University Assignment: Managing Inward Value Chain and Sustainability

This report examines the critical role of sustainability within inward value chains, focusing on sourcing strategies and their impact on global supply chains. It begins with an introduction highlighting the growing importance of sustainability in business operations and the need for sustainable supply chain practices, emphasizing the integration of environmental, social, and economic responsibilities. The academic literature review provides a detailed overview of supply chain management, sustainable development, and sustainable supply chain practices, including the Triple Bottom Line framework. The report then presents a country case study on the Indian sugar industry, illustrating the challenges and opportunities in implementing sustainable supply chain management, specifically within the context of sourcing strategies. The report also analyzes the sourcing strategies such as single sourcing, multisourcing, outsourcing, and insourcing. The report concludes with a discussion on the implications of sustainable sourcing strategies in the Indian sugar industry and recommendations for future improvements, emphasizing the need for a holistic approach that considers economic, environmental, and social factors.

Running head: MANAGING INWARD VALUE CHAIN
Managing Inward Value Chain
Name of the Student
Name of the University
Author’s Note

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Table of Contents
1. Introduction............................................................................................................................2
2. Academic Literature Review..................................................................................................3
3. Country Case..........................................................................................................................6
4. Industry Case..........................................................................................................................8
5. Discussion and Conclusion..................................................................................................10
References................................................................................................................................12

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1. Introduction
In the recent years, the presence of major increase in concerns can be seen related to
the environmental effects triggered by industrial operations all over the world (Yao and
Minner2017). In addition, there has been also increased pressure in the social and economic
fields for the adoption of principles and practices which assure persistent improvement in
business performance. The definition of sustainability can be provided as the integration of
environmental, social and economic responsibilities and this is now considered as a part of
the daily business operations for the companies all over the world (Yao and Minner2017). A
global supply chain can be considered as a dynamic worldwide network when good or
services are purchased by a company from overseas. The introduction and use of
sustainability in global supply chain needs to be regarded as a contemporary and future
magnifying change which demonstrates the significance of sustainability in international
supply chain context. It is highly possible to achieve improvement in performance and
sustainability within the organizations through sustainable supply chain that involves
different business processes such as sourcing, procurement of materials, gathering,
production, storage, distribution and others (Jain and Hazra2017). For this reason, the
challenge is to employ sustainability in sourcing strategy which is a part of supply chain.
Considering the growing importance of sustainability, sustainable sourcing strategy in supply
chain is of great significance. For the demonstration and discussion of the above-mentioned
challenge, Indian sugar industry has been selected. The sugar industry in India is among a
few industries contributing towards the rural economy. Out of almost 600 sugar mills in
India, 527 sugar mills are operational; and India is regarded as the largest consumer of sugar
in the world. Due to the presence of such huge operations in Indian sugar industry along with
the large consumption of sugar, there is a need for improving the supply chain in the

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companies under Indian sugar industry through the introduction of sustainability in sourcing
strategy of these companies.
2. Academic Literature Review
There has been major involvement in supply chain from cost minimization and profit
maximization to a more inclusive method to deal with functions, operations and
managements of the companies (Stadtler2015). Additionally, supply chain management has
turn out to be a major procedure for improving business performance and concepts like
maximization of value across the value chain, association, information sharing, overall
strategy and others (Chin, Tat and Sulaiman2015). More specifically, the definition of supply
chain management can be provided as a global network that the companies use in order to
deliver products and services from raw materials to finished products through a plotted flow
of information, physical distribution and cash. Supply chain management is the process of
planning and managing all activities involved insourcing and procurement, change and all the
activities related to logistics (Chin, Tat and Sulaiman2015). It is noteworthy to mention the
fact that supply chain management includes partnership and harmonization with all the
channel partners such as suppliers, third party service providers, intermediaries and
customers. Therefore, supply chain management involves in integrating supply and demand
management across and within the business organizations. For this reason, moving and
storing raw materials, components, work in progress, finished products from the original
point to consumer points are includes in supply chain management. Moreover, interconnected
networks, channels and business organizations involved in the provision of services and
products needed by the customers are includes in supply chain (Chin, Tat and Sulaiman
2015).
Sustainability that is also known as sustainable development has become massively
popular worldwide due to the increase in environmental and sustainability issues. The

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definition of sustainability or sustainable development can be given as the development
which satisfies the present needs without negotiating the ability of future generations for
satisfying their own needs (Ioannou and Serafeim2017). Sustainable performance can also be
defined as a term associated with the results involve in measuring the connection of social,
economic and environmentaldimensions. More specifically, sustainability can be referred as a
move from a consideratedevelopment in quantitative terms to a qualitative type involves in
establishing close connections between economic, social and environmental dimensions.
Sustainability is also referred as Triple Bottom Line (TBL) that refers to three specific
dimensions that are economic, environmental and social (Herremans, Nazari and
Mahmoudian 2016). The environmental dimension is associated with natural environment
including animals, plants, water and land; the social dimension is associated with human
capital that involves in developing as well as implementing practices good for employees,
community and regions where the businesses have operations; and economic dimension is
associated with the economic benefits the region, nation and community where the
companies carry out the business operations (Herremans, Nazari and Mahmoudian 2016).
In the recent years, a growing trend can be seen within the business organizations in
integrating sustainability into their operations of supply chain which is helping them to move
from principal business activities to a broader reach. Sustainable supply chain is considered
as a key element for promoting sustainability in the business industries (Saenzet al.2015).
The definition of sustainable supply chain can be provided as the strategic, clear integration
and attainment of a company’s business objectives through the systemic coordination of
major inter-organizational business procedures. In other words, sustainable supply chain is
effectively managing the key information along with the flows of capital and collaboration
among the business organizations along with their supply chains while considering the
objectives from the three dimensions of sustainability (Eskandarpouret al.2015). For these

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reasons, a sustainable supply chain not only involves in thee generation of economic profit,
but it is also accountable and responsible to the suppliers, customers, envirmental and
societies through the creation and implementation of innovative strategies methods and
management technologies (Herremans, Nazari and Mahmoudian 2016). Furthermore,
sustainable supply chain engages in integrating the practices that are environmentally and
economically feasible into the lifecycle of supply chain commencing from designing and
developing products to selection of material, manufacturing, packaging, transportation,
warehousing, distributing, return and removal. It implies that sustainable supply chain helps
in establishing integration between three crucial stages of supply chain which are
procurement, manufacturing and distribution. Therefore, sustainable supply chain is a vital
aspect in the improvement of the whole supply chain of the companies (Eskandarpouret
al.2015).
Sourcing strategy is a crucial part in the supply chain management of the business
organizations. The presence of an effective and flexible sourcing strategy can not only
contribute to the reduction of costs and increase in efficiency, but also provides competitive
advantage for assisting the organizations in increasing the top line (Gupta, He and Sethi
2015). It needs to be mentioned that there are certain requirements of a successful sourcing
strategy. A successful sourcing strategy needs a detailed consideration of the business
strategies of a company, the required resources for developing and implementing the strategy,
different forces in the market and the company’s risks that are unique allied with the
implementation of supply chain approaches. There is a greater need for a regularly reviewing
the strategies as this certifies attainment of the expected outcomes and continued association
with the objectives of the businesses (Guo, Lee and Swinney 2016). The presence of some
popular sourcing strategies can be seen adopted by the business organisations all over the
world; they are single sourcing, multisourcing, outsourcing and insourcing. These methods

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can also be considered as the best practices in sourcing strategies in sustainable supply chain
(Gupta, He and Sethi2015).
Single sourcing can be considered as a method in supply chain where only one
supplier is responsible for the supply of purchased parts. In the JIT manufacturing process,
there is only one supplier of the parts with the aim to establish close relationship between the
suppliers. These close relationships in the presence of mutual independence help in
developing reliability, superior quality, small lead times and supportive actions (Chen and
Xiao 2015). After that, Multisourcing is considered as another crucial sourcing strategy and
this strategy involves more than one independent supplier for the procurement of goods or
services. The main reason behind the use of this particular procurement strategy by the
companies is to encourage healthy competition between the supplies for the intention to attain
superior quality and lower price (Tsai 2016). The next popular sourcing strategy used by the
large number of companies is Outsourcing. This can be considered as the process to have
supplies responsible for providing services and goods. Substitution is involved in outsourcing
which involves in replacing the internal ability as well as production. The last sourcing
strategy is Insourcing and this strategy involves in the development of goods or services on
internal basis (Guo, Lee and Swinney 2016). In this context, it needs to be mentioned that the
costs of supply chain primary procurement and transportation can be between fifty to seventy
percent of sales based on the type of industry. For this reason, it is critical for the business
organizations to spend considerable time for the development of sourcing strategy. This
aspect also ensures the periodic review of the sourcing strategies that is critical for ensuring
achievement of organizational goals and objectives (Guo, Lee and Swinney 2016). In many
business organizations, the main focus of sourcing strategy is the reduction of costs.
However, in today’s highly competitive world, most of the business organizations do not only

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focus on the reduction of costs, but they put more emphasis on value creation while taking
into consideration reduction in cost and waste (Guo, Lee and Swinney2016).
3. Country Case
Indian sugar industry is one of the major industries of the country contributing largely
towards the rural development. For this reason, the sugar industry of India is considered as a
key driver of rural development that largely supports the economic growth of the country
(in.kpmg.com 2020). Indian sugar industry is supporting more than 50 million farmers along
with their families along with employees and entrepreneurs of more than 500 million
(in.kpmg.com 2020). In India,the key developments in industrial automation and subsequent
system complexity have made the reliability of machines and other equipment more
significant. This is especially applicable in the process industries like sugar industry that are
characterized by severe environmental consideration and extensive specialized equipment.
The sugar industry of India can be considered as a large engineering unit that has continuous
production of sugar for 24 hours a day during the peak seasons (Jain, Girotra and
Netessine2016). Therefore, in order to overcome these production related challenges, it has
become necessary for the sugar companies in India to introduce sustainable supply chain
management that include appropriate sourcing strategy. In the Indian sugar industry,
sustainable supply chain management works as a network facilitating the activities
performing the product development and procurement functions of materials from vendors,
material movement between production facilities and the manufacturing products along with
the distribution of finished goods to the customers (Namdaret al.2018).
Now, it needs to be mentioned that sourcing strategy has a crucial role to play in the
supply chain management of the companies. In the supply chain of the Indian sugar industry,
the presence of three processes can be seen; they are Grower, Haullier and Miller. There are
two processes in the grower stage; they are harvesting and transporting the sugar canes to the

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mills. There are three processes in the haullier stage; they are cutting the sugar cane, carrying
them to the mills and waiting for unloading. Lastly, there are three processes in the miller
stage; they are offloading and crushing. Within the Indian sugar industry, the presence of
coordination problem can be seen, especially when the involved large number of sugar cane
suppliers in this industry are the units (Kumar, Basu and Avittathur2018). The use of
computerized harvesting can be seen in the Indian sugar industry with the aim to get the
maximum recovery of the matured sugar canes. All these aspects indicate towards the use of
multisourcing strategy by the companies under the supply chain. The main reason for this is
that the sugar canes are supplied by different farmers to the companies and this eliminates the
presence of one single supplier in the companies of this industry. At the same time, it needs
to be mentioned that the sugar companies are involved in sustainable supply chain where the
raw materials are supplied in the most sustainable manner through the supply chain of the
companies (Chen et al.2015).
4. Industry Case
Bajaj Hindusthan Sugar Ltd is a part of Bajaj Group and it is regarded as India’s
number one company involves in the manufacturing of sugar and ethanol
(bajajhindusthan.com 2020). The company operates through fourteen sugar plants with a
combined aggregate sugarcane crashing capacity of 136,000 tonnes crushed per day along
with a distillery capacity of producing 800,000 litres of alcohol per day (bajajhindusthan.com
2020). During the year 2017-2018, India has appeared as the largest sugar prouder across the
whole world producing 32.5 million MT by surpassing Brazil (bajajhindusthan.com 2020).
Before the year 2017-18, Brazil used to be the largest producer of sugar, but India surpassed
Brazil as the highest producer of sugar during the year 2018-19 (bajajhindusthan.com 2020).
Over the years, it has been observed that India has been playing a key role in the global
balance sheet along with global surplus/deficit in sugar production. It has also been observed

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over the years that there is key volatility in the sugar production in India and any increase in
the production of sugar provides surplus sugar to the Global Balance Sheet and there is
deficit in the Global Sugar Production due to any dip in the production of sugar in India
(indiainfoline.com 2020). This can be seen from the following table:
(Source: indiainfoline.com 2020)
It can be seen from the above table that the production of sugar in India affects the
production of sugar in the whole world. Bajaj Hindusthan Sugar Ltd has developed its
sustainable supply chain through the development of a specific sourcing strategy
(indiainfoline.com 2020).
As part of the sourcing strategy adopted by Bajaj Hindusthan Sugar Ltd in sustainable
supply chain, a survey is conducted by the company on every yearly basis for bringing on the
sugarcane cultivated areas of the farmers (bajajhindusthan.com 2020). This process takes into
consideration dissimilar kinds of sugarcane grown by the farmers. This indicates towards the
adoption of multisourcing strategy by the company. After this particular process, the
company provide every farmer within the command area of the mill with a calendar in order
to tell them the time when they can expect a Mill Supply Ticker against which the sugarcane
needs to be supplied. The distribution of calendar is done for over 180 days. On the basis of
the maturities and recovery expected from the varieties of sugarcanes, the distribution process
occurs in the calendar (Akhavan and Beckmann 2017). After receiving the Mill Supply

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Ticket, the sugarcanes are harvested by the farmers and they are transported in bullock curt or
in tractor trolley to the mill gate. Sugarcanes are supplied at the mill’s centres by the farmers
who stay in far flung. Then, transportation of these sugarcanes are done to the mill through
trucks or rail. Under the command area of Bajaj Hindusthan Sugar Ltd, the presence of a total
141155 hectares of land can be seen. 1344 villages along with over 95 centres are covered by
this area. Sugarcanes are purchased by Bajaj Hindusthan Sugar Ltd from over 113577
farmers. It can be assumed that a family of 5 per household, the economy of over half a
million households are reliant on Bajaj Hindusthan Sugar Ltd (bajajhindusthan.com 2020).
5. Discussion and Conclusion
It can be seen from the above discussion that sustainable supply chain has become
largely popular all over the world because of the presence of rising concerns associated with
sustaibailty and environmental issues. Sustainable supply chain helps the business
organizations in the incorporation of social, economic and environmental objectives of the
business organizations so that the business organizations can create and enhance value.
However, it needs to be considered as a key challenge for the business organizations to
incorporate sustainability in supply chain, especially in the sourcing strategy in supply chain
management. The above discussion also points towards the crucial aspect that the selection of
the appropriate sourcing strategy of supply chain of the companies is of major importance for
the overall success of the companies’ supply chain. This is vital for the future of sustainable
supply chain as the companies will be required to carefully select the sourcing strategy.
According to the above discussion, the presence of four types of sourcing strategy can be
seen in the business organizations all over the world; they are single sourcing, multisourcing,
outsourcing and insourcing; and the business organizations are required to take into
consideration all the necessary aspects at the time of the selection of these sourcing strategies

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such as the detailed knowledge of company’s strategies, the required resources for these
strategies and others.
As per the above discussion, the sugar industry of India is such an industry where it is
important to carefully adopt the sourcing strategy as the success of the whole supply chain
depends on it. As India is holding the first place in producing sugar all over the world, the
future of this industry is largely dependent on sustainable supply chain, especially on the
selection of the appropriate sourcing strategy. Bajaj Hindusthan Sugar Ltd is the number one
sugar and ethanol manufacturing company operating within the Indian sugar industry. It can
be seen from the above analysis that Bajaj Hindusthan Sugar Ltd has adopted multisourcing
strategy as a part of their sustainable supply chain in order to overcome the challenge in
supply chain in this industry. More specifically, Bajaj Hindusthan Sugar Ltd uses multiple
suppliers in the form of farmers for acquiring the sugarcanes for the production of sugar.
On the basis of the above discussion, it is recommended to the business managers to
put utmost importance on the employment of sustainable supply chain in order to integrate
different categories of business objectives into a common one. Moreover, they are suggested
to ensure considering all the necessary aspects at the time of the adoption of sourcing strategy
in supply chain.

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