Role of Sustainability and the Nature of Green Logistics in the Supply Chain - Case Study Example

Role of sustainability and the nature of ‘green’ logistics in the Supply Chain Name: University: Tutor: Date: Synopsis Through consideration of articles, journals, conferences and books, this assessment has analysed roles of sustainability and nature of green logistics in the supply chain. In so doing, numbers of issues have been assessed; nature of sustainability within the context of supply chain management, roles and nature of green supply chains within the context of sustainable logistics, and current examples where sustainable supply chain management approach has been used to curb issues affecting given organisations. Introduction In mid 1979 Philip Crosby published a book entitled Quality is Free. For many of his readers, this title was a force to reckon. The most intriguing aspect of the book was that quality did not add cost of production. Instead, according to Crosby, ensuring that quality is build on to a product was, to say the least, a breakeven proposition. It is quite certain to me that by the time this book was published, companies and logistics managers around the world were entirely concerned with manufacturing and or sales and cared little about quality and sustainability. While ignorance of quality and sustainability was the order of the day by 1979, this case is different today because ‘greening’ and sustainability has been interwoven in every organisation. Every company has been reacting to challenges of ‘green’ issues through the implementation of ‘green’ or sustainable logistics and supply chain management. As the matter stands, this essay intends to present literature review in the role of sustainability and the nature of ‘green’ logistics in the Supply Chain. And following the increasing number of conferences, journals, work-shops and books, systematic literature review will be indispensible in my research. Sustainability and supply chain management Just like role of sustainability and the nature of ‘green’ logistics in the supply chain can be understood from different perspective, definition of terms from different scholarly articles and books are necessary to better understand the scope of the thesis statement. To begin with, supply chain management being a recent managerial principle, the most recent book on the topic is by (Handfield and Nichols, 1998) who argue that, “The supply chain management encompasses all activities associated with the flow and transformation of goods from raw materials (extraction), to the consumer, as well as associated information flows. Material and information flow both up and down the supply chain.” (p. 2). On the other hand, definition coined by Harland has it as, “The management of a network of interconnected businesses involved in the ultimate provision of product and service packages required by end customers” (Harland 1996, p. 64). Council of Logistics Management looks at supply chain management as planned coordination of important activities and tactics across those activities within specified partners with an aim of improving the long term performance. It therefore remains a challenge to integrate sustainability and supply chain management. According to an article by Carter and Rogers (2008), sustainability means, “An integration of social, environmental, and economic issues.”(p. 361). I presume that these scholars gave these definitions from a macro-viewpoint on supply chains so that they can achieve the concept of “triple bottom line” as suggested by Elkington (2004). If that is the idea, then my understanding of sustainability in the context of supply chain management will be the integration of company’s environmental, social, and economic goals through coordination of business activities so as to improve long term objectives and value networks. Role of sustainability in the Supply Chain After the Kyoto agreement which was applied worldwide, leading organisation have embraced sustainability in the supply chain because of the role it plays. To begin with, McIntyre et al. (1998) discus roles of sustainability in the supply chain and among things discussed was that sustainability in the supply chain helps in preserving business continuity. Business operations in the current market often experience disruption from basic commodities it needs. Such is the supply of electricity and other natural resources needed for productions. For instance, “Proceedings of the 14th Annual Conference of the Logistics Research Network, Leeds” reports that in 2009 alone, China witnessed power shortage in her aluminum industries not to mention other rotating blackouts in other manufacturing industries. Therefore green or sustainable chain supply initiatives play a role of ensuring that energy and other resources required are sustained and can buffer continuity of business process from such disruption while contributing to the reduction of emission. Since environmental sustainability remains to be an issue of concern, logistics service companies have been trying to be adaptive in supply chain. As this stands, another role of sustainability in the supply chain has been to enhance market access and create strategic degrees of freedom. Whether it is in already developed or emerging markets, companies all over have been seeking to make use of freedom they have so as to produce products that are in line with market-based system. To this regard though, Shrivastava (1995) advices that some sectors will need to access market knowing that resources they need to achieve that are the same resources that community around them need for their sustainability. Even though, if these companies become sustainable in their supply chain, they will be able to have greater long-term control over their objectives because they will be able to combine business process inventions with solutions to the problems facing society. As reported by Borade and Bonsad (2008) a unique example where sustainable approach to supply chain management has been applied in an attempt to mitigate issues facing the organisation is the Coca-Cola Company which due to attempts to avoid competition from its competitors has established a corporate aim of becoming “water neutral.” This has been made possible by over stocking the amount of water they use in producing their beverages. This is what is referred to as “sustainable logistics” as cited from during the “European Union (EU) Order on the Disposal of Waste from Electrical Equipment.” This outcome will ultimately curb the control of business strategy and diversion of time and resources. Sustainability in the supply chain ensures that companies have a demonstration of economic value to their supplies. Through greening the supply chain, there will be a clear and significant case that benefits will accrue to suppliers. Benefits may take different formats such as improving production methods, improving productivities and competitiveness and cost reductions. In modern economy we are experiencing a situation where suppliers are themselves firms with growing market presence which has been able work for majority of global customers anyway. Therefore their bargaining power with their customers coupled with their quest for value need to be recognised in quests for the green supply chain. A good example of a company that has taken sustainable approach to supply chain management is the “Green Logistics Consultants Group.” This group deals with technical innovations and other services such as packaging, transport modes and reverse logistics. The main problem facing the group at the moment is to develop strategies of reducing energy use and emissions. For instance, taking a case study of Green Logistics Consultants Group, sustainability in the supply chain enables organisations such as transport providers to assess the level of emissions from their machines. Harzing (2009) argues that going green in the supply chain gives shippers as well as owners of goods chance to make calculation of the supply chain emissions footprints. He argue that when companies decide to go green, they will be able to quantify emissions from mobile sources and with that data at hand, such supply chain will ensure that emission mitigation methods are developed and performance tracked over time. Nature of ‘green’ logistics in the Supply Chain The two words, green and logistics that make up the title are each responsible for the meaning. Logistics from one hand means operation of today’s transports system which stretches to the degree of control over freight movement. Greenness on the other hand has been a code word for range of environmental issues. When put together, Harzing defines green logistics as, “Supply chain management activities that is aimed at curbing environmental and energy footprint of freight distribution.” The loosely defined meaning covers myriad aspects related to physical distribution, production planning and material management. Nature or scope of ‘green’ logistics in the Supply Chain entails product design and production planning. ‘Green’ logistics in the Supply Chain has a convectional focus of product design and improvement of competiveness and commercial factors such as quality, price and features of performance. In this case, products are increasingly produced from a supply chain viewpoint; meaning their distribution and sourcing where main issue will be environmentally friendly supply chain is redesigned. Redesigning may include production process which includes contracting suppliers who have demonstrated that they deal in products which are in a sustainable manner. The next nature involving ‘green’ logistics in the Supply Chain is the reverse distribution. In reverse distribution ‘green’ logistics in the Supply Chain is concerned with activities related to taking consumed as well as waste materials to be recycled. In this case, environmental benefits are not direct but derived. Finally, green logistics in the Supply Chain involves the material management concerned with the reduction of the environmental effects connected to the manufacturing of goods in all their industrial steps of production along supply chain. An outstanding strategy of doing this involves proper packing so as to increase density of the load but reduce materials consumption and wastes. Conclusion This essay has reviewed a number of issues related to role of sustainability in the supply chain and the nature of green logistics in the supply chain. Issues analysed in this assessment can be taken to represent a small portion or snapshot of a wider experiences that face global companies, their non-global market place and suppliers. Owing to the economic forces we currently experience, there has been increasing number of concerns over the quality of environment and kind of resource consumption mankind is exposed to. This at stake, I strongly feel that we are yet to see more debates on greening the supply chain initiatives. Along with that will be debates and discussion over ways of managing and rationalising global supply chain. References Borade, A. and Bonsad, S.V. (2008) The discipline of supply chain management: a systematic literature review. The Icfai Journal of Supply Chain Management 5(1):7-26. Carter, C. and Rogers, D.S. (2008) A framework of sustainable supply chain management: moving toward new theory. International Journal of Physical Distribution & Logistics Management 38(5):360-387. Elkington, J. (2004) Enter the triple bottom line. In: Henriques A, Richardson J (Eds) The Triple Bottom Line: Does It All Add up?. Earthscan, London. Handfield, R.B. and Nichols, E.L. (1998) Introduction to Supply Chain Management, Upper Saddle River: Prentice Hall. Harland, C.M. (1996) Supply chain management: relationships, chains and networks. British Journal of Management 7(1):63-80. Harzing, A.W. (2009) Journal quality list, thirty-fourth edition. http://www.harzing.com Accessed 2012-05-12. McIntyre, K., Smith, A. Henham, and J. Pretlove. (1998). Logistics performance measurement and greening supply chains: Diverging mindsets. The International Journal of Logistics Management, 9 (1): 57-67. Proceedings of the 14th Annual Conference of the Logistics Research Network, Leeds, pp. 195- 203, September, 2010. Shrivastava, P. (1995) Environmental technologies and competitive advantage, Strategic Management Journal, Vol. 16, pp.183–200. Read More