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A supply chain management approach for investigating the role of tour operators on sustainable tourism: the case of TUI

A supply chain management approach for investigating the role of tour operators on sustainable tourism: the case of TUI

Journal of Cleaner Production 16 (2008) 1589–1599 Contents lists available at ScienceDirect Journal of Cleaner Production journal homepage: www.else...

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Journal of Cleaner Production 16 (2008) 1589–1599

Contents lists available at ScienceDirect

Journal of Cleaner Production journal homepage:

A supply chain management approach for investigating the role of tour operators on sustainable tourism: the case of TUI Marianna Sigala* Department of Business Administration, University of the Aegean, Michalon 8, Chios, GR-82100, Greece

a r t i c l e i n f o

a b s t r a c t

Article history: Available online 13 June 2008

Increasing awareness and demands in sustainable tourism require firms to implement sustainable Supply Chain Management policies (SCM). Tour operators can significantly influence and promote sustainable tourism development due to their central distribution role and capability to direct tourists to destinations and suppliers. Despite the emerging role of SCM and sustainability, the applicability of SCM practices in tourism is not studied yet. This paper adapts and illustrates the value of using SCM concepts within tour operators’ business for integrating sustainability into tourism supply chains. After reviewing the literature in SC management and collaboration, a model for implementing sustainable SCM is proposed and its applicability is shown by analysing the case of TUI. The implications of the model and the case study are discussed. Ó 2008 Elsevier Ltd. All rights reserved.

Keywords: Supply chain management Sustainability Tourism Tour operators

1. Introduction Intense competition forces companies to cluster and cooperate in supply chains (SC) for enhancing agility, flexibility and performance [1,2]. Increasing tourists’ concerns on environmental issues also force companies to adopt sustainable supply chain management (SCM) strategies [3,4]. Sustainability includes the achievement of community wide good socio-economic, cultural and environmental long-term impacts, while SCM covers all aspects of a product’s life such as raw materials, processing, manufacturing, distribution, retailing, customer use and final product disposal. Being part of a SC, firms realize that long-term sustainability is not a firm, but rather a SC issue involving all downstream and upstream players. Research in green SCM is also booming in the academic circles [5,6]. The DIY retailer, B&Q, is a good example of sustainable SCM [7] addressing the environmental and social impacts of all its 40,000 products, as products’ sustainability includes evaluation of all suppliers’ tiers right back to source and internal operations product’s ethics (e.g. employment and working conditions). Tourism is not an exception, as firms increasingly realise that: (a) the multidimensionality and variety of tourism packages (e.g. transportation, accommodation, events) necessitates inter-firm collaboration [8]; and (b) collaborating with competitors, suppliers, customers, and/or firms in the SC is an imperative for surviving and developing sustainable destinations [9,10,11]. Although, tourism

* Tel.: þ30 2310 801615; fax: þ30 2310 801625. E-mail address: [email protected] 0959-6526/$ – see front matter Ó 2008 Elsevier Ltd. All rights reserved. doi:10.1016/j.jclepro.2008.04.021

contributes to employment and economic development [3,4,12], it also leads to negative environmental and social impacts such as: resource consumption, pollution and wastes generation [12,13], disruption or destruction of local cultures, use of drugs and prostitution [12,13]. Sustainable tourism becomes a critical aspect, while their implementation is heavily influenced by tour operators, because they can: (a) greatly influence the volume and direction of tourism flows; (b) integrate and affect attitudes and practices of numerous tourism suppliers and stakeholders; and (c) lead to widespread benefits due to their large size. Tour operators also need to understand their role and responsibility for tourism sustainability, because of the severe impacts assigned to their core business (mass tourism), i.e. the assembly of standardised low-cost tourism packages appealing to tourists’ masses travelling to specific well-known geographical areas. Research shows e.g. Refs. [14–16] that mass tourism should be adjusted to integrate and support sustainability, since it is better to address its impacts rather than simply transfer them elsewhere. Although tour operators’ important role for promoting sustainability is recognised e.g. Refs. [3,14,17], none effort exists so far investigating how tour operators can apply SCM for integrating and implementing socio-economic, cultural and environmental sustainable policies in SC. By adopting a case study methodology, this study addresses this gap by proposing and analysing the applicability of a sustainable tourism SCM framework from tour operators’ perspective. The paper initially critically reviewed the literature for developing a theoretical framework and using it for collecting and analysing findings. The theoretical underpinnings of the study are debated in the first sections, whereby, the importance and the tools for


M. Sigala / Journal of Cleaner Production 16 (2008) 1589–1599

building of collaborative SCM are analysed and synthesised into a SCM framework. The validity and reliability of data collection are justified in the methodology section, while the framework’s applicability is shown by analysing the SC sustainable practices of TUI (a mega tour operator). Its theoretical and research implications are also discussed. 2. Sustainable SCM in tourism: a tour operators’ perspective 2.1. (Sustainable) SCM: concept and aims SCM refers either to a process-oriented management approach to sourcing, producing and delivering goods/services to endconsumers or in a broader meaning to the coordination of the various actors of the same SC [1]. SC members participate in coordinating activities spanning firms’ boundaries for fulfilling end-customer needs and developing agile SC [19]. By promoting intra- and inter-firm integration, SCM requires firms to cooperate for increasing overall SC performance, total business-process excellence and end-consumer satisfaction, rather than competing for a bigger profit share. SCM represents a new way of managing the business and building networks of long-lasting relationships with SC stakeholders [1,2]. For greening the SC, SCM concepts are applied. Hervani et al. [6] found that several authors have applied sustainable issues in different SC activities such as product design, process design, and procurement. Seuring and Mu¨ller [20] showed that sustainable SCM research emphasises the need to incorporate the sustainability of all SC stages and of final products through their lifecycle and development processes. In this study, sustainable SCM is defined similarly, while considering the following tourism services issues (rather than only manufacturing); sustainable SCM: (a) refers to all SCM stages, but when applying SCM to tourism, one has to recognise that tourism production and consumption take place simultaneously at the destination; (b) refers to the natural environment, socio-cultural and economic environment of tourism; and (c) encompasses a reversed logistics process creating feedback, continuous learning and improvement processes. Sustainable SCM depends on the co-development of SC activities coordinated and shared amongst all SC entities. Table 1 summarises literature e.g. Refs. [3,11,13] for illustrating the above conceptualisation and practice of sustainable SCM in tourism.

regions and local suppliers [17]. Tour operators can influence the dissemination (both flow and balance of direction) of tourists’ visits and activities amongst both local tourism enterprises and international destination geographies and spaces [3]. They can also promote and trigger suppliers’ actions towards the implementation and co-development of sustainable tourism SCM practices, e.g. by contracting and including in tour packages, only suppliers complying with sustainable standards [14,23]. As travellers are also SC players, tour operators’ local guides and representatives should also educate and make travellers aware about the environmental and socio-cultural sensitivities of the destination, the potential impacts of their consumption, and the preventive measures and behaviour they should adopt for avoiding negative impacts. Customers’ training, establishment and enforcement of tourists’ behaviour code of conducts are also a tour operators’ sustainable practice [3]. Generally, tour operators can influence the choice of travellers, the strategies of SC members and the development plans of destinations. Overall, sustainability in tourism is a multi-sectoral (hotels, restaurant, transport companies, etc.) and a multi-disciplinary (economic, social and environmental) concept. In other words, tour operators’ package sustainability depends on the performance of all the products, suppliers and links within the tourism SC. Recent data [22] also show that travellers’ satisfaction substantially depend on their service quality perceptions of all aspects of their holiday (e.g. quality of see water, destination infrastructure and environmental resources). To increase travellers’ satisfaction, tour operators have a strong incentive to influence, monitor, control and support the sustainable quality development of the totality of their tour packages’ components. Tour operators play a focal role for tourism sustainable SCM, as according to Seuring and Mu¨ller [20] focal companies are the companies governing, ruling a SC and/or coming in contact with customers. In playing a focal role, tour operators should organise multi-stakeholder dialogues for bringing together the different views and interests of local authorities, the private sector, civil society and NGOs. Hence, tour operators’ role can be exercised through relationships’ building aiming to collaboratively create a common voice and sustainable targets [17,23]. 3. Theoretical framework

2.2. Sustainable SCM in tourism: tour operators’ role

3.1. Implementing sustainable SCM and critical success factors for SC collaboration

Despite the importance of collaboration for achieving tourism sustainability [3,8,9,10,21] and the demonstrated applicability of SCM in tourism [2], research fails to recognise SCM’s role for further analysing sustainability issues. The tourism SC (Fig. 1) comprises the suppliers of all the goods and services creating and delivering tourism products as well as tourists, since they actively participate in tourism services’ production and consumption (co-producers). The major SC activity of tour operators is the bulk purchase of products (e.g. accommodation, transportation, excursions), their bundling in tour packages and the later’s distribution–sale in a single package price that is lower than the prices’ sum of the package’s products. By linking demand and supply, tour operators play a crucial role in promoting, distributing products and facilitating information sharing in tourism SC. These tour operators’ activities vitally retain the survival of small and medium tourism suppliers (SMTS), since, due to their limited resources and competencies, SMTS cannot promote and distribute their products. At destinations, tour operators can also promote the use of different local products and companies and so, support economic development, for example, by influencing their distribution channels (e.g. travel agents and reps) to fairly distribute tourists to several

The SCM model of Cigolini et al. [24] was adopted for developing the theoretical framework and identifying the critical success factors for implementing sustainable SCM in tourism. This is because Cigolini et al. [24] have recently developed and tested a SCM model that not only defines SCM, but it also identifies the constructs of successful SCM implementation. Since, sustainable SCM builds on SCM, and then the former also needs to be based on the same building blocks as the later. Cigolini et al. [24] identified two categories of SCM-related actions: SC techniques and SC tools. SC techniques are the main building blocks defining the SC’s main hard framework and control system, and shaping its configuration, management rules and performance. SC techniques are related either to the configuration of a SC (e.g. warehouses, retailing system and redesigning techniques) or to its management (e.g. JIT) and their main aim is the achievement of cross-functional activities and process alignment amongst SC members. SC tools are relationspecific assets or investments (e.g. an information system) enabling the implementation and support of one or more SC technique(s). In this vein, sustainable SCM is considered as a SCM technique and aim based on which the tourism SC players need to integrate, coordinate and direct their SCM practices, and the next section

M. Sigala / Journal of Cleaner Production 16 (2008) 1589–1599


Table 1 Definition and examples of TUI’s sustainable SCM

Sustainable SCM in tourism

Stage of SC

Activity Definition

Example of TUI

Sustainable product design

Design and creation of a tour package, e.g.

Selection and use of certified companies Step-wise continuous certification of TUI firms. Until 2003, 28% of all TUI Group turnover was generated by certified companies (in 2002, it was 2%), while the Group’s aim for 2006 is to increase this percentage to 35%. TUI companies are free to chose whether they are certified in accordance with ISO standards or in accordance with EMAS – the environmental audit of the EU



Sustainable procurement

Sustainable production

Selection, contracting with and management of suppliers and stakeholders of tour package As service production takes place in the consumption place, it involves producers, suppliers, consumers and servicescape and so, sustainable management refers to: B



Sustainable delivery– distribution Sustainable reverse logistics

Inclusion and selection of supplier Design of the aims and nature of tourists’ activities at destinations



tourism destinations all suppliers’ and internal business making up the tour package tourists


conceptional development in coordination with local sustainable experts and authorities; support for local cooperation practices use of sustainable means of transport increasing awareness of natural and cultural assets active involvement of tourists

Staff training and education (through seminars, videos, and in-house management schemes); training guide for tour guides and assignment of a ‘‘TUI environmental ambassador’’ responsible for destination sustainability issues. Exemplary consumer information on environmental aspects Environmental management reflected in areas ranging from brochure production, travel agencies incentive schemes and priorities, programme planning, outward and return travel

Sustainable management of tourist distribution chain, e.g. travel agents Feedback performance measurement mechanisms

critically reviews the literature for identifying the SCM tools and critical success factors for implementing the former. Cigolini et al. [24] identified three SC tools namely information tools, coordination and control tools, and organisation tools. Information tools (e.g. online connections, automated identification systems such as barcodes and shared databases) are utilized to gather, analyze, transmit and share data, regarding customer data, end-to-end inventory status and locations, order status, costs related data and performance status. Data sharing ensures that participating members will be able to make use of shared information to help design and deliver products that fulfil customer requirements more quickly and effectively. Visibility of performance metrics enables members to address production and quality issues more quickly permitting more agile demand planning. The

TUI Group’s wide sustainability activities reflect social dialogue and cooperation with multiple tourism stakeholders and entities Priority selection and contracting with suppliers abiding to TUI’s environmental schemes and achieve annual sustainable targets Development of environmental product declaration schemes (EPDS) for the development of tourism products. For example, TUI’s criteria for the design of destination excursions include:



Executive board responsibility for environmental performance management, transparency and stakeholder dialogue Worldwide environmental reporting of hotels, airlines, destinations, shareholdings and at every step of the value chain with a continuous improvement process

importance of information is also highlighted in sustainable SCM literature; Seuring and Mu¨ller [20] reported that insufficient or missing SC communication is a major barrier to sustainable SCM implementation. Coordination and control tools are utilized to monitor and influence the decision-making process, by measuring performances and setting rewards based on the achievement of certain results. A SC performance metric system, including a set of parameters that fully describe the performance metrics of both the whole SC (as perceived by end customers, and of each actor of the chain), is a necessity for ensuring trustworthiness and accountability [25]. Hence, instead of functional-cost-oriented metrics that are often achieved at the expense of another member, integrated metrics are required. However, research in SCM performance measurement has

Tourism Demand Providers of tourism infrastructure

such as water and power supply, road infrastructure airports etc

Leisure travelers

Tour operators

Hotels, resorts, golf courts, restaurants, museums and other tourism related suppliers

Travel Agents Other tourism intermediaries such as internet websites, destination organizations etc

Direction of money, documents, and information flows Fig. 1. Tourism supply chain.

Conference travelers etc


M. Sigala / Journal of Cleaner Production 16 (2008) 1589–1599

been limited, while reported performance metrics are focused internally and do not span across multiple SC members [6,26]. Hervani et al. [6] summarised the problems of performance measurement in a SC inter-organisational environment as follows: non-standardised data, poor technological integration, geographical and cultural differences, differences in organisational policy, lack of agreed metrics, or poor understanding of the need for inter-organisational performance measurement, and complexity due to numerous tiers and partners. Members’ commitment to continuous improvement and learning is dependent on shared performance metrics [27–29]. Thus, performance metrics should be continually shared to identify SC bottlenecks in time and enable continuous and accelerating SC performance improvements. The importance of communicating performance metrics is also highlighted in the sustainable SCM literature. Many authors [20,30,31] emphasised the need to monitor and communicate evaluation metrics through reports, and enforce their achievement through sanctions. Hervani et al. [6] added that performance measurement in green SCM is also needed for regulatory, marketing and competitiveness issues, and its basic purposes include: external reporting (economic rent) – which may also be legally mandatory, internal control (managing the business better), and internal analysis (understanding the business better and continuous improvement). The literature [32,33] also advocates the use of environmental management systems by SC players for enforcing the SC adoption of minimum required sustainable performance standards. Authors [3,20,34,35] highlighted the need to enhance performance metrics by incorporating socio-cultural and environmental criteria in suppliers’ evaluation schemes and selection. Gunasekaran et al. [36] and Brewer and Speh [37] summarised the main issues for developing a SC performance management as follows. First, information sharing, acquisition and monitoring are important for overcoming mistrust. Financial and non-financial SC wide metrics need to be used and aligned with internal performance systems. This is crucial as lack of alignment between SC and internal performance metrics can lead to misunderstandings, conflicts and failures of targets, since managers prefer internal performance measures they can control. Thirdly, as different SC entities may have different goals and thus, prefer different metrics, SC wide organisation and coordination is required to develop commonly agreed goals and standardised performance metrics based on which the performance of each SC entity would be measured and improved. In determining SC wide performance metrics, SC players also need to co-agree on who is the SC stakeholder and customer whose value needs to be linked with sustainable performance. The links between sustainable socioenvironmental metrics and economic performance metrics need to be made explicit and shown [6,20]. Finally, an information system is required for gathering and disseminating performance information amongst all SC players. Information sharing is the starting point for any SC collaboration, as it aims to capture and disseminate timely and relevant information to enable decision-makers to plan and control SC operations, while by including performance metrics, information sharing also enables SC continuous improvement. Organisation tools are needed to support cross-firm communication and coordination. Cigolini et al. [24] considered ‘‘interface managers’’ as a key organisational tool facilitating data transmission, supporting established processes, new project initiation and tight coordination. Interface units should be cross-functional and at all managerial levels (i.e. senior, middle and operational level). Hervani et al. [6] highlighted the importance of three organisational capabilities for implementing a green SC performance measurement system: organisational resources and capacities (e.g. financial and knowledge resources, organisational structure, staff training and long-term orientation in sustainable

issues, firm relations with external stakeholders, status of sustainable issues in company’s strategy and culture); organisational innovativeness (i.e. firm’s previous commitment and track record in implementing advanced organisational practices, e.g. TQM); and organisational monitoring (methods for measuring, analysing and monitoring performance in key dimensions). Seuring and Mu¨ller [20] found inter-firm communication, training and performance evaluation (on economic and social and environmental targets) of purchasing and supplier’s staff as important factors for achieving SC sustainability. For achieving SC environmental innovation, Greffen and Rothenberg [38] highlighted the importance of building, exploiting and using organisational networks going beyond company’s boundaries and involving external stakeholders, as the latter bring competencies and knowledge not existing in a single company. Several other authors [39] have identified similar tools for implementing SCM. Simatupang and Sridharan [40] also identified three SC enablers: information sharing, decision synchronisation, and incentive alignment. Information sharing refers to the ability to see private data in partners’ systems and monitor the progress of products as they pass through SC stages. Information exchange has been widely accepted as an indispensable SC tool e.g. Refs. [41–43]. Shore and Venkatachalam [44] revealed that information sharing capabilities require both hard (i.e. technology systems) and soft (i.e. trust, openness, and mutual benefits) factors all contributing to the long-term network stability [45,46]. Decision synchronisation is the ability to orchestrate decisions at different managerial levels and time horizons for pursuing SC common goals [47]. It covers aligning strategic objectives, policies and metrics amongst SC members (operational decisions), synchronizing mutual improvements (tactical decisions) and synchronizing SC planning and execution (strategic decisions). Incentive alignment refers to the process of sharing costs, risks and benefits amongst SC members [40], and it is considered as a vital factor, as it motivates members to act in a manner consistent with the mutual SC strategic objectives. Compensation fairness also ensures that aligned incentives motivate members to share equitable loads and benefits resulting from collaborative efforts. 3.2. Case study’s theoretical framework In summarising the previous literature, it is argued that collaboration in SCM requires three major factors [40]: (a) information sharing; (b) decision synchronisation; and (c) incentive alignment. These factors were used for developing a SC collaboration index, whose reliability and validity were recently proved in Ref. [48] and it is useful here because: (a) its items can be tailored to any relationship to gauge the levels of collaboration for any common SC practice; (b) it can be used for identifying gaps that need to be eliminated; (c) it can be used for continuous SC performance improvement, as findings showed a relationship between its constructs and operational performance; and (d) it includes factors and issues that have also been reported as critical support factors for implementing sustainable SCM. Because of these, Simatupang and Sridharan [40,48] collaborative SC model and index were adapted in this study for identifying and analysing the processes, roles and practices that tour operators can develop for achieving sustainability tourism SC. The conceptualisation and analysis of the three collaborative SC constructs is presented in the previous section, while Fig. 2 illustrates their interconnections. 4. Research methodology This paper aimed to illustrate the usefulness and applicability of SCM concepts for implementing sustainable SCM through the focal SC role of tour operators. A case study methodology was adopted

M. Sigala / Journal of Cleaner Production 16 (2008) 1589–1599

Specifies information needs

Information sharing

Facilitates visibility Justifies aligned incentives Decision synchronization

Motivates to reveal truthful information

Facilitates fair compensation Incentive alignment

Motivates to make joint decision Fig. 2. Enablers of SCM (adopted from Simatupang and Sridharan, 2004).

for demonstrating through industry experience how a large tour operator, TUI, applies SCM for implementing sustainable SCM, aiming for theory testing and potential enhancement. TUI is selected because TUI is widely recognised as a leading tour operator having a strong commitment in sustainability (e.g. the German Manager Magazin’s Good Company Ranking 2006 listed TUI as having the best environmental management in a European comparison survey) and so, the case study also reveals best practices from an industry leader that others can learn. Case study research is also deemed as a good methodology for conducting research into (sustainable) SCM field [18], because it enables data collection from different and several SC stages, which is also achieved here. Case studies in sustainable SCM have been accused [18] for lacking theoretical underpinning, methodological rigor and so, data reliability and validity. To address these, the paper first critically reviewed and synthesised the relevant literature in the field of SCM and sustainable SCM with the aim to develop a theoretical framework, which in turn was used for gathering and analysing findings. Content validity was enhanced by discussing theoretical models and findings with field experts at conferences. Findings’ reliability and validity were ensured by gathering and validating data from multiple sources located at different countries and SC stages. The following data collection methods were used: semi-structured interviews with TUI staff (a person working for a TUI travel agent in Greece and another working at the Environmental Management department of TUI in Germany); interviews were structured based on the three factors of the theoretical framework; identification of company’s documentation including website information, annual corporate environmental reports, information and training material about sustainability included in the TUI staff Intranet portal; and open interviews with one Grecotel management staff (a Greek hotel chain partially owned by TUI), with the managers of two independent hotels in Greece contracting with TUI and with one TUI rep working on a Greek island; open interviews aimed to cross-check the reality of the found TUI sustainability activities. Validated data were analysed using a content methodology by grouping findings based on the three factors of the framework.


the human and natural resources that will be needed in the future’ [16]. The sustainability policy of TUI is based on the long-term planning projections for a fair, open, partnership-based and responsible configuration and harmonisation process for tourism development in the sense of economic yield, environmental compatibility and social cohesion. The organisation’s policy, culture and commitment to sustainable SCM are demonstrated in the groups’ numerous sustainable practices spanning all SC stages (Table 1). TUI adopts two strategies for achieving sustainable SCM [20]: (1) avoiding risks from global SC by ensuring and influencing the sustainable performance of all tourism suppliers and stakeholders that TUI incorporates into each product and are involved in its SC; and (2) practicing SCM for sustainable products by monitoring the lifecycle development and sustainable requirements of its products. These strategies are regarded as complementary and supporting [20] and findings reinforce this. According to Refs. [32,33] to enforce use and monitoring of performance sustainability standards, TUI gives preference to the ISO 14001, because this is the globally valid, recognised and established standard. Being a global service company, ISO is beneficial not only for TUI’s suppliers and subsidiaries (which are globally dispersed), but also for its global customers as, ISO guarantees direct international comparability and benchmarking. In addition, numerous TUI subsidiaries have also established their own environmental codes of practice, policies or corporate guidelines focusing on the following three areas: being a responsible business (internal sustainable management); being a good neighbour (external network sustainable management and collaboration, e.g. local communities, staff, tourists, authorities); and protect holiday destinations (destination sustainable management). This wide range of initiatives is incorporated within a Group-wide framework by TUI’s voluntary commitment, while there is also great cooperation amongst TUI’s subsidiaries for jointly developing environmental programmes and schemes. For example, the in-house ‘‘EcoResort’’ quality label was cocreated between TUI Hotels & Resorts and TUI’s Group Corporate Environmental Management. TUI’s commitment to enable foster and support environmental information sharing and dialogue within its corporation and SC is illustrated via the establishment of TUI Environmental Network (TEN!) that promotes in-depth stakeholder dialogue (Fig. 3). TEN! was formed because effective environmental protection is only possible when everyone is pulling in the same direction. TEN! extends beyond the organisation’s borders and integrates staff and company departments of all hierarchy levels with international affiliates, contractual and external partners, authorities, policy makers and associations with the aim to promote networking, dialogue and cooperation. The value chain networking configuration of TEN! (Fig. 4) also illustrates TUI’s aim to integrate and apply sustainable management along the whole tourism SC by linking up actively involved TUI staff from different departments and at all levels of the tourism SC.

5. Sustainable SCM in tourism: the TUI case study 5.2. Information gathering and sharing-reporting Sustainability integration into a tour operator’s SC requires the establishment of a coherent company policy and a performance management system that set clear targets and actions for economic, environmental and social performance [3,12,17]. By using the above framework, this section demonstrates how TUI uses its focal role for achieving sustainable SCM in tourism SC. 5.1. TUI’s sustainable SCM practices Sustainable development for business means ‘adopting business strategies and activities that meet the needs of the enterprise and its stakeholders today while protecting, sustaining, and enhancing

Effective information gathering, sharing and dissemination require an initial establishment and commitment to a sustainability policy and action plan. All SC members need to commit resources and time for achieving sustainability policy and integrating it in their existing management systems [20,38,43]. Literature [36,37] also shows that all tourism suppliers need to co-agree and break down the sustainable policy and metrics in certain actionable sustainable goals, whose current and future performance levels-metrics achieved by all tourism suppliers need to be traced and monitored. An information sharing and gathering process should include [23]: (1) a baseline assessment of tourism service


M. Sigala / Journal of Cleaner Production 16 (2008) 1589–1599

Fig. 3. TUI Environmental Network (TEN!).

suppliers; (2) a system for monitoring and reporting on progress (as measured against the initial baseline); and (3) information gathering and dissemination systems and procedures. 5.2.1. Information communication and coordination In the case of TUI, environmental monitoring, analysis and dissemination for the development of common actions are at the core of its sustainable corporate policy. Controlling the standards involves a multi-phase environmental monitoring system, which is optimised by a Continuous Improvement Process (CIP). To achieve reporting and information sharing, IT solutions, organisational structure (including creation of departments’ functions and assignment of roles to responsible staff), and systems to standardise the gathering of environmental indices are developed and prepared for Group-wide application. Environmental reporting is an integral part of in-Group reporting, Group financial information, public relations work and the continuous development of TUI’s environmental strategy. Concerning the organisational structure enabling environmental performance monitoring and continuous improvement, TUI Group’s Corporate Environmental Management is assigned as a core coordination platform of environmental activities responsible for co-operating with the environmental officers that are established in each company of the Group. The Corporate Environment Management is also responsible for promoting in-depth stakeholder dialogues through the TUI Environmental Network (TEN!). Corporate Environment Management not only benefits by acquiring and sharing expertise and knowledge outside TUI’s networks [38], but also by aligning its economic and environmental goals with the enhancement of TUI shareholders’ and stakeholders’ value [27,28,30,31]. Overall, it plays a major strategic and operational role by assisting strategically TUI’s Corporate centres and by advising environmental coordinators of the Group’s companies on the operating side of the business. Hence, this department’s role is regarded as the ‘interface manager’ [24] enabling coordination and communication within TUI companies, its subsidiaries and TUI’s external network of tourism stakeholders.

To support achievement of sustainable targets at local–operational level (i.e. at each SC stage), environmental coordinators and environmental officers are established at each TUI subsidiary and/or contracted company. These are empowered to act independently within their source markets guided by the economic, social and environmental policy frameworks. TUI’s Environmental Management supports local officers by providing advice and coordination. 5.2.2. Performance metrics: development and use The central Environmental Management department annually surveys and analyses the environmental performance of TUI affiliated companies (e.g. hotels, airlines, travel agents, travel guides, etc.) on the basis of standard Group-wide criteria (Table 2) that consider various references and socio-cultural criteria including the Global Reporting Initiative (GRI) and OECD guidelines, the requirements of financial markets (non-financial aspects), of sustainability experts within the scientific community and of consulting companies. Thus, TUI’s performance criteria and metrics include indicators in all three areas (social, economic and environmental), while they are cooperatively established by achieving agreement and understanding of several stakeholders [6,20,36,37]. The monitoring questionnaire covers aspects ranging from environmental policy, environmental risks and preventative measures, to certification and practical environmental protection measures (Table 3). The environmental checklists help control the implementation of sustainable measures by individual hoteliers, hotel chains, airlines, travel agents as well as the whole tourism sector in holiday regions. Therefore, in addition to compiling all environmentally relevant information at a Group level, systematic environmental monitoring also gives an important boost to improve the environmental performance of all TUI affiliated companies within the context of the Continuous Improvement Process (CIP). TUI affiliated companies also accept their social responsibility for sustainable social development, nature and environmental protection. Their endeavours to carry out their business in an

M. Sigala / Journal of Cleaner Production 16 (2008) 1589–1599


Fig. 4. TUI Environmental Network (TEN!) integrating TUI Group’s business along the supply chain.

environmentally and socially compatible way range from dialogue with various interest groups to active involvement in several associations and initiatives, staff training on sustainability and provision of educational scholarship to staff and their dependent family members. Fig. 5 illustrates the complexity, multistakeholder and multi-dimensional (economic, socio-cultural,

environmental) perspectives of sustainability reporting of TUI Group, as it involves internal and external environmental networking within TUI’s Corporate Centre and the Group’s companies found in all SC stages. Standardised Group-wide reporting is currently planned for 2006, however, standard metrics used in future activities need to


M. Sigala / Journal of Cleaner Production 16 (2008) 1589–1599

Table 2 Environmental criteria reporting (2005) of TUI Group companies

1. Organisation Environmental policy Statutory compliance/legal compliance B Environmental risk factors B Environmental organisation B Certified environmental management systems 2. Activities in 2005 B B




Environmental impacts of business operations Environmentally-friendly business practices/operations Innovation, conserving resources, reducing emissions and climate protection: Conservation of species and biodiversity Memberships, cooperation projects Environmental communication Expenditure in 2005 Savings and other benefits in 2005

3. Environmental objectives for business year 2006 and beyond 4. Any other relevant information Source:

address the following inhibitor factors: different business models of TUI companies (e.g. hotels and airlines) which inhibit metrics’ comparability; many tourism companies (particularly small with limited financial and knowledge resources) are not owned by TUI Group and so, collection and reporting of metrics are difficult; the same holds for several external contractors; the existence of different monitoring systems, regulations and metrics in different destination countries; and the economic and workforce constraints that make it difficult to convince partners, suppliers and contractors of the need to engage in time-consuming recording of environmental performance indicators. Findings confirm theoretical claims arguing the difficulty in defining appropriate metrics SC wide performance and in reaching SC agreement and application. To overcome some of these barriers, it is argued that governments should cutback in bureaucracy and reduce unnecessary overregulation to avoid location disadvantages in an international competitive marketplace [3].

Table 3 Media and channels for external reporting B B




the Environmental Chapter in the TUI AG Annual Report the TUI Intranet Portal (TIP) featuring a ‘‘document centre’’ and ‘‘Experts corner’’ for peer learning and knowledge exchange the Environmental Coordinators’ Conference The ‘‘TUI Times’’ staff newspaper Company wide e-mail based Environment Newsletter three times a year the internet: the Group Environmental Reporting TUI AG has been registered at the independent internet platform since December 2003. This website was developed under the auspices of UNEP to improve transparency for sustainable investment in Europe. Seminars and conferences Dissemination in financial markets, e.g. TUI AG was selected for the Ethibel Pioneer Index, and since 18th September 2006, TUI AG is selected as an index component of the Dow Jones Sustainability World Index information concerning hotels and destinations is published in TUI brochures

5.2.3. Performance monitoring process: data collection, reporting and use The TUI Service or agency managers in each holiday region are responsible for up-to-date reporting. To check environmental quality in the holiday regions, nominated staff from TUI Service and incoming agencies question local authorities, environmental groups, etc., and report back to TUI’s Environmental Management on the current state of the environment. The reports reflect TUI environmental criteria for holiday regions and must look at all of the criteria in detail where possible. The environmental reports are supplemented by numerous appendices reflecting TUI environmental criteria for destinations and including reports by public and private sector organisations, local press releases, environmental education brochures produced in the regions covering nature and environmental protection, samples of guest information material provided by TUI hotels, feedback from TUI airlines’ passengers as well as photographs and maps. This information is analysed by TUI Environmental Management and made available to TUI headquarters’ departments that posses strategic functions and the environmental coordinators in the affiliated companies. TUI Environmental Management has undertaken continuous monitoring of the environmental situation in tourism destinations since 1990, and coordinated the environmental monitoring of contracted hotels (since 1992). All the surveyed Group companies and the TUI’s executive committee receive detailed feedback on environmental reporting quality and all the implemented measures. Results are published in various internal and external company places. TUI has enhanced its public dissemination activities for responding to the demands of sustainability ratings and providing the information required by independent index providers, research organisations and specialised investment funds. Table 3 summarises the major dissemination media and channels used for external dissemination of TUI’s sustainable SCM practices whereby Internet-based channels are dominant media. This is not surprising since TUI believes that Internet-based environmental communication is miles ahead of the print media in terms of up-to-dateness, accessibility, transparency, dialogue capability and reduction in distribution losses. ‘‘For us, the internet is the ‘‘motor’’ of environmental communications’’ Dr. Wolf Michael Iwand, Director of TUI AG Group Corporate, Environmental Management (TUI Environmental Report, 2006, As concerns internal reporting, it is currently a major aim of TUI Group to incorporate and use the special environmental know-how of Environmental Management into the Corporate Centre Legal Affairs & Human Resources and other departments (Finance, Contracting, and Procurement). The results of TUI’s global environmental monitoring are also passed on to tourism managers in local, regional and national seminars, workshops and conferences, etc. The results are also passed on to regional and national governments in the form of recommendations. All of this activity is part of TUI’s endeavours to jointly find sustainable solutions with all of its network partners. TUI’s environmental monitoring and report information dissemination are also enabled through providing in-depth reports on TUI’s cooperation partners and pending projects. This website also aims to get tourists more aware, involved and gain their cooperation in sustainability. Environmental reports are used for various purposes, e.g. TUI Deutschland, TUI Suisse and TUI Austria use them to prepare the consumer information included in their TUI brochures. In addition to providing the group with information, systematic monitoring also raises the awareness of local residents and decision-makers of environmental and sustainability issues. Overall, through information collection and dissemination TUI Group aims to achieve the following: early identification of environmental risks within the

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Fig. 5. TUI Group sustainability reporting.

value chain; editing and further development of the Company’s Environmental Reporting; analysis and benchmarking of environmental achievements of the Group companies; communication with stakeholders and shareholders; customers protection, information and awareness; continuous improvement process. Hence, TUI aims to exploit and perceive the dissemination of sustainability performance metrics as a learning experience and continuous improvement exercise [27–29]. 5.3. Decision synchronisation, technical and organisational support amongst the different tourism suppliers and stakeholders





TUI recognises that sustainability is a multi-stakeholder issue requiring internal monitoring and control but also an intensive external dialogue, close cooperation, a great deal of government lobbying, and persuasion of contractual partners such as hoteliers, agencies and environmental protection organisations. Thus, TUI’s sustainability commitment and activities’ development are shown through dialogue as well as collaborative networks creation with other interested groups such as nature conservationists, politicians and media to raise awareness, create opportunities for developing dialogues amongst different tourism stakeholders, enhance a common tourism voice and lobbying power and provide technical and educational support and opportunities. Many of these external partners are also part of TUI’s TEN network. Examples whereby TUI seeks to achieve synchronisation in developing collaborative sustainable activities by exploiting the resources of multiple stakeholders are shown in Fig. 6. Based on interview data with TUI staff, the following issues are regarded as important factors for enabling TUI to achieve and foster decision synchronisation amongst its SC members: B


its continuous monitoring system through out the whole value chain; the information management system integrating internal and external stakeholders and enabling informed decisions. Transparency and open dialogue are part of the company’s

comprehension of sustainable development. It is because of this that TUI is both nationally and internationally present as qualified and engage contact persons for politics, the sciences, lobbies and the economy; organisational structure and key organisational positions with specific responsibilities and roles that reflect the company’s commitment to sustainability policy and issues; the alignment of the Group’s environmental goals with its stakeholders’ value; the provision of feedback, raising awareness of suppliers, destinations and other stakeholders; social dialogue and collaborative activities negotiated and agreed through the TEN! network.

5.4. Incentive alignment The effective implementation of good decision synchronisation is not guaranteed without the provision of some incentives to SC stakeholders that can motivate their actions towards the attainment of sustainable goals e.g. Refs. [20,40]. Thus, the third sustainable SC critical factor is the provision of incentives to sustainable suppliers by recognising and rewarding improvements on key environmental, social and economic issues. For example, TUI has established and awards its International Environment Award every year to people, non-governmental organisations or regional initiatives which have made vital and model contributions to the protection and conservation of nature and the environment in TUI destinations. However, full integration of sustainability issues into a tour operator’s business and incentive practices requires more than the annual sponsor of an award such as altering the way purchasing choices are made, suppliers’ contracts are written, public relations practices are conducted and internal operations are organised. Ways in which TUI rewards and motivates tourism suppliers to achieve sustainable goals include the following. TUI gives emphasis in suppliers’ evaluation schemes for selecting and contracting with tourism suppliers [34,35]. TUI integrates


M. Sigala / Journal of Cleaner Production 16 (2008) 1589–1599

As a member of the Environment and Culture Committee of the German Travel Agency and Tour Operator Association (DRV), TUI is actively involved in the environmental performance monitoring of the world's major airlines. TUI is a founding member of - Forum for Sustainable Development of German Industry, whose members include leading national and global companies. Joint discussions are held to air the duties a nd opportunities for sustainable development internally within the industry, and externally on the basis of d ialogue with politicians, stakeholders from non-governmental organisations (NGOs), science and the general public. The forum is interested in stimulating ideas and supporting sustainable development with specific activities by debating the strategies and responsibilities of i ndustry and politics. TUI is also a founder member of the Tour Operators´ Initiative (TOI), which works in partnership with UNEP, UNESCO (United Nations Educational, Scientific and Cultural Organisation) the UNWTO (United Nations World Tourism O rganisation) (March, 2000), and aims to support and engage in collaborative activities making a positive contribution to the natural, social and cultural environment. TUI has been actively involved in several committees promoting national and international dialogue on sustainability issues. Airlines TUI AG Aldabra Marine Programme with the University of Cambridge Thomsonfly Environmental Policy Committe of the BDI (Federation of German Industries) Born Free Foundation Archelon/Sea Turtle Protection Society Greece Business in the Community German Transport Forum (air transport and sustainability) Environmental Group der British Air Transport Association Econsense – Forum for Sustainable Developmentof German Industry (BATA) Green Business Network IACA International Air Charter Association Shipping Sustainable Aviation Group Hapag Lloyd Cruises AECO Association of Arctic Expedition Cruise Operators IAATO International Association of Antarctic Tour Operators Hotels & Resorts WWF Artic Programme Oslo Grecotel WWF England - 2003 Green Shipping Group Archelon/Sea Turtle Protection Society of Greece Promoting species protection and local culture in the Doron Society Tour Operat ors Greenpeace Hellas TUI Deutschland “Environment and Culture” Committee, German Travel Agency and Tour Operator Hellenic Society for the Protection of the Environment and Cultural Inheritance Association (DRV) Hellenic Society for the Protection of Nature ECPAT (End Child Prostitution, Child Pornography and Trafficking of Children for Sexual Purposes) MedSOS MEDITERRANEAN SOS Network Fig. 6. Examples of TUI Group’s collaborative activities for tourism sustainability.

sustainability criteria and monitoring into suppliers’ contracts, e.g. the filling out of annual checklists providing TUI with information on the measures and activities implemented by the hoteliers to protect the environment at their hotels is a contractual obligation. TUI applies preferential contracting with those suppliers achieving sustainable goals (use sustainability contracting standards). Training and rising suppliers’ awareness on sustainability issues [20] is also deemed important; e.g. TUI’s suppliers are convinced and trained on importance of Sustainable Development for tourism during the Environmental Coordinators’ Conference annually organised by TUI. TUI suppliers’ are also motivated for their efforts by providing continuous positive feedback on their environmental activities and reporting. TUI uses tourism demand forces and pressures [20] for motivating suppliers to adopt sustainable practices. This is achieved by publishing good sustainable performance internally and externally e.g. in travel agents’ catalogues, brochures, websites, publications of list with rankings of suppliers, in intranets. For example, hotels with outstanding environmental measures are highlighted in the TUI brochures produced by TUI Deutschland, TUI Suisse and TUI Austria by the designation ‘‘Environmentally-compatible hotel management’’. Hotels managed in an environmentally proper way are also marked (with a green triangle) in the index of holiday brochures making it easier for travel agent staff to advice customers. TUI has also launched the provision of several sustainable awards that are presented to qualified suppliers in widely promoted conferences and events. For example, 10 of the TUI’s hotels with the highest customers’ evaluation scores receive the ‘‘TUI Environment Champion’’ award based on the results of the questionnaires filled in by hotel guests. These 10 hotels are highlighted on the Internet, brochures and travel agents. An award ceremony also takes part for giving the hotels a trophy and certificates to all their staff. 6. Conclusions and implications for future research Achieving product and service sustainability nowadays has become an indispensable requirement of demand and tourism is not an exception [3,4]. This study aimed to show the applicability and usefulness of SCM as a critical management tool for ensuring

sustainability during all stages of tourism SC by analysing the case study of TUI. Although the case study cannot be considered as a representative case of average practices in tourism, it provided several good practices that policy makers and tourism suppliers can adapt for enhancing tourism sustainability. The study’s implications are important, since they are based on theoretically sound and robust arguments. Efforts were also undertaken for ensuring both the content as well as external reliability and validity of case study findings such as literature reviews, discussion of preliminary findings with experts at conferences, collection and cross-check of findings from multiple sources located at different SC stages and countries. However, future research should further investigate the global adoption of sustainable SCM not only from the tour operators’ but also from other tourism suppliers’ perspectives. Particularly, future studies should investigate the circumstances under which tourism suppliers will be willing and are capable to adopt such SCM sustainable practices. The need to undertake dyadic and multiple stakeholders view is also highlighted in the literature [20]. The case of TUI has shown that the group is facing problems and difficulties in persuading external contractor and small tourism suppliers that are not owned by the group to gather and report the necessary information. Given the great number of SMTS as well as their importance for the socio-economic viability of several destinations, studies investigating on how to overcome these problems, engage and support SMTS in sustainable SCM in tourism are critically important. In examining such issues, one hypothesis could be that to commit resources and time for achieving sustainable goals, tourism suppliers should be guaranteed long-term partnerships and sustainable volume of tourists from tour operators. Otherwise, tourism suppliers may see none benefits in working together and complying with tour operators’ sustainable plans. By taking a tourism suppliers’ perspective, future studies can also examine additional circumstances that are considered as critical for the implementation of sustainable SCM practices in tourism, such as the negotiation and development of commonly agreed standardised sustainable metrics, factors inhibiting and/or facilitating knowledge exchange within sustainable networks. In

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Marianna Sigala is a Lecturer of Operations and Production Management at the University of the Aegean, Greece. Her interests include productivity and service quality management, supply chain management and Information and Communication Technologies (ICT) applications in tourism and hospitality. Before joining the University of the Aegean, she had been lecturing at the Universities of Strathclyde and Westminster, UK. She has professional experience from the hospitality industry in Greece, while she has also contributed to several international research and consultancy projects. Her work has been published in several academic journals and international conferences. She has served at the Executive Board of EuroCHRIE as President (European Council of Hospitality, Restaurant and Institutions Educators, and she currently serves at the IFITT Board as Membership Director (International Federation of IT in Travel and Tourism,