Sustainable Supply Chain Practices and Their Impact on Competitive Advantage (Review)

Abstract

Sustainability is now recognized as a competitive objective for most businesses in the global
business environment. Businesses can compete in today's market by using sustainability as a
differentiator. However, pills supply chain management continues to face difficulties in protecting
the environment worldwide, even despite the growing adaptation to sustainability methods. While
considering the moderating influence of sustainability inhibitors and the mediating role of
sustainable supply chain practices, the study examines the relationship between sustainable
competitive advantage and sustainable supply chain strategy. However, as competition now exists
among supply chains rather than between firms, effective supply chain management (SCM) has
come to be as a potentially useful strategy for gaining a competitive edge and enhancing
organizational performance. This review evaluates sustainable supply chain practices (SSCPs) and
their influence on competitive advantage. It highlights gaps in the literature, such as fragmented
research on interrelated practices, inconsistent performance metrics, and inadequate long-term
studies. Addressing these gaps, the paper synthesizes recent research, provides a framework for
assessing SSCPs, and suggests areas for future exploration. The findings underscore the need for
integrated strategies and industry-specific approaches to achieve both sustainability and
competitiveness.
1. Introduction
Supply chain management (SCM) involves the administration of operational activities
occurring beyond the firm's boundaries, including the procurement and transformation of
raw materials from suppliers, the manufacturing of finished products, and the distribution
of these products to wholesalers, retailers, and end consumers [1, 2]. Diverse supply chains
are employed to oversee the design, production, marketing, and distribution of products to
final consumers, contingent upon the nature and uniqueness of the commodities [3].
However, the difficulties of delivering a good or service at the right moment and location
at the lowest possible cost increased in the 1990s as markets expanded globally and
competition grew fiercer. Companies realized that increasing internal efficiencies was
insufficient and needed to make their entire supply chain competitive. Understanding and
putting SCM into practice is now a must for increasing profitability and remaining
competitive in the global race [4-7]. The strategic aspect of trading partner coordination is
acknowledged clearly in the supply chain management (SCM) concept, which also
explains its dual goal of enhancing the performance of individual organizations and the
supply chain as a whole. SCM aims to provide seamless information and material flow
throughout the supply chain as a powerful tool for competitive advantage [8].

Minimizing production costs to the achievable minimum necessary to satisfy consumer

demands is one of the best strategies to compete successfully in the market. This can be
achieved through effective supply chain management, which is thought to be crucial to a
company's success [9] . Also demand for all business operations boosts the sustainability
of their supply chains [10]. As a result, a sustainable supply chain framework shows that
management support and policies help businesses reach sustainable goals [11]. Modern
supply chain integration can be adopted and implemented more easily with the help of
sustainable supply chain management (SSCM). Organizations may enhance their overall
supply chain performance, cut waste, and boost efficiency by implementing sustainable
practices and concepts into their operations. By offering real-time data, promoting
communication and cooperation, and simplifying procedures, technology adoption (TA)
tools like automation, data analytics, and the Internet of Things (IoT) can assist firms in
 achieving these objectives. Because they can better meet customer demand, cut costs, and
increase their overall competitiveness, suppliers can so become more competitive in terms
of their operational performance [12]. All corporate environments and organizations are
undergoing fast changes lately, and the market is dominated by fierce competition,
financial strains, short-term market potential, and shifting consumer preferences [13]. The
performance and success of modern firms are significantly influenced by supply chain
management [14]. Businesses are becoming more aware of the crucial significance of
effective and efficient supply chain management techniques in a highly competitive global
economy to sustain growth and preserve a competitive edge[15]. SSCM integrates
environmental and social considerations into supply chain operations to achieve
competitive advantage while addressing stakeholder demands. This review examines
existing literature to evaluate how sustainable practices contribute to competitive
advantage and identifies research gaps.
2. Literature Review
Environmental, social, and economic considerations are integrated across the entire supply
chain by sustainable supply chain management (SSCM) [16]. which improves business
performance [14]. SSCM procedures boost customer loyalty, lower expenses, improve
brand perception, and promote operational efficiency, all of which contribute to long-term
financial success and competitive advantage [17]. Initiatives for environmental
sustainability, such as waste reduction and energy conservation, help companies reduce
their negative effects on the environment while also improving their capacity for
innovation, operational effectiveness, and overall performance [18] . Social sustainability
initiatives that promote community development and fair labor improve a company's
standing with stakeholders, employee motivation, and public perception [19].
Economically sound methods, like waste minimization and logistics optimization, enhance
profitability, supplier relationships, and cost effectiveness. Setting in place a sustainable
supply chain promotes social justice, economic sustainability, and environmental
accountability [20]. The implementation of a strategic method that other firms are not
currently using to save costs, take advantage of commercial possibilities, and/or neutralize
competitive difficulties is known as competitive advantage, or CA [21]. It is nearly
impossible to draw in and keep customers over the long term without a competitive edge,
 and a company cannot consistently make money without a constant customer base [22].
Without sufficient income, the business cannot create new goods and services, replace or
repair deteriorating assets, or hire and train staff as it expands or departs [23]. Moreover,
it is unable to adopt new work practices, restructure systems, or purchase new technology
in reaction to changing market demands. In other words, without a competitive advantage
that sets it apart from its competitors, the company would eventually fail. In order to
maintain a competitive edge, the product or service's quality is crucial. According to the
idea of competitive advantage, companies should create policies that consistently give
priority to producing high-quality products that can be sold at competitive prices. Due to
certain characteristics or circumstances, a company's competitive advantages—such as cost
advantage and differentiation advantage—increase value for the business and its
shareholders. decided that resources or capabilities that are hard to copy and crucial to an
organization's ability to outperform its rivals in the marketplace are considered a
competitive advantage. Therefore, the supply chain's strategic capacity to manage
capabilities—such as coordinated system-level operations, integrated information sharing,
and company-supply chain integration—is an advantage.

2.1 Key Sustainable Supply Chain Practices

2.1.1 Green Procurement
Green procurement seeks to mitigate negative environmental impacts in comparison to
similar products or services that fulfill specific determined environmental standards or
that have the same purpose [24]. Adopting green procurement practices benefits both
the business and the environment [25]. Regarding the environment, the advantages can
be realized by lessening adverse effects on the environment and nearby people. From
a corporate perspective, the advantages are realized through enhancing reusable
content, enhancing environmental performance, and lowering environmental handling
expenses. The performance of the building and construction process is enhanced when
green procurement is used in the construction sector [25]. In many countries, green
procurement is still a relatively new idea. Because environmental concerns are
growing, it is necessary to educate the public and private stakeholders about green
 procurement. According to [26], there are 17 challenges of green procurement
implementation, and these challenges ere further classified into 10 including
knowledge, training, awareness, policy, commitment and demand, integration, time,
cost, and availability. The finding of this od this study can serve as the basis for further
research and fill the academic gap in this era.

2.1.2 Eco- Design

Throughout the whole product life-cycle, the design phase determines over 80% of the
environmental impact [26]. Due to the growing need to safeguard the environment and
ecology, more and more businesses are starting to pay attention to eco-design [27, 28]
Eco-design can successfully lower the amount of materials, energy, and pollutants used
in the manufacturing, use, transportation, recycling, and reuse of products. The
production process is the primary step of the entire product life-cycle that results in
pollutant emissions for manufacturing enterprises that involve significant energy
consumption and heavy pollution [29]. It is also the stage that directly consumes
resources and energy. For instance, data from the Chinese National Bureau of Statistics
indicates that almost 30% of the nation's overall electricity consumption in 2018 came
from high-energy-consuming businesses [30]. The U.S. Bureau of Energy Information
and Statistics reports that, on average, manufacturing enterprises' energy consumption
throughout the production process makes up 80% of their overall energy consumption,
with 48.2% of that amount coming from the operation of production equipment. Over
30% is attributed to the operation of additional auxiliary equipment, such as heating
and cooling[31]. Thus, the Chinese government's "Guiding Opinions on the
Development of Eco-Design of Industrial Products" document aims to promote eco-
design among businesses. It makes it very evident that manufacturers should
concentrate on lowering energy and resource consumption as well as the release of
pollutants and toxic and hazardous materials during the production process when
implementing eco-design (http://www.gov.cn/zwgk/2013-
02/27/content_2341028.htm, accessed on 27 February 2013). The effects and
implementation space are constrained, nevertheless, if businesses solely rely on their
own eco-design initiatives to consistently encourage energy conservation and carbon
 reduction. They must thus collaborate with the supply chain upstream. Additionally, it
can produce favorable outcomes and possible avenues for reducing emissions and
conserving energy [32]. Despite many efforts in the era there is no quantifiable
explanation for the dynamic influence of eco-design efforts on the manufacturer's unit
product profit; for example, certain significant innovations are realized after the
investment efforts, which will boost the profit.

2.1.3 Reverse Logistics

Reverse logistics encompasses recycling, remanufacturing, and waste management.
Firms implementing reverse logistics reports reduced operational costs and enhanced
customer loyalty. According to [33], reverse logistics is a systematic approach used
to effectively manage the movement of resources and goods in the opposite direction
from where they originate, specifically from the end-user or consumer to the original
manufacturer or producer. According to [34] the primary goal of supply chain
management is the effective and efficient coordination and integration of various value-
enhancing processes and activities across numerous firms that function inside a
networked supply chain. According to the research of [35] it is crucial to recognize that
a considerable percentage of businesses encounter challenges when attempting to
effectively include reverse logistics into their internal value chain in addition to forward
logistics.

3. Impact on Competitive Advantage

Sustainable practices contribute to competitive advantage by improving operational
efficiency, differentiating products, and fostering customer loyalty. SSCM enhances
operational efficiency by reducing costs through waste minimization and improved
resource utilization. Additionally, sustainability certifications enable companies to
differentiate themselves in the market, appealing to eco-conscious consumers and securing
a competitive edge. Furthermore, organizations with robust SSCM practices tend to build
stronger brand images, fostering trust and improving their market positioning.
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