F8NA1 Sustainable Development In Practice

The role and importance of outsourcing in supply chain environmental management

In the world today, environmental responsibility in outsourcing is of crucial concern in every company. Supply chain environmental management not only covers the management of environmental impacts that arise from a company’s practices or supply chain but also some business advantages (Handfield, Sroufe and Walton, 2005, p. 14). It is now more important than ever for organizations to ensure responsible business practices through the process of outsourcing. Multinational companies have different roles when outsourcing in supply chain environmental management.

To begin with, we have Apple. Over the years, Apple has focused its outsourcing from other countries due to the flexibility and extensive manufacturing capabilities. However, Apple’s consideration of promoting Environmental supply chain management has been because of different reasons. One, risk diversification. Since Apple aims to build a stable supply chain, outsourcing from the right suppliers ensures Apple can react to disruption more easily hence becoming more flexible (Doval, E., 2016, p. 161). Two, recycling. In 2010, Apple realized its goal of recycling about 70% of its products. The company tries as much as possible to use recyclable materials in their packaging and products. This has reduced its outsourcing costs and also environmental degradation.

Secondly, we have McDonald's. This company faced a lot of criticism when the news about its outsourcing of expired meat got out. Its sales plummeted since its Chinese suppliers did not meet the FDA provisions. Therefore, McDonald's reinvented its outsourcing by promoting supply chain environmental management. It has brought about different roles and advantages to the company. One, creating value for business and society. McDonald's is on the forefront to promote resource efficiency so as to create value among communities (Vitasek, and Manrodt, 2012, p. 9). Two, better protocols for the measuring and scaling of sustainable beef production. This has ensured customers acquire great products that have value. Lastly, the company has been able to work with suppliers in promoting innovation for its sustainable ingredients.

Lastly, we have KFC. This company also has issues with its outsourcing since the outsourcing of its products was not effective. This led to the closure of some of its restaurants due to poultry shortage and loss of revenue. To combat this, the company also reinvented its outsourcing through encouraging environmental supply chain management through the following. One, the development of its distribution strategy. KFC has managed to grow its restaurants efficiently hence being able to provide better services to its consumers. Two, reduced environmental destruction. KFC created a program for purchasing recycled paper products thus promoting sustainability and reducing environmental degradation (Evripiotis, 2016, p. 21)

Reflection

Outsourcing and sustainability go hand in hand. An organization that has no regard for the impact of its practices on the environment, community and on itself is bound to fail. For example, when McDonald's was under criticism due to providing expired meat to its clients, it was found to lose its customers if it had not acted to formulate its outsourcing of the beef products. In relation to what I have learnt, seeing how different organizations are promoting sustainability in their operations is very encouraging. For example, promotion of ethics in company decisions has promoted transparency to the community hence maintaining Corporate Social Responsibility.

References

Doval, E., 2016. Is outsourcing a strategic tool to enhance the competitive advantage. Review of General Management, 23(1), pp.157-177.

Evripiotis, M., 2016. Towards An Assessment Of Globalization And Localization Of Western East-Food Chains In China: The Case Of

KFC. European Journal of Business and Innovation Research, 4(3), pp.17-28.

Handfield, R., Sroufe, R. and Walton, S., 2005. Integrating environmental management and supply chain strategies. Business strategy and the environment, 14(1), pp.1-19.

Vitasek, K. and Manrodt, K., 2012. Vested outsourcing: a flexible framework for collaborative outsourcing. Strategic Outsourcing: An International Journal, 5(1), pp.4-14.