Green-lean supply chains for improving sustainability, human development and competitiveness in Latin-American global food chains

A core principle of mainstream sustainability thinking is that sustainability is a global and integrative concept with three dimensions (environmental, social, and economical) that should be balanced for making progress towards sustainable development. In the context of businesses, it is increasingly popular to refer to these three dimensions as Planet (Environment), People (Society), and Profit (Economy), following the terminology coined by Elkington who proposed the Triple Bottom Line approach for sustainability assessment. Latin America exports a large range of food products at a large scale. The European Union and United States are the most important international market for value added export food chains in the Latin American region. Some of these global food chains may have significant impacts not only on the socio-economic development of local communities but also on the environment. The authors consider that improving market access of small scale food producers and transformers can contribute to improve substantially the social and economic pillars of sustainability in the Latin American region. At the same time, this paper is based on the idea that improving the environmental pillar of sustainability in these global food chains could contribute to enhance the access to some international markets. From 2002 to 2006, the EU Commission-funded concerted action Safe and High Quality Food Supply Chains and Networks (SAFEACC) identified major bottlenecks and opportunities related to food safety and quality in three regions: EU (industrialized countries), Mercosur (emerging economy countries), and ACP (African Caribbean Pacific, least developed countries). Some outcomes of this program suggest that the difficulties of primary producers and food manufactures in developing countries in implementing public and private food quality standards could limit their access to international markets. However, this paper only shares this view partially. International market access does not only depend on fulfilling the requirements of international retailers by getting some specific certification evaluated by an independent third-party accredited by an accreditation body. Although these certifications will have an influence and could even be decisive in some cases, there is increasing evidence on the tendency of large retailers to choose “lean” suppliers that are highly efficient in delivering value-added products to their customers at a relatively low cost. Cost efficiency is essential in getting access to international markets not only for individual operators but also for the whole supply chain. The classical view of Porter about competitive strategies is: either “leadership in cost” or “differentiation in quality”. But there are empirical evidences about the ability of large food retailers to implement both strategies without conflicting each other. Because of the high bargaining power of large retailers, their suppliers face a strong pressure to be very competitive in both price and quality as well as being responsive to customer demands. This pressure is resulting in food supply chains becoming leaner and leaner from the perspective of value added delivery and cost efficiency. Consequently, the application of some paradigms such as Lean Thinking, Total Quality Management, and Supply Chain Management are now playing a significant role in business operations. Likewise, the concept of sustainable supply chains is considered to be a very sensible issue for large retailers in the European Union and in the United States as it was for large brand manufacturers in other sectors. Therefore, the future certification schemes for sustainability that will be fostered by large retailers are likely to pay more attention to the sustainability of the entire food supply chain (or of the product supplied for it) than to the sustainability of the production activities of individual operators within the supply chain. Tesco’s carbon footprint labelling is an early indication. In this context, this paper discusses how emerging paradigms such as the concept of green-lean supply chains can be applied for improving sustainability, human development and competitiveness in Latin-American global food chains.