Implementing environmental sustainability in logistics operations: a case study

Abstract

Purpose The purpose of the study is to develop an in-depth understanding of how supplier–buyer relationships, particularly in operational coordination, are affected when a company introduces an environmental sustainability target (CO2 emissions reduction) into its supply chain operations. The investigation focuses on the joint activities of the logistics function of the company (buyer) and the third-party logistics providers (3PLs) (suppliers). Design/methodology/approach This single-case study takes the perspective of a sustainability-conscious Danish company that outsources logistics services to 3PLs but maintains internal logistics as a boundary function. The value offering point/order penetration point (VOP/OPP) methodology is used. Findings The results showed that the introduction of sustainability led to the emergence of multiple decoupling points in both the demand and the supply chains. The logistics function therefore began to play the role of “integrator” across both the functions in the company and the organizations in the supply chain. The findings indicate the need to develop clear cross-functional and inter-organizational coordination mechanisms. Research limitations/implications This is a single-case study in a Danish context. Practical implications The study provides rich insights into managing the implementation of sustainability in supply chain operations, and it exemplifies how the VOP/OPP tool can be applied by 3PLs to develop sustainable offerings. Originality/value The current research on sustainable supply chain management takes into account the entire supply chain. In contrast, this study focuses on the logistics function. The VOP/OPP concept is used to capture the processes used in actual practice, and both the buyer and the supplier are considered potential co-producers of value.