “make” model ignoring social sustainability)

• Production focused on volume and cost efficiency rather than longevity (fast-fashion disposability)

3. Nestlé & Mondelēz Palm Oil (West Papua)

• Large-scale land clearing for raw materials (resource depletion typical of linear systems)

• Palm-oil supply chain designed for global throughput, not regeneration (no reinvestment in ecosystem or community)

Limits of linear supply chains

• Resource depletion (continuous extraction of raw materials increases pressure on finite natural resources)

• Carbon-intensive global shipping (long, globalised transport routes create high emissions across logistics networks)

• Massive waste streams (textiles, electronics, plastics) (products designed for short life cycles lead to growing landfill and e-waste problems)

• Ethical and social risks (forced labour, unsafe factories, poor wages, and labour exploitation in low-cost countries)

• They do not support UNSDGs

What is the circular economy global supply chain?

CE is a system where materials never become waste and nature is regenerated. In CE, products and materials are kept in circulation through processes like:

• Maintenance

• Reuse

• Refurbishment

• Remanufacture

• Recycling

• Composting

Circular Global Supply Chain is defined as the application of CE principles within supply chains across countries. CGSCs actively cycle materials back into global production networks, minimizing waste and environmental impact. CGSC transforms core activities; procurement, logistics, and production to close resource loops