Sustainability in Supply chain
Write about the Report on Operations and Supply Chain Strategy.
Supply chain sustainability is a philosophy that is focused on being socially responsible, to consider the long term profitability by following practices that are good for the environment. Its focus goes beyond delivery, inventory, and traditional views of managing costs. The company following this philosophy can work towards reducing energy cost, any form of waste, application of green technology, as well as reduction of gas emissions along with reducing the environmental damage done in any form. Supply chain sustainability requires a collaboration of both internal and external partners of the process involved (Cetinkaya, et al. 2011).
Barloworld Logistics which is in the trucking industry, there is a tremendous benefit in considering sustainability in its operations. The green movement of the company has been the first green trailer for which the company did not rely on any truck manufacturer rather pushed the initiative on their own. The Green Trailer has the capacity to reduce the carbon footprint by 14 tons in 6 months and save the fuel by 7-10%. The attention these days to corporate responsibility along with sustainable development is increasing and green supply chain management activities have gained a lot of it. These green trailers if incorporated in the supply chain have a lot of benefits (www.fleetwatch.co.za/, 2010), such as:
- These trucks give the firms a competitive advantage over other firms.
- The reduction of energy and fuel also add to the benefits in reducing the cost.
- Reduction of the greenhouse gas emissions in distribution activities contributes to environmental improvements.
- They present a good picture of the company, creates goodwill when a company is engaged in green practices.
- Companies that have adopted such green practices and have focused it on implementing those practices in their distribution activities have successfully improved their business and environmental performance.
- The business is able to better differentiate in their distribution service, manage the risk, increase sales and also create goodwill in the market all the while by also reducing distribution cost.
In this specific case, for Barloworld Logistics, they would have the advantage of the monthly saving of over AED 4250, along with contributing in reducing their environmental impact.
SkySails GmbH takes wind power to the next level. This company is a leader and innovator in the field of automated towing kite systems and is the first company in the world that has successfully developed kite technology into an industrial application. The company has large and fully automated kites that are the key technology through which the energy is generated from high-altitude winds (Levinson, 2016). This kind of innovation represents next generation of wind power. Benefits of such initiatives and incorporating them in the supply chain of the organization would have the following benefits:
- Wind is Powerful, unlimited and free along with being the cheapest and greenest source of energy on the high seas
- Use of wind as a source of power will lower the fuel costs along with reducing the levels of emissions.
- This system can be installed as auxiliary propulsion systems on existing as well as new builds.
- It is efficient, very safe in use along with being easy.
- It will reduce the operating costs reason being that it is cheaper than oil
- Flying towing kites also generates 25 times more energy than the conventional sails propulsion systems.
- It is considered as a great environmental practice in the shipping industry that will lower the greenhouse gas emissions, also reduce the fuel consumption and costs (skysails.info, 2016).
This practice should be incorporated in the supply chain of organizations that use ocean transportation, because shipping industry approximately supports 90% of the international physical trade of the world (www.skysails.info, 2016).
Wal-Mart, the company has been phenomenal in incorporating green initiatives in its operations. The company uses renewable sources of energy for approx 26% in its running functions, along with making some goals in reducing the global problem of food wastage. The company has also reduced its greenhouse gas emissions from its supply chain; this has reduced their energy usage along with costs. The company also has reportedly reduced its water consumption and recycles and reuses approx 34% of the water in store operations. The company has taken numerous initiatives in incorporating green initiatives in its operations and supply chain management.
Different Types of Waste in Logistics and Supply Chain
The supply chain managers have to set realistic goals to attain sustainability in their operations and development. Companies adopting sustainable approach will not only focus on strengthening their relations with buyer and sellers but will also engage in creating benefits for the both. The managers have to identify efficiencies through which their operations could be improved and operations become more sustainable. Sustainable supply chain will have the following benefits.
- It will reduce the consumption of energy, water, raw materials and the facilities used in supplying.
- It will reduce the carbon footprint of the company as well as will manage risk well.
- The routes for purchase and delivery of goods will be optimized.
- The work conditions would be improved and the internal systems will be managed better (Supply Chain & Logistics Association Canada, Green Supply Chain 2008 Survey, 2008).
Overall, sustainable supply chain, as seen in the above three cases, will provide the company with long term benefits such as goodwill, competitive edge over other market players along with environmental benefits for the company. Sustainability is a realistic ambition for the supply chain managers and such initiatives should be incorporated to the maximum in the operations of the company (BSR, 2011).
There are seven types of waste in lean manufacturing, they are, transport, inventory, motion, waiting, over-processing, over production and defects (Interieri, 2013).
To achieve lean environment the company has to avoid excessive movement of goods, this would imply as the wastage of resources such as time, energy and would also incur cost to the company. Another wastage that could take place in the company could be motion, since in the logistics industry workers are required to conduct some extra motion, this excessive than usual motion could sometime result in the worker being injured at the workplace, which was not even required for the job. This type of wastage should be avoided by the company
The company should focus on eliminating the waste in terms of applying lean logistics policy, i.e. it should specify the value of the customer that has to be added along the supply chain, it then needs to map out the value system and identify all process along the network of the supply chain. The processes that does not add or create value to the overall product should be eliminated in this stage, a sensible product flow should be created by the company that will outline all the factors in order to add value to the processes so that it is carried out with minimum interruptions and inventory downtime is maintained. The next should be to establish a customer pull where only the product that is needed by the customers made available across the supply chain (www.mhlnews.com , 2011).
The company should avoid the wastage of inventory and defects in its operations. The company should not hold only goods that are not adding any value to the process. It should also make sure that the quality is not deficient in any manner as it would lead to wastage.
Sustainability in the supply chain will only add value to the company, a supply chain manager has to have a sustainable approach in managing its supply chain operations, it will result in the overall benefit to the company in terms of cost reduction, getting competitive edge over the competitors and moreover improving the picture of the company in terms of reducing the carbon footprints and the environmental damage. The company should adopt lean approach in its operations whether in logistics or in supply chain. Elimination of wastage would help the company in gaining competitive edge and would also improve its profitability and operations.
BSR,(2011) Maximizing Benefits From a Sustainable Supply Chain [Online] Retrieved on 29th October 2016. Available at URL:https://www.bsr.org/reports/BSR_Maximizing_Benefits_From_A_Sustainable_Supply_Chain.pdf
Cetinkaya, B, et al. (2011) Sustainable Supply Chain Management: Practical Ideas for Moving Towards Best Practice. Germany: Springer Science & Business Media
Interieri, C. (2013). The 7 kinds of waste, and intro to KAIZEN. [Online] Retrieved on 29th October 2016. Available at URL: https://cerasis.com/2013/10/07/lean-environment/
Levinson,W. (2016). Lean Management System LMS: 2012: A Framework for Continual Lean Improvement. US: CRC Press.
Supply Chain & Logistics Association Canada, Green Supply Chain 2008 Survey (2008) Green Supply Chain Management [Online] Retrieved on 29th October 2016. Available at URL: (https://www.ic.gc.ca/eic/site/dsib-logi.nsf/vwapj/pg00032_eng.pdf/$file/pg00032_eng.pdf
The Green Supply Chain Editorial Staff (2015) Green Supply Chain News: Walmart is on a Sustainability Mission [Online] Retrieved on 29th October 2016. Available at URL:https://www.scdigest.com/gsc/NEWS/15-04-30-1.php?cid=9251
www.fleetwatch.co.za/.( 2010) Green Vision Become Reality [Online] Retrieved on 29th October 2016. Available at URL: https://www.fleetwatch.co.za/magazines/Jul2010/12-Green%20vision.htm
www.mhlnews.com (2011). Cargill’s Green Shipping Idea: Go Fly a Kite. [Online] Retrieved on 29th October 2016. Available at URL: https://mhlnews.com/global-supply-chain/cargill-s-green-shipping-idea-go-fly-kite
www.skysails.info. (2016) Advantages. [Online] Retrieved on 29th October 2016. Available at URL https://www.skysails.info/english/skysails-marine/skysails-propulsion-for-cargo-ships/advantages/
www.skysails.info. (2016) Powerful-Unlimited-free. [Online] Retrieved on 29th October 2016. Available at URL:https://www.skysails.info/english/skysails-marine/skysails-propulsion-for-cargo-ships/
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