are The Role of Traceability in Sustainable Supply Chain Management Master of Science Thesis in Supply Chain Management KRAIVUTH KRAISINTU TING ZHANG Department of Technology Management and Economics Division of Logistics and Transportation CHALMERS UNIVERSITY OF TECHNOLOGY Göteborg, Sweden, 2011 Report No. E2011:085 The Role of Traceability in Sustainable Supply Chain Management KRAIVUTH KRAISINTU TING ZHANG © Kraivuth Kraisintu, 2011 © Ting Zhang, 2011 Master of Science Thesis Report No. E2011:085 Department of Technology Management and Economics Division of Logistics and Transportation Chalmers University of Technology SE-412 96 Gothenburg, Sweden ABSTRACT Nowadays, sustainability has become a new management principle for firms to steadily compete in the market. On the public side, food crisis has increased consumers' awareness of safety on their consumption. Based on this awareness, governments of many countries have legislated firms in the food supply chains to implement the traceability system in order to identify sources of deficiency and be able to withdraw hazardous products on the market precisely and efficiently. Firms in different industries have implemented traceability systems to increase supply chain performance. By the enforcement of food safety laws, food safety becomes a new important traceability attribute for these firms. This enforcement becomes a great opportunity for firms to start applying new management principles by considering sustainability on all sustainable dimensions. In this thesis, 82 academic papers are reviewed and analyzed. The authors identified the contributions of traceability to sustainable supply chain management by identifying effects on economic perspective, social perspective, and environmental perspective and the mechanism on how traceability can create sustainability by identifying relationships among three perspectives, including other factors that should be considered. At the end, the thesis also presents future opportunities for firms that currently apply traceability to gain higher economic benefits from traceability while increasing public welfare. Key words: Traceability, Sustainability, Sustainable supply chain management, I The Role of Traceability in Sustainable Supply Chain Management ACKNOWLEDGEMENTS This master thesis has been done within the division of Logistics and Transportation in the department of Technology Management and Economics at Chalmers University of Technology from January to July of 2011. First of all, we would like to express appreciation to our supervisor Vahid Mirza Beiki at the division of Logistics and Transportation for his great support and valuable help during the entire thesis process. The various resources he provided to us and the inspirations from our discussion always became the dynamic ideas of the thesis. Without his guidance, support and patience, this thesis would simply not have been completed. We also thank Professor Kenth Lumsden, our examiner, for providing the opportunity for this thesis. Kraivuth wants to discourse his gratitude for his family and all friends at Chalmers for life and work inspirations. He would like to thank to all Swedish people who represent democracy, show much a person's life can be so valuable, and illustrate how people's contribution to a country can be so precious. Finally, thanks to all Japanese, Korean, and Thai entertainment media as relaxations during the thesis. Ting would like to thank Feng Wang and Lu He for staying with her and sharing her happiness and suffering during the thesis process and master years. Ting also would like to show her great thankfulness to Annbritt Skånberg and Pia Danielsson for their endless help and support whenever she needs that always brings the family feeling for her and makes her always have someone to talk to. Finally, Ting wants to show her gratitude to her parents for all of their concerns, encouragement, and understanding. Last but not the least, we really appreciate Chalmers for offering such a precious opportunity for us as international students to achieve the Supply Chain Management master program that we will never regret and gain diverse types of knowledge as well as useful research experience, which will help us not only in future career but also through the whole life. Chalmers is just like a giant‟s shoulder that raises us up to more than we can be. Kraivuth Kraisintu Ting Zhang II The Role of Traceability in Sustainable Supply Chain Management TABLE OF CONTENT 1. Introduction ............................................................................................................................... 1 1.1. Background .................................................................................................................... 1 1.2. Research contribution .................................................................................................... 2 1.3. Scope and limitation ....................................................................................................... 2 1.3. Problem analysis ............................................................................................................ 3 1.4. Purpose and research questions ...................................................................................... 3 2. Methodology ............................................................................................................................. 4 2.1. Databases selection ........................................................................................................ 4 2.2. Key words and journal selection .................................................................................... 5 2.3. Analysis of the selected papers ...................................................................................... 6 3. Traceability in supply chain management ................................................................................. 8 3.1. An overview of traceability systems .............................................................................. 8 3.1.1. Definition of traceability ..................................................................................... 8 3.1.2. Necessity of traceability ...................................................................................... 8 3.1.3. Tracking and tracing ........................................................................................... 9 3.1.4. Principle of tracking and tracing ....................................................................... 10 3.2. Scope of traceability ..................................................................................................... 11 3.3. Technologies in traceability systems ........................................................................... 15 3.3.1 Alphanumerical codes ........................................................................................... 15 3.3.2 Bar Code ................................................................................................................ 15 3.3.3 RFID ...................................................................................................................... 16 3.3.4 GIS ......................................................................................................................... 16 3.3.5 GPS ........................................................................................................................ 17 3.4. Areas of consideration in traceability .......................................................................... 18 3.4.1 Geographical focus ................................................................................................ 18 3.4.2 Traceability applications in different supply chains .............................................. 19 4. Sustainability in supply chain management ............................................................................ 21 4.1. Key concepts ................................................................................................................ 21 4.2. The interaction between sustainability and supply chain management ....................... 22 III The Role of Traceability in Sustainable Supply Chain Management 5. Traceability and sustainable supply chain management ......................................................... 24 5.1 Traceability for economic sustainability dimension ........................................................ 24 5.2 Traceability for social sustainability dimension ............................................................... 30 5.3 Traceability for environmental sustainability dimension ................................................. 33 5.4 Effects of traceability on single and multiple sustainability dimensions ......................... 35 6 Discussion ................................................................................................................................... 39 6.1 Benefits of traceability for different sustainability dimensions ....................................... 39 6.2 Sustainable supply chain and four supporting facets ....................................................... 42 6.3 Mechanism of traceability on sustainability dimensions ................................................. 45 6.4 Traceability performances for improving sustainability in supply chain ......................... 47 7 Conclusions ................................................................................................................................. 49 8 Further research area and development