Conceptualization and development of an instrument to
measure Supply chain sustainability
Md. Maruf Hossan Chowdhury*, Eijaz Ahmed Khan** and
Mohammed Naim A. Dewan***
Despite a wide range of research on sustainability, supply chain
sustainability assessment and measurement model has not been
explored far. As a result, sustainability construct scales are
misspecified and this might lead to reduced scale validity. Existence
of such a void in the literature the manoeuvre of this research was
to conceptualize and develop a measurement scale for supply chain
sustainability constructs in the context of Ready-made Garment
Industry (RMG) in Bangladesh. The study was designed in a mixed
method research stream. The dimensions and their measurement
were conceptualised based on extensive literature review and then
qualitative field study was performed to contextualise the
dimensions and their measurement items. Content analysis
procedures were utilized to analyse the transcribed field study
interviews. The items developed from literature and field study were
analysed through Exploratory Factor Analysis (EFA). Four
dimensions of sustainability: social, environmental, economic and
operational were explored from the EFA. Therefore, supply chain
sustainability in the context of RMG industry of Bangladesh found to
be four dimensional hierarchical construct.
1. INTRODUCTION
Supply chain sustainability is echoed frequently owing to the significant attention of
governments, profit and non-profit organizations on environmental and social
responsibility. Mounting interest in the field of supply chain sustainability research
can be traced over the last couple of years, which offers the promise of promoting
sustainability in the focal company as well as its suppliers and consumers end. The
terms supply chain sustainability and sustainable supply chain often used
synonymously. sustainable supply management relies on the sustainability of supply
chains because of the fact that the focal companies held accountable for the
environmental and social performance of supply chain members (Oec, 2005).
Therefore, sustainability in supply chain management is critical for the success of
whole supply chain management. To achieve sustainability in the supply chain it is
important to quantify and measure the sustainability of the supply chain entities.
Therefore, measurement of different dimensions of sustainability is crucial to
manage sustainability in the supply chain.
In recent years, an increasing number of special issues on sustainability and
sustainable SCM have been edited in Journal of Supply Chain Management (Pagell
and WU, 2009), Journal of cleaner production (Seuring and Muller, 2008), Supply
Chain Management: an International Journal (Lindgreen et al., 2009), Corporate
Social Responsibility and Environmental Management (Gold et al., 2010),
International Journal of Physical Distribution & Logistics Management (Carter and
Easton, 2011), International journal of production economics (Ageron et al., 2012).
However, still there is deficit of research dealing on sustainable supply chain
sustainability (Seuring and Muller, 2008). Measurement of supply chain sustainability
integrating social, environmental and economic aspects is rare. Few studies are
available pertaining to measurement of supply chain sustainability e.g. (Zhu et al.,
2008); (Carter and Jennings, 2004). But these studies focus either on environmental
supply chain management or purchasing social responsibility across social and
environmental dimensions. To the best of researchers’ knowledge empirically
developed measurement instrument for supply chain sustainability integrating the
dimensions of social, environmental and economic sustainability has not yet been
established which aggravated the researchers to pursuit the scale development for
supply chain sustainability.
The main objective of this research is to develop a multidimensional sustainability
scale for measuring supply chain sustainability. As such, our specific objectives are,
first, to conceptualize the nature and dimensions of the supply chain sustainability.
Second, we focus on systematically developing a scale to measure supply chain
sustainability. Our third objective is to assess the psychometric properties of the
supply chain sustainability scale. Finally, the study concludes by discussing the
research implications, limitations and future research directions.
.
2. LITERATURE REVIEW
2.1 Sustainability
Climate change, depletion of resources, increased pollution, energy consumption,
violation of social rights, poor working environment, demand for transparency
regarding social and environmental performance have brought the agenda of
sustainability in every walk of our life and within the broader facets of society (Carter
and Easton, 2011).
Sustainability can be referred as ‘‘creating long-term
shareholder value by embracing opportunities and managing risks deriving from
economic, environmental and social developments’’ (Jones, 2005). In other words it
is termed as “make the world a better place for future generations” and to “provide
the processes and products which will give the people of the world shelter, clothing,
food and drink, and which keep them in good health” (IChemE, 2005). The most
popular and widely accepted concept of sustainability is the meeting the needs of the
present in a way that do not deter the ability of meeting the needs of future
generations. (World Commission on Environment and Development, 1987, p. 8): In
the recent years the domain of sustainability has magnified beyond the
organizational boundary with incorporating the whole rubric of the supply chain (Gold
et al., 2010) because focal firms are not only responsible for own operations but also
responsible for the environmental and social issues of their supply chain members
(Oec, 2005).
2.2 Supply chain sustainability
Sustainability in supply chain is introduced by most researchers as sustainable
supply chain management. Sustainable supply chain management has got
substantial interests to academic and corporate body just over a decade (Corbett
and Klassen, 2006; Seuring and Muller, 2008). There are still fundamental issues
that need to be addressed to assist business managers and supply chain
professionals to achieve supply chain sustainability (Pagell and WU, 2009). A
sustainable supply chain (SSC) is one that “manage material, information and
capital flows and cooperate among all entities in the chain with a view to achieve the
economic, environmental and social goals deriving from customer and stakeholder
requirements” (Seuring and Muller, 2008). To be responsible to stakeholders,
environmental and social burden arising from different stages of production such as
the environmental and social performance of supply chain members need to be
acknowledged (Oec, 2005). In this regard, branded companies sometimes come
under pressure from stakeholders, such as government, activists, non-governmental
organizations (NGOs) if there is problem in the chain (Seuring and Muller, 2008).
Likewise, the branded apparel chains such as Nike, Disney, Levi Strauss, Benetton,
Adidas or C&A have been accused few years back for problems in the upstream
supply chain with respect to production of their clothing (Preuss, 2001; Seuring and
Muller, 2008).
Despite the essence of SSCM, the literature on SSCM is limited and not enough
(Gold et al., 2010). Studies mostly encapsulate social, environmental and economic
issues in a standalone fashion rather that integrated. In the management literature,
most of the existing studies on organizational sustainability and supply chain
sustainability have focused on environmental aspects and have little consideration to
social and economic aspects (Carter and Rogers, 2008). Studies of (Carter, 2004;
Chowdhury et al., 2012c; de Brito et al., 2008; Hutchins and Sutherland, 2008) are
perhaps the only few that consider both social and environmental sustainability in
supply chain. However, these studies fall short of integrating all wings of
sustainability in supply chain for example, the study of (de Brito et al., 2008)
analyses sustainability only from logistical point of view and lacks indication
regarding influence of manufacturing operation on social and environmental aspects.
Similarly, (Hutchins and Sutherland, 2008) studied on supply chain sustainability
mainly on social perspective and (Carter, 2004) focuses on social and environmental
responsibility during purchasing. In this regard (Carter and Jennings, 2002; Carter
and Rogers, 2008) rightly mentioned that integrated study incorporating economic,
social and environmental aspects is sparse. The study of (Carter and Rogers, 2008)
is a milestone in the literature of SSCM. Using the triple bottom line concept of John
(Elkington, 1999) as a core, they introduce a theoretical framework of sustainability
in supply chain which they denoted as SSCM. (Carter and Rogers, 2008) suggest
that SSCM is essential for organizations as SSCM enables the long-run
improvement of an organization’s economic bottom line. Though informative and
widely covered, the study is still conceptual and has lack of indication about
measurement aspects of social, environmental and economic issues. In the midst of
existing void of lacking integrated empirical work on social, environmental and
economic sustainability in supply chain, the underlying study fills the gap by
considering all aspects of sustainability in the chain. It also addresses the
interrelation among the social, environmental, economic and other aspects of SSCM.
2.3 Dimensions of supply chain Sustainability
Previous studies focused on different dimensions for achieving and improving
sustainability but the most widely used dimensions can be found in the triple bottom
line concept of John Elkington (Elkington, 1999). The United Nations world summit
2005 also describes the three pillar of sustainability: environmental sustainability,
social sustainability, and economic sustainability. Now it is commonly agreed
standing that a balance between social, environmental and economic factors is
inevitable for the long term success and sustainability of the organizations which is
also one of the outlines inherent in stakeholder theory (Freeman, 1984).
The “triple bottom line” served as a common ground for numerous sustainability
standards in business, such as, Global Reporting Initiative (GRI), the Dow Jones
Sustainability Index, and International Standard Organizations (ISO) 14001, The
sustainability metrics by Institute of Chemical Engineers (IChemE) (Delai and
Takahashi, 2011). Based on the multitude of products, services and operations,
(Epstein and Wisner, 2001; Hutchins and Sutherland, 2008; Labuschagne et al.,
2005; Vasileiou and Morris, 2006) and others measure sustainability in the specific
context. In spite of these, still there is a paucity of sustainability performance
measurement (Ramos and Caeiro, 2010) and it still faces some considerable
challenges such as lack of integrated focus for measuring economic, social and
environmental aspects (Adams and Frost, 2008; Labuschagne et al., 2005; Singh et
al., 2009). Though sustainability measurement is firmly discussed in the studies of
sustainable development and corporate social responsibility, supply chain
sustainability measurement is hardly found. Few studies e.g. (Ageron et al., 2012;
Carter, 2004; de Brito et al., 2008) include some of the aspects of sustainable supply
chain and its measurement. However, empirically tested measurement of supply
chain sustainability in terms of social, environmental and economic issues is very
rare. Therefore, it has become forefront of supply chain research.
2.3.1 Social sustainability in supply chain
Social dimension of sustainability stresses on how to bring human wellbeing, how to
meet their needs and how to generate development opportunities for all (Comission
on sustainable development, 2002). Social sustainability mainly focuses on the
corporate social responsibility (CSR) practice of the businesses. The fulfilment of the
social issues is intended to minimize any harm and maximize the long run beneficial
impact of the firm on society (Bloom and Gundlach, 2000). From organizational
perspective social sustainability focuses on impact of organizational activity on the
stakeholders specifically, employees, customers, suppliers, shareholders and
government (Delai & Takahashi, 2011). In the contemporary world social
sustainability has got intensive focus because of the high profile corporate failures
(Aaronson, 2002), and failure to observe social issues by the chain members
(Chowdhury et al., 2012a; Kolk and Pinkse, 2006). Among the lot, the poor working
environment in apparel manufacturing companies of underdeveloped countries
(Emmelhainz and Adams, 1999; Islam and Deegan, 2008) is worth mentioning. Such
type of violation of social and environmental issues is not unlikely in the corporations
of many developing countries such as Bangladesh, Pakistan (Naeem and Welford,
2009). Therefore, social sustainability issues in the supply chain need to be
emphasized while outsourcing from low cost countries. Social sustainability in the
supply chain can be ensured by a number of factors such as fair wages, health and
safety factors, child labour, force labour and some other indicators (Carter, 2004; de
Brito et al., 2008; GRI, 2011; IChemE, 2005; Jones, 2005). Table 1 lists the factors
associated with social sustainability.
2.3.2 Environmental sustainability
Environmental sustainability focuses on the maintenance of natural capital
(Goodland, 1995). Scholars argue that the depreciation of natural capital cannot go
on endlessly (Lovins et al., 1999). In organizational perspective, environmental
sustainability concentrates on the production and consumption of resources by
corporations in a responsible fashion (Seuring and Muller, 2008). Responsible
companies now keep track to the carbon foot print of their activities and open the
records to the public. The consumers’ concern and environmental regulation
regarding the impact of production and consumption is getting tougher as a result
companies are shifting their production bases to the areas where the regulations are
relaxed specifically the developing and under developed countries. Environmental
factors shall not be overlooked while outsourcing from low cost countries (de Brito et
al., 2008). The cause of concern is that some production processes have high
environmental impact for example, because the processes of dyeing, drying and
finishing, the apparel industry make intensive use of chemical products and natural
resources (Caniato et al., 2012; de Brito et al., 2008). Moreover, the production of
fibres, such as cotton, wool and synthetics, has a significant environmental impact
(Caniato et al., 2012). In such a situation the environmental factors along with
economic factors need to be considered throughout the supply chain for long term
sustainability. Studies (de Brito et al., 2008; GRI, 2011; Hervani et al., 2005; Pagell
and WU, 2009) and others refer a number of practices to ensure environmental
sustainability in the supply chain such as pollution control, waste recycling,
compliance of environmental issues, supplier’s environmental performance
evaluation and monitoring and others. Table 1 lists the practices relating to
environmental sustainability.
2.3.3 Economic sustainability
Economic sustainability evaluates short term and long term economic value
generated by the organizational activities and the corresponding relationship with
shareholders (Delai & Takahashi, 2011). It focuses on that segment of the natural
resources base which provides physical inputs, both renewable and exhaustible, into
the production process (Goodland, 1995). For example, financial capital, such as,
debt-equity, tangible capital and intangible capital need to be managed sustainably
to produce maximum outputs. In other words, economic sustainability is concerned
with long term economic health or organization and accounts for share value, sales
growth, profitability, such as, debt-equity, and other important indicators while
maintaining social and environmental responsibilities (Delai & Takahashi, 2011). It is
not enough to maintain profit and growth for the company itself rather the economic
health of all supply chain members shall be considered because competition is no
longer confined between firm to firm rather extended to supply chain versus supply
chain (Mentzer et al., 2001). Failure to keep cost of production lower than the
competitor makes the companies and their supply chain less profitable and
incompetent in the highly competitive market. To keep the production cost lower
some companies shift their production location in cheaper labour areas. For
example, European clothing and textile factories could not sustain their production in
Europe as a result shifted to low cost underdeveloped Asian and South American
region or got engaged in outsource which created thousands of people unemployed
(de Brito et al., 2008). Similarly, the companies that are operating in the low cost
areas now need to consider the management capabilities and technological up
gradation to remain economically sustainable in the long run. A number of factors
can be maintained to ensure economic sustainability of the organizations and their
supply chains. However, Sales, cost, Value addition, Net income before tax and
Return on average capital employed are most widely cited factors for economic
sustainability (Delai and Takahashi, 2011; GRI, 2011).
3. INSTRUMENT DEVELOPMENT PROCESS
To develop an instrument for measuring supply chain sustainability, this study began
by investigating commonly cited items under each dimension of supply chain
sustainability, as outlined in the previous section. Through this process, three
primary dimensions were identified that reflect supply chain sustainability: social
sustainability, environmental sustainability and economic sustainability. Social
sustainability is concerned with the working conditions and human rights issues and
monitoring social issues of suppliers. Environmental sustainability is related with
pollution control, waste management, monitoring and evaluating environmental
performance of suppliers. Economic sustainability includes profitability, cost, sales
and growth. The investigation of literature reveals the conceptualization that
sustainability is a multidimensional, hierarchical. It is also identified that sustainability
dimensions may vary in different context. Therefore, we conducted an exploratory
qualitative study to explore the specific dimensions and to confirm the contextual
appropriateness of the primary dimensions identified in the literature.
3.1 Qualitative study
This study concentrated on RMG industry of Bangladesh which is one of the leading
exporters of RMG in the world. RMG industry is an economic propeller of
Bangladesh and accounts for 78.6% of total export earnings and over 4 million direct
employments of which 80% are women. Moreover, apparel exports stood-up at
19.90 billion US dollar in 2011 and marked us as the second largest apparel exporter
in the world (BGMEA, 2012). Despite its huge potentiality, the RMG supply chain is
facing a climax situation owing to myriads of challenges such as labour unrest for
violation of human rights, poor wages, lack of safety measures and hazardous
working environment, environmental pollution, political instability, interruption in utility
supply especially power shortage, inefficiency in customs and port management,
exchange rate fluctuation, longer lead time, increased competition, disruption in
supply of fabrics and other accessories in time, increased competition, inefficiency in
operation, (Chowdhury et al., 2012b; Haider, 2007; Islam and Deegan, 2008;
Nuruzzaman, 2009; Paul-Majumder, 2001). These incidences often threaten the
sustainability of RMG supply chain of Bangladesh. In such condition through the
qualitative interview we try explore the sustainability practises in RMG supply chain
of Bangladesh.
In our study, we obtained qualitative data from 15 in-depth interviews conducted with
supply chain decision makers of RMG manufacturing companies and the accessory
producing companies. Each interview lasted for approximately 45-60 mins.
Participants were selected using convenient sampling to ensure productive findings
and the richest data for scale development. In each case, respondents were asked a
number of questions to explore the practises related to the sustainability of their
supply chain. The answers were recorded, synthesized and categorized to identify
the core dimensions with respect to supply chain sustainability. In the qualitative
study, the respondents opined about different dimensions of supply chain
sustainability which indicates the multi-dimensional aspect of supply chain
sustainability. Throughout the study the respondents stated either about social
issues (e.g. “we need to maintain social compliance to get orders” or environmental
sustainability issues (e.g. “we care about waste disposals”) or economic factors (e.g.
“we need enough sales to continue business”). Respondents also mentioned about a
number of factors which are not related with the widely discussed social,
environmental and economic factors but associated with operational issues (e.g. “we
need to meet quality and specifications of buyers.”). These issues were considered
under the dimension operational sustainability. Though we developed the
dimensions based on the themes identified in the qualitative study, the literature was
used to support our findings.
3.1.1 Social sustainability
Social sustainability emphasize on Social fairness and sustainable human resource
management (de Brito et al., 2008). More specifically it lays importance on the
themes such as fair pay, health and safety factors, child labour, force labour, supplier
evaluation on social issues etc. (Boyd et al., 2007; Carter, 2004; de Brito et al., 2008;
GRI, 2011; Hutchins and Sutherland, 2008; IChemE, 2005; Jones, 2005). From the
qualitative field interview data, eight themes were found related to social
sustainability in the supply chain which are: wages, benefits, hazard and safety,
health and sanitation, child labour, force labour, employee satisfaction, monitoring
suppliers. These themes were frequently referred by the respondents and following
comments can be cited as examples: “We must need to pay a minimum wage”; “we
provide leave benefit and medical benefit to our workers”; “we conduct fire drilling
and safety inspection”; “we supply pure drinking water and maintain cleanliness”;
‘‘we do not have any child labour and we show zero tolerance about child labour”;
“our buyers visit our plant to evaluate working environment and pollution level” etc. A
summary of field study responses with respect to social issues can be obtained from
Table 1. It is revealed from Table 1 that all respondents (N=15) are concerned about
child labour and forced labour because these are very sensitive issues to
international buyers.
3.1.2 Environmental sustainability
Environmental sustainability encompasses reduction of environmental impact i.e.
environment friendliness of operation (Chien and Shih, 2007; de Brito et al., 2008;
Tan et al., 2002). More specifically it focuses on the themes such as pollution, waste
disposals, recycling, environmental audit, suppliers’ environmental performance
evaluation etc. (Carter, 2004; Chien and Shih, 2007; de Brito et al., 2008; GRI, 2011;
IChemE, 2005; Jones, 2005). From qualitative field interview data, seven themes
were found related to social sustainability in the supply chain which are: water
pollution, air pollution, soil pollution, waste recycling, hazardous material,
environmental certification and audit, and suppliers’ environmental performance
evaluation. These themes were frequently referred by the respondents and following
comments can be cited as examples: “We have effluent treatment plant (ETP) to
reduce chemical and water pollution”; “we do not have emission”; “we sell clothing
wastes to recyclers”; we do not use banned chemicals and hazardous material”; “we
have environmental certificate”; “our buyers monitor our plant”. A summary of field
study responses with respect to environmental issues can be obtained from Table 1.
It can be cited from Table 1 that all respondents (N=15) are serious about hazardous
material because pre-shipment inspection is needed to confirm about the hazardous
material presence.
3.1.3 Economic sustainability
Economic sustainability focuses on short term and long term economic performance
of organizations (Delai & Takahashi, 2011). It emphases on the issues such as
costs, sales, value added, return on capital, etc. (GRI, 2011; IChemE, 2005; Jones,
2005). From qualitative field interview data, four themes were found related to
economic sustainability in the supply chain which are: profit, costs, sales, and sales
growth. These issues were frequently referred by the respondents and following
comments can be cited as examples: “we can make good profit”; we calculate the
cost of product “Our sales are increasing”. A summary of field study responses with
respect to environmental issues can be obtained from Table 1. It is revealed from
Table 1 that all respondents (N=15) are highly conscious about cost of production
because of severe competition is in international market.
3.1.4 Operational sustainability
From the field study the operational compliance was emerged as a new component
of sustainability in RMG supply chain of Bangladesh. It was evident that a substantial
number of participants laid emphasis on operational aspects in terms of
conformance of quality of products (N=15), meeting delivery lead time (N=15),
maintaining reliability on specifications (N=15), and efficient updated machinery
(N=9) for the sustainability of RMG supply chain. It was also observed that because
of short lifecycle of fashion products the supply chain members are very concerned
about time. RMG products are also sensitive to design, colour and use of
accessories. The significance of quality and on time delivery was reflected by the
statement of participant 4: “……we need to ensure quality and on time delivery to
satisfy the buyers and to continue business….” The manufacturers need to submit
samples for buyers’ approval before producing in a bulk quantity. If the size, colour,
design and other specifications are approved by the buyers, operation is started.
Sometimes, buyers reject some batches of production because of non-conformity of
final bulk production with the approved sample. It’s a huge economic loss and
reputation loss for the garment manufacturers. Moreover, buyers set a fixed lead
time and within this time the manufacturers need to accomplish procurement,
production and delivery of finished products. If there is any deviation buyers are
dissatisfied and even reject the shipment. A survey on previous literature show
evidences in favour of quality, leadtime, and conformance with specification for
competitiveness and sustainability of business (Bateman and David, 2002; Bicheno,
1998; Epstein and Wisner, 2001).
Based on the findings from content analysis and theoretical justification we
conceptualized sustainability as a multi-dimensional hierarchical construct which is
reflected by the dimensions: social, environmental, economic and operational
sustainability.
Table 1: supply chain sustainability dimensions and their measurement
Factor
Variable
Participants
6
7
y
y
y
y
y
y
y
-
1
y
y
y
y
y
2
y
y
y
y
y
3
y
y
y
4
y
y
y
y
y
5
y
y
y
8 9 10 11
y y y y
y y y y
y y y y
y y y y
y y y -
12
y
y
y
-
13
y
y
y
y
-
14
y
y
-
15
y
y
y
y
y
y
y
y
y
y
y
y
y
y
-
y
y
y
y
y
y
y
y
y
y
y
-
y
y
y
y
-
y
-
-
-
-
y
y
y
y
-
-
y
y
y
y
y
y
y
y
-
y
y
y
y
y
-
-
-
-
y
y
y
y
y
y
-
-
-
y
y
y
y
y
y
y
-
-
-
y
y
-
y
y
y
-
y
y
y
y
y
y
y
y
y
y
y
y
y
y
y
-
y
-
y
y
-
y
y
y
y
y
y
-
y
y
y
y
y
y
y
y
y
y
y
y
y
y
y
y
y
y
y
y
y
y
y
y
y
y
y
y
y
y
y
y
y
y
y
y
y
y
y
y
y
y
y
y
y
y
y
-
-
y
-
y
y
y
y
-
y
-
-
y
y
y
y
y
y
y
y
y
y
y
y
y
y
y
Cost
y
y
y
y
y
y
y
y
y
y
y
y
y
y
y
Profit
y
y
y
y
y
y
y
y
y
y
y
y
y
y
Sales growth
y
y
y
y
y
y
-
y
y
y
y
-
-
-
SUS1
SUS2
SUS3
SUS4
SUS5
SUS6
SUS7
Wages
Benefits and facilities
Facilities
Hazard and safety
Health and sanitation
Child labour
Forced labour
SUS8
y
y
y
y
-
y
-
y
y
SUS9
Social
compliance
of
suppliers
Employee are satisfaction
y
y
y
y
-
y
-
y
SUS10
Water pollution
y
y
y
y
-
y
y
SUS11
Air pollution
y
y
y
y
-
y
SUS12
Soil pollution
y
y
y
y
-
SUS13
Recycling wastes
y
y
y
y
y
SUS14
SUS15
Hazardous material
certification and audit
y
y
y
y
y
y
y
y
SUS16
Complying legislation
y
y
y
SUS17
SUS18
Monitoring suppliers
lead time
y
y
y
y
y
y
SUS19
Quality
y
y
SUS20
Specification
y
SUS21
Updated Machinery
SUS22
SUS23
Sales
SUS24
SUS25
y
y
3.2 Scale development
To develop scales for the supply chain sustainability dimensions (i.e. social,
environmental, economic and operational sustainability) as identified in the
qualitative study, items creation and items purification by pretesting were performed
at this stage. The step items creation was performed with the aim of ensuring
content validity by selecting the right items for the construct. On the other hand
items’ purification was conducted with the objective of affirming both content validity
and construct validity by determining the convergence and divergence of items under
each dimension.
3.2.1 Item Creation
To create a set of items under each construct, items were identified using existing
instruments as well as additional items were created through exploratory interviews.
The findings from content analysis were compared with existing scales to match the
construct definitions. To develop scales for social sustainability, Environmental
sustainability and economic sustainability most of the items were adapted from
sustainability indices such as (GRI, 2011; IChemE, 2005; Jones, 2005) as well as
study of (Carter, 2004; Epstein and Wisner, 2001) and others. However, no valid and
reliable scales were identified to measure operational sustainability. New scales thus
had to be developed for this construct. This construct was developed from field study
findings. Theoretical justification was also established in line with the study of
(Bateman and David, 2002; Bicheno, 1998; Epstein and Wisner, 2001) which
confirmed the content validity of the construct.
The items under different dimensions of supply chain sustainability, were selected
using a Cronbach’s alpha coefficient or composite reliability with minimum thresh
hold value of 0.60 and 0.7 respectively to ensure the reliability of the psychometric
properties (Straub et al., 2004). Finally, item pools were created for the four supply
chain sustainability dimensions following a thorough examination of the existing
items, elimination of redundant items and the inclusion of new items to adjust the
context for the current study.
3.2.2 Item purification
A primary version of questionnaire was prepared consisting of 25 questions. The
measurement instrument for each item consist of 6-point Likert scale (ranging from
‘strongly disagree’ to ‘strongly agree’), to avoid the tendency of selecting neutral
answer and biasness. The instrument thus developed was administered for
pretesting to ten respondents: four supply chain managers from garments
manufacturing companies, three from accessory producing companies and three
supply chain academics. Questionnaires were sent by email with feedback form. The
respondents were asked for suggestions regarding addition or deletion of particular
question, appropriateness in sorting/classification of items under each dimension,
wording and understandability. Based on the opinion of the respondents it was
realized that some statements in questionnaire need further clarification for better
understandability. For example, the respondent asked about the clarification of the
term “different specification of the buyers”. All the comments were considered into
the final design of the questionnaire. The final version of the questionnaire was then
organized for the pilot study with the aim of testing the instrument.
4. INSTRUMENT TESTING
Following the reviews from pre-test procedure, a pilot survey was conducted with the
purpose of ensuring the applicability of the data. The supply chain managers were
targeted for data collection. In some companies the position of supply chain manager
does not exist as a result the persons who perform the supply chain functions were
communicated in those organizations. Respondents were selected by convenience
sampling method from the list of garments manufacturers and accessories producers
in BGMEA directory. The respondents were initially approached via phone and they
were informed about the objective of the research. Then the managers who agreed
to participate in the survey were selected for data collection. One hundred ten
managers were communicated regarding the appointment of survey and finally
eighty six managers consisting of sixty managers from RMG manufacturers and
twenty six from accessory supplying companies were agreed to participate in the
survey. Total eighty one usable response were obtained from pilot study. By means
of the pilot study data we conducted the exploratory factor analysis using the
varimax rotation procedure to assess the initial measurement scale. We used
Kaiser–Meyer–Olkin (KMO) and Bartlett’s test of sphericity to evaluate the
appropriateness of the factor analysis. The (KMO) test ensured the overall measure
of sampling adequacy as it was 0.90 (>0.50). The Bartlett’s test of sphericity provide
evidences for the validity of the instrument as it was 1550.134, df = 300, significant at
p = 0.000. Four factors with eigenvalues greater than 1 were extracted, and after
rotation, they were 5.076, 4.195, 3.213, and 3.147. The sums of squared loadings
from the eight components had a cumulative value of 69.727% in explaining the total
variance in data.
In evaluating the result of factor analysis, items were deleted that had loading <0.40
or had cross loadings (>.5) with other factors (see Table 5). In this process, SUS3,
SUS6, SUS9, SUS16, and SUS17 were deleted. Cronbach’s alpha values
corresponding to each construct was also examined for ensuring reliability. It
revealed that Cronbach’s alpha values of the extracted four factors exceeded the
minimum threshold of 0.70. For further scale refinement corrected item–total
correlation was examined to improve the reliability. No problem was identified in item
total correlation results. Finally, the initial instrument was refined by removing low
loading or cross loaded items. Out of 25 items the remaining 19 items were retained
for the next run of factor analysis. The factor analysis with a varimax rotation,
generated four factor solution (see Table 2), based on an eigenvalue greater than 1.
The refined model explained 73.387% of the cumulative variance.
Table 2: Results of exploratory factor analysis (EFA) in the pilot study.
SUS1
SUS2
SUS3
SUS4
SUS5
SUS6
SUS7
SUS8
SUS9
SUS10
SUS11
SUS12
SUS13
SUS14
SUS15
SUS16
SUS17
SUS18
SUS19
SUS20
SUS21
SUS22
SUS23
SUS24
SUS25
We pay fair wages to our employees
We provide Benefits to our employees
We provide different facilities to our employees
We take precaution to Hazard and safety
We ensure health and sanitation for employees
We do not use Child labour
We do not force our employees to work
We monitoring our suppliers social performance
Our employees are satisfied with us
We take measures to control water pollution
We take measures to control Air pollution
We take measures to control Soil pollution
We recycle wastes or sell wastes to recyclers
We do not use any environmentally hazardous material
We have environment Certification and audit
We comply environment legislation
We evaluate suppliers’ environmental performance
We can meet desired leadtime
We maintain expected quality
We can meet specifications of buyers.
We have updated machinery and technology
We have good sales volume
Our cost of sales is low
We good profit margin
Our sales growth is satisfactory
1
.699
.625
.490
.624
.649
.429
.653
.786
.438
.400
.193
.167
.211
.239
.172
.466
.049
.463
.344
.404
.359
.386
.062
.219
.460
Component
2
3
.404
.350
.421
.447
.324
.584
.181
.531
.304
.431
.060
.492
.255
.175
.024
.034
.488
.313
.718
.119
.748
.375
.570
.268
.810
.138
.635
.369
.626
.274
.437
.044
.250
.759
.207
.646
.288
.589
.421
.734
.265
.640
.298
.375
.060
.295
.386
.234
.252
.287
4
.025
.230
.250
.067
.230
.255
.057
.115
.337
.207
.194
.404
.103
.329
.208
.222
.133
.535
.240
.365
.364
.651
.772
.689
.649
Table 3: Results of EFA of the refined scale in the pilot study.
Factors
Social
sustainability
Environmental
sustainability
Operational
sustainability
Economic
sustainability
Items
Loadings
Item total Eigenvalue
correlation
.775
3.368
SUS1
.713
SUS2
SUS3
SUS4
SUS5
SUS6
SUS7
SUS8
SUS9
SUS10
.632
.820
.629
.656
.709
.752
.671
.794
.525
.595
.729
.732
.754
.583
.817
.643
.634
.775
.484
.730
.677
.744
.655
.565
SUS11
SUS12
SUS13
SUS14
SUS15
SUS16
SUS17
SUS18
SUS19
SUS20
SUS21
SUS22
.593
.741
.646
.730
.808
.798
.658
.777
SUS23
SUS24
SUS25
.781
.701
.656
.691
.726
.779
Cumulative
variation
25.6
Cronbach’s
alpha
.937
2.725
45.2
.935
1.896
60.8
.864
1.564
72.3
.889
5 DISCUSSION AND IMPLICATIONS
5.1 Summary of findings
The objective of this study was to develop and validate an instrument for measuring
supply chain sustainability in the context of RMG industry of Bangladesh. Despite the
existence of enormous studies on sustainability and supply chain sustainability there
was a dearth of measurement scale for assessing supply chain sustainability. As the
development of a reliable and valid scale is a fundamental goal of scientific
exploration in this study, the multi-dimensional supply chain sustainability instrument
developed in this study makes an important contribution to theory, method and
practice.
The findings suggest that supply chain sustainability is reflected by four dimensions:
social sustainability, environmental sustainability, operational sustainability and
economic sustainability. The interesting finding of the study is the exploration of a
new dimension i.e. operational sustainability in the context of RMG supply chain
sustainability of Bangladesh. Our field study respondents strongly supported the
importance of operational issues for survival and success of their business.
Operational sustainability which was measured by time, quality, specification and
use of updated technology are very relevant and vital factor for the sustainability and
competitiveness of supply chain. Previous studies (Bateman and David, 2002;
Bicheno,1998; Epstein and Wisner, 2001) also supported the importance of these
operational issues for organizations and their supply chains. Therefore, out of the
border of traditional triple bottom line settings of sustainability, incorporation of a
fourth dimension (operational sustainability) in supply chain is logical and empirically
valid.
5.2 Implications for theory
Building on previous research, and filling the gaps in the existing literature, this research
offers new and valuable insights by developing a research model and further, the developed
model was contextualised through a qualitative field study. The final research model thus
developed; address the sustainability requirements of RMG supply chain in Bangladesh and
to ensure sustainability of the supply chain. This study has a novel contribution to the
supply chain literature by developing and validating a higher-order supply chain
sustainability model on four dimensions (i.e., social sustainability, environmental
sustainability, economic sustainability and operational sustainability). Specifically, the
contribution of this research to supply chain sustainability research is manifold. First,
it identifies and defines the constructs and their associated measurement items in
the context of RMG supply chain of Bangladesh. Second, this study unearthed a new
dimension of sustainability (i.e. operational sustainability) out of the box of traditional
triple bottom line settings of sustainability. Therefore, this study will enhance the
body of knowledge on supply chain sustainability literature.
5.3 Implications for practice
The implications of this research are significant to the Supply chain managers,
specifically the RMG supply chain managers of Bangladesh and elsewhere. The
findings suggest that the supply chain managers shall maintain a balance of social
sustainability, environmental sustainability, economic sustainability and operational
sustainability to survive and to compete in the long run. In fact, the RMG supply
chain managers will be equipped with the knowledge on factors required for ensuring
sustainability in the supply chain. For example, the social sustainability can be
achieved through ensuring wages, benefits, health, safety issues, no to child and
force labour, monitoring suppliers and employee satisfaction. Similarly,
environmental sustainability can be achieved through controlling pollution (soil, water
and air), waste recycling, controlling hazardous material, monitoring suppliers
environmental performance and so on. Further, operational sustainability can be
ensured through ensuring time, quality, specification and use of updated technology.
Finally, economic sustainability can be ensured through maintain low cost, good
margin, increasing sales and keeping sales growth.
6. LIMITATIONS AND FUTURE RESEARCH DIRECTIONS
All research methods and designs have their own flaws and limitations (McGrath
1982). This research is also has got some limitations. Several limitations are worth
noting. Firstly, this research adopts a cross sectional design which investigate the
phenomenon of supply chain sustainability for a particular point-in-time. Longitudinal
research design could capture the effects of supply chain sustainability and supply
chain relationship in the long run. Thus, a longitudinal focus is recommended for
future studies. Secondly, this research was conducted within the specific industry
and in one country however, replications in other contexts would increase confidence
in the research model. A confirmatory may be undertaken in future to test and
validate the developed scale. Future research might also be conducted to
investigate the interrelationships among the supply chain sustainability dimensions.
For example, the relationship between economic sustainability and social
sustainability as well as environmental sustainability may be explored. Another study
may be conducted in a cross industrial setting to test the applicability of the scale
items in a different context.
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