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Summary Strategic Supply Chain Management Notes Lecture articles for week 4
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Sustainable development: is “development that meets the needs of the present withoutcompromising the ability of future generations to meet their own needs.” WCED 1987 ( needs VS
wants)
Sustainability can be regarded as involving the three Ps: people, planet, and profit.
Propositions:1) The linear supply chain paradigm limits our understanding of the real nature of
supply chain dynamics and 2) Design of truly sustainable supply chains needs to be informed by a
systems view of i) the supply chain ii) interactions with supporting systems and iii)the environment
Rebound effect (or take-back effect) is the reduction in expected gains from new technologies
that increase the efficiency of resource use, because of behavioral or other systemic responses.
ARTICLE 1: DON’T TWEAK (LEE)
In order to make SC sustainable: ‘’substitutions’’ (i.e. swapping one material, vendor, location,
production step, or mode of transportation for another). Although each change might seem
worthwhile, such actions can, when you factor in the unintended consequences, end up raising
financial, social, or environmental costs and lead to supply chains that are not, well, sustainable.
Instead, companies—throughout the supply chain, not just at the end—should take a holistic
approach to sustainability and pursue broader structural changes than they typically do. These may
include:
1) sweeping innovations in production processes,
2)the development of fundamentally different relationships with business partners that can evolve
into new service models
3)collaboration with multiple companies to create new industry structures.
What ESQUEL did:
1) helped independent farms and those it owned in Xinjiang try sustainable- farming techniques
2) Esquel also introduced different harvesting techniques
3) changed its supplier-customer relationships with independent farmers to be more like
partnerships
1)Manage Sustainability as a Core Operational Issue: Treat sust. as internal to operations like
inventory, cycle time etc. (Example nike’s SC manager’s accountable of sust. improvements). How:
Identify where environmental and social-responsibility problems or opportunities lie. Evaluate
alternative ways to make improvements that may require trade-off s between the two types of
performance.
2) Coordinate with Neighbor’s Operations: internal operation can achieve only limited
sustainability improvements on its own. Its adoption of a new material, component, or technology
may require changes in adjacent units. How: Start coordinating efforts by identifying all the
overlapping activities. Then, working with the other parties, explore improvements you could make
together that would transcend what any of you could achieve on your own. (Example: In order to
reduce the carbon footprint of packaging materials, Safeway collaborated with its partners to
establish the changes.)
3) Examine the Extended Supply Chain: don’t focus only to the direct suppliers or customers but
also to the 2nd or 3rd tier suppliers and customers. How: Map out your extended SC and figure out
which performance indicators must be monitored to ensure that all members meet agreed-upon
standards and targets. The collaborate with members to make improvements. Information is
essential; educate members about why transparency is needed and how the information will be
used. (Bad example Matel’s paint scandal from 3rd tier supplier, Good example: Starbuck’s program
CAFÉ: rewards (premium price) for the best farmer that use sustainable ways of growing products,
loans to help etc.
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