Logistics, Operations, and the Environment from an Environmental Perspective - Research Paper Example

From an environmental perspective discuss the relationship between Logistics, Operations and the Environment in International Manufacturing Organizations. Contents Contents 2 Introduction 3 Main Body 4 Manufacturing organizations 4 Logistics and Operations in international manufacturing organizations 5 Operations management and the environment 6 Value chain of Manufacturing Industry 7 Integration of Sustainability into SCM 8 The “Green” factor in operations management 10 Reverse Logistics and the environment 11 Examples from the manufacturing industry 12 Conclusion 13 References 14 Introduction The international manufacturing industry has been evolving at a steady rate. Globalization has brought about major changes in the sector like the increasing trends of export have facilitated the interconnection of the manufacturing industries of different countries to work on a global platform. Consequently the internationally evolving issues have also posed as challenges to the manufacturing organizations across the globe (Brandimarte and Giulio, 2007, p. 16). One such issue is the management and preservation of the natural environment. The environmental impacts of the activities of the manufacturing companies have been a major concern for the environmental activists. In this respect, the customers and the organizations have also become more conscious about the negative effects of the manufacturing operations on the ecology of the planet (Gourdin, 2006, p. 9). The operations and logistics of international manufacturing organizations may impact the environment through the type of raw materials used, the production and procurement processes, waste management, and pollutant emissions. The authors have stated that the essence of operations strategy lies in the pattern of decisions which affect the ability of the organization to attain the long term objectives of the business, manufacturing tasks, and the requirements of the market (Rudberg and Olhager, 2003, p.31). One of these decisions is the decision related to the compliance of the activities of the organization to the environmental laws and requirements. The customers, suppliers and other stakeholders demand that the manufacturing companies try to minimize the negative effects of their production, operations, and other processes on the environment. This has brought about the increasing concern of the manufacturing organizations about the sustainability of their operations and supply chain through the adoption of the “green factor” in the supply chains and taking effective steps to conduct their operations and manage their logistics in an environmentally sustainable manner. The pressures on the manufacturing organizations from their stakeholders have made it necessary for these organizations to modify and develop their supply chain and other operational aspects to suit the environment and benefit the society as a whole (Lowe, 2005, p. 24). Main Body Manufacturing organizations The manufacturing industry is an important industry in the advanced and developed world. The focus of the revenue generation in different economies has shifted from agricultural industries to manufacturing industries. The manufacturing organizations are driven by innovation and continuous development. The manufacturing industries are major contributors to economies, productivity growth, exports, and research and development (McKinnon, Browne, and Whiteing, 2012, p. 136). Logistics and operations of the manufacturing organizations encompass the planning, implementation, control and overall management of the flow, transfer and storage of materials, goods, services, and information from the point of inception to the point of consumption with the aim of satisfying the needs and requirements of the end consumers (Rushton, Croucher and Baker, 2010, p. 62). The increasing trends of international trade practices involving exports and imports have led to the creation of major challenges along with opportunities for the manufacturing organizations to operate on a global scale. Among the various challenges and opportunities faced by the international manufacturing organizations, one key challenge is environmental sustainability and adaptability of the operations and logistics processes carried out in these organizations. The operations strategies of an organization are aimed at reconciling the operational resources and capabilities with the evolving demands in the market (Rushton and Walker, 2007, p. 242). The author identifies that the early signs of environmental orientation of the decisions of operations strategy were noted among the organizations in the mid-1990s. However, at that time, it was in the inception phase (Shrivastava, 1995, pp.183-200). The researchers have identified that the interests of organizations as well as the stakeholders towards environmental friendly operations management have been demonstrated through the adoption of green supply chains and significant sustainable practices in the operations management of the organizations (Corbett and Kleindorfer, 2003, pp.287-289). Logistics and Operations in international manufacturing organizations Logistics and operations are one of the most critical aspects of the business processes of manufacturing organizations (Song and Panayides, 2012, p. 24). The authors describe operations as those segments of organizational activities in which the requirements of the customers and the capabilities and resources of the organization are reconciled (Slack and Lewis, 2002, pp.99-100). The logistics in manufacturing organizations refer to the planning, coordination and management of the manufacturing activities. The scope of logistics in the manufacturing organizations starts from the determination of the customer demand and extends to the fulfillment of these demands. The whole process encompasses the flow of materials, services and information across organizational, industrial and national boundaries (Stroh, 2006, p. 59). The logistics and operations of the international manufacturing businesses are characterized by complexity because of the involvement of a number of participants in different phases of the supply chains and operational activities. The operations management of the manufacturing industry calls for identifying the challenges and opportunities and responding to them in an appropriate and quick manner (Taylor, 1997, p. 37). Sustainable development of the operations and logistics of the manufacturing industry encompasses the integration of environmental management in the contexts of manufacturing, procurement, production and other relevant operational processes. The need for the manufacturing organizations to develop resilient and sustainable supply chains and operations has emerged as a critical competitive differentiator in the manufacturing industry (Baker, 2002, p. 27). Operations management and the environment One of the major challenges faced by the operation and logistics segment of all industries, especially the manufacturing industry, is the increasing concern about the negative impacts of the operational activities on the environment (Vollmann, William, Clay and Jacobs, 2005, p. 91). The manufacturing sector has been a major contributor to the harmful effects on the environment by the industrial activities. With the accelerated growth in the international trade activities, the manufacturing organizations have faced the pressing need to develop robust, resilient, focused, and environment friendly supply chains and distribution systems in order to maintain sustainability and competitiveness of the organizations operating in this sector (Wireman, 2004, p. 73). The logistics and supply chain systems of the international manufacturing organizations are responsible for the flow of huge volumes and huge value goods and material from the point of origin to the point of purchase and consumption. This makes the role of the logistics and supply chain management of the manufacturing organizations significant in meeting the evolving environmental sustainability challenges for the manufacturing segment (Bass, 2010, p. 37). According to the authors, the topic of environmental impact of the operations, logistics, and supply chains of an organization and its various activities has emerged as a mainstream topic of discussion in the current business world (Corbett and Klassen, 2006, pp.5-22). Earlier, profitability and profits were considered to be the most critical elements necessary for driving the success of a business and the growth of an economy. But the new economic order indicates that the people and planet factors have emerged as equally significant factors in deciding the success and sustainability of a business as well as of an economy. The future of people including the internal and external stakeholders of a company and the future of the environment and ecological system of the planet Earth are considered to be major factors for ensuring the sustainability of a business (Murdick, Render and Russell, 1990, p. 46). The concerns related to the people and planet factor have been captured in the Triple Bottom Line (3BL) by the academics, which include the people and planet factors along with the profit factor (Kleindorfer, Singhal and Van-Wassenhove, 2005, p.483). The triple bottom line framework also includes the objectives of maintaining feasible economic franchisees and feasible social franchises. The economic franchisees include the ability of the business to pay from the generated cash flows to produce the outputs while the social franchisees include earning the trust and support of the stakeholders of the business like the customers, supplies and the communities in which the business operates. The Triple Bottom Line concept has been formed by White and Lee (2009, pp.689) as the Three pillars in which a balanced approach towards the people. Profit and planet factors are taken up to decide the dimensions of business activities. In the present global business environment, operations management is directly connected to sustainability and encompasses both the operational drivers of success and profitability and the relation of these operational drivers with the people and planet factors in a business (Bassett, 1992, p. 51). Value chain of Manufacturing Industry The macroeconomic forces like the advent of digital manufacturing technologies rise in the spending power of the global population, and increasing free trade activities have led to the distribution of the value chains of manufacturing industries across the globe. The value chains of the international manufacturing organizations are spread across the globe (Hollins and Shinkins, 2006, p. 241). For example, the research and development process of a manufacturing company may be established in one country while the manufacturing and engineering may be in another country and the customers may be present in different regions of the world. Therefore, the different activities of the value chain of manufacturing industries often exist in geographic distances and are characterized by high interconnectivity, complexity and rapidly changing dynamics which have created major challenges for the business leaders in the industry. The authors have complied a literary work in which they indicate that the environmental performance of organizations have been recently recognized as a critical part of the strategic management of an organization (Avella and Vazquez-Bustelo, 2010, pp.576).Globalization has enabled the manufacturing companies to carry out their activities in value networks in which different facilities owned by different organizations are interconnected to create maximum value out of the activities of the international manufacturing organizations. Integration of Sustainability into SCM The supply chain is major part of the operations management of any organization. The supply chain involves the transformation and movement of goods, services, and information from the stage of raw materials to the ultimate product offered for use by the end consumer (Mohr, 1996, p. 96). The need for integrating sustainability factors in the supply chain management of manufacturing industries has been recognized across the entities in the global manufacturing industries (Simpson, Power and Samson, 2007, pp.1-15). The sustainability of the supply chains of manufacturing companies should ideally include the designing of the product, procurement of raw materials, manufacturing of by products, product lifecycle and recovery process of the product in the maturity or decline stage along with the basic supply chain activities like sourcing, transferring and storing the goods and information in different stages of the supply chain (Wang and Bovik, 2006, p. 137). The need for integrating sustainability in the supply chains has been created with the increasing awareness of the consumers and other stakeholders in the area of impacts of the operations of the manufacturing businesses on the ecological system. This has called for the adoption of the Sustainable Supply Chain Management (SSCM) in place of a general supply chain management process in which the sustainable management processes and systems are considered to be critical with respect to the environmental, economic, and social requirements of the customers. In manufacturing companies, the supply chain is the part where almost 60% of the carbon footprints are seen (CERES. 2013, p.1). The development of the Sustainable Supply Chain Management (SSCM) can be affected by the changing environmental conditions and concerns and can impact the formulation of government policies, production operations, identification of business models, and operational practices in the manufacturing companies operating in both private and public sectors (Chorafas, 2012, p. 9). The pressure from the customers and the urgent need for sustainability has forced the international manufacturing organizations to adopt new environmental approaches in the supply chain management systems and other operations management processes of the businesses. The sustainable supply chain management processes integrate the environment and social factors into the supply chains in order to increase the competitiveness and environmental compliance of the manufacturing and operational processes in these companies. The sustainable supply chains have resulted in guaranteed returns in terms of increased efficiency, customer satisfaction, sales and market share, and decreased costs and expenses. This has resulted in the adoption of sustainable supply chains by different manufacturing companies including the automotive, electronics, paper manufacturing, transportation equipment manufacturing, etc (Juran, 1992, p. 79). The “Green” factor in operations management The green aspect of supply chain and operations management has become an important topic of discussion, which has attracted considerable attention from both operations management and environmental management researchers and academicians (McCormick, 2002, p. 29). There is an established link between the operational performance of an organization and the environmental management systems and environmentally sustainable practices and it is substantially stronger is some industries like the industrial sector and the manufacturing sector (Mok, Sparks and Kadampully, 2013, p. 82). The main drivers of the integration of green factor in the operational processes and the adoption of green supply chains are the increasing depletion of the natural resources due to the polluting effects of the manufacturing processes and the consumption of natural resources by the industrial activities (Zhu and Sarkis, 2004, pp.265-289). The high levels of economic development and urbanization has led to widespread activities and more complex operations management of the manufacturing industries. The concept of an environmental friendly operations management system advocates that such a system would encompass the considerations of the natural environment and the integration of these considerations in the transformational and operational processes of the businesses to make them more effective and efficient and to create more value for the stakeholders of the business (Zeithaml, 2010, p. 12). The authors have supported the concept of green supply chain or sustainable supply chain in their work in which they have analyzed the data of 274 manufacturing organizations to evaluate the cumulative effects existing among different manufacturing organizations (Avella, Vazquez-Bustelo and Fernadez, 2011, pp.707-729). The environmental operations management concept is relatively new and radical in the field of operations management and has emerged as a critical concept being adopted widely by operations managers across different manufacturing organizations. According to the work of the authors, the interest in sustainable and green supply chains has become a mainstream topic and a major indicator of this is the environmental protections an environmental performance have been included as core capabilities in the international manufacturing organizations (Byrne, Heavey and Ryan, 2013, p.201). Reverse Logistics and the environment The concern for the fast depletion of natural resources and the accumulation of huge quantities of industrial waste was visible among the consumers from the mid-1990s. As presented in the work of the authors, the manufacturing organizations identified the need for adopting suitable supply chains and logistic processes in order to minimize the harmful effects of their operations on the environment (Young and Kielkiewicz-Young, 2001, pp.260-268). The operation management of the large manufacturing and industrial organizations were modified and restructured with the introduction of environmentally sustainable operations strategies and operations activities. One of these new concepts introduced in the operations management of different organizations in order to establish sustainability is the concept of reverse logistics. Reverse logistics is the activity in the supply chain management wherein the flow of information and materials in the phase of return of the goods from the customers back to the warehouses is planned, controlled and managed. The traditional logistics is the process of the movement of the products from the factory of the organization to the consumers whereas reverse logistics encompasses the activities of carrying the goods back to the warehouses from the consumers in case they are returned. Reverse logistics has been a comparatively new process that has been established to ensure increased sustainability of a business (Rodrigues, 2013, p. 59). As stated by the authors, reverse logistics as a process which ensures recycling and waste management and is established in order to maintain proper compliance with the new environmental policies and rules related to disposal of waste and recycling (Zsidisin and Siferd, 2001, pp.61-73). Examples from the manufacturing industry More and more international manufacturing organizations are focusing on adapting environmental friendly approaches in their logistics and operations activities to increase the sustainability of their production an operations process in the future. Companies from diverse manufacturing industries varying from the automobile manufacturing industries to the paper manufacturing industries have implemented the planet factor in their supply chain and operations to ensure the continuity and sustainability of their operations in the future (Fabrizio and Tapping, 2006, p. 144). As identified from the company website, Toyota is one of the major companies in the automotive manufacturing sector which has adapted the sustainable supply chain in their business processes (Toyota Corporate Website, 2013, p.1). Other companies like Nike has taken up lean, green, sustainable, and equitable factors in their supply chain and operations activities. According to the corporate website of Nike, the green factor is implemented in the sourcing activities, design and the product development of Nike to ensure competitiveness in the global manufacturing segment (Nike Corporate Website, 2013, p.2). As stated by the author, the adoption of the environmental friendly practices by the major manufacturing companies across the world indicate that the organizations have started to prepare themselves suitable in order to respond to the evolving environmental challenges so as to improve the environmental image of the companies and ensure that the customers can rely on these companies in respect to the production, operations and logistics of these businesses (Theyel, 2001, pp.61-69). Conclusion The uncertain environmental conditions have led to the development of supply chains and operational processes, which use the environment compliant and sustainable strategies. The emerging new markets and advent of advanced technologies have opened up new opportunities for the international manufacturing organizations. On the other hand, the high level of environmental damages caused by the operations of different industrial and manufacturing organizations have brought about major challenges for the international manufacturing organizations. The environmental factors are the main influencers of the adoption of sustainable practices in the logistics and operations of these organizations (Zsidisin and Siferd, 2001, p.14). The practices like Sustainable Supply Chain Management (SSCM), Reverse Logistics and adoption of green logistics processes have gained much popularity among the operations managers in the past few years. Most of the researchers and academic observers identify environment as a major factor, which will influence more changes in the operations and logistics of manufacturing organizations in the future. 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