Sustainability issue and challenge
In this report on the sustainability within Logistics and Operational Management, the discussion will be conducted on the awareness of the sustainability issues which is increasing among the business, communities, customers as well as legislators. Supply chain sustainability is referred to the efforts which an organisation undertakes in consideration to the human and environmental impact of the journey of their product through the entire supply chain starting from the sourcing of raw material to manufacturing, delivery, storage as well as transportation links which are present in between. Due to this, sustainability has become a highly crucial concept for several of the organisations in the past few years, which has been forcing the changes in the operations and logistics of the business organisation. New business models, policies, investments, and technologies are the by-product of such awareness (Heizer et al. 2017).
The purpose of this report to discuss the manner in which operational management has changed by identifying a particular sustainability challenge or issues and the requirement for the changes within the operational and logistics management policies of the business on the basis of the sustainability issue. In addition to that discussion relating to the process adapting as the companies are altering their strategies in answer to the sustainability concerns and challenges. The cost of adapting such strategies as well as the prospective impact as the company fails to adapt to the supply chain strategies in relation to the sustainability concerns will be discussed. Lastly, the agreed goals stated in the COP26 which occurred in Glasgow will be discussed which includes the related management practices and legislation which supports the elimination of the environmental impact of the operations and logistics will be elaborated (Marshall et al. 2015).
Sustainability is referred to the process of attaining to their own requirements without having to compromise with the ability of the future generations in order to achieve their own requirement, in terms of natural, social and economic resources. The concept of sustainability is a relatively new one, where the entire movement has its roots attached with the concepts of conservationism, social justice, internationalism as well as other previous movement with an in-depth history and during the end of the twentieth century, these ideas have formed together and is known as sustainable development (Rajeev et al. 2017).
The concept of Triple Bottom Line are being adopted by the companies for sustainability where they commit their emphasise on the social as well as environmental concerns along with the profit aspect. The triple bottom line consist of three aspects namely, Profit which signified the traditional measurement of the corporate profit through the books of accounts, People which the measurement of the socially responsibility of the organisation in their past and Planet which signified the environmental friendliness which a firm possess (Ansari and Qureshi 2015).
The sustainability issue which is present at a global level is climate change where the year 2019 was considered to be the second warmest year on the record as well as end of one of the warmest decade which was from the year 2010 to 2019 which has ever been recorded. The level of carbon dioxide as well as other various greenhouse gases present in the atmosphere increased to a new record in the year 2019. This particular climate change has been affecting every region and country globally and has been disrupting the entire national economies along with affecting the lives of people and animals (Martins and Pato 2019).
Such changes in weather patterns, increase in sea level as well as various weather even are becoming extreme in the upcoming years. Even though the greenhouse gases and their emission have been projected to a decrease of about 6% in the year 2020 because of the travel bans and restrictions as well as economic slowdown due to the COVID-19 pandemic, such an improvement is temporary because it is expected to rise again after such restrictions will be eliminated which shows that climate change is not at a pause or hold. Once this entire global economy started to recover from such a pandemic, the emissions are majorly expected to return back to their higher level as it previous was (Johnsen, Howard and Miemczyk 2018).
Saving the livelihood and lives needs urgent action in order to address both the climatic emergency and the pandemic. As per the Paris Agreement which was adopted in the year 2015, the purpose is to strengthen the response made globally in order to threat the climatic change which has been keeping the global temperature to increase in this century below two degree Celsius above the pre-industrial levels. The agreement has also the aim towards strengthening the countries’ ability for dealing with the climatic change impact through the accurate financial flow, adoption of newer technology framework as well as improved capacity building framework (Giannakis and Papadopoulos 2016).
Such a climatic change is highly linked to the supply chain operation and even though they add value to product as they move through the system, they highly contribute to the environmental degradation, and especially to the climatic degradation through the GHG releases. Each of these aspect link to the logistics and operational management and subject to opportunities and risk because of the climatic change in such a form that extreme events as well as other phenomenon such as high winds and flooding takes place along with higher degree of hot summers, increase in sea level, desertification, temperature change and change in the local weather patterns. Therefore, it can be stated that supply chain operations as well as climate change are affected on a mutual basis (Kusi Sarpong, Gupta and Sarkis 2019).
The link within the supply chain such as in the form of manufacturing, the climatic change can be conducted through the destruction of the assets, liability risks, disruption of production and plants lines, regulation in relation to the carbon emissions, changes within the efficiency and effectiveness of the manufacturing processes, increase in the cost for the maintenance and energy activities, increase in the cost for upstream operations as well as product quality, stimulation of the investment within the renewable energy as well as energy efficiency projects which increases the demand for the renewable energy sources and biofuels within the energy sectors. Further, from the manufacturing perspectives, there will be an increase within the demand for the pharmaceuticals sector, stimulation of the demand for the non-emitting products, as well as deployment of the lower carbon oriented intensity based operating practice by the market leaders development of the diversified products on the basis of the lower GHG emissions (Quarshie, Salmi and Leuschner 2016).
From the perspective of transportation, climatic changes can resulted in an increase within the rutted roads and buckled rails, delay lead towards payment for compensation for operators as well as causing problems to the customers, overhead cables to be destroyed, challenges related to the coastal defences, drainage challenges, landslip due to heavy rainfall and security stability of the structure (Khan, Haleem and Khan 2021). For warehousing and storage, climate change can be challenging as it results in vulnerability of the personnel, infrastructure, supply and communication systems as well as possible dislocations because of the extreme events related to the weather. As for trading purpose, climatic change can result in reputation risk within the downstream sectors in order to increase the requirement for the transparency, new regulations relating to the product labelling, increase within the consumer product manufacturing prices and costs as well as decrease in the demand for the consumer products. For the consumption as well as customer service related purposes, where climatic changes have resulted in the enhancement of the product design which are aimed towards eliminating the increase of the product durability, recyclability, reusability and materials efficiency (Türkay, Saraço?lu and Arslan 2016).
The requirement for the changes within the logistics and operations management policies of the business on the basis of the sustainable issue of climate change which are related to the facilities are the dislocation of the energy intensive manufacturing processes, selection of technology as well as making related investment in order to fit the emissions reduction frameworks, planning of capacity being impact by the certain manufacturing technology adopted, placement of the facilities near the consumption areas which will minimise the total emissions and transportation costs and proximity aspect of the product factories to produce green products which are more suitable for the ‘green sensitive’ market (Chin, Tat and Sulaiman 2015).
For the necessary change requirement in the operations and logistics management procedures and policies for the purpose of sourcing is the requirement for the efficient carbon management by the partners throughout the supply chain, adopting different criteria for sourcing agent selection where there is effective implementation of carbon emission management, lower carbon constraints as well as exposure of the suppliers to the physical hazards, along with changing the negotiating power of the buyers in comparison to the suppliers in terms of the quality, lead time, cost which are complemented to the emission, to implement suppliers within the well-developed carbon auditing framework, having a proximity between the suppliers and the ‘near sourcing’ which is a major sourcing drivers, having consideration for the natural resources as well as their availability, reinforcement of the diversification or shifting of strategies for sourcing locations and incorporation of the carbon consideration within the contract management (Nakamba, Chan and Sharmina 2017).
For the purpose of distribution and transportation, the changes which companies can include within their logistics and operations management are reduction in emission by forcing the number of the nodes downward as well as miles driven, a higher consideration for the nodes as well as aggregated and consolidated shipments, having the drivers to select such mode of distribution and transportation by considering the technology within the vehicles and using the low carbon fields, using the lightweight materials, enhancing the infrastructure quality and adopting ICT to enhance the route optimisation solution. Further, they have been switching between the utilising of the energy and the lesser energy intensive mode of transportation, adopting new methods of delivering the end product to the consumers and placing the transportation assets nearby the markets (Cankaya and Sezen 2018).
In the recent times, the companies have been adopting and altering their strategies in response to the sustainability concerns which are recently being highlighted. Unilever is one such multinational consumer goods company based in the United Kingdom, which provides the consumers with products from the range of food items, ice cream, wellbeing vitamins, supplements, coffee, tea, cleaning agents, beauty products and so on, has recent adopted sustainable form of supply chain management. The organisation has more than 3.4 billion individuals who utilises their products on a daily basis and consist of one third part of the planet (Centobelli, Cerchione and Esposito 2018).
They utilise various raw material for the manufacturing of their products and several millions of individuals play a crucial role in order to provide the same. For securing a sustainable supply chain for their raw material as well as final products, they have aiming to develop the fundamental for the future growth of their business in order to achieve the ambition for delivering such positive impact. Their approach towards a sustainable as well as regenerative sourcing which have four stands namely, that sustainability sourcing is one of their highest standards from their network of suppliers, for driving change through consistent improvement of their policies with their suppliers, playing the lead role within the transformation of the agricultural sector which are related to their business and communicating with the consumer base about the sustainability sourcing throughout the brand (Formentini and Taticchi 2016).
One of the major three strategies which Unilever has adopted are sustainable warehousing which is referred to the combination of the technology as well as organisational solutions which are designed for the inclusion of the warehouse processing efficiency through the maintenance of the highest standards in the society as well as reducing the effect on the nature with regards to the financial efficiency (Park and Li 2021). Within the global supply chain management, warehouses manufactures the environmental pollution due to cooling, heating and lighting, where the larger the warehouse, the greater is the carbon footprint. The warehouse managers are able to measure the carbon footprint through their operations by considering the major performance indicators such as utilisation of the natural resources, emissions, as well as amount of recycling and waste management (Bastas and Liyanage 2019).
Unilever has implemented logistics service provider for the purpose of distribution activities in order to receive the product directly from the sourcing units through the warehouses directly to the customers. The organisation has implemented measures which will ensure that their new warehouses are sustainable where the aim is to look for the potential options for making sure that the warehouses are sustainable and meeting the performance accurately. For achieving such research goals, they are aimed towards decreasing the necessary warmth, energy, light and water in the warehouses as well as reduce the waste production. The criteria which they have utilised are little to no negative impact over the operations, enhancement of the working environment, lower effort while implementation, lowering the cost, enhancing the ecological sustainability, increasing the BREEAM score and increasing the marketable image of the organisation (Sarkis 2020).
For the implementation of such sustainable options, they have opted for inter-firm collaboration and inter-firm project investment. They have implemented insulation, thermo graphic assessment, air curtains for the loading docks, humidity control, heat recovery from the ventilation, green façade, acoustic alarm for the warehouse door and radiation from heating control. Further for waste management, Unilever has conducted stimulating waste segregation, compressing of the waste as well as initiating building material for their warehouses. They are implemented motion sensors for their taps with double flush system as well as intelligent lighting within their warehouses along with that have utilised wind turbine and PV panels for energy reduction (Massaroni, Cozzolino and Wankowicz 2015).
Another strategy which Unilever has adopted is green product design which is also known as design for environment, design for the eco-efficiency or the sustainability product design which is a proactive approach made by businesses in order to address the environment considerations at the initial stages of product development process for the minimisation of the negative environmental impact through the entire life cycle of the product. Such a process consist of material selection, utilisation of resource, requirement of production as well as planning for the final disposition of the product (Taghikhah, Voinov and Shukla 2019).
Unilever through their actions have made sure that their products are safe for the consumers as well as workers along with that lands a positive impact on the environment. They have a separate Safety and Environmental Assurance Centre’s (SEAC) is an industry leading environmental and safety sustainability science which has result them to develop and apply their partnership with the external experts over the several years. They utilises their science throughout their organisation and while working with their colleagues they make sure that their processes and products are sustainable and safe by their design. Unilever is one of the purpose driven brands who have made their statement about the safety of their products and ingredients, as well as impact on the health, planet and environmental sustainability (Bag et al. 2018).
SEAC researchers and scientists work in a combined manner with the scientist throughout the organisation at every stage of their product’s life cycle, starting from designing and discovering the new sustainable concepts to fully implementing the new technology with their product innovation as well as understanding of the product utilisation as well as disposal of the consumers throughout the world. They have initiated safety and environmental sustainability guidance throughout their innovation process along with that they are partnered with several other firms which enables them to apply the creative and leading edge science along with true design safety as well as sustainability within their products (Stindt 2017).
The third strategy which Unilever has adopted for the implementation of sustainability within their operations and logistics management is ethical procurement which is referred to the large range of issues which has the possibility to impact the sustainability and ethical goals and objectives of the business. For instance, by monitoring the unethical or the illegal suppliers the business’s procuring and practices can affect the procurement efficiency as well as reputation of the organisation. It outlines the code of conduct of the company as well as their commitment to the environmental, social and legal ethics which required an in-depth understanding of the corporate social responsibility of the company, their expectation as well as societal obligations (Morais and Silvestre 2018).
Sustainable procurement has adopted a wider perspective and have include newer benefits to both the buying organisation as well as the world as it lands a considerable impact on the economic, environmental and social factors through their quality and prices. For the purpose of implementing sustainable and ethical procurement, Unilever has partners on the basis of the responsible sourcing which has strengthen their supply chain as well as the business along with it. They support in mitigating the risks as well as developing the trust among the stakeholders and consumers. Responsible Sourcing Policy (RSP) by Unilever has been updated in the year 2017 which reinforces the company’s commitment towards working together with their suppliers towards the long term successful and sustainable future for all of their stakeholders (Gupta, Kusi-Sarpong and Rezaei 2020).
It has been instrumental in order to make sure that they have been delivering their business objectives while developing a social impact on millions of people’s lives around the world as well as reduce their environmental impact. It is one of their ambition at the core of the Unilever Sustainable Living Plan (USLP) (Luthra, Garg and Haleem 2016). The Responsible Sourcing Policy (RSP) consist of the Mandatory Requirement that every suppliers are required to follow in order to conduct business with Unilever. Beyond this the organisation encourages their suppliers to adopt Good Practices as well as Best Practices for their journey towards continuous improvement. In their code of conduct, they stated their requirements for conducting lawful business with integrity by complying with the laws, avoiding bribery, conflict of interest, implementing confidentially and competitors’ information, gifts and hospitality as well as keeping a check on financial records, insider trading and money laundering (Ansari and Kant 2017).
In the year 2021, the United Nations Climatic Change Conference took place which is also known as COP26 summit in Glasgow which has been attended by the world’s leaders and there are four major goals which has been agreed upon namely, securing global net zero by the mid-century as well as keeping 1.5C degree within the reach, adapting towards protection of communities and their natural habitats, mobilising finances and working together to deliver the results. Unilever has adopted the goal of securing the global net zero by the mid-century and keeping 1.5 degrees within the reach. Such a goal has majorly implemented by asking the countries to come ahead with the ambition that by 2030 there will be an emission reduction targets which will align with the reach of net zero by the mid of the century. In order to deliver such stretching targets, the countries will be required to accelerate their phase out of cool, curtail the deforestation, speeding the switch towards electric vehicles as well as encouraging the investment into renewable resources (Gold and Schleper 2017).
Unilever has adopted such initiatives which will ensure setting up of the net zero goals with the action plans as well as milestone which will report the progress as well as engage with the investors, government and suppliers. In order to help the drive towards a faster transition of the low carbon and resilient economies, the businesses can empower the policymakers to become more ambitious. By generating the right combination of the policies, incentives and frameworks, the government will support towards propelling the business plan and actions in order to keep the track towards 1.5C (Jadhav, Orr and Malik 2019). They are aiming towards implementing policies which will phase out the coals as well as other fossil fuels, setting a price on the carbon which reflects their true cost to the nature as well as the society along with switching towards a more renewable energy as well as electric vehicles. They have combined such initiative with the immediate roll out of the natural based policies and solutions which performs a major role when it comes to limiting the warming towards 1.5C (Zavala Alcívar, Verdecho and Alfaro Saiz 2020).
Unilever has published their own Climatic Transition Action Plan in order to be transparent about their approach as well as to encourage the other companies to follow the same. They have been led by the climate science, for their ambitious climate goals which includes possessing an ambitious climate change goals which consist of possessing an emission free operations by the year 2030 as well as achieving the net zero emissions within their value chain by the year 2039. They have also switched to about 100% of the renewable energy as well as electric vehicles along with working with their suppliers and the innovation partners in order to scale their solution which will protect the planet as well as the people (Luthra, Garg and Haleem 2015).
They had adapted another goal from the COP26 and that is, adapting to protect the communities as well as natural habitats where the climate has already been changing and it is essential to reduce the emission with the devastating effecting. It is crucial to protect as well as restore the ecosystems along with building a defence, resilient as well as warning system infrastructure as well as agriculture in order to avoid the loss of livelihood, homes and lives. Unilever has also taken steps to protect the biodiversity and conserve the loss of biodiversity and climate change which are highly interconnected. They have adopted actions which has enabled them to nurture and flourish as well as benefit the climate, especially by ending the deforestation within their supply chain, regenerating agriculture and preserving water (Ivanov 2018).
In order to implement sustainability within the logistics and operational management of any organisation, it is essential to address four major areas within the supply chain namely, procurement where most of the organisation initiate their sustainability program by looking at the water and energy procurement as well as procure the sustainable material in order to utilise their products. The second aspect is operational process which consist of the steps across their supply chain which can make the process highly efficient and reduce the resource utilisation. The third aspect is retirement which is related to avoiding of excessive waste as well as obsolete items by designing such products which will upscale and reuse the products. The last aspect is data and communication which measures the total effectiveness of the initiative in the first major three areas as well as strengthening of any related efforts by communicating with the customer, partners within the supply chain as well as other stakeholders. Innovation needs to be included within the supply chain sustainability as well as a data driven supply chain, companies leveraging a cloud based supply chain execution system which provides a detailed analytics as well as even pull the data from the equipment sensors and the Internet of Things (IoT) devices,
Therefore, in order to conclude this report on sustainability in logistics and operations management, it can be stated that climatic change is a major sustainability issues which has been hampering every aspect of the supply chain management, therefore, in order to tackle the same the companies are required to implement sustainable strategies such as sustainable warehousing, reverse logistics, green product design and ethical procurement in order to achieve competitive advantage.
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