Sustainable supply chain management in the Colombian agricultural sector

Civil society organisations and consumers in importing countries have begun pressuring international suppliers to provide products that meet higher social and environmental standards. This has prompted many companies to... [ view full abstract ]

Civil society organisations and consumers in importing countries have begun pressuring international suppliers to provide products that meet higher social and environmental standards. This has prompted many companies to undertake initiatives to make their supply chain more sustainable. The way in which companies engage with suppliers has been categorised in two general methods: assessment (evaluation of suppliers, such as site inspection, CSR audits, certifications requirement) and collaboration (working directly with suppliers providing them with visits, training and joint efforts). Some authors argue that assessment itself is not enough and collaborative relationships are needed, especially when working with emerging and developing countries. Sustainable supply chain management (SSCM) is an emerging topic relevant for Colombia because of its rapidly economic growth, and large land assets for agricultural expansion. In recent decades, large national buying companies have collaborated with their agricultural suppliers to introduce sustainable practice. This practices aim to improve supplier’s overall competitiveness and sustainability, while securing the supply of raw materials and meeting growing demand for agricultural and agro-industrial products. These partnerships are diverse in terms of the degree of formalization, the governance structure and their ability to share knowledge, practices and value along the supply chain. In this paper, we aim to understand how SSCM practices are incorporated in the production processes of agricultural companies and their suppliers and why some succeed while others fail in the context of an emerging economy. Using a case study methodology, we conducted an analysis of such relationships in one of the biggest dairy processors in Colombia. We explored: i) the motivations for introducing sustainable practices in the value chain ii) barriers or bottlenecks that prevent collaboration between companies to implement sustainable practices iii) the factors that facilitate organizational learning and scaling up of these practices; and iv) the impact on the eco-systemic services and welfare of the actors in the supply chain. These factors are identified separately for buyers and suppliers as they face different challenges in the supply chain, also addressing the lack of supplier’s perspective in the academic literature. Internal leadership and two-way communication were found among the most important factors to maintain the alliances. Lack of knowledge and awareness was one of the ex-ante barriers for suppliers to join sustainable programmes. However, that is overcome through the partnership leaving the high economic cost as one of the ex-post barriers to continue with the collaboration and scaling up the programme. This paper contributes to theory by better understanding how these aspects interact in the journey of achieving sustainability along the supply chain through collaborative relationships in emerging economies.

Keywords: Sustainability, emerging economies, supply chain, agri-food supply chain, collaboration