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Abstract:- Supply chain operation in Zimbabwe remains at risk of being inefficient and unsustainable. The emphasis of this paper is to institute governance on suppliers to improve supply chain sustainability. Supplier governance would be instituted mainly in two ways; through organisations when they initially engage suppliers and through legislation and policies continuously imposed directly on suppliers to ensure conformance to supply chain sustainability. The study employed desk research to explore the various governance systems and practices that can be implemented on suppliers within public and private institutions to improve supply chain sustainability. Findings revealed that the industry was fraught with poor transparency, inadequate corporate governance, weak rule of law on suppliers, corrupt practices, too much supplier bargain power, poor supply transparency, inconsistent consideration of supplier governance among buying organisations, lack of understanding on sustainable supply and procurement, lack of standards and proper certification among other factors. Proposed recommendations focused on skills and policy alignment, leveraging the right technology, restricting value leakage and embedding risk mitigation strategies into all supply chain activities.
packaging, transportation, storage of goods, delivery, use, return, and disposal. Sustainable supply chain management entails merging environmentally friendly and financially viable activities throughout the supply chain lifecycle. Environmentally sustainable supply chain and procedures will assist businesses in not just significantly reducing emissions, but also optimizing their end-to-end operations save more money and earn more profits. When businesses wish to be successful by leveraging suppliers’ services and goods, the cooperation involving sustainable supply chain management and supplier governance emerges. Organizations strive to be driven by the market in order to meet consumer wants, and to give end users precisely what they need which is a social apect. Finally, firms do have strong motivation to safeguard the environment and ecosystems through green procurement procedures (environmental management). Any service or industrial organization in the existance is dependent on provided products or services to varied degrees. As a result, in order to establish sustainable supply chain management, companies at all levels of the supply chain must adopt effective supplier governance as a preliminary step (Akamp
& Muller, 2013).
Global supply chain governance
In the mid-2000s, the term supply-chain governance’
(SCG) was coined. It is a regulatory system composed of laws, methodologies, and organizations that employ laws and policies to guide, govern, and propel supply chains with the objective of enhancing production. Multiple parties, including big corporations and small enterprises, employ governance systems in the entire supply chain. The global supply chain refers to the process of transforming raw materials into completed items, which frequently occurs in multiple countries, as well as the movement of goods and services between suppliers and buyers. This technique is becoming increasingly prominent as globalization and interdependence rise. This has contributed to the proposal for the establishment of a governing body to aid in the efficient running of global supply chains (Egels-Zanden,
Keywords:- Governance, Sustainability, Supply Chain, Triple Bottom Line, Zimbabwe.
I. INTRODUCTION AND BACKGROUND
Almost all organizations (manufacturing and service)
are completely reliant on the products or services of
Pullman & Dillard, 2010).
The strength of every
sustainable supply chain is defined by its weakest link
(Ashby et al, 2012). Dube (2018) also stated that suppliers
contribute inputs to supply networks, which is why the stability of supply chains is primarily dependent on suppliers. Supplier governance is really a managerial concept that enables enterprises to get the most out of their suppliers. As a result, supplier governance is critical in building a sustainable supply chain management system (Beske, Johnson & Schaltegger, 2015). Supplier governance begins with product design and development and progresses to raw material sourcing, production, labeling and
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Supply Chain Governance in Zimbabwean
The Public Procurement and Disposal of Public Assets
Act (PPDPAA) (Chapter 22:23) mandates the Procurement Regulatory Authority of Zimbabwe (PRAZ) to design and deliver a transparent and equitable framework for the registration of bidders and contractors intending to do
business with procuring entities (Dube, 2019). However, this
Act does not identify the course that must be taken to guarantee that each supplier complies with governance requirements related to sustainable supply chain management. All governance standards for sustainable
supply chain management must be completed at this initial registration.
In Zimbabwe, poor supplier governance occurs when politicians use their muscle in procuring or supply contracts, resulting in the flouting of supply regulations, particularly in high-value tenders. The procurement and supply chain management management systems in Zimbabwe have come under fire, with many blaming the public procurement process for inadequacies to execute government projects and initiatives (Beske, Johnson & Schaltegger, 2015). Earlier research in sourcing and supply chain management established that procurement efficiency has an influence on service provision and public service effectiveness (Ashby et al, 2012). A number of studies on supplier governance published explain why government and private sector programs and service delivery are so poorly implemented (Cox et al ,2002) The current study aims to address governance concerns by concentrating on suppliers throughout the engagement process.
Numerous scholars identified the following critical issues with Zimbabwe’s supplier governance system: (1) inadequate and out-of-date supplier policies and processes; (2) public sector supply remaining an operational rather than strategic activity; (3) a complete absence of transparency and accountability in supplies; a lack of sustainable supply chain knowledge and skill; and (4) embedded fraud and corruption (Beske, Johnson & Schaltegger, 2015). According to Ashby et al, 2012). emerging and entrepreneurial suppliers face considerable challenges due to a lack of adequate skills and specialized knowledge.
II. STATEMENT OF THE PROBLEM
Over 60% of businesses say they lose an average of 25% of value every time they purchase a service or product as a result of inadequate supplier governance (Dube, 2019). The new PPDPA, which went into force in 2018, compels suppliers and supply chain experts to adhere to strict governance standards in order to promote sustainable supply chain management (Dube, 2018). Since the PPDPA and other statutes managing suppliers in supply chain management were enacted, Zimbabwe has continued to have weak supplier governance. The primary source of concern is that these suppliers constitute a significant portion of the supply chain system’s inputs. The purpose of this study is to discuss supplier governance techniques and their usefulness in developing a sustainable supply chain management system.
4.1 Sustainable Supply Chain Governance
Sustainable supply chain governance (SSCG) is the practice of governing in a sustainable manner (Egels- Zanden, 2014). In the manufacturing and service sectors, SSCG has become a more relevant subject. If the upstream supply chain partners of a focal firm, particularly suppliers, achieve sustainable results, the company is deemed dedicated to sustainable supply chain management (Kaynak & Montiel, 2009). The SSCG connects traditional supply chain operations and governance structures that manage societal interactions, procedures, and methods in order to create sustainable development (Gimenez & Tachizawa, 2012).
Within the confines of their own organization, a focal company’s sustainable governance is somewhat distinct from traditional organisational governance (Kaynak & Montiel, 2009). By maintaining direct contact with key supply chain partners, procurement experts in charge contribute significantly to governance (Kar & Pani, 2014). The two sub-sections that follow, sustainable supply chain governance framework and “sustainable supply chain governance procedures,” discuss several governance frameworks and processes.
4.1.1 Sustainable Supply Chain Governance Structures
The SSCG structure has been studied from a supply chain management, global value chain, developmental channel, and network theory perspective (Kar & Pani, 2014). Cox et al,(2002) propose a model of sustainability governance based on the density of supply chain networks and demonstrate how the centrality of the focal organization influences sustainability governance. Gimenez and Tachizawa, (2012) conceptualize sustainable governance by companies and non-actors through chains in the value chain of global commodities and distribution networks. Additionally, SSCG systems were examined in terms of network assessments and governance patterns in the food supply chain, that comprises parties other than buyers
and producers (Awaysheh & Klassen, 2011)
4.1.2 Sustainable Supply Chain Governance Mechanisms Sustainable supply chain governance structures are defined as the activities, rules, and processes that an organization employs to manage relationships with supply chain stakeholders with the goal of adopting sustainable into the supply chain and optimizing sustainability outcomes
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To explore various supplier governance mechanisms in
To enhance sustainable supply chain management
through supplier governance.
To recommend sustainable supply chain governance
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(Cramer, 2008). Control-based (assessment-based) and relationship-based (buyer-supplier cooperative effort) guidelines are two well-known approaches (Gimenez and Sierra, 2013,).
4.2 Supplier Control-Based Governance
Supplier control-based governance systems include codes of conduct, standards and qualification requirements, auditing protocols and supplier evaluation practices (Awaysheh & Klassen, 2011). On the other side, ‘peer-to- peer’ relational governance frameworks have been formed, which rely on mutual adaptation via unique investments such as schooling, training, or code of conduct workshops (Klassen and Vachon, 2016).
4.2.1 Control-based Governance Mechanisms
The most extensively explored purchaser-
driven control-based management practices in the SSCG domain are buyer-driven influence governance mechanisms ( Egels-Zandén, 2007). It is possible to distinguish between descriptive and prescriptive methods to control-based procedures (Andersen et al., 2016). The descriptive approach includes developing vendor codes of conduct, establishing various evaluation requirements, and developing classification techniques for assessing vendors from the customer’s or focus company’s perspective (Kar and Pani, 2014). Rather than that, the prescriptive method examines a variety of corporate and strategic objectives in order to build systems and processes for evaluating and weighting vendors versus specification criteria ((Liu, et al, 2009). Both (descriptive-prescriptive) method proponents propose for a highest level to lower level relational approach to procurement strategies, which are mostly used by buyers and salespeople (Andersen et al., 2016). Due to the scarcity of supplier perspectives, descriptive and prescriptive analyses provide only partial perspectives (ibid). Additionally, reflection on contingent or situational effects is frequently overlooked. The following are many of the most often used control-based procedures for monitoring supplier sustainability efficiency, which are crucial for purchasing businesses’ long-term supply chain management.
Compliance is a sort of corporate voluntary control
system that buyers use to determine a supplier’s capacity to adhere to specified criteria or rules, the buyer’s code of conduct for subcontractors and supliers (Awaysheh & Klassen, 2011). Numerous scholarly articles include significant references to enforcement, whether in terms of issues or a lack of vendor compliance (noncompliance), or increased compliance, or the significance of conformance ((Cramer, 2008Compliance performance may be evaluated through testing and inspection at the point of call with first time suppliers and in collaboration with existing suppliers, depending on the terms of the agreement between suppliers and buyers (Seuring, 2008). The buyers, who are nominated by the buyer’s auditors or supplier-suggested auditors or observers, assess a supplier’s compliance with the buyer’s standards of conduct (researchers). As a consequence, the researchers’ assessment of the current level of enforcement is subjective (Liu, et al, 2009). However, opponents question
the practicality of an enforcement-based system (Pullman & Dillard, 2010) because compliance entails fulfilling minimum standards rather than exceeding maximum expectations. As a result, purchasing firms and their suppliers may lack responsibility and accountability in order to be compliant (Cramer, 2008). The application of codes of conduct would aid in enforcing compliance (Egels-Zandén, 2014), as codes of conduct define the conditions that providers must satisfy.
4.2.3 Codes of Conduct (CoC)
Codes of conduct contain standards and guidelines
regarding work hours, minimum salaries, conditions for workers, health care, and child labor, among other things (Egels-Zandén, 2009). Little research has been conducted to ascertain what it is like to be on the receiving end of CoC (Dubois &Araujo, 2007). One of the most major obstacles in adopting CoC is that providers must adhere to many customer-specific codes of conduct. This results in a state of confusion regarding the applicability of a given standard (Huq et al., 2016). One strategy is to exert pressure on suppliers through coordinated actions like termination for non-compliant providers (Dubois &Araujo, 2007).
Another option is to work from within with suppliers to integrate CoC process into the overall strategy of the business (Egels-Zandén, 2014). Rather than excessive audits and compliance, a third method would be to establish long relationships with suppliers, maintain frequent communication with them, and support in their competency- building phase to facilitate efficient CoC adaption (Frostenson & Prenkert, 2015).
4.2.4 Supplier Selection
Organizations are having difficulty implementing
codes as they deal with multiple suppliers. The contract’s implementation starts with the selection of vendors (Huq et al., 2016).). Codes of conduct have a significant influence on the criteria used to recruit new suppliers and evaluate existing vendors (Kar and Pani, 2014).. Suppliers’ capacity to act responsibly and their performance on social concerns are the two most critical elements in strategic sourcing (Klassen and Vereecke, 2012). According to a study done in Zimbabwe’s service and manufacturing industries, purchasing organizations employ a variety of supplier selection strategies across the supply chain (Adebanjo et al., 2013). Despite its critical role in sustainable supply chain procedures, supplier selection has received insufficient attention in creating environments (Akamp and Müller, 2013). Supplier selection is critical to investigate because picking suppliers who support human rights, engage in business ethics, and prioritize safety conditions involves the review of a new supplier or current suppliers ((Dubois &Araujo, 2007).
4.2.5 Supplier Assessment or Evaluation
Supplier assessment or evaluation is used by
purchasing firms to identify ethical suppliers and to determine the authenticity of suppliers that claim to practice ethical behavior ((Rodríguez,et al.,2016). Recent research has shown that there is no difference in supplier evaluation
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and assessment (Gimenez & Tachizawa, 2012).). Previously published authors defined these interface domains ((Dubois &Araujo, 2007). Supplier evaluation is viewed as a form of supplier pre-selection. Supplier evaluation comprises monitoring current suppliers’ social responsibilities, which can help determine the supplier’s long-term success (Ashby et al, 2012). Cox et al ,(2002) examine the relative relevance of environmental and social variables in supplier evaluation by examining the supply chains of six industrial businesses.
Supplier assessment is a suggested governance technique because it is believed to prevent supplier opportunism as a result of buyer compulsion via regular supervision (Cox et al ,2002). Reduce opportunistic behavior by not working excessive hours, not employing child labor, and not withholding wages, among other things. Additionally, Akamp and Müller (2013) assert that supplier assessment or evaluation processes boost suppliers’ sustainability performance. Purchasing businesses evaluate suppliers by monitoring or auditing them in order to ascertain their sustainability performance throughout the supply network ((Rodríguez,et al.,2016.
4.2.6 Supplier scorecards
The major objective is to oversee and control the
performance of vendors. As a result, scorecards are a critical component of the supplier evaluation and management processes. Scorecards are a critical management tool for seasoned providers to ensure they do not become complacent. The document’s data enables firms to maximize their return on investment (ROI) while minimizing risk. Additionally, evaluating vendor performance helps businesses clarify expectations, ensuring buyers and suppliers are working toward the same goals, assess the entire supply chain costs of the product or service, and discover any loopholes or supply chain vulnerabilities that may be handled promptly (Ashby et al, 2012)
4.3 Relational-based Governance Mechanisms
Mechanisms of relationship governance are founded on mutually agreed-upon ideals and methods governing social connections across supply chain members (Klassen and Vachon, 2003). Relationship-based governance strategies for sustainable supply chain management include reciprocal adaptability, unique investment, and knowledge exchange (Gimenez and Sierra, 2013). The purchasing firm’s training and education to the vendor is an instance of this type of mechanism. This peer-to-peer governance model does not rely on threats to compel suppliers to conform with mandatory criteria, but mainly on mutual adaptation, which demands unique investments in training seminars, and benefits Purchasing firms that cultivate connections with their vendors rather than relying only on a ‘compliance- driven’ methodology of supplier selection (via auditing) are referred to as ‘commitment-driven’ organizations (Cox et al ,2002). According to the study, buyer-supplier relationship- based governance is a much more effective method for supplier assessment than buyer-driven control-based governance (Gimenez and Sierra, 2013). Due to the fact that a buyer-supplier relationship is incoherent and can supplant traditional control-based supplier evaluation, monitoring,
and auditing, it develops trust and understanding, integrity, and commitment (Klassen and Vachon,2003). This governance system can include supplier growth supplier collaboration and buyer-supplier partnership (Klassen and Vachon, 2003).
4.3.1 Supplier Development
Supplier development, according to contemporary
literature, refers to “activities done by enterprises to improve, help, and educate suppliers direct or indirect in order to meet stakeholder demands” (Frostenson & Prenkert , 2015).The authors incorporate a border perspective on sustainable practices into the preceding concept by focusing on supplier growth rather than just penalizing suppliers for substandard performance. The authors continue by stating that both direct and indirect supplier development measures can assist in improving performance and mitigating associated risks in social concerns (Seuring, 2008; Seuring and Müller, 2008). According to the literature, direct means of supplier development include teaching and training, offering feedback on evaluations, capital investment, technical and financial aid, and partnership with suppliers (Sancha et al., 2015; Lu et al., 2012; Humphreys et al., 2004). Additionally, it is stated that routine information sharing, knowledge transfer, and know-how transfer between buyer and supplier boost supplier development, as these acts result in the sharing of data and reporting on social elements across the supply chain (Kar and Pani, 2014)..). When offered directly by purchasing firms, supplier development can help both suppliers and buyers enhance their sustainability effectiveness (Ashby et al, 2012; Akamp and Müller, 2013). Additionally, it is believed that including cultural context through training is the most efficient approach to improve sustainability initiatives (Huq et al.2016). Nevertheless, other academics argue that purchasing firms do not aid or teach their suppliers in order to improve social difficulties (Cox et al ,2002). Additional research is necessary to evaluate whether social responsibility is embedded in the supply chain via supplier growth (Rodríguez,et al.,2016). Supplier development procedures, like what is instructed, how it is taught, and the consequences of supplier training, are mostly unknown.
4.3.2 Supplier Involvement
Supplier engagement refers to buyers cooperating with
suppliers rather than conducting transactions at arm’s length (Ashby et al, 2012). The involvement of buyers and suppliers is most evident when examining green supply chain. Additionally, they underline the importance of customers and suppliers collaborating on process improvement, product adaption, and logistical coordination (Klassen and Vereecke, 2012). Additionally, buyer and supplier commitment is defined as actions that include the purchasing firm directly collaborating with its suppliers to achieve economic, environmental and social solutions (Vachon and Klassen, 2006). Vertical collaboration between buyers and suppliers on sustainability is a valuable asset that can result in a much more sustainable supply chain (Kar and Pani, 2014)..). Rather than social performance elements, relationship governance via buyer-supplier cooperation has been examined largely for environmental efficiency
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mechanisms (Gimenez and Sierra, 2013). Additionally, sustainable supply chain governance involves not just the involvement of focus corporations with suppliers, but also lateral coordination across multiple organizations and the involvement of players to address locally relevant issues (Ashby et al, 2012). The governance border in the global supply chain extends beyond the focal corporations’ direct authority (Gimenez and Sierra, 2013) and necessitates shared accountability across corporate entities, governments and nongovernmental organizations (Touboulic et al.,2014)
Sustaining sustainable supply chain governance is a worldwide threat that affects both developed and developing countries. Supply governance challenges primarily impact governments that lack an effective rule of law and rules governing the supply of goods and services. In Zimbabwe, current sustainable supply chain governance challenges have primarily been addressed through mainstream purchasing, which entails the delivery of high- to medium-value goods and services. In general, purchasers’ bargaining power gradually erodes in relation to the majority of supplies in the supply chain system. Due to Zimbabwe’s present economic depression, a sizable portion of the populace has taken up business and begun supplying a variety of commodities without much expertise of sustainable supply systems. The majority of these suppliers are unaware of the importance of adhering to international standards such as ISO 14000, ISO9000, and other recognized standards, since they perceive compliance as an expense that eats into their profitability as they struggle to survive. Once established suppliers have secured long-term supply contracts with respected organizations, they have a propensity to become complacent. If all of the recommended solutions are executed, the Zimbabwean supply chain system will become more sustainable. However, after evaluating the key findings, it was determined that additional research is necessary to focus on the governance of all supply chain stakeholders, including buyers, all intermediaries, and even consumers, to ensure that the issue of supply chain sustainability is addressed holistically from all angles.
From the study, it can be concluded that the sustainable supply chain governance can be achieved in the Zimbabwean supply chain system. Several fundamentals need to be addressed and these include giving awareness to supplying organisations on what is sustainable supply chain management, implementation of key supplier governance pillars, introduction of supplier score cards, development of supplier governance framework, supplier skills alignments among other requirements. All these governance instruments need to be backed by national procurement and supplies agency and the government ministry responsible for procurement, trade, and investment.
10.1 Implementation of the key pillars to supplier governance which are:
|The study was focused on the Zimbabwean manufacturing and service sector supply chains. An exploration was done on documented information with regards to the contribution of supplier governance towards sustainable supply chains in Zimbabwe.|
|VI. METHODOLOGYThe research paper was premised on the desk methodology. A compilation of various sources was used ranging from internet sources, newspapers, internal data within organisations, online databases, trade associations, sourcing and supply chain bulletins. The exploratory research design was used to get information from various literature sources regarding sustainable supply chain management.VII. KEY FINDINGS It was established that only a few suppliers understood the term sustainable supply chain in Zimbabwe. Corrupt practices are so gross in the Zimbabwean suppliers and buyers. In this regard supplier organisations tend to deliberately ignore all the necessary governance procedures required for sustainable supply chain management. There was poor transparency within supplying organisations.|
| A handful of organisations in Zimbabwe do not consider supplier governance consistently. Buying organisations are mostly interested in the price that suppliers offer rather than understanding the quality and appropriateness of supply. Most supplier organisations in Zimbabwe do not have any certification or subscribe to any organisation governing suppliers. Most buying and supplying organisations entirely focus on economic sustainability neglecting social and environmental aspects. Suppliers have more bargaining power and tend to have monopolies in scarce commodities. In such instance suppliers incline to dictate the way to supply whilst|
|buying organisations are just on the receiving end. Supply chains are mostly controlled by suppliers instead of buyers and are usually unsustainable in such instances.|
10.2 10.3 10.4
Contract Management, Performance Management, Financial Management, Relationship Management, Risk Management.
Skills alignment, leveraging the right technology, Implementation of supplier governance framework Embedding risk mitigation into all supplier selection
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- 10.5 Implementation of a supplier code of conduct.
- 10.6 Capability and reliability measurement
- 10.7 Suppliers to match international standards.
- 10.8 Use of scorecards on approved/ accredited suppliers.
- 10.9 Formulation of an independent body that adjudicatesall suppliers.
- 10.10 Creation of national suppliers’ data base.
- 10.11 Restricting value leakage
- 10.12 Training and education of suppliers on sustainablesupply
We are deeply grateful to staff members from the following institutions for their unwavering support in the writing of this paper; Baisago University Business Management, Chatered Institute of Logistics Zimbabwe, Department of Supply chain Management, Chinhoyi University of Technology, Lupane State University and Botswana Accountancy College.
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