Assignment Sample on Sustainable Supply Chains
INTRODUCTION
Sustainable supply chain management refers to mixing of the practices which takes into consideration the environmental and financial viability aspects. It is implemented from the step of product design and it ends with the disposal (Bastas and Liyanage, 2018). It is helpful in reducing the total carbon footprint as well as enhancing optimization of operations for achieving greater cost savings and profitability. A company should pay equal attention to its supply chain management for making it sustainable. This report is based on a startup company named Electronix Plc which is situated in the West Midlands. It is a manufacturing of electric vehicle. Further, this report comprises of analysis of the sustainability performance of organizations supply chain, comparing the company with another organisation in the same market and application of tool/framework/technique for improved practices.
TASK 1 – Analysis
Sustainability performance is the integration of environmental, social and financial objectives in order to deliver main business activities and maximize value. There are many benefits available to a company which performs efficiently and effectively on sustainable level (Bendul, Rosca and Pivovarova, 2017). This company was formed by Simon Jones, a serial entrepreneur for developing high and luxury vehicles which are suitable for the environment. He has taken into account number of things such as mild range, body parts, and materials to be used for interior etc. A detailed analysis has been provided below:
Quantified analysis of CO2 and other emissions
The team of Electronix Plc has provided that it has complied with all the norms and requirements for developing the electric vehicle model named Pegasus 4S. It has tried to keep the emission level as low as possible as it’s the main objective of the company. Pegasus 4S model is a fully electronic salon car with a 400 mile range and0-60 mph time of 2.8 seconds.
Tailpipe CO2 emissions stood at 299 g/km. It has also obtained Euro Standard 6 for Air quality. NGC rating is 94. The rating provided by NGC is not good as compared to other cars of the competitors such as Tesla and Lucid. It is required to improve its existing CO2 emission and other waste management system.
Provided further, UK government has provided that largest greenhouse gas emission is being done by transport which accounts for 28% of CO2 gas emissions. 87% of this is because of road transportation. Electronix obtain the raw materials from different countries and some of them are in Europe only such as it outsource tyres from France. It also contributes to emission of such harmful gases (Dubey et. al., 2017).
In addition to this, a battery car is likely to produce 66% lower emission than a petrol car and 60% then a diesel vehicle. The admission is likely to fall if there is a huge number of electric vehicles on the roads.
It has been observed that, company has worked on its emission and try to reduce it from 19.3 to 7.5 in the current year. This data is regional waste to landfill. Waste to landfill for vehicle which is expressed in kilogram, has been noticed that it has decreased from 15.6 to 8.1. Hazardous waste generation was 26.7 and now it is at 21.3. Hazardous waste generation per vehicle, it is started from 9.3 and now it is 7.
It can be observed that company is working hard for reducing over CO2 emission and taking measures for improving its supply chain management.
Social impacts
The emission of CO2 gases is harmful for our environment because it affects the lives of people. Number of diseases have seen increased in the last few years such as cardiovascular diseases, respiratory issues, early death, and many other problems (Fahimnia et. al., 2017). From the reports provided by the government, it has been estimated that the monetary amount of maintenance health in a polluting environment at 1340 euro per year. These are the hidden costs which must be added to the overall cost of co2 emission. The cost of reducing such gases have stood at 247.77 euro per year for the ten years lifespan of an e-vehicle. Provided, charging must be done with the updated electronic grid. There are other annual social cost such as urban Road noise which is estimated to be between 7-10billion euros every year (Espinosa and Walker, 2017).
Apart from these, developing more and more electric vehicles help in in increasing the overall profitability of Government and the company by installing high power charge points in busy locations which are likely to generate higher profit. UK Government has reduced the rigid requirements in order to boost developing electric vehicles every year. Furthermore, it has been provided that 1.8 billion people are expected to join the global consuming class by 2025 which is a straight 75% increase over 2010. Investing into to such companies are likely to eat good profit in the future. Sustainable supply chain management has impacted human rights and the labor working in the organization. Also, there is a reduction in social issues. It provides a protection to the rights available to a person and working in the organisation. If right approaches are implemented, the company can earn huge profit by being environmental and sustainable conscious (Evans et. al., 2017).
Sustainable supply chain management reduces the overall cost and enhance inclusion of all the people which is the company is a part of society. When the cost is reduced, an organisation is likely to spend more on the betterment of people and the areas where it is operating.
Complexities of balancing environment and social aspects with economic goals
Every organisation is here to make profit which is necessary for its survival in the long run. It is necessary to generate revenue and spend on social and environmental aspects as a part of corporate social responsibility (Ghadimi, Wang and Lim, 2019). Sometimes it become difficult to create a balance between environmental and social aspects are non-financial whereas economic goals are financial in nature. Some of the complexities in this regard have been provided below:
- Electronix using a material called plastica which has been opinionated to crack in low temperature. This is a step towards saving the environment but may generate doubts among the customers about its durability.
- It has to outsource number of items from different countries raising the cost leading to higher prices of the final product. Outsourcing such products is important because of the quality that other country provides.
- Difficulty in providing satisfaction to the customer as there are other competitors who may provide similar articles at much lower price (Huang al., 2018).
- Shipping the product is also a huge task which may be expensive because the production of raw materials in the UK has been stopped in this case study.
- Sustainable supply chain management has to take into consideration the environmental aspect at every state without skipping any point. If it contravenes any provision or unable to fulfill the legal requirement related to environmental and social aspects, then it can add a burden on the company.
Electronix must focus on reducing the carbon emission as well as earn profit by developing the product required by the customers. It must review the existing policies on a regular basis in order to adjust with the changes taking place in the market since it is a key to be sustainable.
TASK 2 – Benchmarking
Sustainability approach is can be defined as something which does not compromise with the resources in order to satisfy the current needs of people. Environment is facing many problems and the survival of mankind is becoming difficult with the time due to the level of pollution. Companies, big as well as a small are taking their initiatives in restoring the environment by reducing CO2 emission (Ji and Darnall, 2018). With the help of benchmarking, Electronix can be aware of those areas which may require improvements. The company chosen for comparison of supply chain management is Tesla. A comparison has been conducted below:
- Procurement- Tesla procures products from different companies such as Daimler and Toyota in order to keep the costs low of some basic component parts. It has created partnership with number of companies who are already into car manufacturing but fuel efficiency cars. It also buy batteries from those suppliers who cannot at all into car manufacturing. On the other hand, Electronix has executed a contract with Prodrive for manufacturing the product. It has not formed any partnership instead it is buying the raw materials direct from the local market of respective countries as mentioned in the case study (Jia al., 2018).
- Production- Tesla is following vertically integrated supply chain which sometimes cause delays in production leading to breakdown in the supply chain. Majority of the products are being manufactured either in Mexico for China. It has a plan to who build a plant near to these 2 countries so that all the parts can be manufactured on site. However, Electronix, bringing parts from different countries and assembling then at one location. It has no such plan of developing a plant manufacturing all the products at one place. The cars will be produced at Banbury which is located in UK only (Klopp and Petretta, 2017).
- Distribution- Tesla targets the countries where the customers have interest in electric vehicles. It follows vertical supply chain integration which allows it to have ownership on each step in the supply chain. For example, it wish to own services, software to be used in the cars along with the hardware. On the contrary, Electronix, has no such consideration and it wish to own the final product. It does not allow any distribution to any other companies. It can be said, it does not follow vertical supply chain integration (Koberg and Longoni, 2019).
- Supplier management- Tesla has hundreds of suppliers in the US, Europe and Asia. This causing issues for the company to manage its supply chain effectively. Therefore, the decision to build gigafactories has been taken to avoid any delays and mis management with the suppliers. In relation to Electronix, team is working hard for reducing any delays and launch the car on time. It is already running late on its launch due to the pandemic situation around the world. Furthermore, it has also included the provision of reverse manufacturing supply chain where the batteries will be sent to headquarter in UK at the expiry (Kot, 2018).
- Warehousing- Tesla has set up warehouses at different locations and the inventory has contributed over $30 million in cash. It has built a new house for increasing the high volume production of model 3. It also has warehouse management system project. In connection with Electronix, has warehouse but in limited area which may be a problem in supply chain management. It may need to have new areas for warehousing purposes. This may add additional cost to the overall costs.
- Transportation and logistics- Tesla is focused on reducing its transportation and logistics cost by bringing manufacturing and warehousing plants at the same place. It has started to build gigafactories at Mexico and China, adjoining with these two places it has also started to build warehouse for reducing the logistics costs. On the other hand, Electronix is required to plan for reducing the logistics’ costs as it is important raw materials from different countries. It may also adopt the same strategy as opted by Tesla (Lim al., 2017).
- Packaging- Tesla is known for its after sales services and the packaging that it provides at the delivery of the final product. It takes extreme care at the time of transporting the final output to the end user. Electronix is a new company which should be focused on keeping the packaging good and attractive.
TASK 3 – Application
Application of one of the tools, techniques of frameworks for improving the existing sustainable supply chain practices
Waste hierarchy refers to an approach which is the best suitable alternative from the environmental perspective by considering the life cycle of material. A material is assessed on environmental basis at all the stages right from the initiation to its recycling. It is focus on preventing amount of waste being generated by companies and others. The priorities tops from reusing, recycling, recovery and disposal (Moult et. al., 2018).
The first step is for prevention which provides that if a person fails to prevent the waste then it should be reused. If it cannot be reused then it has to be recycled if recycling is also failed then there should be recovery of other values and finally the landfill which is disposal of the waste. It has been applied earlier for reducing the carbon footprints. Apart from this, there are number of legislation which should be abide by Electronix Plc in order to reduce the waste and becoming sustainable.
It can be applied in the current company in the following manner:
Prevention- this step is related to navigate the practices in a manner which controls be emissions to a great extent. Electronix uses of material called plastica which is environmental friendly. The electronic engine has a 400 mileage range and 60 mph times of 2.8 seconds. It has used vegan ultra-leather and alcantara materials from Ultra fabrics Inc. which are according to the environmental. It can use the better quality of such material and make its engine more powerful which is suitable to the environment for preventing the emissions (Pires and Martinho, 2019).
Reuse- this is stage of the hierarchy is concert with use of a serviceable article or item which can be given to another person for using it without considering it as a waste material. In other words, it is about using second hand products. Electronix can sell its used parts other car manufacturing companies and avoid disposing off as it will become a waste. It is recommendable for the company to go for the system if it fails to prevent the emission and wish to upgrade the existing mechanism to a higher level. Reusing helps in declining the amount of waste material in the environment. It can also use those parts which have been already used but for a shorter period of time, intact and safe. It can be done so with some alteration or repairing which will modify the whole part into something new. It is a great step in reducing carbon footprints. Since, the company deals in electric vehicles this is step can become successful if applied correctly (Reefke, and Sundaram, 2017).
Recycling– it refers to changing de material into a new product with the characteristics of old one. When an item is recycled, it should have equal or greater value then it had earlier. There are to specific distinctions closed loop and open loop. Former is consult with including characteristics similar of the earlier one and latter is when a material is recycled making its non-recyclable in the future. It is also known as down cycling. Both options have greater benefits. It is recommended for Electronix to opt for closed loop since it will have the opportunities to recycle it in future which is not possible in open loop. Recycling is done when both prevention and reusing are serving the purpose. It can recycle some of its parts and use it in in manufacturing a new product which well satisfied customers to a great extent (Schneider, Wickert and Marti, 2017).
Recovery– this stage of the hierarchy pyramid plays a role in recovering the energy value from certain ways like plastics, tyres and wood. It also includes the waste which are left after recycling a product. Electronix may go for this in order to recover the energy value from the raw materials which have been specified above. It can avoid mixing different types of rigid plastics in order to attain higher energy value.
Disposal- this is the last step which is to landfill. It is ranked as the least favourable option since it has low environmental benefit. When a raw material is disposed of, it is likely to provide low value. Apart from this, gases like methane is also generated from decomposition which is not at all good for productive energy generation. This is step should be avoided Electronix as it may burden it with legal costs for not complying with the environmental provisions. It should be used as the last resort when all the above mentioned stages have failed (Taušová et. al., 2019).
With the application of waste hierarchy, Electronix Plc can improve its existing waste management policy and measures that it take to control CO2 emission. It is also helpful in being sustainable and survive in the competition by achieving competitive edge. Reducing the emission of waste and harmful gases ultimately lower down the overall cost. Every company is required to work for its community and society and using this approach can help it attract use number of customers. It can also increase its ranking in the environmental index of the country.
CONCLUSION
From the above report, it can be concluded that sustainable supply chain management combines all the practices from which time a raw material is chosen to its recycling. The activities included are according to the environment. Before proceeding with the development of a product or supply chain management, calculation of current level of admission must be done. It is to determine the social impact and level of complexity that a company may have in striking a balance between economic goals and environmental and social aspects. In addition to this, entities should look for their competitors who are doing a great job in the same stream. It can be done by comparing the current activities with the benchmark entity in the market. Lastly, one of the appropriate frameworks/tools/techniques must be chosen by organisations for reducing carbon footprint and enhance sustainable supply chain management practices.
REFERENCE
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