Managing Information Processing Needs in Global Supply Chains: A Prerequisite to Sustainable Supply Chain Management

Abstract

Sustainability is an important topic in supply chain management research and practice. For buying firms, one of the most pressing challenges associated with sustainable supply chain management is that they frequently do not possess sufficient information on what is occurring in their complex supply chains, as demonstrated by numerous incidents lacking sustainability. Using eight in‐depth case studies across four industries and elaborating on information processing theory, we identify three forms of sustainability‐related uncertainty that each firm is facing in its supply chain. We refer to them as task uncertainty, source uncertainty, and supply chain uncertainty. The study shows that the extent to which these uncertainties translate into information processing needs depends on a newly identified boundary condition labeled uncertainty intolerance. With respect to the management of such information processing needs, prior research has pointed primarily at matching information processing needs with fitting information processing capacity and secondly at mitigating information processing needs with corrective measures. This study illuminates how some innovative firms occasionally employ a more radical sustainability‐driven supply chain modification mechanism. In doing so, this research exemplifies how sustainable supply chain management may eventually turn from an amendment to a firm's daily business to a decisive factor for shaping future supply chains. In addition, the study constitutes a nascent step to elevate information processing theory to the supply chain level.

Tackling the sustainability iceberg

“…While some buying firms interact only with their direct suppliers which act as gatekeepers and help them to approach suppliers at distant tiers (Wilhelm et al, 2016a), other firms approach lower tier suppliers directly to control and monitor their sustainability performance (e.g., Grimm et al, 2016). However, the missing direct business relationship with second-or third-tier suppliers and the resulting opaque supply network structures often cause information deficits for buyers (Busse et al, 2017a). Wilhelm et al (2016b) investigated multi-tier supply chains in different industries with respect to LTSM strategies and their particular contingencies.…”

“…Only then, critical lower tier suppliers with poor sustainability practices can be either eliminated or supported (Pagell et al, 2010). Therefore, decision makers must balance the associated transaction costs in terms of information gathering and supplier-auditing capacity (Zsidisin and Siferd, 2001) with the benefits they obtain from applying LTSM (Busse et al, 2017a). Such benefits may include higher selling prices, risk reduction or winning orders over competitors (Foerstl et al, 2015).…”

Sustainable supply chain management and partner engagement to manage climate change information

“…Extant literature examines why and how individual firms seek to reduce their impact on the natural environment by focusing their efforts on challenges and concerns within their supply chains (e.g., Ansari & Kant, ; Busse, ; Busse, Meinlschmidt, & Foerstl, ; Grosvold, Hoejmose, & Roehrich, ; Lamming & Hampson, ). Much of this research draws on the concept of green or sustainable supply chain management (SSCM; Ahi & Searcy, ; Linton, Klassen, & Jayaraman, ; Sajjad, Eweje, & Tappin, ), but concerns remain about a lack of understanding whether and how firms collaborate with their supply chain partners to respond to specific SSCM issues such as climate change (Finke, Gilchrist, & Mouzas, ; Hofmann, Busse, Bode, & Henke, ; Montabon, Pagell, & Wu, ; Rodriguez‐Melo & Afshin Mansouri, ; Seuring & Müller, ).…”

Using Country Sustainability Risk to Inform Sustainable Supply Chain Management: A Design Science Study

“…Buying firms face substantial information‐processing challenges surrounding the various sustainability‐related grievances lurking in their complex global supply chains (Busse et al. 2017b; Foerstl et al. ).…”