TRES ETAPAS

Not only technological developments are shaping the future of supply chains but also societal changes. On everyone’s agenda recently is corporate social responsi-bility (CSR) and the sustainaresponsi-bility of a firm’s supply chain; upstream as well as downstream. With climate change as a global concern, consumers, investors, governments and shareholders alike increasingly want to know how “green” a company’s supply chain really is. The term sustainability refers to the simultaneous pursuit of economic prosperity, environmental quality and social equity; this often is referred to as the “triple bottom line.” In practical terms, sustainability initiatives seek to reduce the use of energy, water, greenhouse gas emissions and harmful substances in the manufacturing, distribution, and the service of products. But sustainability also includes goals on social responsibilities to employees, customers, suppliers, and community.⁴⁹

Major areas of concern towards which channel members mostly turn their attention are energy and climate, land and soil, air, water and local communities.

The energy and climate concerns refer to the amount of greenhouse gas emissions associated with the supply chain. Global factor conditions in labor costs and raw materials have exacerbated the carbon footprint of many firms. Many retailers have also received criticism about their own land use and its relationship to urban sprawl.⁵⁰ Urban sprawl refers to the widespread movement of households and private firms from city centers and inner suburbs to very low-density suburbs.⁵¹

47Harrop (2009).

48Orsini (2014).

49Schlegelmilch and O¨ berseder (2007) and Pedersen (2009).

50Hicks (2007).

51Downs (2007).

The use of water in the supply chain has also come under intense scrutiny. In this context, Nestle´, for example, is facing environmental challenges for its use of spring water. Pepsi (Aquafina water) and Coca-Cola (Dasani water), in contrast, have already switched to processing municipal water for sale at the retail level.⁵²

Considerations of channel members regarding the local communities of the places they source from are also very prominent on executive agendas as well as in the media. The widely publicized recalls of tainted pet food and lead-laden toys made in China or the suicides of workers at an electronics factory in Shenzhen have driven home the reality that stakeholders, and in particular consumers,⁵³ increas-ingly hold corporations accountable for actions of their supply chain partners.⁵⁴ Given the increase of social- and environmental problems around the globe, it is likely that sustainability issues will gain further importance in the design and management of global supply chain and distribution networks.

7.7 Summary

Global supply chain management and distribution networks are important in creat-ing customer value. Since very few enterprises are able to supply products to all possible customers independently, the majority need to rely on other parties, such as intermediaries. Hence, a range of collaboration agreements between independent companies characterizes most supply chains and distribution networks. When these companies are dispersed around the globe, managing supply chains effectively and efficiently is a formidable challenge. If managed well, global supply chains and distribution networks can be a powerful source of competitive advantage. On the downside, mistakes in this area can render a company uncompetitive.

We start the discussion by briefly outlining the key dimensions of global supply chains, namely logistics, purchasing, operations and marketing channels, as well as the main benefits that can be derived from global supply chain management, such as cost reduction, quality improvements, increased customer satisfaction and compet-itive leverage. This is followed by a look at the upstream side, comprising of inbound purchasing, operations and logistics, and the downstream side of the global supply chain, that is outbound logistics and marketing channels. As marketing channels comprise the part of the global supply chain that connects to customers and has a boundary spanning function, in this global marketing strategy text, most of the discussion duly focuses on marketing channels.

Following some general remarks on the function and different organizational formats of distribution channels, the focus shifts to the key drivers of channel design, and subsequently the management of a channel, including the selection, motivation and evaluation of channel members. A pertinent issue in channel

52Thottam (2005).

53O¨ berseder et al. (2013).

54Lee (2010).

management is the reduction of channel conflict. In an international context, grey markets may cause channel conflict. Above, we outline the conditions that favour grey markets and suggest an approach to combat grey market activities.

The chapter closes with a look at future trends in global supply chain manage-ment and distribution networks. In addition to singling out some important techno-logical developments, such as the increasing impact of E-commerce and inventions like radio frequency identification tags or 3-D printing, mounting stakeholder demand for sustainability and CSR is likely to shape the future development of global supply chains.

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