Three-echelon apparel supply chain coordination with triple bottom line approach

Abstract

PurposeAn apparel supply chain primarily consists of geographically distant suppliers, manufacturers and retailers. The coordination among the members of the supply chain becomes difficult when we consider the triple bottom line of sustainability in it. Moreover, the complexity increases with the change in dominance power of the respective members. However, the task of managing the channel further becomes complicated after incorporating sustainability and dominance power simultaneously into the supply chain. To fill this gap, this paper focuses on designing of mechanism and demonstration of three-echelon model to coordinate sustainable supply chain.Design/methodology/approachIn this paper, the noncooperative game theoretic method has been applied for the exploration of models. The various structures of the centralized and decentralized supply chain are considered on the basis of a player's dominance power. The model uses simultaneous and sequential move games to analyze optimal profit of supply chain agents, total channel profit, green innovation level and corporate social innovation level.FindingsAnalytical results show that simultaneous game performs better than the sequential game. The consumer sensitivity toward green and social innovations increases total channel profit. We also proposed a linear two-part tariff contract model. The proposed model enhances the sustainability level and leads to perfect channel coordination. Using a numerical example, we present the effectiveness of multiple game structures under centralized and decentralized settings. The results reveal that channel efficiency is the highest in the two-part tariff contract followed by a simultaneous move game structure and lower in the cases of sequential move game.Research limitations/implicationsIn this research, model setting are deterministic and there is no any information asymmetry. Therefore researchers are encouraged to study multiechelon sustainable supply chain coordination models under stochastic and information asymmetry settings.Practical implicationsThe paper includes implications for the development of sustainable supply chain coordination model to tackle the problems of dominance power, sustainability issues and lower channel efficiency of supply chain.Originality/valueThis study proposes game-theory-based three-echelon sustainable supply chain for the channel coordination.