ISO14001 Standards & Supply Chain Sustainability - Case Study Example

ISO14001 Standards & SCS (Name) (University) Abstract As the language of environmentalism has emerged more vocal globally, a large number of organizations showcase divergent approaches in gaining such competitive advantage. Issues emerging from environmental concerns are central and dynamic, hence the need to understand the relationship between sustainable supply chain and ISO 14001. The need for certified standards of operations, though not a compulsory instrument for organizations, has become imperative in determining an organization’s competence in the contemporary business environment (Jain & Ahuja, 2015). Formerly adopted in 1996, ISO 14001 presents a strategy for voluntary internal environmental standards that has been adopted by a large number of companies. ISO 14001 has continuously evolved with it set of standards getting more involving and specific (Jain & Ahuja, 2015). ISO 14001 focuses on the need to have continual improvement in the systems of an organization and effectively approach concerns of the environment (Asif et al., 2013). ISO14001, this paper confronts, has been attuned to supply chain management in creating a sustainable approach. The research draws upon divergent sources in understanding the relationship existing between the relationships between these two concepts. TABLE OF CONTENT Contents 1.0 Introduction 4 2.0 Literature Search 5 2.1 ISO 14001 6 2.2 Supply Chain Sustainability 9 2.3 ISO14001 Reduction of Company Waste in Supply Chain Sustainability 10 2.4 ISO14001 Improving Logistics in Supply Chain Sustainability 12 2.5 ISO14001 Zero Carbon Manufacturing in Supply Chain Sustainability 12 2.6 ISO14001 Driver towards success of Supply Chain Sustainability 13 3.0 Critical Analysis 15 4.0 Conclusion & Future Directions 18 4.1Non-Value –Added Paper-Driven Process 18 4.2 ISO14001 Perform Only as a provision for Supply Chain Foundation 18 4.3 ISO14001 Potentiality 19 4.4 Theoretical implications of the research findings 19 4.5 Practical implications of the research findings 20 1.0 Introduction The ISO14001 formally adopted in 1996, focus on international environment standards in structure, implementation, & maintenance of current environmental management system (Nawrocka, 2013). The paper analyzes the competitiveness of ISO14001 standards leveraged in Supply Chain Sustainability through the system, ISO14001, is under the pressure of opinions that pose controversies and criticism despite the international recognition. Additionally, the main challenge identified in ISO14001 is the system time consuming, costly, requires high level of trust between the customer company involving suppliers and it advises the companies to engage all employees in the creation of new internal human resource activities that determine the success of IS014001 and supply chain sustainability (Magnus, 2013). As such, the paper analyzes through empirical frameworks that identify the different levels of ISO14001 towards sustainability in the supply chain. In the fast moving consumer goods market, the characteristic of products that have a short lifespan has certain implications for the organization and the operation of companies (Kotler, 2012). There have been a continuous shift and evolutions of practices set out to meet the uncertainties of the market and still continue to function effectively. Elevated competition has additionally made managerial tasks more complex. The recent introduction of sustainable supply chain operations has grown due to global awareness on environmental preservation and ethical awareness (Gopalakrishnan, 2012). The Recent revision of the standard articulates that the strategic planning of an organization have to have increased the prominence of environmental management and possess a stronger input from senior management to ensure commitment to effective environmental performance. The aims of this research are to: explain the concept of ISO 14001, expound on supply chain sustainability and provide the kink between ISO 14001 and supply chain sustainability. This section has given a brief introduction to supply chain sustainability and ISO 14001. The following section will discuss relevant literature about ISO 14001 and supply chain sustainability. The literature will further connect the two concepts and provide implications on the same. The study will then give a conclusive summary of the discussion and provide suggestions for further research. The research also identifies the advantages of a corporation using the ISO system towards supply chain sustainability. The system advises the company to implement a EMS system whereby the ISO14001 reduces company waste, the level of carbon footprint, reduce in tax, energy & insurance bills, increase of overall efficiency, smooth allocation of time & resources spent, system wins the clients heart through adding value and supporting their environmental regulations among others (IMSM ISO Specialist, 2015). As such, the aims & objectives of the paper is to provide a comprehensive understanding of the relationship between supply chain sustainability and ISO14001. The paper also explores relevant literature overviews regarding concepts, models, theories towards the ISO14001 and Supply Chain Sustainability and conclusions for future directions. 2.0 Literature Search Supply Chain design workability determines the organization EMS and sustainability goals. The majority of the companies prefer having a working partnership with suppliers embracing the company EMS policies which contribute towards implementing an effective sustainability strategy. Research studies conducted by Institute of Supply Management indicate that only 60% of the corporate company among top 100 documented corporate sustainability strategy while almost 36% had implemented sustainability supply chain approach (Cooling, 2012). The analysis indicates that the sustainable chain supply paradigm is shifting from hazardous products and organization function that negatively affect the business environment and focus on goods and services that embrace environment principles. Additionally, registering an EMS is another approach towards firms moving towards sustainable supply chain design. In the UK, research was conducted in more than 149 organizations. The agenda was to identify how many company during purchasing consider issues related to the environment, which was at 49% while companies are observing the green purchase procedures at 28%. 15% of the outcome indicated organization attending to workshops to assist suppliers while only 12.5% indicated companies visiting suppliers to enlighten them on the importance of EMS. As such, the outcome findings indicate that organizations approach towards environmental management are in the formal assessment procedurals in ISO14001. This indicates that ISO14001 design intends to achieve the bringing of togetherness in the environment and supply chain sustainability in companies with a purposeful reason for management of environmental issues (Klassen 2012). 2.1 ISO 14001 Due to the increased importance of environmental management globally, the need arose to come up with a system that monitors the preservation of the environment and integrate it into all the sectors that affect or which are affected by the environment. The new standards have been applied in businesses, and they happen to be a measurement for good business that consequently promotes sales and market share. ISO 14001 is among a series of international environmental standards of management that have emerged to promote the continuous progress of the environmental performance of a company through the embracing and implementation of an environmental management system (Krut & Gleckman, 2013). The environmental management system based on ISO 14001 has its suitability effective to any organization. The standards principally require that organizations take to heed all manner of environmental issues that apply to its organizational functions (Comoglio & Botta, 2014). The issues could include pollution of air and water, sewage issues, management of waste, corruption of the soil, issues on solutions for climate change and effective use of resources. As compared to the other systems of standards of management, there strongly exists the need for continuous improvement in this approach to environmental management systems. There are several benefits that can be accrued from the adoption of ISO 14001. Implementation of these standards helps environments to demonstrate their compliance with the present requirements put across by regulatory organizations to prove their competency in their field of operation. ISO 14001 additionally increases the involvement of the organizational leadership and the engagement of employees as stipulated in the standards of operation. Moreover, the image of the company achieves substantive publicity and acknowledgment due to its adherence to the standards. As such stakeholders will increase their confidence in the company and provide the opportunity for advanced investment (Chkanikova, 2012). Adoption of the environmental standards of operation aids in giving the company a competitive advantage over its business rivals and ultimately encourages an improved environmental performance that has been integrated into the operational system of the organization (Chkanikova, 2012). ISO 14001 has been recently revised, and the objective of the revision is to make sure that the relevance of the standards is achieved with the ever dynamic operations among business and subsequent external factors. ISO 14001:2015, for instance, is tailored to suit the external and internal influences that could occur to within and without an organization. Unpredictable elements of nature such as changes in climate or other forces of nature have been discussed in ISO 14001:2015 to ensure that the standard is indeed compatible with the possible changes from within and outside the organization. The revised ISO 14001:2015 requires that the management of the environment be made increasingly prominent within the organization. The leadership of the organization is additionally expected to show more commitment to the environmental cause. Proactive initiatives require to be adopted to protect effectively the environment form harmful practices that lead to degradation as well. These initiatives are such as the use of resources sustainably and a focus on solutions to mitigate climate changes. The revised system is moreover insistent on a communication strategy that is focused on the stakeholder. The adoption of ISO 14001 is without doubt the key goal of achieving sustainability in supply chain management (Maruf, 2013). The following section discusses supply chain sustainability in the management of supply chains. 2.2 Supply Chain Sustainability The general definition of supply chain sustainability attempt to point it out as an approach where there is a minimum performance that is achieved in the economic, environmental and social perspectives. The overall idea of supply chain sustainability from the literature reviewed is that orders are anticipated and delivered way before the retailer can notice the requirement. The explicit alignment of economic goals with sustainability is vital in the acceptance and embracing of supply chain sustainability. Most of the literature reviewed however shows that the win-win situation of all the three dimensions of sustainability is not practical in the long term. Adoption of supply chain sustainability primarily focuses on sustainable and supply and purchase strategies that are equally sustainable (Maruf, 2013). The supplier of the products has to ensure that the purchased products are in compliance with the set standards of environmental sustainability and these encompass not only the finished products but also the ingredients that have been included in the making of the product. The process of manufacturing the products has to be sustainable as well. This would include the adoption of standards such as the ISO 14001 which have environmental policies that control the process of manufacturing and ensures that all the procedures are followed (Zhu et al., 2013). Initiatives of environmental management strive towards achieving various standards that include compliance with the regulations that have been put out by the concerned regulatory body (Searcy et al., 2013). The requirements dictate that all safety, health and environmental regulations be adhered to, and this adherence is henceforth used to rate the performance of the organization. The present initiatives additionally require that the systems advised being developed and implemented in the respective companies. This calls for purchasing equipment that is sustainable and compliant with the requirements of the standards. It also specifies the use of this equipment or processes in the accurate way to achieve maximum sustainability. Integration of sustainable management of the core functions of the organization then serves to coordinate the operation smoothly and skillfully. This integration is the key to ensuring that the management is directly involved and as such it leads directly to the employees. The whole establishment is thus able to operate sustainably. Figure 1: The role of the capabilities of supply management in the implementation of sustainability 2.3 ISO14001 Reduction of Company Waste in Supply Chain Sustainability ISO14001 through a partnership with supply chain sustainability enables the company to reduce waste disposals. Using the guidelines from ISO, companies collect wastes generated from its delivery and the installations aspects of the company business. As such, the companies observes environmental protection either in packaging regulations or producers & suppliers regulations. The packaging objectives is intended to reduce the use of unnecessary material, resources and energy which might impact the environment negatively in future & contributes towards challenges of outsourcing raw materials. The system undertakes audits measuring the outcomes against the identified targets with the intention of reducing the level of waste to a practical situation. The supply chain sustainability is effective through a company packaging waste to recycle scheme. This includes the installation & delivery of items, recovering at least 95% of the waste either from suppliers, consumers & manufactures (IMPEL, 2014). Additionally, the policies focus on procurement of products embracing the company waste sustainability policies, delivery and installation approach regarding the company packaging & waste management policies and inhibiting the manufacturing of red-listed materials through innovative approaches. The adoption of environmental standards among companies has frequently raised the question of the real motive behind the implementation of the environmental program. The literature review suggests that organizations are into green supply chain mostly for regulatory purposes and not any concern for the environment (Searcy et al.,. 2013). Furthermore, the reputation gained from complying with the standards of operation has business advantages such as competitive advantage and investor confidence in the company. The fundamental objective of introducing ISO standards was to achieve improvement in business fields regarding quality and sustainability. With climatic changes and all manner of natural forces that leave huge impacts on people, land and businesses, these standards have been compiled to mitigate the situations and to provide a mode of operation that is adamant on the prevention of environmental degradation through human practices (Heras-Saizarbitoria, 2013). Environmental supply chain management focuses on predicting market expectations, managing risk, ensuring compliance with regulations and promoting efficiency in business. All these are done in the regard of how the environment affects and how it is affected by all these processes. 2.4 ISO14001 Improving Logistics in Supply Chain Sustainability Iso14001 improves company logistics through supply chain sustainability. One of the options is the company communicating with the suppliers to adopt the certificate of ISO14001. It implies that the partnership between the company & suppliers embracing ISO14001 attributes towards the production of products and services that is of quality in customers satisfaction in the supplier-customer relationship. ISO advice companies to forego aspects that prove challenging especially in logistics and embrace procedures that improves efficiency and sustainability of the whole process (Mehalik, 2012). 2.5 ISO14001 Zero Carbon Manufacturing in Supply Chain Sustainability At this phase, supply chain sustainability needs to be considered as upstream or downstream. Focusing on the transportation issues, the transportation of goods from the suppliers to the facility and from facility to customers contributes towards carbon emissions depending on the mode of transportation, packaging technique used, and distance covered. The majority of the companies use ISO14001 to meet the targets concerning environment in the supply chain. With such an approach, contrary opinions arise during zero carbon manufacturing since the system is not a panacea towards giving clear directions & targets of zero carbon. As such, a new system is adjudicated towards supply chain references to a new incorporation of Green supply chain references (Ellison, 2012). Additionally, approaches like converting waste into energy, construction of facilities and the development of corporate social responsibility in the local community improves the possibilities of Zero Carbon in supply chain sustainability. 2.6 ISO14001 Driver towards success of Supply Chain Sustainability The ISO14001 performs well in well-structured drivers of supply chain sustainability development. As such, the system greatly focuses on customers, producers and suppliers that define the company profitability through supply chain sustainability. The figure below displays a well-structured system of supply chain competitive approach using ISO14001 Figure 2 Diagram Showing Drivers towards Success of Supply Chain Suitability The diagram above represents the ability of the supply chain sustainability. As such, the design enables the company to respond to a wider range of quantities demanded by customers, the ability for company sustainability, the services offered is of high quality, embracing technology to come up with innovative products and the capabilities of meeting short lead times. ISO14001 has beneficial aspects towards Supply Chain Sustainability. Some of the advantages include improvement of internal management within institutions, satisfaction within the organization stakeholders, competitive advantages in various markets, reduce overhead costs, improves the company image, ease access to capitals, improvement in environmental performance. Additionally, the advantages prevent the possibilities of intense non-tariff trade blockage, limited regulatory checks that disturb the daily routine of the company, reduced insurance costs and associated fines among other factors (Albuquerque, 2013). 3.0 Critical Analysis Analysis carried out in one of the companies indicated the benefits of using ISO14001 in supply chain sustainability. As such, clients from BSI experienced the benefits of ISO14001 in energy management system (BSI, 2014). The below figure indicates the findings from BSI company using ISO14001. Figure 3: BSI Diagram showing ISO14001 in Supply Chain Sustainability Finance With the implementation of ISO14001, the BSI reported a 65% first year saving up to a record of $25,000*, while 27% reported a saving of up to $100,000*** & finally, 66% agree that ISO14001 reduces the organization operating costs. As such, the system has a positive impact on the bottom line. Management Results indicate that 37% towards management performed better towards average profitability hence the system, ISO14001, protects the image of the company since it improves on company performance. Sales & Marketing 55% of the majority reported that ISO14001 helped the organization with the capabilities of identifying new opportunities in the public sector while 75% indicate that the system attracted new customers to the company hence a technical improvement in sales & market access through supply chain sustainability. Operations & Facilities ISO14001 through operations & facilities reduces costs, effective operational & the capabilities to manage impacts. This is attributed to the 98% data of landfill savings & 98% company approval of the preparedness in emergency situations. Legal ISO14001 reduces the organization's risk of litigations & the imposition of fines. As such, the 84% data indicated an impressive reduction in permit violations while respondents indicated that 55% of the company activity improved on the legal compliances. Product Development Product development contributes towards product differentials. The respondents, 96% indicate that the products manufactured are friendly towards the environment. Currently, limited frameworks exist for the environment and supply chain sustainability. As such, there is a yet research to be conducted regarding the position of EMS in the supply chain sustainability and the position customers play in driving the organizations to acquire the registrations of ISO14001. No research has ever been conducted to focus on EMS functionality and the employing of ISO14001 for determining supplier choice and supply chain strategy. The outcome of limited framework indicates that no effect is determined in the ISO environmental standards to have on the supply chain sustainability performance. Analysis indicates that ISO14001 is not directly linked towards performance standards. It is possible for companies under the certification of ISO14001 to contribute still towards pollution level & regarded as not complying with regulations. Reactive organizations are still registered under ISO14001 that pose a high level of inefficiency and as such, the ISO team committee are on agreements of the weaknesses posed by the system. ISO14001 is costly & time-consuming during implementation phase in organizations. The genuine supporters of ISO14001 point out a system to be very expensive & time spending. Preparation for a single site takes more than one year while a preparation & assessment done might take more than a week & payments are made hourly. The process does not come to completion after the assessments. Continuous assessments are in place even after registration & issuing of certificates, which is mostly done for a short duration, like quarterly a year hence to many resources spent. 4.0 Conclusion & Future Directions As the emphasis on sustainability among business operations gets pronounced, there is a need for additional standards that suit the functioning of the business without affecting productivity and the product quality. The standards could be tailored towards ensuring that business people embrace the process first as a sustainability measure then as a business advantage to ensure the commitment on the side of the corporate. 4.1Non-Value –Added Paper-Driven Process The majority of the organizations view ISO14001 standards registration as a game of obtaining ISO14001 certificate. As such, many of the companies using such as a game tactic purposefully to run the business prevents the opportunities of achieving benefits of ISO14001 (Darnall, 2013). Companies need to much more efforts in ISO14001 regulations and supply chain sustainability so as to realize the benefits of the two integrating. As a recommendation, organizations need to see the opportunities structured under ISO14001 with the intention of improving EMS and the supply chain towards environmental standards that pose the ability of a strong, sustainable supply chain. Additionally, the organization should freely engage with suppliers under ISO14001, and if the majority of suppliers are not registered, the company should use suppliers during compliance situations. 4.2 ISO14001 Perform Only as a provision for Supply Chain Foundation ISO14001 standards have been on the critics ideologies of only acting as a foundation towards supply chain sustainability. The procedural of receiving ISO certification does not give opportunities for engagements discussion or structuring programs to empower suppliers to improve the environmental performance. As such, during certifying companies in future, it is important to recognize the seeking of information especially on environmental issues, policies, process, and systems design for suppliers, which will impose the specified performance expectations from suppliers. 4.3 ISO14001 Potentiality The analysis above indicates that IS014001 has the potentiality to the improvement of supply chain sustainability if only used under the rightful procedurals. The findings communicate that the system is applicable to firms to greening supply chain suitability especially in the understanding of environmental factors & processes, reduction in waste products, inhibits pollution and improves the company performances. It is difficult to determine the ISO14001 risks, benefits, uncertainties towards sustainable chain supply since it varies depending on the organization functionality. As such, some of the ISO certified companies take a competitive advantage from registration while other companies keep struggling with sustainability growth, compliance & integration with registration. This implies that organization that is fully implemented with 1SO14001 and the upcoming organizations; it is not a guarantee that any of the organizations can reap the benefits either internally or externally regarding supply chain sustainability. 4.4 Theoretical implications of the research findings The findings of this research have given a comprehensive understanding of supply chain sustainability and the adoption of ISO 14001. The findings will additionally provide a basis for further research on the topic discussed and expounded discussions on the same. 4.5 Practical implications of the research findings The impacts of sustainable supply chain management are evident from the literature provided, given the application of environmental programs in industries to provide a sustainable organization and overall prevention of degradation of the environment. This research can further be used to assists organizations in embracing supply chain sustainability for better organizational performance and continuous improvement in the environment. This integrated with the operations of the business contribute towards an environment with lowered risks and an equally efficient environment. Business practices that are environmentally conscious have been receiving elevated attention from all the relevant parties, and there are many organizations contemplating the integration of the system into their operations. There are initiatives that provide for organizations to get an environmental friendly with guiding steps from certification organizations like ISO to help meet the full requirements. The debate on the honesty of the organizations in adopting these standards is still inconclusive as most organizations have put the goal of business growth first. With this argument, the general reasoning is that if it takes embracing of environmental policies to achieve in business then that is the strategy to take. Research is still needed to determine effectively this fact as the effectiveness of the environmental program in achieving good business has equally been debated over. The concept of supply chain management and sustainability may be the better way to improve business, but the trade-offs lie in the question of the genuine nature of businesses and the reliance that it is a long-term implementation that will not fail in the future. References List Albuquerque, P. 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