Sustainability and the Green Supply Chain - Essay Example

?Sustainability and the Green Supply Chain Table of Contents Introduction 3 A Brief Background of BP plc 4 Sustainability Report of BP plc 6 Green Supply Chain Report of BP plc 10 Conclusion 14 References 16 Introduction In today’s contemporary business world, the concepts of sustainability and green supply chain can be identified as interrelated with each other. This can be justified with reference to the fact that contemporary organisations intend to develop green supply chain related procedure in order to sustain in this competitive landscape and thereby, preserve their leadership positioning. The notion of Green Supply Chain Management (GSCM) is often identified as the key attribute in such measures applied by contemporary organisations, fundamentally described as “the process of using environmentally friendly inputs and transforming these inputs into outputs that can be reclaimed and re-used at the end of their lifecycle thus, creating a sustainable supply chain” (Cognizant, 2008). It is worth mentioning that a sustainable supply chain is typically observed as a sole entity instead of a sequence of fragmented constituents that encompass various significant aspects such as manufacturing, procurement and distribution among others (Rushton & et. al., 2010). It can thus be apparently observed that the focus of a sustainable GSCM is to support modern organisations through increased customer value, profitability along with overall productivity and attaining superior competitive positioning over their chief business market participants (Christopher, 2012; Wisner, 2011). The major facets of a sustainable GSCM include safeguarding the environment, value creation, fostering innovation in every operational procedure of the organisation, forming as well as developing effective interrelation with every organisational member and minimising any sort of hazards that are likely to arise while performing diverse operational functions. Specially mentioning, the modern organisations tend to prioritise forming a sustainable GSCM, owing to certain significant benefits that it delivers to them in this present globalisation and technological era. These benefits are usually recognised in the form of enhanced brand image, lessened logistics, manufacturing or other related costs, optimised manufacturing procedures, expansion to new business markets and developed SCM process among others (Morana, 2013; Dai, 2011; Cognizant, 2008). With this concern, the essay intends to describe the imperative aspect of sustainability and green supply chain by considering a particular real organisation, which has an international profile. In this regard, BP plc has been taken into concern as the organisation. The major concerns of sustainability along with green supply chain relating to BP plc have also been described in this essay. A Brief Background of BP plc BP plc, which was formerly acknowledged as British Petroleum, is currently regarded as one of the foremost global oil and gas companies throughout the globe. The company conducts its operational functions in numerous nations, employing a substantial number of personnel that stood at nearly 85,900 during the year 2012 (BP plc, 2013). The company mainly deals with various sorts of business functions ranging from delivering fuel to customers for transportation, energy for light along with heat and lubricants for keeping diverse kinds of machines to petrochemical products that are used for preparing daily items (BP plc, 2013). The mission of the company is to become a worldwide leader in the respective industry. The company focuses upon maintaining certain values that are coined as one team, respect, safety, excellence and respect in order to attain its predetermined business targets (BP plc, 2013). Assessing its recent sustainable strategies, it has been recognised that BP is often regarded as one of the well-known brands, which has been operating since its commencement in the 19th century. One of the major strengths of the company can be apparently observed in terms that it possesses its own distribution along with refining market channels, resulting in making operational processes more sustainable in comparison with its major business market competitors. In addition, better utilisation of accessible resources, deployment of advanced technologies and delivering quality products to the worldwide customers are the other chief strengths possessed by the company (Scribd Inc., 2013). It can be affirmed from a broader perspective that BP has been able to sustain its business in this competitive era with the virtues of major technology programmes as taken into concern by the company. In this similar concern, it can be viewed that the technology programmes of the company has been segregated into upstream and downstream business or operational segments. When performing its functions in the upstream operational segment, the company has been observed to conduct flagship programmes of technology. This particular technology programme emphasises developing its sustainability strengths especially in exploring deepwater and gas value chains among others. When performing in downstream business or operational segment, the technology programme mainly focuses upon extracting and refining gas and oil particularly into energy effective products for the consumers and the businesses with due significance to energy efficiency measures. Apart from the above discussed technology programmes, the company also utilises a technology relating to alternative energy, which plays an imperative role in creating uncontaminated bio fuels, resulting in lowering carbon emissions by a certain extent (BP plc, 2013). Sustainability Report of BP plc In order to determine about how BP is adopting the principles of environmental along with social responsibilities, especially in its SCM and logistics operations, the objective of BP can be determined. In this regard, the prime intention of the company can be apparently viewed as generating greater value for its several stakeholders along with energy supplies for the entire globe in a secured and responsible manner. From the environmental perspective, the company is making deliberate efforts to manage the imposition of environmental impacts upon its various projects along with SCM and logistics operations with the intention of sustaining in this competitive environment. It can be apparently observed in this similar concern that the company is adopting the principle of an effective Operating Management System (OMS) for the purpose of dealing with the environmental impacts throughout its operational lifecycle (BP plc, 2013). At the functional or the group level, the company reviews its management strengths on the basis of certain material issues on a yearly basis that include emissions generated from the discharge of greenhouse gases, water scarcity level related consequences and affects observed in the underdeveloped protected along with sensitive areas. Accordingly, the company tends to recognise emerging problems or risks and evaluates methods to lessen them by a considerable extent at all these levels. This can be better explained by taking into concern an instance. The critical concern of water scarcity is often viewed to be a potential problem or risk for the company, which restricts it from performing various operational functions effectively. In response, the company has been observed as involved in developing effectual procedures and tools for the purpose of mitigating the issue associated with water scarcity (BP plc, 2013). The formation along with the development of OMS by the company in order to handle environmental impacts throughout its SCM and logistics operations can be better understood with the help of the following pictorial illustration. Source: (BP plc, 2013) The above depicted OMS principle or approach has been designed by the company in order to drive incessant enhancements, particularly in environmental along with social performance through focusing upon the development of certain vital approaches such as operational integrity, safety and risk management. It can be viewed that the OMS incorporates the prerequisites on environmental along with social accountability, security and health as well as safety into a common management structure followed in BP. Notably, the OMS principle or approach supports SCM and logistics operations of the company throughout the globe in assessing and handling their environmental along with social impacts by conducting a yearly OMS assessment. This assessment further aids in recognising the problems or the risks that emerge in SCM and logistics operations of the company and then devising appropriate action plans to manage the same (BP plc, 2013). With regard to evaluate about how BP is adopting the principles of environmental responsibility, particularly in its SCM and logistics operations, it can be apparently observed that the company is adopting the principle of identifying, assessing along with managing risks relating to its oil spill that impose extensive impact upon the environment. In this similar concern, the company strongly believes that by recognising and then assessing the potential risks relating to oil spill and its impact upon the environment, it can form suitable oil spill concerning response and crisis management policies. Specially mentioning, in order to lessen the unfavourable impacts of oil spill upon the environment, the company has established an oil spill associated modelling system since the year 2012. Apart from establishing the modelling system, the company also has been focussed upon certain other controlling aspects in order to safeguard against the imposition of unfavourable impacts of oil spill upon the environment. These aspects comprise enhancing the prevailing modelling tools linked with oil spill, performing staff training and developing socio-economic along with environmental data that is essential in the models. The company also adopted and executed certain innovative technological advancements like remote sensing satellites in order to identify the risks associated with oil spill and their negative impacts upon the environment (BP plc, 2013). Apart from adopting the principles of environmental sustainability in SCM and logistics operations, BP also followed certain principles of social sustainability in order to attain superior competitive positioning over its chief business market competitors and sustain in this present day business context. In this regard, the company had also adopted one of the principles of social sustainability i.e. forming along with developing constructive interrelation with indigenous people, which eventually supported the company to preserve its social licence towards performing SCM and logistics operations effectively. It has been apparently observed that the company desire to respect the rights, education levels, traditions, income structures and the values of the indigenous people for the purpose of revolutionising the entire procedure relating to SCM application along with logistics operations of the company. The areas wherein the company has been identified to develop a robust affiliation with the indigenous people are Indonesia, the US and Canada (BP plc, 2013). In addition, the company has also been adopting the approach of financial transparency as a form of social sustainability principle in its SCM and logistics operations. The approach of financial transparency signifies that the company works collaboratively with various governments, international agencies and non-governmental organisations with the intention of enhancing transparency in its various operational functions such as logistics and SCM among others. Thus, in order to maintain transparency in various operations, the company engages itself in paying taxes to the governments of those particular nations wherein it operates its business functions. The company believed that the payment of taxes to the governments would eventually result in maintaining transparency along with building superior governance structure aiding its sustainability performances. The following chart would depict the tax amounts that are paid by the company during the periods ranging from 2008-2012. Source: (BP plc, 2013) When determining the way BP is adopting the social sustainability principle in its SCM and logistics dimension, it can be affirmed that the company broadly takes into concern the various aspects of human rights as a mechanism to manage these operations. In this regard, the company anticipates that its suppliers along with the contractors would act consistently in accordance with the developed Code of Conduct, which strictly outlines the requirements that no forced or child labour would be executed while performing these operations (BP plc, 2013). Thus, based on the above discussion, it can be affirmed that BP has been adopting the principles related with environmental along with social responsibilities in its SCM and logistics operations in order to enhance its overall financial performance at large. Green Supply Chain Report of BP plc Conceptually, a green sustainable supply chain is fundamentally described as the procedure of adopting and implementing effective environmental measures for protecting the environment from unfavourable impacts imposed by any external or internal force. It has been apparently observed that the perception of a green sustainable supply chain tends to lessen operational costs while supporting the environment. Notably, there exist various facets of a green sustainable supply chain that could be enhanced from the perspective of sustainability aspect. One of these facets includes the design along with the production of a product without imposing unfavourable impacts upon the environment. It can also be affirmed that the organisations belonging to this modern day context are often viewed to follow and adopt the guidelines of a green sustainable supply chain in order to sustain their respective businesses in this present day context. Thus, in precise, a green sustainable supply chain aids the modern organisations to attain superior competitive advantages in terms of restricting the environment from being affected and most vitally, through attracting substantial customers towards buying the products (MHI, 2013; Basu & Wright, 2012). In relation to the above discussion, the GSCM functions in BP can be determined as based upon its two business or operational segments that include upstream and downstream functions. Where on one hand, the upstream business or operational segment of the company represents the exploration, advancement and the production activities that are performed through global functions having specialist fields of expertise; on the other hand, the downstream business or operational segment of the company signifies the operations of hydrocarbon value chains that mainly cover three prime business areas such as lubricants, petrochemicals and fuels. Besides, the GSCM of BP can also be assessed on the basis of certain important factors that entail transporting, trading, manufacturing and marketing various sorts of products offered by the company. Moreover, the other factors comprise the report concerning the emissions resulting from greenhouse gases, engagement of group priorities and the ideas regarding diversity along with inclusion. In relation to transporting and to trading various products, the company normally moves hydrocarbons through ships, trucks, pipelines as well as trains and thus, it is able to capture greater sustainable value throughout the procedure of supply chain. Additionally, when manufacturing its product offerings, BP is typically observed to be refining, processing along with blending hydrocarbons in order to produce lubricants, fuels and petrochemicals. In terms of marketing the products, the company also aims to supply its worldwide customers with fuel for transportation, lubricants in automobiles and petrochemicals (BP plc, 2012). Apart from these, there are certain other imperative factors that clearly depict the GSCM process in BP. One of these factors can be associated with submitting the report of emissions that are released by greenhouse gases while transporting along with trading, manufacturing and marketing diverse product offerings of BP. It can be apparently viewed that the company largely focuses upon preserving this vital factor, as it extensively imposes unfavourable impacts upon the environment and also on the overall sustainable performance of the company. Apart from recording the emissions level that are commonly generated through the release of greenhouse gases, the company also records the quantity of individuals belonging to various nations of the world on a yearly basis who are employed in the organisation. This ultimately depicts the extent of diversity along with inclusion prevailing within the organisation, which can be duly considered as the other decisive aspect of a GSCM. In relation to the factor of engagement of group priorities, the company also tends to measure about how the personnel belonging to the company are involved with its strategic priorities concerning value, safety and trust (BP plc, 2012). These can be better understood with the help of the following diagrammatical representation. Source: (BP plc, 2012) While discussing about the GSCM process practiced within BP, it has been evident that the worldwide growth in energy consumption rate slowed significantly in the year 2012. In order to address and enhance this situation, the company is making deliberate efforts towards forming an effective GSCM through periodically refining and exploiting pioneering technological advancements in its SCM functions along with logistics operations. In relation to the aspect of creating an effectual GSCM to suffice the purpose of accelerating growth in energy consumption, the company has been viewed to introduce the service of Refining & Logistics Technology (R<) in its recent endeavours. In this regard, R< is often regarded as the Refining & Marketing Shared Service, which generally provides active support to the company in growing the capability of its refining along with logistics assets. It can also be affirmed from a broader perspective that the company introduced the aforesaid services in order to safeguard the environment from being negatively affected while conducting various operations linked with SCM and logistics. It is worth mentioning that with the introduction of R< service, the company tends to generate certain sustainable solutions in the form of applying incessant technologies, exploiting accessible technical resources and sharing diverse knowledge linked with its imbibed refining and logistics technology (BP plc, 2013). The company strongly believes that the approach of R< would aid the company in augmenting its growth in worldwide energy consumption, which has been extensively lowered due to financial downturn. Most importantly, the company realised the significance of creating a sustainable GSCM in order to respond towards the recently identified incessantly altering business environment. Certain crucial factors that include increased level of globalisation along with internationalisation and prevalence of extreme business market competition, eventually contributes in transforming the contemporary business environment by a greater extent. With regard to the aspect of GSCM, it has been noted that the company in the year 2012 continued to work collaboratively with various federal along with state trustee agencies for the purpose of evaluating the impact that is imposed over environment while conducting its SCM, logistics operations and other related services (BP plc, 2013). Conclusion In a nutshell, it can be affirmed from a generalised understanding developed from the overall study that the vital aspects of sustainability and green supply chain plays an imperative role for contemporary organisations in attaining a superior competitive position over its major business market participants. In this similar concern, it can be apparently observed that BP is adopting the principles of environmental along with social responsibilities, especially when performing its SCM and logistics operations. Relating to the principles of environmental responsibility, the company has been noted to focus much upon managing its environmental impacts, wherein it conducts its business. The company manages the environmental impacts emphasising the enrichment of biodiversity, working deliberately in diverse sensitive areas, evaluating environmental performance on a periodic basis and recognising the risks that are associated with oil spills. On the other hand, the company has also been viewed to adopt the principles of social responsibility through building local capabilities, preserving financial transparency and working upon community investments among others. From the perspective of social responsibility, the company also considers the important aspect of human rights while performing its SCM and logistics operations. Apart from maintaining sustainability in SCM along with logistics operations, BP has also been apparently observed to form and develop an effectual GSCM for the purpose of raising its worldwide energy productivity, which had lessened due to financial slowdown. In this regard, the company introduced its R< service as a key element behind the establishment of an efficient SCM process within the company, which aided it towards growing the capability of its logistics technology. Thus, it can be concluded that the approaches of BP towards preserving sustainability and forming an effective GSCM would facilitate the company in accomplishing its predetermined business or operational targets. References BP plc, 2013. BP At a Glance. About BP. 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