The application of sustainable supply chain management in tourism enterprises in nha trang city

TRƯỜNG ĐẠI HỌC PHAN THIẾT
---------***---------

THE APPLICATION OF SUSTAINABLE
SUPPLY CHAIN MANAGEMENT IN
TOURISM ENTERPRISES IN
NHA TRANG CITY
Member of the topic group:
-

Nguyễn Thị Ngọc Nữ

-

Trần Bình Thuận

-

Tạ Văn Khánh

-

Trần Nguyễn Trí Lâm

-

Trần Thị Thiết Trinh

Phan Thiết, tháng 09 năm 2017

TABLE OF CONTENTS
LIST OF FIGURES
LIST OF TABLES
LIST OF ABBREVIATION
INTRODUCTION
CHAPTER

1.

OVERVIEW

OF

SUSTAINABLE

SUPPLY

CHAIN

MANAGEMENT IN TOURISM ................................................................................. 1
1.1. Definition of sustainable supply chain management ........................................ 1
1.2. Contents of tourism sustainable supply chain management ............................ 3
1.2.1. Supply chain assessment .................................................................................. 6
1.2.2. External environment review ........................................................................... 8
1.2.3. Risks and opportunities evaluation ................................................................ 10
1.2.4. Supply chain management responsive programs ........................................... 11
1.2.5. Sustainability practices engagement .............................................................. 16
1.3. The advantages and disadvantages of applying sustainable supply chain
management in tourism ............................................................................................... 24
1.3.1. Advantages ..................................................................................................... 24

1.3.2. Disadvantages ................................................................................................ 25
1.4. The needs in applying sustainable supply chain management in Nha Trang
tourism........................................................................................................................... 26
CHAPTER 2. THE REALITY OF THE APPLICATION OF SUSTAINABLE
SUPPLY CHAIN MANAGEMENT IN TOURISM FROM 2010 – 2016 ............... 29
2.1. Overview of tourism industry in Nha Trang City .......................................... 29
2.1.1. The number of tourists ................................................................................... 29
2.1.2. Average guest stay ......................................................................................... 30
2.1.3. The revenue of the whole industry ................................................................. 31
2.2. The application of sustainable supply chain management in tourism in Nha
Trang city ...................................................................................................................... 32
2.2.1. Supply chain assessment ................................................................................ 33
2.2.2. External environment review ......................................................................... 35


2.2.3. Risks and opportunities evaluation ................................................................ 37
2.2.4. Supply chain management responsive programs ........................................... 39
2.2.5. Sustainability practices engagement .............................................................. 40
CHAPTER 3. ORIENTED DEVELOPMENT AND RECOMMENDATIONS IN
IMPROVING SUSTAINABLE SUPPLY CHAIN MANAGEMENT IN
TOURISM INDUSTRY IN NHA TRANG CITY ..................................................... 56
3.1. Opportunities and challenges in applying sustainable supply chain
management in tourism in Nha Trang City............................................................... 56
3.1.1. Opportunities ................................................................................................... 56
3.1.2. Challenges ....................................................................................................... 58
3.2. Targets and orientation of Nha Trang city in developing sustainable tourism
to 2020............................................................................................................................ 60
3.2.1. Orientation....................................................................................................... 60
3.2.2. Target .............................................................................................................. 62
3.3. Recommendations for developing sustainable supply chain management in

tourism in Nha Trang city ........................................................................................... 62
3.3.1. Recommendations for the city authority ......................................................... 62
3.3.2. Recommendations for tourist companies ........................................................ 65
CONCLUSIONS .......................................................................................................... 68
REFERENCES
ANNEXES


LIST OF FIGURES
Figure

Name

Page

Figure 1.1

Primary and secondary supply chain networks

8

Figure 1.2

Analysis of scenario drivers

9

Figure 1.3

Scope of sustainable supply chain management

12

implementation
Figure 1.4

Kaplan & Norton Balanced Scorecard

17

Figure 1.5

The Sustainable Supply Chain Scorecard Perspectives

18

Figure 1.6

Sustainable Supply Chain Scorecard – relations of the

19

perspectives


LIST OF TABLES
Table

Name

Page

Table 1.1

Business strategy levels and types

7

Table 1.2

An example of threat-opportunity profile

11

Table 2.1

Number of tourist arrivals to Nha Trang from 2010-2016

29

Table 2.2

Total guest stay in Nha Trang from 2010 to 2016

31

Table 2.3

Total revenues from tourism of Nha Trang city from 2010

31

to 2016
Table 2.4

Awareness of Nha Trang’s tourism businesses about

34

sustainable supply chain management
Table 2.5

Priority of Nha Trang’s tourism businesses for price

34

competition strategy
Table 2.6

Evaluation of Nha Trang’s tourism businesses on risk

35

management issue
Table 2.7

The application of risk management of Nha Trang’s

36

tourism businesses in practice
Table 2.8

Reality of applying strengths and weaknesses evaluation

38

procedures of Nha Trang’s tourism businesses
Table 2.9

Evaluation of Nha Trang’s tourism businesses on the cost

40

of applying sustainability practices
Table 2.10

Reality of environmental and social impact assessments of

41

Nha Trang’s tourism businesses
Table 2.11

Evaluation of Nha Trang’s tourism businesses on engaging

43

sustainability
Table 2.12

Evaluation of tourists on the diversity of ecological tours

44

Table 2.13

Evaluation of tourists on the diversity of tours visiting

45


religious sites
Table 2.14

Evaluation of tourists on the diversity of tours visiting

46

historic heritages
Table 2.15

Evaluation of tourists on the diversity of tours visiting and

46

exploring community/traditional villages, traditional
cultures and customs
Table 2.16

Reality of applying certification standard system of Nha

47

Trang’s tourism businesses
Table 2.17

Reality of tourism businesses’ activities in relations with

48

supplier
Table 2.18

Opinions of Nha Trang’s tourism businesses about

48

cooperation with suppliers
Table 2.19

Opinions of Nha Trang’s tourism businesses about

49

cooperation with suppliers
Table 2.20

Reality of Nha Trang’s tourism businesses activities

50

towards human development
Table 2.21

Evaluation of tourists on the cooperation among transport

52

companies, restaurants, hotels and tour operators to
deliver conveniences to tourists
Table 2.22

Evaluation of tourists on the promotion/ advertising/

53

information provided on the internet for traveling in Nha
Trang city
Tabe 2.23

Evaluation of tourists on the density of hotels/motels

54

distributed in Nha Trang
Table 2.24

Evaluation of tourists on the quality of hotel rooms and
other facilities

55


LIST OF ABBREVIATIONS
No.

Abbreviations

Content

1

ASEAN

Association of Southeast Asian Nations

2

GDP

Gross Domestic Product

3

ISO

Internation Organization for Standardization

4

SAI

Social Accountability International

5

IUCN

International Union for Conservation of Nature and
Natural Resources

6

PCI

Provincial Competitiveness Index

7

VND

Viet Nam Dong

8

LCA

Life-cycle Assessment

9

AEC

Asian Economic Community


1

INTRODUCTION
1.1. Necessity of the research
Tourism has long been an important factor for the development of many
countries all over the world. Some countries consider tourism as the main income for
the country while some would deem this industry as a tool for payment balance or the
key industry of the whole economy. For Viet Nam, it is a crucial factor for the
economy. However, despite our potential not only in natural resources but also in our
glorious history and breadth of culture, Viet Nam has not taken remarkable
consideration into this promising field. Doing business in tourism, it requires a lot of
preparation from different stages not only from transport, accommodation or
excursions but also tour designs, bars and restaurants, waste disposal, infrastructure
and human power, etc. There is no escaping the fact that tourist companies in Viet Nam
are still working individually. There have not been many connections between them.
This creates many obstacles for them to deliver the best service quality to tourists such
as lag in communication between transportation agents and tours operators, price
variations in tours, etc. Moreover, environmental issue is also a noticeable problem for
tourism businesses to consider. Environment degradation will directly threaten our
lives and also the future generation. These common problems forces companies to
pursue their links between each other in order to avoid wastes, better communication
and leads to a brand new resolution, sustainable supply chain management in tourism.
Tourism, like all other supply chains, operates through business-to-business

relationship, and supply chain management can be applied to deliver sustainability
performance improvements alongside financial performance, by working to improve
the business operations of each supplier in the supply chain. Many countries in the
world have adopted this field of management and it has brought positive outcome so
far. Seizing this emerging trend, Vietnamese tourism enterprises have shaken their
hands to create a closed-loop supply chain and create their competitive advantages.
Nonetheless, in practice, many companies have had to bitten the bullet due to
their lack of management skills in tourism supply chain, especially sustainable supply
chain. To adopt this management strategy successfully, they will have to place more


2

emphasis on not only social, environmental or economic aspects of the business but
also the collaboration relation or the network with other businesses in the chain. The
benefits of applying sustainable supply chain management are remarkable. It will help
upgrade service quality to meet versatile customers demand, encourage provincial
economy as well as preserve and embellish natural resources for a sustainable tourism
of the country.
Nha Trang city is one of the most famous tourist attraction in the world in
general and Viet Nam in particular. Thanks to its possession of many beautiful natural
scenery and beaches as well as fascinating heritages through the transformation of
history, Nha Trang are becoming more popular and attracting tourists from all over the
world. However, together with the advancement of tourism, shortcomings and
problems unquestionably appear. In practice, many companies working in tourism
industry are still taking too much care of the short-term profit without consideration
about the long-term vision for a continual future of tourism. This leads to the existence
of an unplanned development and may cause harm to the environment, the society and
also the economy in the future. Therefore, to create a bright future for our economy and
evoke the potential of this beautiful beach city, sustainable tourism is an indispensable

resolution at the present.
With the hope to make a little contribution to the revolution of Viet Nam
tourism, especially Nha Trang city, I decide to choose the topic for my graduation
thesis as “The application of sustainable supply chain management in tourism
enterprises in Nha Trang city”. Through this work, I would like to give a new approach
to achieve sustainable tourism as well as the improvement in the operation of tourism
companies in Nha Trang city.
2. Overview of the research
Although studies of sustainable supply chain management are not rare, the
examination of hospitality supply chains is burgeoning. While the hospitality supply
chain was discussed in a broader framework of tourism supply chain management by
Zhang et al. (2009) and Huang et al. (2012), the conceptual framework provided by Xu
and Gursoy (2015) is among the first to discuss the hospitality supply chain


3

management systematically. This study utilizes the conceptual framework developed
by Xu and Gursoy (2015). Xu and Gursoy (2015) define a hospitality supply chain
(HSC) “as a network of hospitality organizations engaged in different activities
including the supply of various components of hospitality products and/or services
such as raw food materials, equipment and furniture from various suppliers;
distribution and marketing of the final hospitality products and/or services to the
customers for a specific hospitality business such as a hotel or a restaurant.”
Hospitality supply chain delivers both products and services from initial suppliers to
end users with a value incremental process (Kothari et al., 2005). It incorporates the
characteristic of both manufacturing supply chain and service supply chain.
A higher and more innovative level of applying supply chain management is
engaging sustainability into the chain. Sustainable supply chain management (SSCM)
is the integration of economic, environmental and social dimensions, sustainably and

ethically, across the supply chain. This is carried out through the integration of key
features, i.e. concepts, process and practices, extended across industries and business
activities while collaborating with partners. As the concept of sustainable supply chain
management has been gaining attention across academia and industry, the focus of
understanding ‘why’ it is necessary is now shifting towards ‘how’ the two fields of
‘sustainability’ and supply chain management merge (Gunasekaran et al., 2015;
Luzzini et al., 2015; Winter & Knemeyer, 2013).. Scientific evidence is stronger
than ever that the planet and people are under the greatest levels of stress ever
experienced regarding climate change, environmental degradation, poverty, energy
issues and resources scarcity (IPCC et al., 2014). Business as usual, in terms of the old
model of economic growth and consumption, is not sustainable. In terms of corporate
social responsibility and ethical business, it is incumbent on companies to take
greater account for their impacts not only on its stakeholders but society and the
environment as a whole.
This approach agrees with Hall, J., Matos, S., & Silverstre, B. (2012). They
conducted a research named “Understanding why firms should invest in sustainable
supply chains: a complexity approach”. It stated that sustainable supply chain


4

management should consider the three aspects economy, society, and environment as
listed in the triple bottom line approach and a successful sustainable supply chain must
be able to satisfy the tripple bottom line criteria.
There have been lots of researches relating to sustainable supply chain
management but litte ones are conducted to go into the specific case of sustainable
supply chain management in tourism. One of the most relevant researches on this topic
is the study by Xu, X., & Gursoy, D. (2015) named “A conceptual framework of
sustainable hospitality supply chain management.” Firms must have a detailed
hospitality supply chain framework to develop. It study also discusses the antecedents,

consequences, actions, evaluation mechanisms, and sustainability practices that can be
implemented by all members of the supply chain on three dimensions (environmental,
social, and economic) of the sustainable supply chain management in hospitality
business following the principles of triple bottom line reporting (3BL) approach. The
author also cited that a true sustainability can be achieved only if all members of a
supply chain participate in sustainable practices. This study is one of the researches
that provides the most complete framework for applying sustainable supply chain
management in tourism as it mentions all the parties involved in tourism supply chain.
Xavier Font, Richard Tapper, Karen Schwartz and Marianna Kornilaki (2006)
also follow the 3BL approach with the research “Sustainable supply chain management
in tourism”. This study stated that companies has focused too much on environmental
aspects of manufacturing, while other aspects of sustainability or the challenges for the
service sector are largely ignored. The unique approach of the study is that it takes
special care of tour operators as the product depends on the activities of suppliers, such
as accommodation, transport and activities, who mostly deal with tour operators.
Therefore, tour operators’ contribution to sustainable tourism will be more effective
through the definition and implementation of policies that acknowledge responsibility
for the impacts of suppliers. The study provides a set of priorities for tourism
companies to implement in order to achieve sustainability in tourism supply chain. The
set of priorities mentions all the sectors involved including accommodation, transport,
ground handlers, excursions and activities, and food and crafts. However, as they take


5

tour operators as the center of the chain, it is quite subjective in evaluating
sustainability of the whole chain and lack of recommendations or instructions for other
parties involved in the supply chain.
Few organisations make significant progress in sustainable development without
the benefit of strong and committed leadership which empowers the management team

to include social and environmental considerations alongside the economic ones. Often
waste management and resource recovery is left to junior management and considered
as ‘housekeeping’, and purchasing decisions are made without any consideration of the
wider issues (that New Zealand Business Council for Sustainable Development, 2003).
Organisations need to recognise that they have to identify, understand and manage
issues within their own organisation before they start working with other organisations
in their supply chain to ensure that these issues are successfully managed throughout.
The study named “Is the concept of sustainable tourism sustainable? Developing
the Sustainable Tourism Benchmarking Tool” by Lucian Cernar and Julien Gourdon
(2005) has systematically learned the evaluation framework for sustainable tourism. In
detail, the standard evaluation tool named “The sustainable tourism benchmarking
tool” (STBT) has been published. STBT evaluates the level of sustainability in tourism
based on 4 dimensions: economic sustainability, social and ecological sustainability,
infastructure sustainability and attractiveness sustainability. In order to measure the
sustainability degree of the 4 aspects above, the author has provided instructions and
equations for quantiative analysis.
A more holistic approach is provided by Cetinkaya, B (2011). Cetinkaya, B
(2011, p.57) provides practical ideas and a systematic generic process for companies to
develop their supply chains to sustainability. Cetinkaya, B (2011) has listed out the
four main ingredients for a successful sustainable supply chain management
application. Also, based on those 4 factors including holistic approach, risks and
opportunities management, implementation of economic, environmental and social
objectives, and balancing those three dimensions, the study has provided a 6-step
iterative process for companies to regularly assess their supply chain and adjust their
supply chain’s components and actions to moving towards sustainability.


6

3. Purpose of the topic

The purpose of this thesis is to provide a clear understanding about sustainable
supply chain management in tourism industry in Nha Trang. Based on that, the author
would like to suggest the framework for applying a brand new management approach
in tourism. This strategy can encourage Nha Trang tourism to develop sustainable in
the three main dimensions: the society, the environment, and the economy.
In order to achieve the target of this thesis, there are some essential issues for
resolving:
-

Contents of sustainable supply chain management in tourism and the reason Nha
Trang city needs applying this strategy.

-

Provide the framework for applying sustainable supply chain management in
Nha Trang tourism and analyze features that influence sustainable tourism
supply chain management in Nha Trang and its effect to the sustainable
development of tourism business in Nha Trang.

-

Recommendations for the improvement of sustainable supply chain in tourism.

4. Research subject
The subject of this thesis is the application of sustainable supply chain
management in Nha Trang city together with facts and figures collected relating to
revenues, number of tourists, the condition of the environment, the infrastructure, and
the human resources of tourism industry.
5. Scope of the research
Mentioning the contents, the author picks the most 5 suitable action steps

for the application of sustainable supply chain management in Nha Trang
tourism to analyze and evaluate.
Regarding research period, the author uses the practice of tourism
industry in Nha Trang from 2010-2016 to analyze the features that affect
sustainable supply chain management. Also, the author takes into account the
orientation and targets of the government for tourism development in Nha Trang
until 2020.


7

Relating to research space, the author conducts study and surveys within
Nha Trang city area.
6. Research methods
Secondary data collection method: Collecting secondary data on the internet and
documents and reports of Viet Nam national administration of tourism from 20102016. This research method helps gather information about the overview of Nha Trang
tourism and the potential of Nha Trang in developing tourism in a sustainable system.
Survey method: The author conducted a survey on 80 companies operating in
tourism industry in Nha Trang city about their performance of sustainable supply chain
management in practice. Also, a survey on 150 tourists in Nha Trang city is
implemented to collect information about their opinions and satisfactions on some
issues related to tourism in Nha Trang.
Observation method: Collecting information subjectively through observing
tourism activities in some famous tourist sites, Cam Ranh airport, bus stations and
railway station in Nha Trang, etc.
Statistics collection method: The author gathers and analyzes survey
information by Excel software. From there, the author statistics each variable and sets
the formula to calculate the average value and percentage for each variable
7. The meaning and practical values of the thesis
This thesis recommends a new trend for developing tourism and tourism

businesses in Nha Trang city in particularly and even in Viet Nam in the future.
Sustainable development has long been a subject undergoing intense study by many
countries in the world. Regarding tourism, one of the key spikes for the development of
Viet Nam so far, sustainability and stability of the advancement of tourism should be
taken into consideration more seriously than ever before. This research brings out a
full-framed picture about the application of sustainable supply chain management in
tourism and the reality of tourism activities relating to sustainable development aspect
in Nha Trang and on that basis suggests some solutions for improving the operation
system of the whole industry to make it work more transparently and effectively.


8

Moreover, the unique idea of this thesis is its emphasis on the collaboration
between firms working in tourism. Because collaboration is the only way to make
tourism industry sustainable and ensure the three main pillars: society, environment,
and economy.
Through this research thesis, tour operators, transport agents, or restaurants and
resorts, etc. can change their mindset about cooperation with other firms and have a
clear guideline to conduct this strategy. Furthermore, thanks to this thesis, the authority
may have a fair understanding about sustainable development and manage policies to
assist tourism companies. Finally, this thesis also places an emphasis on the importance
of educating the local people and reminding tourists about sustainable tourism,
especially environment protection and waste saving.
8. Thesis’s structure
Apart from the introduction, conclusion, list of references, and annexes, this
thesis contains three main chapters:
-

Chapter 1: Overview of sustainable supply chain management in tourism.

-

Chapter 2: The application of sustainable supply chain management in tourism
from 2010 – 2016.

-

Chapter 3: Oriented development and recommendations in improving
sustainable supply chain management in tourism industry in Nha Trang city.
In order to finish this thesis successfully, the author would like to express a

sincere thank to all lecturers and staffs of Foreign Trade University during the time was
studying here. Specially, the author would like to thank Mr. Tran Quoc Trung for the
dedicated help and instruction for the whole period from December 2016 to April
2017. Also, the author would like to give great appreciation for the support of Nha
Trang authority, particularly Department of Culture, Sports and Tourism, as well as the
friendly local people and tourism businesses in Nha Trang.
Due to the limit of time, sources of references as well as knowledge and
experience, this thesis may have mistakes that needs correcting. The author is looking
forward to receive feedbacks from Foreign Trade University teachers and readers to
improve and supplement it.


9

Ho Chi Minh City, May 4th 2017
The Author

Nhan Quang Nhat Linh

1

CHAPTER 1: OVERVIEW OF SUSTAINABLE SUPPLY CHAIN
MANAGEMENT IN TOURISM
1.1. Definition of sustainable supply chain management
Over the past decades, companies from various sectors have come up with
different strategies and tools to influence their suppliers towards better environmental
and social practices.

All these companies believe that no enterprise can exist

independently, and the success of company depends on its supply chain partners.
Tourism is a special industry. This industry has an essential attach to natural resources,
heritages, and human resources. Hence, an over-exploitation of tourism can directly do
harm to the environment and the living conditions of many people. Therefore, it is such
an emergent need that companies working in tourism arm themselves a mindset of
sustainable supply chain, an emerging trend for business management, and a great care
for the social issues. Moreover, when tour operators start to design tours and
expenditure for tourists, tourism has naturally been a chain itself. It requires companies
such as transport companies, tours agencies, restaurants, resorts, etc. to cooperate to
form a complete tour. Therefore, it is undeniable that sustainable supply chain
management is so suitable a solution for tourism industry operation.This new strategy,
if conducted in a proper way, can evoke a new way to cut costs, avoid risks, protect the
environment, and consequently win public relations battles.
There were some preliminary definitions for sustainable supply chain
management by some scholars and scientists in the past. Through the revolution of
time, these opinions and ideas are complementary to each other and create diverse
aspects regarding sustainable supply chain. Svensson, (2007) stated that “The

sustainable management of a supply chain requires a broader vision (than ordinary
supply chain management) and must highlight the economic, environmental and social
aspects of business practice.” It seems that most studies on sustainable supply chain
management are based on the triple bottom line model which covers the three main
dimensions of a business. Carter and Rogers, (2008) added in that sustainable supply
chain management must be “The strategic, transparent integration and achievement of
an organization’s social, environmental and economic goals in the systemic


2

coordination of key inter-organizational business processes for improving the longterm economic performance of the individual and its supply chain”
In another perspective, Seuring and Muller, (2008) poined out the main three
flows of a specific supply chain. Accordingly, they defined “Sustainable supply chain
management as the management of material, information and capital flows as well as
cooperation among companies along the supply chain while taking goals from all three
dimensions of sustainable development, i.e., economic, environmental and social, into
account which are derived from customer and stakeholder requirements.” Pagell and
Wu, (2009) perceived in the business perspective as developing but still satisfies two
environmental and social elements. They said “A sustainable supply chain is then one
that performs well on both traditional measures of profit and loss as well as on an
expanded conceptualization of performance that includes social and natural
dimensions”; “If a sustainable chain is one that performs well on all elements of the
triple bottom line, sustainable supply chain management is then the specific managerial
actions that are taken to make the supply chain more sustainable with an end goal of
creating a truly sustainable chain.” The same idea was shared by Hassini et al., (2012)
as “The management of supply chain operations, resources, information, and funds in
order to maximize the supply chain profitability while at the same time minimizing the
environmental impacts and maximizing the social wellbeing.”
Later in 2013, Ahi and Searcy, (2013) developed those previous ideas an

defined sustainable supply chain management as “The creation of coordinated supply
chains through the voluntary integration of economic, environmental, and social
considerations with key inter-organizational business systems designed to efficiently
and effectively manage the material, information, and capital flows associated with the
procurement, production, and distribution of products or services in order to meet
stakeholder requirements and improve the profitability, competitiveness, and resilience
of the organization over the short- and long-term.”
Recently, in a report named “Supply chain sustainability – A Practical Guide for
Continuous improvement”, UNGC has defined supply chain sustainability management
as “the management of environmental, social and economic impacts, and the


3

encouragement of good governance practices, throughout the lifecycles of goods and
services.” They also stated that “The objective of supply chain sustainability is to
create, protect and grow long-term environmental, social and economic value for all
stakeholders involved in bringing products and services to market.”
Based on these prominent and complementary definitions of supply chain
management, and our review of the sustainability literature, we define sustainable
supply chain management as the strategic, transparent integration and achievement of
an organization's social, environmental, and economic goals in the systemic
coordination of key inter-organizational business processes for improving the
long‐term economic performance of the individual company and its supply chains. This
definition of sustainable supply chain management is similarly based on the triple
bottom line and the four supporting facets of sustainability– risk management,
transparency, strategy, and culture.
As tourism has its products as holidays and tours and customers usually travel to
its products to enjoy them, tourism is a special industry.

However, just like any

other industries’ supply chain, tourism supply chain also involves core and ancillary
tourism goods and services. Moreover, just similar to any other sustainable supply
chain, the management and application of sustainable supply chain in tourism also
focus mainly on three dimensions: economic, environmental and socio-cultural issues.
Defining sustainable supply chain management exactly is very important to help
companies and entrepreneurs to understand this strategy properly and realize its good
effects on their businesses as well as on the environment. And understanding this
definition correctly will help to create a good guideline in achieving this level of
management.
1.2. Contents of tourism sustainable supply chain management
There has been a remarkable number of researches conducted relating to tourism
supply chain. However, discussion of how to make the chain sustainable is still very
rare. It is believed that true sustainability cannot be achieved by efforts of a single firm;
achieving true sustainability requires participation of all or most players in
sustainability efforts (Xu, X., & Gursoy, D., 2015). For example, sustainable actions


4

taken by firms who aim to use products in an environment-friendly manner may not
contribute much to sustainability efforts if those products were made from
environmental threatening materials. This obviously explains the reason why
companies need to implement sustainability actions from the upstream of the supply
chain and, thus, sustainable supplier selection and cooperation remarkably contribute to
sustainable supply chain management.
Previous studies suggest that sustainable supply chain management must satisfy
environmental, social, and economic dimensions as indicated in the triple bottom line
approach (Mentzer et al., 2002; Lambert et al., 2006; Hall, J., Matos, S., & Silverstre,

B.,2012; Xu, X., & Gursoy, D., 2015; Xavier Font, Richard Tapper, Karen Schwartz
and Marianna Kornilaki, 2006). The triple bottom line approach provides a holistic set
of goals for companies when engaging sustainability in their supply chain. Each
dimension of this model has their emphasis on different essential issues for a “Healthy”
supply chain. Many researches have come up with many application frameworks
based on this model. . However, no studies provide a clear roadmap for companies to
apply sustainable supply chain management properly. A sustainable supply chain
involves more than the implementation of sustainable practices. Rather, individual
practices must be assembled to integrate meaningful long-term sustainability principles
along the end-to-end supply chain.
Balkan Cetinkaya (2011) in the study named “Developing a Sustainable Supply
Chain Strategy” established a systematic process for

firms to engage sustainability

into their existing supply chain in a broader perspective. This 6-step process not only
suggests companies practices to achieve the final goal of balancing economic,
environmental, and social issues but it also provides instruction to assess existing
internal and external factors that may hinder the application of sustainable supply chain
management and recommends proper responses to those scenarios.

The

implementation of sustainable practices is originally based on the Kaplan/Norton
Balanced Scorecard as they cover the four main perspectives including financial,
sustainability, supply chain, and learning and growth perspectives. However, the
application process established by this study only mentions issues in the supply chain


5

in general but have not yet introduced specific practices to improve the sustainability of
the supply chain.
Recently, Weihua Liu , Enze Bai, Liwei Liu and Wanying Wei (2017) has come
up with a framework for sustainable service supply chain developed from original
frameworks for manufacturing firms. Their study clearly stated out main parties
involved in the service supply chain including service providers, service intergrators,
and customers and detailed practices to achieve the objectives of the triple bottom line
model. However, practices they suggested were mainly related to managing
partnerships with suppliers and strategic approach to improve upsteam partners without
mentioning issues with other partners and stakeholders such as the employees, tourists,
or the local community. Combining the process of Balkan Cetinkaya (2011) and the
detailed framework provided by Weihua Liu, Enze Bai, Liwei Liu and Wanying Wei,
(2017) together with sustainability practices guided by Environmentally and Socially
Responsible Tourism Capacity Development Programme (ESRT) and adjusting them
for the case of Nha Trang tourism, we have a systematic 5-step process for the
application of sustainable supply chain management in Nha Trang city. Based on the
original 4 main perspectives, this systematic approach to strategy design and
integration can help companies developing a sustainable supply chain to create a value
proposition. There are 5 main steps for a company to develop their sustainable supply
chain management strategy:
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Step 1: Supply chain assessment.

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Step 2: External environment review.

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Step 3: Risks and opportunities evaluation.

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Step 4: Supply chain management responsive programs.

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Step 5: Sustainability practices engagement.
The first three steps allow tourism companies to re-define their existing supply

chain and review external impacts that may influence their operation and long-term
development. The other two steps provide the key to sustainability and the orderly
instruction to open the door to that sustainability of not only businesses’ supply chain
but also the whole tourism industry.


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1.2.1. Supply chain assessment
It is important to evaluate the current state of the supply chain before engaging a
new management strategy to it. Companies need to identify their resources and
capabilities necessary for applying sustainable supply chain management. The purpose
of this step is for companies to locate where they are on the journey to sustainability.
Moreover, the integration of sustainable supply chain strategy is not a greenfield development, which is likely to re-engineer the whole supply chain. Otherwise, it
is preferable as a step-by-step adaptation. In this initial step, companies along tourism
supply chain need to take stock of:
-

Their existing corporate and competitive strategies.

-

The sustainability strategy (if sustainability is not already part of the corporate
strategy).

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The company-specific supply chain strategies.

-

The cross-company supply chain and collaboration strategy.
The identification of these strategies provides the understanding of potential

intra- and inter-organizational goal conflicts because potential short- and long-term
goal conflicts can rapidly become serious barriers to implement a sustainable supply
chain along its members. It seeks to discover whether there is a common strategic
alignment, and whether the goals of each strategy element are integrated, aligned, and
complementary. A company’s own supply chain strategy which is not aligned to the
corporate and cross-company supply chain strategy cannot be perceived as being
sustainable. It is easily understandable that a tour operator heading forward a cost
leader in the market cannot adopt an agile, service strategy or build short-term
partnership with their suppliers and customers. It is because these strategies will raise
or maintain their high cost level instead of cutting costs in order to become a costleader company. The following table lists out some business strategies along a supply
chain.


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Table 1.1 Business strategy levels and types
Strategy level

Strategy type

Competitive strategy

Cost

leader

strategy,

differentiation

strategy
Supply chain strategy

Lean, cost and efficiency driven strategy;
Agile, service, speed-driven strategy.

Cross-company collaboration strategy

- Long-term partnership or short-time
partnership.
- Hierarchal or heterarchal control.
- Horizontally or vertically integrated
networks.

Company’s own sustainability strategy

Defensive or offensive strategy.
(Source: Summarized by the author)

It is recommended that tourism companies should have a management team who
would in charge of implementing as well as evaluating sustainability in the businesses’
supply chain first. This management team will be responsible for sustainability
practices of the company and evaluate performances to keep track the progress to a
sustainable supply chain. The management team is also in charge of reviewing their
company’s competitive strategy with their supply chain strategy as well as with their
suppliers’ strategies.

They should compare those strategies to identify conflicts

between them and then recommend adjustments to form a unified set of strategies.
Furthermore, tourism companies should also collaborate with their partners to build
sustainability criteria to verify the sustainability progress of each company
Step one ends with an “as-is” analysis of the current state of company and
supply chain specific characteristics. The next step aims to identify current and forecast
potential future developments and trends emerging from external factors influencing
the supply chain. It is an external view, and considers aspects which are usually not
under the direct influence of a company.


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1.2.2. External environment review
In this step, companies need to locate current, potential, and future impact
factors that may affect the operation of tourism sustainable supply chain. Impact

factors also mean stakeholders along supply chain that may have influence on the
business of the company.
Figure 1.1 Primary and secondary supply chain networks

(Source: Developing a Sustainable Supply Chain Strategy, Balkan Cetinkaya, 2012,
p.36)
It is necessary for tourism companies to understand and forecast all the
information and trends relating to their relevant stakeholders in order to develop their
sustainable supply chain strategy in the right way. One well-known tool for this step is
“Scenario planning” This is a method of medium- and long-term planning, simulation,
and of forecasting probable future developments based on the continuous observation
of indicators. Scenario planning allows supply chain managers to gain a better
understanding of the possible business environments they will need to tackle in the
future. In this prediction process, companies need to identify what are going to be big
shifts in their partner status, as well as society, economics, and politics. One of the


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most useful tools to review uncertainties is “360° Stakeholder Feedback”. This tool is a
survey instrument containing open as well as closed questions about concerns that may
have influence on the company in the future. Different stakeholder groups are selected
and asked to answer this questionnaire. They can be external ones such as the top
biggest suppliers, top biggest customers, and also internals like one or two of
employees, top managers as well as strategic planners, and additionally people from
key operational positions such as marketing, sales, R&D or external specialists. Next,
they are to identify their critical uncertainties that may impact their business and their
future goals and objectives. And finally, they will need to pick out the main
uncertainties and draw possible scenarios that will potentially led by these
uncertainties. In a highly uncertain business environment like tourism, it makes sense

to analyze the scenario drivers according to their predictability and degree of impact.
The following graph exhibits an example for analysis of scenario drivers for a tour
agency.
Figure 1.2 Analysis of scenario drivers

(Source: Summarized by the author)
For each part of the matrix, we will have different ways of approach for
solutions. An uncertainty with high impact and high predictability should be well
planned by the company to deal with it. On the other hand, an uncertainty with low
impact and low predictability should be carefully reviewed as we don’t know how and
when it will occur. However, because it doesn’t have a great influence on the company,
managers just only need to keep track with it in case that uncertainty increases its