Supplier sustainability assessment in the age of Industry 4.0 – Insights from the electronics industry

Abstract

Achieving transparency of the social and environmental impacts of industrial production poses significant obstacles for companies operating in complex global supply chains. They often do not possess sufficient information of other actors, especially at lower tiers in the supply chain. In recent years, data collection and information exchange in industry has been increasingly assisted by digital technologies, coining the term Industry 4.0. However, it remains largely unknown how companies try to foster transparency in their supply chains and how digital technologies are utilized for this purpose. In this study, we employ a qualitative, interview-based approach from both buyers’ and suppliers’ perspectives to investigate practices of supplier sustainability assessments in the electronics industry as well as their current and envisioned utilization of digital technologies. With regard to the exchange of sustainability-related information, we find that buying firms do not consistently check for the availability of digital interfaces to suppliers. Systematic and well-structured collection of such data is rare in suppliers, relying on manual self-assessments and lacking the means of automated data collection. This poses difficulties for buying firms to ensure validity of sustainability performance claims, highlighted by the fact that not all buying firms analyze suppliers’ self-assessments. To overcome such issues, ongoing industry-wide efforts of standardizing sustainability requirements should be extended to include strategic considerations of streamlining technology implementation to enhance data availability and validity.

Keywords

• Supplier sustainability assessment
• Sustainable supply chain management
• Industry 4.0
• Digital technologies
• Supply chain transparency
• Digitalization