Perspectives on Supply chain sustainability

V.Vinay Raju, Jindal Global Business School, Sonipat, Haryana.

(E-mail: 12jgbs-vvraju@jgu.edu.in, Mobile: +91 9050423191)

 

The word was revolving around my mind for hours what it is exactly, why is it and how does it function?

A supply chain is a grid of facilities and distribution options of a firm that performs the tasks of raw materials procurement, material transformations into finished products, and the distribution of these finished products to customers [Ram, 1995]. Supply chains exist in both service and manufacturing organizations, although the complexity of the chain may vary greatly from industry to industry and firm to firm and it connects an organization input to its output with additional challenges of lowering cost, improving efficiency, ensuring definite time frame etc. The word sustainability refers to the capacity or power to endure things through regular maintenance, Nourishment, contrasting and development and it holds the same meaning when assigned with the supply chain.

Eco awareness, cooperative business relationships and applied sustainability concepts have immediate business impacts and reduce business sustainability risks by creating SCM alignment. Incorporating sustainability concepts into business relationships creates at a minimum line of sight across the value chain. This visibility provides a path to the greater value of alignment and engagement [Julie, 2012].

 Supply chain sustainability is important in current and also for future trends of business and can be an interest of maximum number of production houses and industry. A recent survey conducted by Centre for Industrial Research and Service (CIRAS) reported that 30% of manufacturers are gaining new profits directly from sustainability initiative, this shows the clear opportunity for bottom line results of implementing sustainability. The major issues in supply chain sustainability are in advance attention in both academic and literature.

The basic roadmap for supply chain sustainability formulates as follows:

Evaluating current supply chain – This forms the first and the major action to be performed in an assessment of current supply chain in terms of financial, social and environmental status and needs.

Developing a vision - a long term vision should be attained for supply chain sustainability. The manufacturing/production houses should know and understand the current situation of sustainability initiatives and issues in the entire supply chain.

Creating a road-map – while creating this the company should focus on making the basic compliance guidelines for their own facilities.

Execute review and change – organization or a company should understand the better impacts of decision on sustainability. They should review and update them-self regularly. Since the decision taken today is right but may be different   tomorrow or the coming days.

Practice is an area and art of boundary of it. One of the key aspects of it is the holistic view that is applied in understanding the total impacts of products or service and focusing improvements in areas with the most impact. This approach encompasses both the entire life cycle of a product or service and the entire supply chain of that service.

Supply chain sustainability majorly consists of three factors, which is also called as triple bottom-line for the supply chain sustainability.

1.      Environmental Performance: Implementing Green Supply chain and developing efficient economic methods by using control mechanisms will help in enhancing industrial ecology performance through the supply chain.

Figure 1: Industrial ecology

(Source: http://valuestream2009.wordpress.com/2010/09/30/industrial-ecology-revisited-its-place-in-the-green-economy-supply-chain-management/)

 

2.      Social performance: Domestic suppliers, manufacturers, distributors, local retailers, consumers working in feed forward and feed backward loop will enhance the social performance of supply chain sustainability.

 

Figure 2: Social co-existence aiding supply chain sustainability  

(Source: http://www.sciencedirect.com/science/article/pii/S0959652608001455)

3.      Financial performance: Success of Financial performance in supply chains primarily can be linked to currency fluctuations, raw material sourcing. Hedging the risks associated with them will help to ensure better financial performance.

Summary

The sustainability of business and its impact on the supply chain has to be well documented by creating alignment across the value chain. The implementation of above said three sustainability factors helps to achieve operational efficiency, reduce cost, and add value.

 Reference:

1. Julie Urlaub, Thursday, December 23, 2010, CSR 2010: Emerging Career Choices in Supply Chain & Sustainability. Retrieved from http://blog.taigacompany.com/blog/sustainability-business-life-environment/csr-2010-emerging-career-choices-in-supply-chain-sustainability
2. Kristine A. Wong, October 25, 2012, Wal-Mart commits to scale sustainability of global supply chain. Retrieved from http://www.greenbiz.com/news/2012/10/25/walmart-commits-scale-sustainability-global-supply-chain
3. Mr. Craig R. Carter – International Journal of physical distribution and logistics distribution – a framework on of sustainable supply chain management.
4. Mr. Gabrielle M. Blue – Inc.com – how to build your sustainability into your supply chain.
5. Ram Ganeshan, Terry P. Harrison, 1995, An Introduction to Supply Chain Management. Retrieved from http://lcm.csa.iisc.ernet.in/scm/supply_chain_intro.html
6. United Nations Global Compact – issue –supply chain sustainability resource and practice.