Supply Chain Management

Increased regulatory citations, consumer complaints, and special interest group pressures, led to the adoption of more responsible business practices, expressed in the context of Corporate Social Responsibility (CSR), which is defined as the deliberate inclusion of public interest into corporate decision-making that goes beyond the corporation’s statutory obligation to comply with legislation. As the nature of many business relations is changing from companies manufacturing goods within wholly owned facilities in national operations to companies engaging in supply chains and supplier-based manufacturing across national borders, the concept of CSR is likewise transforming. Except from their own corporate practices, companies are also held responsible for environmental and labour practices of their global trading partners in their supply chain such as suppliers, third party logistics providers, and intermediaries over which they have no ownership. As a result, the relationship of CSR with the whole supply chain of a corporation becomes very important. This chapter presents basic concepts and definitions concerning the relation of Corporate Social Responsibility with Supply Chain Management (SCM) and provides a short literature review on the subject. The most popular practical applications so far are described, such as Purchasing Social Responsibility (PSR), sustainable packaging, sustainable warehousing, sustainable transportation and reverse logistics. The role of the implementation of codes of conducts based on international social standards by the larger organizations is explained as a means for implementing a system that ensures the compliance of all the involved supply chain stakeholders in common social and environmental principles. The chapter closes with a discussion concerning the expected trends in the subject and the potential benefits as well as the existing barriers for a full implementation of CSR in the supply chain domain.