Green Supply Chain Management in the Woolworths - Implementing New Steps for Sustainable Grow - Example

Green Supply Chain Management: The Woolworths Plan- Implementing new steps for sustainable grow Green Supply Chain Management: 2 Executive Summary: 3 Plan Aims: 3 Transportation and Supply chain: 4 Packaging and procurement 4 Waste Management: 5 Supplier energy base: 5 Environment, efficiency Sustainability scorecard 5 Waste Management Plan: Application of RFID 6 Compostable packaging: 7 Hybrid trucks 7 Organizational Restructuring 7 Advantages and Disadvantages: 8 Reference: 9 Introduction: Despite the popularity of the term, supply chain management there remains considerable confusion with respect to its meaning. There are those that defines the term in the context of its operational meaning like the flow of materials and products (Tyndall, Gopal, Partsch and Kamauff, 1998); yet others view it as management philosophy while the rest view its in terms of its being a management process (La Londe, 1999). One of the best ways of discussing the concept of supply chain management is to break the outlook into three basic elements: those of supply, supply chain, and supply chain management. Supply could be understood to be the measure of goods obtainable for utilization in terms of actual, or planned, replacement of a product (Kala, 2008). A Supply Chain on the other hand is defined as a set of three or more companies (of a company, an immediate supplier and an immediate customer) directly linked by one or more of the upstream and downstream flows of products, services, finances and information from a source to a customer (Mentzer, 2001). Supply Chain Management (SCM) is the systematic, strategic coordination of the traditional business functions within a particular company and across business within the supply chain, for the purposes of improving the long term performance of the individual companies and the supply chain as a whole. Green Supply Chain Management: One of the primary innovations on the existing norms of the supply chain management process has been that of the Green Supply Chain Management (GSCM)-it has emerged mostly as a key approach that aids enterprises seeking to make their businesses environmentally friendly (Emmet and Sood, 2010). The idea essentially implies the insertion of the environmental criteria within the decision-making context of the traditional process of supply chain management. GSCM has become a key strategic issue for organizational of all sizes and types rather than just a talking point for lobbyists and hobbyist do-gooders, given the fact that the notion of CSR is now one of the few ideas that now find complete and total integration within the concept of the GSCM. It also needs to be understood that green supply chain management is important in the case of most enterprises that are looking to work towards the achievement of being environmentally sustainable (Gunther, 2005). Green Supply chain refer to the buyer companies requiring a certain level of environmental responsibility in core business practice of their suppliers and vendors. GSCM concepts are useful in the management of environmental impacts where their occur, ideally before they occur (Basu and Wright, 2008). These are also inclusive of the government, regulatory bodies, non-profit and also the consumers. The principles of GSCM are similar to lifecycle of product (Khiewnavawongsa and Schmidt, 2008) Executive Summary: The following report will present a method of sustainable development and green supply chain management for Woolworths, one of the largest supermarket chains in Australia. The idea in the report would be to define the methods that are being sued by Woolworths at present, analyze the flaws and the scope of improvement in each of these presenting a plan of action for future development and ending with a discussion on the advantages and disadvantages of each one. Plan Aims: The aims of the plan that would create the GSCM program for Woolworths would be based on changes in four basic of the supply chain management process. 1. Upstream activities of the organization include evaluation criteria of suppliers' environmental performance. 2. Downstream, usually comprises those activities related to the disposal and sale of excess stock, including recovery and recycling opportunities.  3. Within the organization, supply chain management might include involvement with "design for the environment" with suppliers. 4. In logistics, activities such as just in time or quality management intertwine with environmental criteria. Some of the major steps that have been taken by Woolworths over te past few years with respect to transforming operations within its supply chain management to being eco-friendly and aiding sustainable development have been: Transportation and Supply chain: 1. The establishment of a forum with major transport suppliers for the development of a low carbon strategy for the purpose of third party distribution networks. 2. It has also conducted a comprehensive study on bio-diesel availability within Australia including the elements of quality vehicle compatibility and cost impacts. 3. The other major initiative taken by Woolworths has been the trial use of the hybrid powered trucks for the purpose of home deliveries. In the areas of packaging it has worked toward the establishment of a supplier forum to work together on the format of sustainable packaging and the company has also focused attention on the establishment of more comprehensive baseline data for packaging of private label products including information on material consumption, local/imported origin and recycled content and recyclability. (It has to be remembered here that the National Packaging Covenant is being revised for its next term). Packaging and procurement 1. The company has also set up a review of its private label procurement policy and supplier guidelines to incorporate things like standardized reporting and data collection, compliance with the Environmental Code of Practice for packaging (ECOPP); package labeling in line with ISO 14021 Standard for environmental claims and supplier training to assist in meeting policy requirements. Waste Management: 2. Finally in order to aid and abet the process of waste minimization, the company has made several attempts at the identification and the organization of recycling technologies similar to EarthPower for recycling resources that are focused on the separation of food wastes from supermarkets outside Sydney in the process of the determination of commercial feasibility. 3. It has also implemented a waste audit program for all stores and Distribution centers. Stress has also been laid ib the continuous phasing out of polystyrene. Recommended Steps for the implementation of a greener supply chain management process would fall into three basic criteria for change: The creation of a policy focused on the usage of renewable energy, ensuring a system that promotes zero waste and products that are sustainable in the long term process. Supplier energy base: On of the first steps that need to be taken in transforming the supply chain management into a green process is ensuring that the process follows a method of energy conservation. The idea should be the development of new methods within the facilities and the promotion of these methods within the supplier base as well to apply the learning gained to improve building efficiency through the identification of long term projects that could help save energy and money. A basic example of this would be the use of CFL lighting within the facilities aided by appliances that magnify lights, thereby helping in energy conservation with the same output. Environment, efficiency Sustainability scorecard The second thing that would be needed in this context is instead of hiring new members of the team with specializations in sustainable product development the idea would be to train existing staff in the new approach to the process. One of the best methods of ensuring that there is a reduction of waste and efficiency introduced within the SCM process is the use of the web-based scorecards. First used by Wal-Mart’s, these help in the evaluation of every product’s packaging against nine sustainability metrics-these are inclusive of the cube utilization, Carbon Dioxide per ton of production, and recovery value, the value of terms of recyclability (Srivatsara, 2007). The use of the scorecard would mean that the packaging part of the process would find greater levels of integration within making the supply chain a greener venue. The best part of the introduction of the scorecard is the fact that its is completely user friendly and the could be introduced to the suppliers of Woolworths without a lot of fuss so that the efforts at innovating the process and the betterment of the standards of environment aid along with energy efficiencies, and use of materials rated relative to their peers find further ground. Waste Management Plan: Application of RFID According to recent researches it has been suggested by logistics literature that RFID technology increases the agility of supply chain systems and gives companies a competitive advantage. RFID tags are analogues to barcodes that wirelessly transmit their serial number to in-store scanning machines (Kinsella, 2003). The automatic self identification process is a great improvement over traditional bar codes, which would typically require employees or physically scan each item (Vance, 2005). RFID chips add a nominal cost to each item but enable supply chain information systems to easily scan items throughout the supply chain, potentially enabling managers to visualize exactly how much inventory exists in the supply chain, and therefore know much more inventory is to be purchased or produced. The discussion on the RFID debate put forward the claim that the technology can potentially enable supply chain managers to overcome problems caused by imperfect or insufficient information inherent in current inventory management systems (RFID Debate, 2003). Compostable packaging: One of the new methods of packaging that seems to be environment friendly over the use of plastic is the use of compostable Packaging-it already has its applications in the UK supermarket industry with chains such as Sainsbury already having certified its usage in the packaging of almost 500 of its private product ranges. The best part of the material used is that it is as user friendly as plastic is but is bio-degradable. In the context of Woolworths it would compliment the existing strategy of phasing out the use of the plastic. Hybrid trucks The use of hybrid trucks has to continue and increase in terms of scale and volumes of usage. One of the best methods of going about this plan is to take use of a professional agency such as RMI, so that the company is able to find aid with the procurement and the usage of trucks that are bio-friendly. The international supermarket supply chain management experience has already witnessed efficiency revolutions in terms of the hybrid diesel-electric trucks and refrigerated trucks that have been used by Wal-Mart’s (Jorgensen, 2005). These feature small power unit for cooling so the engine could be turned off when the truck is stopped. The use these trucks has seen an increase fuel efficiency of roughly 25 per cent (Plambeck, 2007). Organizational Restructuring The final recommendation here is the reorganization of the departments so that each one is aware of a specific set of responsibilities encouraging an easier tracing of accountability. 1. Merchandising (buyer-this group is set to be focused on needs of consumer and the on the perception of the collection of the product along with the assortment of these products in a manner that might best aid the consumer experience 2. Product Development-this is to concentrate on the development of the product per se imncluding product design and implementation of the policy-the idea here would be to create an amalgamation of the demands of the consumer with the trends and supplier constraints characterizing the marketplace so that the development of the product can see its pinnacle 3. Technical Services and Sourcing—This department would be focused on the issues of technique, the research on green technologies and how thse could be applied to increase efficiency and reduce costs. The supplier base issues and training needs would also be taken care of by this department. 4. Planning and Execution—focused on financial planning, ordering and inventory management, and store layout. Advantages and Disadvantages: The biggest advantages of these measures would be that in the long run, they would yield results in terms of sustainable product development and energy conservation along with product efficiency and price reduction. The disadvantages would be that in the short term most of these process implementation require that software that would not be combatable with existing infrastructure measures, the process takes time to yield positive returns on investment. The other big problem here is that most of these technology based steps and innovations are still evolving. It is only when these technologies gain mass acceptance that adopters would have to face the daunting task of gathering and managing massive amounts of data. Reference: Kala, D., (2008). Greening' The Supply Chain. Retrieved April 5, 2010, < http://www.indianmba.com/Faculty_Column/FC770/fc770.html> Emmet, S. and Sood, V., (2010). Green Supply Chains: An Action Manifesto. Wiley Books, pp3-5 La Londe, B.J. 1999. Executing in the red zone. Supply Chain Management Review 35(2): 7–9 Tyndall, G., Gopal, C., Partsch, W. and Kamauff, J. (1998) Supercharging Supply Chains: New Ways to Increase Value Through Global Operational Excellence, New York: John Wiley & Sons. Mentzer, J. T., (2001). Supply chain management, Volume 2000. Sage Publications, pp8-10 Basu, R. and Wright, N., (2008). Total supply chain management. Elsevier Publishing. pp253-255 Kinsella, B., (2003). The Wal-Mart Factor. The industrial Engineer . 35(11). Pp32-36 RFID Forum. (2003). Logistics and Transport Focus. 5(1). p49  Vance, A., (2005). IT Infrastructures Agility, in Business agility and information technology diffusion. (Eds.) Baskerville, R., Springer books. p147  Plambeck, E., (2007). The Greening of Wal-Mart's Supply Chain. Retrieved April 5, 2010, < http://www.scmr.com/article/329829-The_Greening_of_Wal_Mart_s_Supply_Chain.php> Woolworths Ltd. (2009). Corporate Social responsibility report. Retrieved April 5, 2010, Jorgensen, B. (2005). The "Greening" of The Supply Chain. Electronic Business, 31 (6), pp. 29-30 Khiewnavawongs, S., and Schmidt, E., K., (2008). Green Power to Supply Chains. Retrieved April 5, 2010, < http://www.tech.purdue.edu/it/GreenSupplyChainManagement.cfm> Srivastara, S. K. (2007). Green Supply-Chain Management: A State-of-The-Art Literature Review. International Journal of Management Reviews, 9 (1), 53-80. Gunther, M. (2006, August 7). The Green Machine. Fortune Magazine. Read More