New Issues in Supply Chain Management: Sustainability, Corporate Social Responsibility and Cognitive Bias

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With globalization of the markets, firms have the opportunity to seek out better quality and lower cost goods worldwide, but at the same time face extended and more complex supply chains. Utilizing the tools from operations research/management science and economics, the objective of this research is to explore emerging issues in supply chain management in the areas of sustainability, environmental and social responsibilities, and decision bias.The first research topic concerns the impact of government environmental regulations on supply chain operations. Global warming, water pollution, and landfill waste are causing serious environmental deterioration, prompting industries and governments to take immediate actions. Many countries have implemented, or are debating the implementation of, various regulations to reshape firms/supply chains' productions and operations. We investigate how different environmental policies affect the operational decisions of supply chains, and what type of environmental policy induces better environmental efficiency and supply chain performance, resulting in an overall benefit to society. The second purpose of the research is motivated by the recent news reports about disastrous outcome occurred in global supply chains due to unsafe production practices. In a case study conducted by Sedex, a global non-profit organization that advocates responsible sourcing, it is reported that the risk of social and environmental responsibility violations increases in the higher tiers of the supply chain in both scale and severity. Due to the complexity of global supply chains, the end firms are often not able to obtain and verify upper-tier suppliers' true information/activities. Thus, for multi-tier non-verifiable supply chains, the question posed is how to align the incentive of not only the immediate supplier, but also the upper-tier suppliers to sustain environmental and social regulatory standards. The purpose of this research is to investigate mechanism design to align the incentives of supply chain members to achieve the best possible performance in terms of both profitability and environmental and social impacts. The third research topic is to consider the impact of decision bias on supply chain decisions. Global supply chain managers from different regions might have differing levels of information-processing and decision-making abilities, and many suffer from cognitive bias. We investigate how decision bias affects the operations decisions, and how this in turn affects supply chain coordination and contracts. The results of this research will provide new insights on the sustainable supply chain productions and operations, better align the incentives of supply chain members for a sustainable society, and advance supply chain management theory and practice with the consideration of decision bias.