**5. Sustainable supply chain and logistic**

As business is becoming more challenging these days, companies need to be aware of and practice sustainable supply chain management to stay competitive. Sustainable supply chain management is about environment protection, social responsibilities, and economic growth and profitability in the long term. **Figure 2** depicts the relationships between the three goals that need to be fulfilled: waste elimination or minimization, optimization of resources, and cost minimization, sustainable development with its three dimensions: economic sustainability, environmental sustainability, and social sustainability, and sustainable logistics with its components: logistics concepts, methods, and functions. To achieve sustainable development, integration of its three dimensions is required; any defect in the three dimensions of sustainable development will not lead to its achievement. Logistics is involved in all aspects of business as well daily life of individuals. Sustainable logistics is tied to sustainable development in general, sustainability criteria should be included in the logistic evaluation, in addition to another criterion such as cost and speed. Sustainable logistics is at the intersection of its concepts, methods, and functions. The goal is to eliminate environmental problems in the areas of logistics, which can be achieved by eliminating or minimizing negative impacts of logistics on the environment. Starting from the concepts, these activities include designing sustainable packaging, and reuse of, recycling waste, reducing energy and the pollution caused by transport.

Several concepts and terms of logistics resulted from strict environmental regulations. Reverse logistics is defined as "the process of planning, implementing and controlling the efficient and cost-effective flow of raw materials, semi-finished and finished products, together with the related information flows, from the point of consumption to the point of origin, in order to recover the value or proper

**Figure 2.** *Sustainability framework.*

management" [4]. Disposal logistics – "the application of the concept of logistics for the residue, to induce their efficient, economically and ecologically, movements, while the space-time transformation, including changes in the amount and type of" [5]. Recirculation logistics – "suggests that product or packaging, is circulated repeatedly in a closed-loop supply chain" [6]. Downcycling – "process of waste or useless products transformation into new materials or products, having lower quality and functionality" [6]. Green logistics is defined as a "management approach" aimed at minimizing the negative impact on the ecosystem of logistics flows. The problems of excessive environmental degradation concern companies, operating in each market sector. In particular, however, apply to freight forwarders and carriers. The concept of green logistics associated with the strategy consists in the use of their resources in the most efficient and environmentally friendly way. It is a trend that stems from the need to care for the global environment [7].

Logistics includes "efforts to acquire materials and finished products distribution to the right place, at the right time and in the right amount. Typical elements of the logistics system are customer service, demand forecasting, distribution communications, inventory control, warehousing, procurement processes, parts and service support, site selection magazine, shopping, packing, handling complaints, waste management, transport, and storage" [8]. To improve logistic operations, companies collaborate with suppliers, shippers, distributors, and customers. As a result, logistic cost will be reduced and business performance will be improved.

Sustainable supply chain management covers all activities, functions, processes, and relationships, where materials, products, services, information, and monetary transactions move among enterprises. The first step in the implementation of sustainable supply chain management starts with product design. In addition to optimizing quality and cost, the design will allow recycling of products. Sustainable production is the second step, which can be achieved through utilizing clean production methods, use of new technology, reducing raw materials, and resources. Sustainable marketing helps companies to enhance their relationships with stakeholders. Maintaining biological balance, paying more attention to environment, and waste management leads to cost reduction and improved competitiveness. Sustainable transportation is a major element in achieving sustainable supply chain management. Utilizing renewable energy, modes of transport, infrastructure, and operational management practices can be considered to achieve sustainable transportation. Sustainable purchase leads to minimizing waste, hazardous materials, and sources of pollution.

Hammer and Somers [9] discussed concepts that provide possibilities of using resources more productively. The lean methods involve following a product through factory or service operation with the objective to reduce waste of energy and materials. Unlike profit per ton, the concept of profits per hour takes into account the time dimension in production process. This concept enables companies to make wise decisions and choices regarding resources and productivity.

Advanced analytic techniques help companies navigate and sort within different variables such as equipment configuration, raw materials, and process changes. Comprehensive change management effort is required for resource productivity, which ensures that employees create more value from less. Think circular is a sustainable logic that creates new value for companies and societies. This logic relies on looping products, components, and materials back into the production process.

Rothenberg [10] promoted the concept of "servicizing," where suppliers could focus on providing services instead of selling products as their business models.

#### *Principles of Sustainable Logistics DOI: http://dx.doi.org/10.5772/intechopen.103018*

This will lead to reduced material use as a strategic opportunity. This is in line with the World Commission on Environment and Development definition of "sustainable development." The author presented the case study of three companies; Gage Products, PPG Industries, and Xerox. The three companies are taking the servicizing approach; they adopted business models that help customers purchase less of their products. The three companies have attracted new customers with their new business models. In addition, they have built stronger customer relationships. This closure customer relationship has led to expanding the range of products they sell, attracting new customers who are impressed with the company's sustainable social commitment, and usually, customers are less likely to change suppliers.

Similar to other large-scale initiatives for change, moving to servicing is faced with challenges. Changing the culture from selling more products to helping customers to use fewer products is not an easy task. There will be internal resistance at different levels to this change. Managing this change falls into six categories: (1) utilizing existing strengths (2) restructuring profit in contractual agreements (3) introducing the new business model (4) new incentive schemes (5) introducing new skills and (6) expressing major significance and special interest of environmental advantage.

Paine [11] discussed the importance of corporate responsibility to their long-term success. Nike's corporate committee's role in supporting innovation was described. The committee was created in 2001 as a result of board member Jill Ker Conway's lobbying. The committee advises on issues such as labor practices, resource sustainability, innovation, and acquisitions. The author concluded that corporate responsibility committee could help companies in several ways such as a source of knowledge and expertise, accountability, driver of innovation, a source for the full board and constructive critic.

Nidumolu et al. [12] discussed the idea of collaboration, as is a necessity for business sustainability. They introduce four models for systematic sustainability using case studies. The models have two common features; stakeholder inclusion and innovation in either operating processes or business outcomes. Companies can work together on issues such as climate change, depletion of resources, and ecosystem. Two types of collaborations focus on business processes and outcomes. First, is corporate collaboration, which includes all players in business such as manufacturers, suppliers, distributors, and retailers. Second, extended collaborations, which covers business and non-corporate partners such as government, NGOs, and academics.

Companies can identify and share operational processes that will minimize consumption of resources and waste, which will lead to natural resources protection. In addition, companies can share defined outcomes that minimize environmental impact. To explain the proposed models, the authors discussed several case studies. Processes were the center of corporate collaborations in the case of Dairy Management Inc. and case of an action to accelerate recycling. The corporate collaboration's focus was on outcomes in the case of sustainable coalition, and Latin American water funds partnership.

Authors stated seven next practices for successful collaborations in sustainability. (1) Starting with small committed group (2) link self-interest to shared interest (3) monetize system value (4) create a clear path with quick wins (5) acquire independent project management expertise (6) build in structured competition, and (7) nurture a culture of trust.

Doorey [13] describes the case study of Nike and Levis. The contribution of factory disclosure was evaluated, and tracking the change from resistance to transparency in supply chain was tracked. Information disclosure is a tool that is used in business and it affects its behavior. Business leaders can change harmful behavior with transparency and empowering private watchdogs. This is clear from the private movement that took place in the late 1990s to pressure corporations to disclose and declare their global suppliers. It was believed that such disclosure would improve working conditions and labor practices. For example, Nike and Levis published their suppliers list in 1995, which was a surprise to the business community. Information systems were introduced to track information about labor practices including global suppliers' databases.

Unlike Nike and Levis, many other companies are not welcoming the idea of supplier transparency. Some of these companies cannot track their suppliers, which will lead to ignorance of labor practices. In such case, the role of private actors becomes essential to apply the needed pressure to create transparent supply chains.

New [14] discussed the importance of transparent supply chain. When supply chain is not transparent, trouble will arise. Many companies consider provenance very important, H&M for example declares that labor practices and environmental effects of its suppliers' suppliers are very important. Origin is considered an important and essential feature of what a customer may buy. Companies such as Wal-Mart are using new technologies to provide origin data. For example, bar codes that can be read with mobile phones, genetic markers for agricultural products and labeling have been transformed by microscopic electronic devices.

Customers have an interest in origins and authenticity. Providing them with information about provenance will become part of the marketing strategy. Provenance is important on downstream and upstream sides of the supply chain. Both customers and suppliers can access this internet of things that gather provenance information.
