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Firms need to take responsibility for the environmental and social performance of their supply chain due to changing regulations and growing stakeholder pressures. Since many parts of the value creation are outsourced across multiple supply chain tiers, companies need to adapt their supplier and sub-supplier management strategies. Due to the complexity of the supply chain and resource constraints, firms need to decide how much of the supply network to delegate and how much of it to directly control.
The results of qualitative research show that the social sustainability dimension tends to be more static. Whereas environmental requirements may vary depending on the products and projects. OEMs mainly employ delegation practices, as they require first-tier suppliers to enforce sustainability requirements and cascade them down the supply chain. This results in a model of delegation across the supply chain. Each tier is accountable to ensure that the next tier complies. Sub-supplier management strategies are adapted based on factors like sustainability risk, product criticality, or detected violations. Automotive companies utilize sustainability scores, certifications, supplier audits, supplier development practices, and directed buys to drive the adoption of sustainability among their suppliers and sub-suppliers. However, the implementation of sustainability requirements varies across supply chain tiers as lower-tier suppliers rarely implement sustainability mandates.
Keywords: Sustainability; Sub-Supplier Management; Sustainable Purchasing; Supply Chain Management; Supplier Assessment and Supplier Development
