Nominated procurement and the indirect control of nominated sub-suppliers: Evidence from the Sri Lankan apparel supply chain

Enrico Fontana,Christina Öberg,León Poblete

doi:10.1016/j.jbusres.2021.01.040

Abstract

This article describes and discusses nominated procurement as a means through which buyers select sub-suppliers to achieve sustainability compliance upstream in emerging economies' supply chains. Hence, it critically examines the ways buyers articulate nominated procurement and the unfolding supply chain consequences. Based on in-depth interviews and fieldwork in the Sri Lankan apparel supply chain, the findings indicate that buyers accomplish sustainability compliance among their sub-suppliers while prioritizing their own business agenda. In doing so, however, buyers perpetuate “suboptimal compliance” of raw material suppliers and “sandwiching” of direct suppliers as harmful consequences on the supply chain. These consequences link theoretically with commercial, geographical, compliance and extended-compliance pressure. This article contributes to the advancement of the Sustainable Supply Chain Management literature by theorizing about nominated procurement, direct and indirect pressure, and pointing to the supply chain consequences beyond achievements in sustainability compliance.

Highlights

Due to recurrent industrial incidents affecting apparel supply chains in emerging economies, such as the Rana Plaza collapse in Bangladesh (Fontana & Egels-Zanden, 2019), downstream international buying firms, such as clothing brands and retailers, are gradually being held responsible for managing sustainability compli ance upstream in the supply chain (Andersen & Skjoett-Larsen, 2009; Gadde & Jonsson, 2018; Goworek et al, 2018; Karaosman, Perry, Brun, & Morales-Alonso, 2018; Turker & Altuntas, 2014)
The SSCM literature, more significantly, indicates that accomplish ing these triadic goals requires an understanding of how a firm carries responsibility for the activities of other parties, that is, how other parties comply with that firm’s responsibilities as they are distributed along the supply chain
Sub-supplier nomination has under lying consequences for the entire supply chain, including raw material suppliers, sub-suppliers, and direct suppliers, which clearly extend beyond compliance

Summary

Introduction

Due to recurrent industrial incidents affecting apparel supply chains in emerging economies, such as the Rana Plaza collapse in Bangladesh (Fontana & Egels-Zanden, 2019), downstream international buying firms (hereinafter: buyers), such as clothing brands and retailers, are gradually being held responsible for managing sustainability compli ance (hereinafter: compliance) upstream in the supply chain (Andersen & Skjoett-Larsen, 2009; Gadde & Jonsson, 2018; Goworek et al, 2018; Karaosman, Perry, Brun, & Morales-Alonso, 2018; Turker & Altuntas, 2014) This responsibility includes ensuring minimum environmental and social standards, among first-tier supplier firms ( after: direct suppliers) and along the entire supply chain (CrespinMazet & Dontenwill, 2012; Gimenez & Tachizawa, 2012; Harwood & Humby, 2008; Ponte & Cheyns, 2013). SSCM scholars note that tensions and trade-offs between commercial benefits and costs often fuel a lack of compliance (Goworek et al, 2018; Harwood & Humby, 2008; Karaosman et al, 2018; Turker & Altuntas, 2014)

Objectives

Methods

Findings

Discussion

Conclusion