Sustainable business-sgd-2012-iitr


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Sustainability is a vital issue to be tackled today. Corporate and organisations need to be concerned and be able to measure their performance based on the new measures of performance which are green and sustainable.
Sustainable Supply Chains offer a good scope for researchers .

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Sustainable business-sgd-2012-iitr

  1. 1. SustainableBusiness : Impressions,Implications and ImpactsDr S G DeshmukhDirector,ABV-Indian Institute of Information Technology & ConferenceEmerging Challenges for Sustainable Business1 June 2012 at DOMS, IIT Roorkee
  2. 2. Credits..• Credits: This presentation is based on thedoctoral work of Mr Apratul Shukla• Apratul Shukla, 2011, Critical Analysis ofSupply Chain Management in IndianContext: A Case of Suitability, Scalabilityand Sustainability, Unpublished Ph DThesis, IIT Delhi6/11/2013 2
  3. 3. 3Outline of the Presentation• Introduction & Motivation• Impressions : Sustainabilitydefined• Implications• Impacts on Supply ChainManagementClosing Remarks
  4. 4. Opening quote….“We do not inherit the earth from ourancestors, we borrow it from our children…Native American ProverbSource:
  5. 5. Impression 1 : SustainabilitySustainable Development (SD)Meeting the needs of the present generationwithout compromising the ability of futuregenerations to meet their own needs-- Brundtland Commission, 1987 –
  6. 6. Impression 2 :Basic Concepts of SustainabilityOur common responsibility(Eco-)Systems ThinkingCarrying fullest capacity of the planetto absorb waste and support lifeSocial CapitalEquity, Dignity, Sense of JusticeAll Stakeholder voicesEconomic, Environmental, Social/Culturalresponsibilities of business to act as aResponsible CORPORATE CITIZEN !
  7. 7. Impression 3: SustainabilityEconomic AspectsGood JobsFair wagesSecurityInfrastructureFair TradeSocial AspectsEnabling workingconditionsInclusive educationCommunity & CultureEquitable justiceEnvironmental AspectsZero Pollution &WasteEnergy ConservationMinimum disturbance toMother NatureSource: Willard B, 2009, “The business case for sustainability”, Green innovationsconference,
  8. 8. Sustainable Company PyramidIntangiblesNonfinancialsReputationConcern for EarthTangiblesFinancials20%80%
  9. 9. Implications..• Interpretation of sustainability –Addressing key business issues• Linking global and local issues, trends anddevelopments with business strategy andactivities• Engage and partner with stakeholders• Make connections & integratesustainability within and across ourbusiness
  10. 10. Implications :Sustainability … a driver for innovation?• if sustainable development is about change,then we need to be the masters of change,with innovations in place …• Driving for No waste, Doing Less Bad• Doing Good, Beyond Zero• New sustainability derived business models;not just doing what we’ve always done – butwith some improvement; rather doingsomething altogether different, etc. =Sustainable Business Model
  11. 11. ImpactSustainable Supply Chain Management (SSCM)• SSCM is all encompassing, strategic set ofactions taken by collaborating partners andstakeholders of an ultimate supply chain toimprove chain’s profitability along withmitigation/elimination of the detrimental impactsof all business activities spanning across thechain on the environment, society, culture,values, health and safety of all stakeholders andthereby ensuring the continuity of operations inthe larger interests of all stakeholders.• *Apratul Shukla, Ph D thesis, IIT Delhi , 2011
  12. 12. Sustainability in the context of Supply Chain• Deteriorating environmental condition in Indian subcontinent• Role of complex, long and global supply chains in deterioration of theenvironment needs investigation.• Growing interest as managers are forced to deal with social andenvironmental issues, related to supply chain (Vachon and Klassen,2006).• Every product generated, transported, used and discarded causesimpact on the environment, (Greenen et al., 2006).• 3Ps and Triple bottom line (Elkington, 1994 )• Climate change and Supply chains activities are related.Corporate socialresponsibilitySustainable supply networkmanagementSupply chain environmentalmanagementGreen purchasing strategiesEnvironmental purchasingGreen marketingEnvironmental marketingmanagement andenvironmental productdifferentiationReverse logisticsEnvironmental managementLife-cycle assessmentISO 14000- Certifications
  13. 13. Environment (Flora, Fauna, Bio diversity, Atmosphere, Water Bodies, Ecology, Climate)Society (People, classes, castes, ethnic groups, habitats, employment, health, institutions, socio-economic status)Scope and Spread of Sustainability in Supply Chain ManagementReverse supply chainsForward supply chainsRaw Materials, Minerals, Farm produce, Fisheries, Fuel, Energy, Natural resources like air, water and forest produce)Infrastructure (Transportation, communication, warehouses, cold storages, power plants, utilities)Solid and liquid waste, Heat, Noise, GHG emission, Toxic substance, Disruption, Dislocation, Nuisance, congestionWarehousing andDistributionManagementSupplierSupplierSupplierManufacturerRetailerRetailerRetailerCustomersDepletionErosionContaminationExtinctionHealth hazards,Pollution,Climate change,Global warmingUnsafeDisposaldamagingUnsustainableconsumptionMicro,small andmediumfirmsImbalance,Class differences,Discrimination,Unrest and RiotsHealth and safety of farmers, miners, workers and all people in surroundingsReverse supply chainsSociety (People, classes, castes, ethnic groups, habitats, employment, health, institutions, socio-economic status)Environment (Flora, Fauna, Bio diversity, Atmosphere, Water Bodies, Ecology, Climate)
  14. 14. 14Sustainable Supply Chain ActivitiesPrimaryIndustryProduction FinishedproductsdistributionRetailingGreener formsand factoriesSoil, water, aircontaminationHealth andsafetyFair wagesLocalcommunityWaste mgmt.Prevention ofbio-diversityEmissions andworkingconditionsEnergyefficientprocesses,technology,lighting andbuildingsInbounddistributionGreen fuelbased vehiclesFull truckloadsCongestionVehicularpollutionCold storageFrozen andcold vehiclesLeaks andemissionsduringtransportAvoidance ofchild labourPackagingwasteFare wagesEquality forwomenworkersDesign forsustainability(DfS)Life cycle costanalysisGreen and cleanprocesstechnologyEco-friendlypackagingWastemanagementEnergy efficientmachines andprocesses,buildingsLabour welfareHealth and safetyWagesLeanmanufacturingMaterial usageWater, soil andair pollutionConsolidatedloadsReusablepallets andtraysRecycling ofpackagingmaterialGreen fuelbased vehiclesReverselogisticsEnergyefficientwarehousesand coldstorages andvehiclesEmission andleak controlSafety inmaterialhandlingSustainableproductselectionSustainabilityasdifferentiatorProperlebellingConformanceto standards instoring andpackagingEnergyefficientstorages andbuildingsInformationsharing withcustomersHealth andsafetyCarrier bagsand packagingResponsibleConsumerRecycle andreuse ofproducts andpackagingJudicious useof productAvoid overconsumptionEnergy savingdevicesUse of takeback systemReturn ofpackagingmaterialWastedisposalChange inhabits andattitudeSocialresponsibility
  15. 15. Our Research : Sustainable Supply ChainManagement• Apratul Shukla, 2011, Critical Analysis of SupplyChain Management in Indian Context: A Case ofSuitability, Scalability and Sustainability, Ph DThesis, IIT Delhi
  16. 16. ImpactEnablers, Drivers and Barriers for SSCM**Apratul Shukla, Ph D thesis, IIT Delhi , 2011Enablers• Commitment of topmanagement• Adopting sustainabilityas business strategy• Strong partnership withstakeholders• Sustainable sourcing• Information andknowledge sharing• Committed employees• Resource competence• Clean technologicalcapabilities• Sustainable productand process design• Product stewardship• Using sustainability asproduct differentiator• Environmental andsocial managementsystem certifications• Awareness about SSCMDrivers• Global concernsabout climate change• Demographics• Customer awareness• Pressure fromstakeholders• Governmentregulations andpolicies• Organization’sreputation and image• Potentialimprovement ineconomicperformance• Sense of corporateresponsibility• Rising cost of energyand depleting naturalresources• Local environmentaland social conditionBarriers• Difficulty in integratingsustainability as corporatestrategy• Focus on short termbenefits• Lack of sustainablesuppliers and serviceproviders• Fear of not meeting costtargets• Lack of Resource• Non availability/costineffectiveness ofinnovative technology• People’s mindset, habitsand attitude• Insufficient training,education, and rewardssystems• Difficulty in measuring thesustainability performance• Lack of support from focalfirms and governmentagencies
  17. 17. Phases of SSCM implementation• Phase I Awareness– Need, Opportunity, Scope, Threats, and Benefit assessment• Phase II Involvement– Willingness to adopt and adaptation,– Participation in sustainability drive.– Early measures initiation• Phase III Active Participation– Accepting sustainability as strategic level– Full scale involvement in SSCM activities– Adopting clean technology– Commitment towards 5 pillars of SSCM• Phase IV Sustainability Excellence– Energy and environment efficient practices across supply chains– Adopting and devising best practices– Technological innovation– Performance measurement system for sustainability– Trendsetter and knowledge hub– Promoter of sustainability– Reputation and image building– Corporate social responsibility– *Apratul Shukla, Ph D thesis, IIT Delhi , 2011
  18. 18. Phases of SSCM*Need,OpportunityScope,Threats,and Benefitassessment* Willingnessto adopt andadaptation,* Participationin sustainabilitydrive.*Earlymeasuresinitiation* Acceptingsustainability asstrategiclevel* Full scaleinvolvementin SSCMactivities* Adopting cleantechnology* Commitmenttowards 5pillars ofSSCM* Energy and environmentefficient practicesacross supplychains* Adopting and devisingbest practices* Technological innovation* Performancemeasurementsystem forsustainability* Trendsetter andknowledge hub* Promoter ofsustainability* Reputation and imagebuilding* Corporate socialresponsibilityAwareness Involvement Active Participation Sustainability ExcellenceSustainablesupply chainmanagementPhases
  19. 19. House of SSCM• While phases provide direction for road ahead but the building blocks of growth towardsSSCM are not explicitly shown. For this we have also proposed house of sustainability– 6 major foundation stones– Sustainable product development, life cycle costing and environmental and social auditing– Innovative green and clean technology– Information and knowledge Sharing– Collaborative and coordinated efforts among networked organizations for sustainability– Integration (Sustainable partner selection and development, Network design)– Commitment at all levels for sustainability (Every individual in supply chain– 5 pillars of inclusive performances– Economic performance– Environmental Performance– Social Performance– Health, safety and hygiene– Cultural, ethnic and local aspects– 3 Roof top stones– Product stewardship– Corporate social responsibility– Using sustainability as product differentiator– 1 Flag– Aware, active, involved and satisfied customer
  20. 20. 20House of SSCMSustainable Supply chainsSustainable product development, life cycle costing and environmental and social auditingEnvironmentalPerformanceEconomicperformanceSocialPerformanceHealth,safetyandhygieneCultural,ethnicandlocalaspectsInnovative green and clean technologyInformation and knowledge Sharing (Common ICT platform and real time true data sharing)Integration (Sustainable partner selection and development, Network design)Collaborative and coordinated efforts among networked organizations for sustainabilityProduct stewardship Corporate social responsibilityCommitment at all levels for sustainability (Every individual in supply chain)Aware, active, involvedand satisfied customerUsing sustainability as productdifferentiator
  21. 21. Insights• Sustainable supply chains to become inevitable infuture.• Threat to the existence of the mankind on planet hasprovided an opportunity to revisit all businessprocesses.• SSCM is new philosophy to prevent negative effectsof the supply chain.• Reflects opportunities of using sustainability asstrategy, realign the supply chain to become morecompetitive, efficient and effective and reposition inmarket where customer is willing to pay additionalprice for sustainable practices.
  22. 22. Performance Measurement for SSCM• Based on the concept of a balanced score card , asustainability scorecard is proposed for identified 5pillars of sustainability.• This helps in identifying the contextual performancemeasures from the developed list of metrics.
  23. 23. Impact: Sustainability ScorecardEnvironmental performanceSocial PerformanceEconomic PerformanceVision andstrategy forsustainabilityCultural and ethnic PerformanceHealth and Safety PerformanceCustomer perspective- Code of conduct andethical guidelinesInternal perspective- Use of child labourLearning and growthperspective-Social auditingFinancial Perspective- Fare wage schemeCustomer perspective- Increased prideInternal perspective- Employment to minoritiesLearning and growthperspective- No of events arrangedFinancial perspective- Cost of culture consciousinitiativesCustomer perspective- Increase in product safetyInternal perspective- No. of accidents/incidences/ yearLearning and growthperspective- Information transparencyFinancial perspective- % of revenue allocatedto H &SCustomer perspective-Customer query timeInternal perspectiveInventory turn overratioLearning and growthperspectiveEmployee training yearlyFinancial PerspectivesReturn on InvestmentCustomer perspective- Reduced packaging in %Internal perspective- Reduction in material usageLearning and growth perspective- EMS implementationFinancial Perspectives- % recycled material used
  24. 24. Closing Remarks..• Sustainability offers a challenger .. As a change driver,as a stimulus for innovation• A balanced scorecard need to be evolved• Addressing social issues by creating shared value willlead to self-sustaining solutions that do not depend onprivate or government subsidies.• When a well-run business applies its vast resources,expertise, and management talent to problems that itunderstands and in which it has a stake, it can have agreater impact on social good than any otherinstitution or philanthropic organization.”• “The Link Between Competitive Advantage and CSR” Michael E. Porter and Mark R. Kramer, Harvard BusinessReview, December 2006
  25. 25. Useful (Research Network forBusiness Sustainability)• Shukla, A.C., Deshmukh, S.G. and Kanda, A. (2009),”Environmentally Responsive Supply Chains: Learnings from IndianAuto Sector” Journal of Advances in Management Research, Vol. 6,No. 2, pp. 154-171.• Shukla, A.C., Deshmukh, S.G. and Kanda, A. (2010), “Flexibility andSustainability of Supply Chains: Are They Together?” Global Journalof Flexible Systems Management, Vol.11, Nos.1 & 2, pp 25-38.