Wind Power Production Initiative - Case Study Example

?Executive Summary Changing preferences of consumers are forcing Canadian manufacturing firms to go for green supply chain practices in their B2B marketing. Though the need for implementing such standards in B2B marketing is clearly recognized however, still only those manufacturing firms which are engaged with the retail B2B marketing are better implementing such standards. Manufacturing firms in other sectors such as aerospace, industrial electricity production etc are still lacking behind in the comprehensive implementation of same. Small manufacturing firms are also lacking in implementing such practices. Background Canada is the 10th largest economy in the world with established services and manufacturing sector. Being the member of G8 and OECD, Canadian economy is mostly a service based economy however, due to large natural resources; Canada is also an economy with established manufacturing base. Canadian firms working in electricity manufacturing have been slow in responding to the global changes and as a result of this also lost their share in global market. Such lack of quick responsiveness to the changing customer needs therefore have been taking its toll on firms as despite having enormous natural resources this sector is still lacking behind in terms of productivity and efficient production. (Negru 1990) Traditionally, Canada’s electronics manufacturing sector has relied heavily on exports from US however; it has now shifted to the developing countries.1 Firms like Nortel, RIM and other manufacturers have been successfully operating in the electronics manufacturing sector. However, due to global shifts in the overall dynamics of the sector, this industry in Canada is losing its ground despite the fact that it is 6% of the manufacturing GDP of Canada. Consumers are becoming aware of the overall impact of traditional sources of energy have on the environment and there is now growing concern for producing and procuring green electricity resources. Such awareness of consumers therefore forces many Electronics manufacturing firms to look for ways which can actually reduce the damage to the environment. Since supply chain management forms one of the essential strategic operations for manufacturing and even service oriented firms, its greener management is one of the key industrial market issues for the firms. (Kim and Min 2011) One of the key concerns for the Canadian electronics manufactures is the high cost of energy and the need to become competitive are the key drivers which are actually causing Canadian manufacturers to go for greener supply chain management practices. What is critical to understand however, is the fact that the same may not be feasible for the suppliers to such manufacturing firms as compliance with greener supply chain practices can increase the cost for the suppliers.2 Large firms in industry however, are also focusing on rewarding their suppliers if they adapt to the green supply chain management practices. By rewarding the suppliers, Canadian manufactures are actually providing a pricing advantage to their suppliers so that the overall marketing relationships remain competitive. There is also a greater marketing challenge for firms in Canada because green supply chain management requires firm to make a transition towards greener marketing and hence towards green organization. More industrial buyers are now actually demanding to purchase green electricity as most buyers are now focusing on reducing their carbon footprint. Such emphasis towards green electricity usage therefore may further create challenges for firms. Such inter-linkages therefore suggest that the firms must strategically take all the steps required to achieve strategic objectives of the firm. The difficulty to integrate all the aspects of industrial marketing therefore forces firms to not to go for green supply chain management practices. Since green energy sector is also heavily regulated therefore suppliers as well as buyers will have to comply with different regulatory requirements. Compliance with strict regulatory requirements however, can be subsidized for manufacturing firms by participating in programs like Wind Power Production Initiative, a federal government effort to support suppliers and buyers to make a transition towards green electricity resources. (Henderson 2000) Analysis There is a critical element of industrial purchasing in the overall process of supply chain therefore the overall process of supply chain requires firms to also define a well-designed industrial marketing strategy also. One of the key challenges and issues faced by Canadian electronics manufacturing firms is the implementation of green supply chain practices. This would require them to actually make their overall purchasing and logistic system in a manner which can be environment friendly. Historically, Canada’s electronics manufacturing sector developed in regional clusters such as Waterloo and Ottawa. Such regional concentration of buyers and suppliers therefore can make it easier for the firms to reduce their direct marketing costs. Such an environment therefore can offer a better marketing opportunity to firms to better design and execute their marketing policies. Purchasing decisions involve activities such as vendor selection, negotiations, selection of material, buying, delivery as well as shipping. Such complex chain of activities therefore may reduce the overall benefit for Canadian firms to go for such practices. It is also because of this reason that most of the firms could not been able to implement such practices across all their supply chain practices. (Fortes 2009) One of the key issues faced by firms in general is their inability to develop a sustainable strategy for market and brand performance. Such aspects therefore outline that the firms may not be fully equipped with the necessary resources to develop tools and techniques to help them measure the brand performance as well as creating greener industrial brands. This is mostly due to the typical value chain structure of the electricity firm encompassing manufacturers and middleman also. There is also a significant component of R&D involved also in this value chain process which effectively increases the cost of production and hence making it difficult to sell high-priced products. Some research studies have clearly established that there is a significant link between customer relationships and green marketing practices. Such link therefore outlines that the Canadian firms need to ensure that their purchasing decisions are based upon the overall orientation of their customers. This would mean that Canadian firms will have to look for opportunities where they can capitalize upon such opportunities. (Morali and Searcy 2011) Some research studies have clearly outlined that large firms have however, have linked their procurement decisions with the sustainability. The linking of procurement decisions with the sustainability therefore outlines that the Canadian firms understand the importance of adapting to green marketing practices however; they are not fully adapted at the organization wide level. (SCL 2011) There is also an issue of negotiation and monitoring the suppliers for their continuous compliance with the greener supply chain practices. Large firms have clearly established rules and policies to outline procedures which are regularly followed. These procedures all firms to actually ensure the compliance of their suppliers with established code of ethics. This ultimately therefore translates into the fact that purchasing decisions remain ethically motivated and is based upon established principles for purchasing. (Rowlands, Parker and Scott 2002) Small scale Canadian firms in electronic industry however, are facing difficulties in terms of ensuring that their supply chain remains greener. The lack of resources, technology as well as capability is some of the factors which can actually allow them to develop green industrial marketing strategy. There is a general dearth of venture capitalists willing to invest in renewable and green energy projects. Such lack of interest therefore makes it relatively more difficult for small firms to find buyers on consistent basis through whom they can generate the required funds. It has also been witnessed that the small and even medium sized firms fail to include resources to their core activities. Most of the manufacturing concerns especially in SME sector fail to take into account the fact that non-renewable energy sources as well as packing material may be directly linked with their manufacturing activities. (J.Lopez, Cote and Marche 2005) This lack of understanding therefore often creates significant challenges for manufacturing firms to actually go for adaptation of green supply chain management practices. These issues become more damaging if the manufacturing firms fail to improve their procurement processes. Another significant challenge faced by firms is the measurement of green brand equity in B2B context. This issue is more significant in smaller firms which lack the overall resources to measure green brand equity. Firms also seem to lack the ability to measure the overall impact of the green suppliers and industrial brands on the overall loyalty of the customers. Some firms however, reported that they are witnessing a significant increase in their business owing to the implementation of green supply chain practices for their industrial purchasing and marketing activities. This therefore clearly outlines that the adaptation of green marketing processes can led to significant improvement in brand equity of the firm. Recommendations Based on the above analysis, following criteria may be used for solving this issue: 1. Small firms involving in producing renewal energy sources should be given more resources in training in terms of selecting vendors and suppliers who comply with the green supply chain practices. This would actually increase their capability to understand and examine as to what kind of suppliers are better strategic fit for their overall green B2B marketing strategy. 2. Development of brand equity and recognition in B2B marketing can be another important strategic option available to firms. This will allow firms to view supply chain management in a larger perspective of B2B marketing and how it can actually supplement the overall market recognition of the firm. 3. There is a need for firms working in high end industries such as producing industrial electricity to better engage them in the development of their brand image in their B2B marketing context. Such large firms are not actively pursuing the green supply chain strategies or failed to develop significant strategic objectives to utilize their supply chain for green B2B marketing. 4. Finally firms have to make a cultural shift and bring in values which support the green supply chain in their B2B marketing efforts. A shift towards green industrial purchasing as well as building green brands therefore is one of the key requirements for Canadian firms to remain competitive and meet the expectations of their customers. Conclusion Canadian electricity manufacturing firms need to make a transition towards green supply chain practices in their overall B2B marketing efforts. They need to build better brand image and develop their relationships with suppliers in such a manner that they comply with the acceptable standards for green supply chain. Bibliography 1. Fortes, Jamal. Green Supply Chain Management: A Literature Review. 2009. http://www.business.otago.ac.nz/mgmt/research/omgr/09fortes.pdf (accessed December 17, 2011). 2. J.Lopez, R Cote, and S Marche. Environmental Supply Chain Management Influences, practices, and opportunities in Nova Scotia. 2005. http://eco-efficiency.management.dal.ca/Files/ESCM_FINAL_REPORT.pdf (accessed December 16, 2011). 3. Kim, Ilsuk, and Hokey Min. "Measuring supply chain efficiency from a green perspective." Management Research Review, 2011: 1169-1189. 4. Morali, Oguz, and Cory Searcy. SUSTAINABLE SUPPLY CHAIN MANAGEMENT IN CANADIAN CORPORATIONS:. 2011. http://scmsymposium.org/symposium/PDF/Sustainable_Supply_Chain_Management_in_Canadian_Corporations__A_Pilot_Content_Analysis_Morali_and_Searcy.pdf (accessed December 16, 2011). 5. SCL. Green Supply Chain Management- Manufacturing- A Canadian perspective. 2011. http://www.ic.gc.ca/eic/site/dsib-logi.nsf/vwapj/pg00032_eng.pdf/$file/pg00032_eng.pdf (accessed December 16, 2011). 6. Consumer perceptions of green powerJournal of Consumer Marketing,192002112-129 7. From the fossil fuel era to the age of light foresight 8. The electric century : an illustrated history of electricity in Canada :MontrealCanadian Electrical Association,1990 Appendix GDP Growth of Canadian Economy Source: http://www.ic.gc.ca/eic/site/cis-sic.nsf/eng/h_00013.html’ Green Power Generation Capacity in Canada Technology MW Technology MW Small Hydro 3172 Geothermal 0 Biomass 1935 Offshore Wind 0 Onshore Wind 1049 Wave Energy 0 Landfill Gas 80 Tidal Energy 20 Solar PV 18 Source: http://www.canrea.ca/pdf/CanREA-greenpower-bckgrd.pdf Read More