Assignment Sample on Sustainable Supply Chains
Introduction:
The industry dealing with automobiles is constitutes as one of the most promising sectors in the global economy of this century. The sector includes wide range of activities and businesses that function together to bring the automobile in its final shape in the shops, like designing, production, manufacturing, sales and marketing of vehicles and its spare component. All of these activities constitute independent business in themselves with host of companies competing in each market. Besides, automobiles a significantly build the global economy and one of are referred as one of the most active business sectors in terms of sales, with a annual global profits as large as the sixth largest economy of the world.
Nevertheless, Automobiles also make use of harmful materials like steel, plastics, glass, rubber, etc., which are non-recyclable, non-biodegradable and non-eco friendly. Carbon used heavily this industry and even after its manufacture, becomes one of the chief causes of air emissions, which not only degrades air quality and accelerates the overall global temperature. Given the significant detriments of this industry in global social, economic, and environmental, facets, there has been a shift of focus to sustainability measure by the industrialists and new sustainable markets and supply chains have started gaining competition.
The report published by the World Commission on Environment and Development (WCED) dated 1987 emphasized the need for diverse sectors to integrate sustainability value laden policies within their market processes in order to achieve a better environment. SCs are in charge of the movement of drugs from conception to delivery to the end customer.
The incorporation of the principles of sustainability the entire network of industrial supply chains which contributed to the coining of the word “sustainable supply chain management” (SSCM), paved way to wider growth and interpretation. This study seeks to provide a comprehensive overview of current research on sustainability-related topics in supply chains of automobile management.
Ensuring continuation of the environmentally conscious image of the company:
Authorities have recently increased attention on the car industry. Government rules, example EU Directive on End-of-Life (EOL) Vehicles, have mandated manufacturing companies in UK and rest of Europe to fast pace switching their SCs into green versions.
Different dimensions of Sustainable activities should be incorporated into various stages of automobile industry SCM, such as architecture, sourcing, supplier partnership, packaging, inventory control, and logistics. Discussions and managerial conferences should be conducted on various facets of environmentally sustainable policies, as well as the difficulties that the automobile industry faces in putting them into reality.
Electronix PLC can employ the Green design for its components as a form of ecological designing of its spare parts or product that promotes environmental consciousness. Such design’s key goal should be to reduce environmental damage by aligning itself with living systems and studying product behaviour in and with the ecosystem, by recycling or reusing, also, can be reused or recycled again if necessary, carry an eco firendly packaging, color coating etc., and are manufactured organically.
In this respect, Electronix uses materials like Vegan Ultraleather, Alacantara, etc, for its seats and ‘Plastica’ overall, which are models of green designing employed. However, along with procurement of environmentally conscious materials, they also have to keep in mind its cost and manufacturing efficiency.
Electronix may also resort to Life Cycle Analysis methods, which entails examining content and energy transfer throughout its life expectancy, starting from procurement of raw material to dispatch and marketing of finished goods to consumer accountability. It also considers the holistic consequences for the resources, climate, wellness and professionals.
Based on the approach of Environmental Conscious Architecture Designing it may try out models via a procedure of optimization executed with the motive of reducing a product’s negative effects over its life cycle, such as Regenerative Braking, MPFi, CRDi, Hybrid and Electric engines, and so on.
The method of preparing a programme scheme, executing it, and managing the reliable, cost-efficient processing of the products, continuously upgrading to latest warehousing and inventories, finished goods scrutiny, and keeping a track of related details right from the stage of genesis to the stage of consumption in order to reevaluate its value or proper disposal is known as reverse logistics (RL), which is again one of the techniques that can be employed to ensure environmental reputation of the company.
Some examples of GSCM in Automobile Industry include Ford Motor’s requirement for all its suppliers to certify to the ISO14001, while others (e.g., Toyota, BMW) need the incorporation of “supplier activities” in statements of ecological responsibility.
Cost Effectiveness:
Not only is a properly crafted supply chain successful, but it is also cost-efficient. Efficiency refers to how well a process utilizes capital in order to ensure that processes operate quickly and smoothly. Effectiveness, on the other hand, is the degree to which a particular procedure produces the intended outcomes.
An productive supply chain makes the best use of its capital, whether they be economical, human, technical, or physical. Consequently, operational costs for products and shipping are reduced, and time is saved. Sustainability necessitates significant level of investment, but only 3% of the sector specific executives in the automobiles or even experts claim to spend enough beyond and above what is expected. According to a majority of analysts (50 percent), car companies are spending less than they can to meet their environmental goals, such as those outlined in the Paris Agreement.
The corporation will have to increase stability, optimize prices of raw materials, reduce working capital, alleviate risk, or secure effective management of data analysis and record keepinh to improve supply chain management quality and effectiveness.
Since there is a larger amount of costs involved in engaging Austrian Firm Magnasetyr as the delivery agent, therefore, it is advisable that a more indigenous approach may be pursued. Even if Prodrive is not giving the optimum results, but exporting the parts for assembly to Austria from UK might prove very cost inefficient for the firm in the long run. Also, securing such raw materials which are most cheap as well as eco-friendly might prove as a better alternative to substances like Plastica which are receiving quality complaints, already.
Companies who use the supply chain as a logistical capability have established a long-lasting logistics network. An effective distribution network and a reliable transportation chain serves as mechanism that allows an organization for easy procurement of goods from a factory to a supplier. Since consumers can get goods wherever there is a demand, and market availability can be ensured, so a fast, stable network is an advantage in a competitive market.
Facilitation of Buy-back systems:
Sustainable procurement (SP) (or buy backs) means integrating social, environmental and financial considerations into one pot. It entails thinking beyond conventional economic boundaries and advocating choice based decision making in terms of total cost of ownership, related risks, performance metrics, and societal and environmental consequences.
Buy-back is a sine qua non of sustainable supply chains as it ensures the environmental component and value ethics in the chain remain constant and reduce, reuse and recycle values are maintained. The company has to ensure effective buy-backs of the damaged cars, spare parts, products with electronic or manufacturing defects or even those ones which are being disposed to :
-Ensure proper waste-management
-Reduce cost curtailment and increase cost efficiency of the products.
-The suppliers remain vigilant about their quality assurance and get a direct participatory role in procurement of their defective products.
-Reduction of carbon foot prints and better CSR through lesser production and more recycling.
A very reliable transportation and distribution network that works reversibly both ways should be an ideal one for Electronix as it can ensure reverse management which is vital for buy-backs. Also, sometimes the company might incur some extra costs in maintaining these reverse chains but in the long run it is worth it.
Checks and Balances on Suppliers:
While speaking about the supply chain managemet, it is inevitable that each and every player in this chain needs to perform their respective roles in order to ensure the smooth functioning of the chain as a whole. When there is Transfer of the sustainability burden to suppliers or the chain partners , it entails improving the suppliers’ expertise and abilities ino order for them to achieve and maintain the status quo level of sustainability as the manufacturing company itself, so that the sustainability value ethics and reputation of the company is reflected in their final products.
The current contracted suppliers engage at every level of manufacturing, currently contracted suppliers for viz Lights, Screens, Computer Components , Driver Assistance Systems, and Powertrain, Assembly, have to be regularly inspected and kept under due diligence to obtain reviews about their quality of work, components used, materials applied, and ensured that they arent doing unnecessary cost cutailment, corrupt practices, or anything that might go against the sustaibaility component in the supply chain.
Collaboration key check and balance mechanism that can ensure intra- and inter-firm cycles to adhere to the sustainability in order to transition and track along all levels of the SC. Assisting suppliers, exchanging information with suppliers, delivering support to suppliers, and integrating suppliers with their services and recource components, such as design, procurement, and manufacturing are all examples of in which suppliers can be collaborated with.
Audits should be conducted to track the SC’s comparable efficacy, either through the involvement of the Electronix PLC at the various arrangements and available suppliers’ premises, or via neutral third parties which can ensure compliance, efficiency and accountability. There are different online networks and digital platforms available to measure the sustainability success inidcators of SC partners, such as ‘EcoVadis’, or to share and assess sustainability track records, such as ‘SustainHub’.
Relevant legislations:
Environmental sustainability principles and legal guidance on policy conservation have aided the car industry in expanding environmentally friendly policies. One of the most prominent regulatory requirements is the European Union (EU) guideline on ELV Commission.
There is currently no umbrella law or legislative directive in place in the United Kingdom in this region. International directives like ISO 14001, is a broadly accepted benchmark for environmental management system (EMS) specification for both the focal manufacturers (OEMs) and their supplier partners in the chain.
Another reference is the ISO 20400, which is also a globally accepted standard for sustainable procurement. It gives organizations detailed advice on how to implement legislation, strategy, organizational conditions, and acquisition procedures which get their supply chains in alignment with their corporate principles and goals. It aids in mitigation of the rising risk exigencies in contemporary supply chains.
Apart from them, there are government best practices and safe procurement guidelines available on a sector specific basis which serve statutory but recommendation purposes. The international conventions, treaty obligations on environment like the Paris Agreement or Rio Conference sustainable development goals have to be adhered to as well.
Changes to be made in the Supplier base:
In case of Suppliers such as ProDrive or Woodall Nicolson, the company has already had its share of negative reviews regarding assembly or manufacturing difficulties. Therefore it is only prudent to change the supplier base:
The supplier base is the chief regulating component in a supply chain management. Supply base ought to closely maintained and updated on a regular basis. Such bases in any concern must be handled strategically, rather than tactically, with the understanding that, like the market world where it works, the supplier base is characterized by dynamicism and evaluation. Finally, the company should understand that managing a supply base necessarily imply reducing the number of suppliers.
Supplier base control is a strategy for preparing, creating, and controlling the base that is systematic, systemic, and competitive. the base shpuld be selected based on several consideratins and one such is relationship management between the Customers and suppliers to ensure they will work together to increase quality by spending 80% of their buying money with 20% of their suppliers by focusing on establishing relationships. The 20 percent of your vendors would also act as the source to 80% of the raw material issues since they are the ones to focus on when handling the operation. It isn’t always on investment basis or on whom the company chooses to invest most money that the relation base is built up.
The roles of a Customer and supplier should collaborate and compromise on to be on the same page about the product levels that the supplier can deliver. There must be complete transperancy with regard to that. There must be agreement on the integrative parameters that will serve as a “point of touch” inbetween the two stakeholders. The principle of integrated value chains aims to bring product production and supply chain management processes closer together.
This necessitates that suppliers must be involved at the nascent stages of product development chain, which has the advantages of broadening experience (supplier capabilities and skills in specialist areas), distributing risk ( some implementation costs in exchange for potential gains is charged by the supplier under the supply contract), and minimizing time to market.
The key sustainable concepts could be introduced/leveraged to ensure Electronix are world-leading
i) Profitability vis a vis Sustainability:
Environmental considerations and supply chain management concepts are combined in a values of Green Deevelopment and Sustainability to determine the environmental effect of an organizational supply chain operations. Previously, , most businesses were concerned with lowering unit costs. Many firms will have to wait until later to make the switch and gross landed costs for the start of world trading. This approach got even more famous because it involves cost efficiency and cost containment measures for companies at a tremendous level while alos adopting an environmental approach.
Further, these programs include improvements in shipping quality, operations, raw material availability, and packaging, all of which are very crucial components in determining the strength and growth of the automotive company.
ii) Competitive Advantage of Sustainability:
This is an attribute recognised rightly by Simon Jones right at the outset of the business establishment when he pointed out the potential of eco friendly luxury cars in the market in close alignment with the likes of Tesla or Lucid.
Increased consumer knowledge and regulatory norms have a strategic edge. Such programs focus on shifting their emphasis from enforcement to building value for consumers and shareholders. Sustainability is increasingly being seen as a strategic edge for businesses looking to expand sector specific market share. This type of healthy competition pushes the company towards excellence in terms of productivity, quality, processes and delivery, albeit in a sustainable way.
iii) Supplier Management in Sustainability
This is perhaps the most challenging facet or concept of sustainable supply chains but it is also what ensures utmost returns to the company in long run. Just a limited number of manufacturers follow the standards of large international firms’ codes of ethics, which provide worker compensation and environmental requirements. Wages, working hours, overtime pay, the absence of unions, and social security are still also big issues. The high presence and movement of migrant workers is one factor adding to the difficulties.
Product lifecycle from concept to grave:
When sustainability has to be integrated at the commodity level, it implies that the product/negative service’s that are detriment to socio-environmental consequences should be minimized or eliminated during its development, usage, and end-of-life phases. Environmental Life Cycle Life Cycle Assessment (E-LCA) and Social Life Cycle Assessment (S-LCA) are effective and time tested methods through which these can be achieved.ts. An LCA examines the effect “that a product has on individuals who are engaged with it during its life cycle.”
As a result, an LCA examines these consequences during the phases of resource and commodity utilization, parts and semi-products, manufacturing, use and repair, and recycling and disposal. However, the standard of implementation of E-LCA and S-LCA differs: whereas the focus of S-LCA is meant to be on the organization and its effects on impacted customers, E-LCA lais emphaiss on the systems.
Since the product/service is frequently the sole focal point connecting the business and the end party, that is, the-buyers, ensuring integration of sustainability at the product/service level is critical. The qualities of this product/service, as versatile rankings indexes of product/service express, can thus be used to determine a company’s sustainability from a customer perspective.
Reduction of Carbon Footprint:
- The Company will have to switch to electric vehicles (EVs), which emit zero emissions when driven by renewable sources of energy, to minimize production carbon footprints and GHG emissions.
- Encouraging utmost sustainability and auditing at every level of the supply chain to ensure the end product is hundred percent optimised as per sustainability standards.
- To ingae in Green Delivery, following the best practices guidelines available. Etc. Integrating green supply management entails the following steps: internal green supply management within the company, supplier green chain management in terms if all the suppliers and partners, integration of customer green chain management with due environmnental accountability, taking it finally to the next level by ensuring community i integration of green supply management by following environmental audits, CSR norms and proper waste management ratios.
Conclusion:
With a review of the supplier base in terms of integration of in the sustainable chain, based on the above parameters it is expected that Electronix PLV will be able to trace out an effective roeadmap to emerge as a key market player in the automobile industry ensuring growth and product innovation virtues in the most unprecedented manner.
Overall, the company has a high possibility given that industry is optimistic about its prospects because of active governmental interest and the UK’s productivity and competitive market.
References:
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Çankaya, S.Y. and Sezen, B., 2019. Effects of green supply chain management practices on sustainability performance. Journal of Manufacturing Technology Management.
Dubey, R., Gunasekaran, A. and Papadopoulos, T., 2017. Green supply chain management: theoretical framework and further research directions. Benchmarking: An International Journal.
Esfahbodi, A., Zhang, Y., Watson, G. and Zhang, T., 2017. Governance pressures and performance outcomes of sustainable supply chain management–An empirical analysis of UK manufacturing industry. Journal of cleaner production, 155, pp.66-78.
Fritz, M.M., Schöggl, J.P. and Baumgartner, R.J., 2017. Selected sustainability aspects for supply chain data exchange: Towards a supply chain-wide sustainability assessment. Journal of Cleaner Production, 141, pp.587-607.
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Nakamba, C.C., Chan, P.W. and Sharmina, M., 2017. How does social sustainability feature in studies of supply chain management? A review and research agenda. Supply Chain Management: An International Journal.
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