Assessing Sustainability in Supply Chain Networks - A Natural Language Processing Approach
Hannes Cordes
University of Hamburg, Germany
Companies are increasingly caught between regulatory pressure, the expectations of their stakeholders and media attention when it comes to sustainability related issues. Supply chains specifically have become a focus of attention due to frequent violations of environmental and labour standards. When analysing sustainability in the context of supply chains, so-called ESG (Environment, Social, Governance) ratings from credit rating agencies are often used. However, these can be opaque, obscure underlying problems and vary from agency to agency. Conducting surveys and interviews in cooperation with companies offers deeper insights into a company’s actions, but is time and resource intensive when aiming to cover the full supply chain. Using available information from the company’s sustainability reports can provide a more in-depth picture while simultaneously allowing for large-scale analysis. To this end, Natural Language Processing (NLP) offers a wide range of tools to use on such text-based sources. This study aims to provide a methodological approach to assess the information present in sustainability reports with a variety of NLP-methods and apply them in the context of supply chain networks. To demonstrate the procedure, a set of reports from two related industries, namely logistic service providers and the aviation industry, was collected. First, it is analysed whether or not the contents of the reports correlate with the ESG performance of a company. Instead of relying on the aforementioned ratings for this purpose, a set of proxies related to ESG issues is used. It is argued that a positive correlation resembles honest efforts, while a negative correlation could hint at efforts to subvert from bad performance or controversies, so-called “greenwashing”. To investigate this correlation, a topic model is employed to cluster the sentences within the reports. Subsequently, a classification algorithm is assigning these topics to their respective ESG dimension. Sentence similarity is then used for the alignment of topics across firm-year observations. The correlation is tested through an econometric model to verify whether the topics discussed in the underlying reports influence the individual sustainability dimensions’ performance of a company.
Spatial Metrics in Urban Delivery Networks
Barbara Himstedt, Frank Meisel
Kiel University, Germany
Urban delivery optimization often involves using Euclidean distances to test routing models and provide practical recommendations. However, the different nature of delivery environments and means of transportation can result in discrepancies between Euclidean distances and actual distances, which then presents a challenge to the effective application of routing models in real-world scenarios. Spatial metrics may offer a way to bridge this gap by helping us understand the structure of networks, as they analyze the connections between locations, provide information about road layouts, and identify bottlenecks and barriers. This presentation will explore the relationship between selected spatial metrics and network efficiency in routing problems, focusing on the difference between pedestrian, bicycle, and road networks in different urban areas. Initial findings suggest that the accuracy of Euclidean distances varies depending on the type of network and the size of the area considered. For localized trips, bicycle and pedestrian routes are generally more efficient than routes for motorized traffic. However, there are some cases where this may not hold true, depending on the overall structure of the transportation network. Therefore, it may be helpful to consider the specific urban structure before applying general findings to real-life scenarios.
Network Structure, Relationships, and the Role of Logistics Service Providers: Insights from the Two-Wheel Sector in Portugal
Ana Isabel Bento, Carla Cruz, Luís Miguel D. F. Ferreira, Gabriela Fernandes
University of Coimbra, CEMMPRE, ARISE, Department of Mechanical Engineering
Currently, supply chains are characterized by an increasing number of actors, and collaborative solutions have been adopted to enhance value within these supply chains. At the same time, companies are increasingly adopting logistics outsourcing to establish relationships with logistics service providers (LSPs). According to the literature, LSPs are crucial in conducting supply networks and are pivotal in promoting collaboration (Prataviera et al., 2023). However, there remains a gap in understanding their role in fostering collaboration, primarily because most studies adopt a dyadic supplier-customer approach, overlooking the role of LSPs (Luo et al., 2023). Therefore, this study aims to analyze the role of LSPs in promoting collaboration among companies in the two-wheel sector in Portugal. To this end, a questionnaire focused on company interactions, logistics outsourcing, and the quality of relationships was distributed to 92 companies, achieving a response rate of 45.65%.
Three main conclusions emerged from the analysis of the data collected. Firstly, based on Social Network Analysis (SNA), which facilitates the representation of companies and calculation of metrics at both node and network levels, an LSP emerges as one of the key players. LSP provides services to other companies that manufacture parts, components, and bicycle assembly. Secondly, there is a notable adoption of logistics outsourcing, reflecting a trend where companies outsource non-core activities to concentrate on core functions. Notably, transport and customs services are the most frequently outsourced activities, with companies citing flexibility, cost reduction, and improved delivery times as the primary benefits, underscoring the fundamental role of LSP in supply chains. On the other hand, significant barriers associated with logistics outsourcing include commitment and governance mechanisms. Thirdly, regarding relationship quality, significant differences in perception were observed within the LSP-customer dyad across six dimensions studied: trust, commitment, satisfaction, collaboration, communication, and relationship-specific assets. Customers perceive a higher level of trust compared to the LSP. Conversely, LSP rates its customers higher in the remaining dimensions, especially in relationship-specific assets.
This empirical study captures the characteristics of the two-wheel sector in Portugal, focusing on its structure and prominent players. Unlike prior studies that overlooked the role of LSPs, this study explores their role as pivotal network actors, identifying companies' outsourced logistics activities and the benefits and barriers associated with this practice. Moreover, there is also a focus on evaluating the quality of the relationship with the LSP, which makes it possible to capture possible differences in perception in dyadic relationships.
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