Sustainability Issues Affecting Chain Supply Management - Coca-Cola - Case Study Example

Sustainability Issues Affecting Chain Supply Management Name: Course: Tutor: University: Date: Executive Summary Supply chains sustainability is a key factor of responsibility in a corporate organization. Indeed, taking a the proper management of social, economic, and environmental impacts of the supply chains management, and fighting corruption makes business sense of a conducive operation. The drive of this report is to bring the understanding of challenges and risks in the supply chain management. Sustainable logistic and supply chains management have come out as a key approach for companies such as Coca-Cola that aim to become feasible in the environment. In fact, this topic is becoming of more concern for the industry and the researchers due to the increased demand to reduce the footprint of carbon. However, it is from the data collected that key drivers of sustainability are developed. Also, the report will focus on the kinds of practices that are related to environmental management that make Coca-Cola Company take an initiative in the management and maintenance of logistic and supply chain management. Further, it will highlight on how these practices influence the operational practices and the environment around the Coca-Cola Company. The report provides more details of the study on the initiatives undertaken by the organization to address sustainable environment and social issues in the organization affecting the company`s logistic. Still, supply chain management and the relationships between the environmental policies and the performances of the operations will be cited as well. Finally, the report will conclude by providing recommendations for the case organization for more effective sustainable logistics and supply chain operations. Introduction Coca-Cola is an organization that exercises environmental business conscious practices, which has received more concern from both practitioners and researchers. Without a doubt, it has been an organization that has integrated environmental practices into its strategic plans and operations. A variety of initiatives has provided incentives to the activities of the Coca-Cola Company to be friendly to the environment. Certainly, the concepts concerning logistic and supply chain management are mostly understood by the organization. Also, these concepts are applied for screening the suppliers with regulations that meet the standards of the organization for a better environmental performance. Therefore, the core purpose of introducing and implementing the concept into its operations is increasing competitive advantages of the company`s performances. Numerous approaches such as cleaner productions, management of the environmental systems, and eco-efficiency have been implemented for green managerial practices. Additionally, risk management, market expectations, business efficiency, and regulatory compliance are factors that are the drivers that increase the competitive advantage of the Coca-Cola Company through environmental performance. However, the key role of the green environment logistic and chain supply management is to ensure that all these factors are implemented and addressed. The green supply chain management has come out as an enterprise for achieving profit and market share objectives by lowering the risks of environmental operations. Coca-Cola Company The Coca-Cola Company is known widely around the globe for its beverages, with Coca-Cola drinks being its main flagship brand. Indeed, the company runs about nine hundred manufacturing plants. Also, its operations in more than two hundred countries. Moreover, its operation around the globe consume about three hundred billion liters of water and require many amounts of sugar, coffee, and citrus. The company also require packaging of bottles, cans, and cardboard. For sure, the environmental footprint has to be significant, without forgetting the company’s activities that are sustainable[DML13]. Nevertheless, the Coca-Cola Company set strategic corporate sustainability focus areas. These areas include conservation change, sustainable recycling, product portfolio, and diverse, inclusive culture. Also, the company made an investment in its attention environment areas of about U.S. $34.8 on capital projects. More so, the Coca-Cola Company has come out with goals in areas of energy conservations, sustainable packaging and recycling, energy conservations, and diverse, inclusive culture[WLT10]. The company is set to reduce the overall footprint of carbon by fifteen percent by the year 2020 as compared to the baseline in the previous years. It has also planned to establish a sustainable water operation whereby it will minimize the usage of water to a water-neutral on the local communities where the company operates. Essentially, it will do so by returning the used water safely by making it an equivalent to what they use in the beverage and production baselines. The company`s aim of reducing the overall carbon footprint will be achieved by measuring its carbon footprint, calculating certified products of the beverages, and increasing hybrid fleet by one hundred and twenty trucks. However, for it to improve on a sustainable water operation, the company reduced water usage by a ratio of 1.73 liters, save three hundred and one million liters of water through other initiatives that are efficient[WLT10]. Also, Coca-Cola reduced the impact of packaging by avoiding to use an approximate of thirty-one thousand metric tons of packaging materials. Indeed, it recycled and recovered an approximate of one hundred and twenty-five thousand tons of packaging and reached ninety percent waste recycling. Evidently, in the portfolio product sector, it introduced zero calorie sports drink and reduced the level of the average calorie content by a percentage of three, and therefore, introduced sweeten the natural low-calorie beverage. Sustainable issues affecting chain supply Sustainable matters in the coca cola company affecting its chain supply include issues like climate change and water supplier. Hence, the company comes up with strategic management to control issues like water risks. The water systems around the world are at risk from the growing population and climatic change around the world. In fact, the high periods of drought increase, reduce the availability of water supply. More so, the infrastructures that support water supplier are outdated; this suggests substantial capital investment for managing water suppliers. Certainly, the climatic change is an issue that has a great impact on the company, customers, and suppliers. Therefore, there is a need to solve the problem by coming up with great strategies. Still, issues of changing patterns in weather has disrupted the Coca-Cola Company. Also, droughts and floods have affected the company`s sugar cane and citrus suppliers. Undeniably, a lapse in quality control, failure to meet working condition rules, and environmental regulation in other countries are the risks that the Coca-Cola Company faces in local suppliers. Nevertheless, there is the benefit of reduced costs in sources from overseas. Additionally, intentional threats from the terrorist networks or criminal groups affect the chain supply in the Coca-Cola Company. Therefore, the company has to develop strategies to control potential hazards, and to come up with ways of making the supply chain management more secure. In reality, it should devise better strategies to manage risks due to continued increase in supply chains management disruptions[SKu12]. Evidently, the Coca-Cola Company is limited to measuring the sustainability of operations in its business operation. Consequently, it is not supposed to extend its evaluation to customers and suppliers to determine its true costs of the environment which are challenging. This challenge might make the organization not able to remove waste from the chain of supply. Additionally, lack of collaboration is a sustainable issue of chain supply affecting the Coca-Cola Company. Indeed, collaboration practices such as sharing distribution reduce waste by guaranteeing that the vehicles that are half-empty do not make deliveries and avoid a loss of economic control[DML13]. However, supply chain sustainability is an issue of business that impacts on an organization`s logistic network and supply chain regarding the environment, costs, and risks. In fact, there is an increasing demand to integrate choice of environmental sound into the supply chain management. Therefore, sustainability supply chain increases the creation of value and opportunities that provide significant competitive advantages for innovators and early adopters[DML13]. Initiatives to address environmental and social issues The focus of the Coca-Cola Company is to make commitments in areas where the company finds an opportunity to make a difference. These areas are sustainable packaging, management of energy, climate protection, and water stewardship. Besides, the water programs for the company`s community is meant to support sustainable programs of the company in balancing the water used in production processes. Consequently, the company has initiated in conservation and protection of natural resources such as the soil, water, and climate[WLT10]. Coca-Cola identifies issues like rights in the global value chain, the company takes initiatives in addressing matters such as land rights. Indeed, it does not get ingredients directly from farms, or from sugar farms and plantations. Rather, it buys ingredients from the agricultural holdings. Therefore, the company has taken the initiative to take an influence and responsibility to protect to take action and help in protecting the land rights of the local community. Also, the Coca-Cola Company has taken efforts in committing itself in protecting the land rights and protecting communities and farmers in the world’s top sugarcane-producing countries. Indeed, it has made an improved effort in promoting accountability and transparency in the global supply chain[JWi15]. Further, the Coca-Cola Company has made commitments to initiate zero tolerance for the land grabs and adhere to free principle, getting informed and prior consent as well as disclosing the top three sugar production regions in the world. Also, the company has plans and action strategy to initiate human rights. It has adhered to diligent studies on forced labor, migrant labor, child labor, and issues of land rights in some countries. Indeed, the company has taken a further initiative of auditing firms and involved the engagement of stakeholders in each country for the management of its resources. Undoubtedly, one of the company`s human right policy is to prohibit the use of child labor. Certainly, it has taken initiatives in ensuring that it creates a viable society around its areas of operations. The Coca-Cola Company does not directly own the firms but instead the organization buys ingredients from the agricultural farms where there is intensive child labor practice. However, the company is making efforts to come up with strategies that will help influence to end the child labor in sugar cane fields. Coca-Cola Company has also launched training that addresses negative impacts that result from child labor. This training fully discourages child labor practices and come up with new efficient methods that can be used in firms instead of child labor. In fact, the company had some funding to save child labor in Honduras by raising community awareness to discourage child labor in Honduras. Hours of work The company has taken initiative implementing overtime laws to show the compliance of local work hours. Reducing overtime hours will increase the morale among the employee thus improving the performance of the business significantly and create a conducive place for work. Further, the company has helped to track down over time to identify the cause of the issue so that it can come up with better initiatives to end the problem. Contract labor Without a doubt, the Coca-Cola Company has initiated contract and agency labor. There are many valid uses of the contract labor. However, the company expects contract workers through the third party to continue playing important roles in the organization through the enhancement of the guiding principles of the suppliers. Therefore, the company was holding contract and agency labor responsible for the ethical treatment of the workers. Workplace safety The Coca-Cola Company came up with the workplace safety initiative to provide a safe and conducive environment for the working of the employee. Also, the human right policy of the coca cola company requires the provision of the productive workplace by minimizing the risks of accidents, exposure to health risks, and injury safety measures to all corporation associates. Indeed, its operating environment defines the policies, and standards for managing safety, quality, and the environment. Recommendation The coca cola company should initiate policy measures to come up with strategic solutions to address the issues of water. Since it runs many operations all over the globe, and all these operations relies heavily on water, the company should, therefore, invest greatly in the water project to solve this issue. Also, Coca-Cola`s initiatives should address the problems associated with packaging to reduce carbon footprint. More so, it should work on reducing the packaging issue by reducing the metric tons of packaging materials. Issues of land grabbing from local farmers should be a zero tolerance issue. Essentially, when individuals grab land, the local communities will not be able to grow sugarcane, and this will affect the company operational freedom. Therefore, the company should use effective measures to solve this problem. Climatic change and water supply are the sustainable issues affecting the chain supply in the Coca-Cola Company. Therefore, the company should invest a substantial amount in the project to control water risks. The investment should focus on maintaining the outdated infrastructures that support water systems. The supply chain management is not secure in some regions; there are cases of insecurity which affects operational flow. Therefore, the company should work in hand with the governments and authorities from such regions to safeguard the security concerns to solve insecurity issues All in all, Issues affecting human right such as child labor should be addressed by the company. Child labor occurs in firms such as the sugar plantations where the company is involved indirectly. Therefore, the company should initiate the policies that prohibit the practice of child labor to help create a viable society under which the company operates. Finally, Coca-Cola as a leading company should implement viable strategies that will bring efficiency to its operations that are friendly to the society and environment around it. List of References DM Lambert, MC Cooper (2013) – industrial marketing management,–Elsevier J Wisner, KC Tan, G Leong – 2015 – books to google.com M Barrat (2012)– supply chain management: an international journal, X – emaraldinsight.com S Knox – (2004) Journal of product & Brand management, emeraldinsight.com S Kumar, S Teichman.. (2012) –international Journal of… – Taylor & Francis VL Crittenden, WF Crittenden, LK Ferrell (2010)… - Journal of the academy … springer. WL Tate, LM Ellram, JF Kirchoff..(2010) supply chain of management, Wiley online library Read More