Local water stress impacts on global supply chains: Network configuration and natural capital perspectives

Abstract

Purpose

The purpose of this paper is to propose a novel resource availability assessment for supply chain (SC) configuration. This approach involves understanding both local resource availability and the demand-side implications of supplying global/regional markets as part of a more holistic SC design activity that incorporates local environmental factors.

Design/methodology/approach

The proposed framework was derived from literature analysis, bridging relevant literature domains – natural capital theory, industrial ecology and SC configuration – in order to develop design rules for future resource-constrained industrial systems. In order to test the proposed framework, an exploratory case study, based on secondary data, was conducted.

Findings

Research findings suggest that this approach might better identify relationships and vulnerabilities between natural resource availability and the viability of regional/global SCs. The research suggests that natural resource availability depends upon three elements – local resource consumption, global resource demand and external environmental factors.

Research limitations/implications

The framework has two main limitations. The current work is focussed on a single industry case study used to exemplify the approach. Second, the framework does not consider other possible industries, which might enter or leave the specific location during the company’s operation. Furthermore, no assessment was made of the migration of populations within the area.

Practical implications

For practitioners, such as those in the agri-food sector, the resource availability assessment framework informs SC configuration design. For policymakers, the research aims to provide policy guidelines, which can help to improve water-saving strategies for a particular region. At a broader societal level, the research raises awareness of resource scarcity amongst industrial players and the wider public.

Originality/value

A resource availability assessment framework has been proposed, suggesting that the dynamics of both global and local resource demand, in conjunction with changing local environmental factors, can over time significantly deteriorate a firm’s natural resource impact on the local environment. Thus, the framework seeks to deliver mechanisms to evaluate potential vulnerabilities and solutions available to firms using a more proactive SC design method and to apply reconfiguration processes that account for natural resources, based primarily on network and resource attributes.

Citation

Yatskovskaya, E., Srai, J.S. and Kumar, M. (2016), "Local water stress impacts on global supply chains: Network configuration and natural capital perspectives", Journal of Advances in Management Research, Vol. 13 No. 3, pp. 368-391. https://doi.org/10.1108/JAMR-10-2015-0068