“Role of the Industry was not to put money in the hands of few people, but Industry should serve in the larger interest of society serve rural development, serve in the cause of poverty alleviation, enhance employee welfare and work for social upliftment.” - This presentation illustrates the case study of the above achievement

1. Sustainable Management
of a Manufacturing Enterprise &
its Supply Chain:
A Case Study
AArivalagan
Ph.D. Research Scholar
Department of
Management
Dr. GRD College of Science
Coimbatore
Dr. B Sudhakar
Director
GRG School of Management
PSGR Krishnammal College
Coimbatore

2. 2
Over View
• Why Sustainable Management?
• Case Study
– Profile
– Governance Structure & Management
– Economic Performance
– Environmental Performance
– Social Performance
– Raw Material Supply Chain
• Summing Up

3. 3
Why Sustainable Management?
• Promoting Equity in distribution of wealth
– Economical impact of all stakeholders
• Protecting Environment
– Industrialization - Increasing population lead us to
Increased use of resources - Increased pollution
(CO2 ) - Climate Change
• Caring for the Society
– Health & Safety of humans
– Providing basic facilities (Health & Education)
Urgent need to sustain the earth and its people

4. 4
Global Warming

5. 5
Sustainable Management
• Managing present situations while
providing human needs but without
compromising the ability of future
generations to meet their needs.

6. 6
Sustainability & Supply Chain

7. 7
Sustainability & Supply Chain
• Organizations should make commitment to
sustainable development and it should be
strongly anchored in the company’s
strategic foundation and management
structures.
• Further sustainability can not be looked as
an isolated activity by any industrial unit.
The company needs to pay attention to
sustainability factors in its supply chain too.

8. 8
Sustainable Supply Chain
Environmental Operational/Economic
Sustainable Supply Chain Management
Profitable
Resource Effective
Meeting our needs w/o compromising
future generations
Social

9. 9
A Case Study
• How an organization has adopted
sustainable management in its
manufacturing operation and in its supply
chain?
• A example from Paper Industry
• M/s Seshasayee Paper and Boards Ltd
(called SPB) located at Pallipalayam,
Erode as a Case Study.

10. 10
Profile of SPB
• Started in 1962 with 20,000 tons per annum
of printing & writing paper.
• Now Capacity - 115,000 tons per annum
• 1500 employees - Rs 400 Crores Turnover
• 25% Exports
• Both ISO 9001 & ISO 14001 Company
• Recipient of TERI Corproate Environment
Award - Niryat Shree Golden Trophy Award
for Export from GOI

11. 11
Economic Performance

12. 12
Economic Performance of SPB
Description of Indicators Unit 1998-99 1999-00 2000-01 2001-02 2002-03
Economic Indicators (Direct)
Employee Salaries, Wages and all
benefits per ton of paper
Rs Million 194.0 236.0 230.0 240.0 249.0
Cost of all goods, materials, and
services purchased.
Rs Million 1119.0 1178.0 1947.0 2245.0 2418.0
Net sales. Rs Million 1495.0 1493.0 2174.0 3111.0 3331.0
Economic Indicators (Indirect)
Total sum of all taxes paid . Rs Million 216.0 238.0 451.0 531.0 499.0
Paid to providers of capital Rs Million 87.2 90.1 242.2 271.8 283.0
Interest on Debt & Borrowings Rs Million 73.7 76.6 228.7 258.3 262.0
Dividends Paid Rs Million 13.5 13.5 13.5 13.5 20.3
Retained earnings at year end Rs Million 48.50 45.5 46.5 48.779 57.8
Return on Capital Employed % 2.0% 2.4% 1.1% 1.2% 7.7%

13. 13
Impact on Employee income
194
236 230 240 249
0
50
100
150
200
250
300
1998-99 1999-00 2000-01 2001-02 2002-03
Rupees in million

14. 14
Taxes Paid to Government
216
238
451
531
499
0
100
200
300
400
500
600
1998-99 1999-00 2000-01 2001-02 2002-03
Rupees in million

15. 15
Environmental Performance

16. 16
Environmental Performance
Description Unit 1998-99 1999-00 2000-01 2001-02 2002-03
Environmental Indicators
Raw material per ton of paper tons/ton 4.37 4.27 3.39 3.15 2.95
wood from man made plantation
as a % of total wood used
% 100% 100% 100% 100% 100%
Bagasse used as a % of total raw
material used
% 52% 54% 47% 41% 41%
Ecological foot print per ton of
product
Hectare /
ton
0.35 0.34 0.31 .80 1.03
Total fuels used per ton of
product
T/t 1.8 2.4 1.7 1.5 1.0
Total chemicals used per ton of
product
T/t 0.9 1.1 0.9 0.6 0.6
Energy Consumption per ton of
paper
GJ/ton 54.85 52.93 43.09 38.80 32.28
Electricity per ton of paper Kwh/ton 1760 1829 1740 1503 1387
Process steam per ton of paper Ton/ton 11.7 12.5 9.7 8.3 7.5
Water consumption per ton of
paper
M
3
/ton 188 179 134 110 97
Total solid waste generation Tons/ton 2.17 2.71 2.10 1.73 1.60

17. 17
Land used for wood
(Raw Material)
0.35 0.34 0.31
0.8
1.03
0
0.2
0.4
0.6
0.8
1
1.2
1998-99 1999-00 2000-01 2001-02 2002-03
Hectares per ton of paper
Increased Production by
increased
use of purchased pulp

18. 18
Electricity Consumption
1760
1829
1740
1503
1387
0
200
400
600
800
1000
1200
1400
1600
1800
2000
1998-99 1999-00 2000-01 2001-02 2002-03
Units per ton

19. 19
Social Performance

20. 20
Social Performance
• Customer Care:
– Continual improvement in quality of products
– Transparent & uniform Marketing Policies to
all Dealers
– Annual Dealers Conferences in Foreign
Countries
– Virtual Private Network (VPN), (links
marketing office, factory, branch offices &
Dealers)

21. 21
Social Performance
• Customer Care:
– Indentors can place orders, verify stock
position and the status of their orders in a
secure and inexpensive way.
– This system enables SPB to efficiently
process orders and service its customers
within the committed lead-time.

22. 22
Social Performance
• Employee care
– Professional development and training of its
employees.
– Train its new workers in ITI at factory itself
– Extensive use of NPC for Developing the
Supervisory and managerial category
– Sponsor Managers for MBA (IGNOU)
– Provides facilities such as housing quarters with
over 1000 houses, 3 schools, a clinic, community
center, bank, communication facility, a Mosque, two
Churches and a temple complex.

23. 23
Social Performance
• Community development measures
– Supplying protected and treated drinking water
through a network of about 240 water taps and 4
overhead tanks (for 5 villages)
– Running of Community Health Centers with a
full-time qualified physician, paramedical staff
and free medical facilities (covering four villages)
– organizing yearly Blood donation & eye camps
– providing Education from the primary to Plus 2
– construction of rain water harvesting systems,
public toilets, village roads, culverts and
renovation of old village temples

24. 24DRINKING WATER SUPPLY TAPS (240 TAPS AT NEARBY VILLAGES)

25. 25
Raw Material
Supply Chain

26. 26
Raw Material Supply Chain
• SPB used “wood” since 1960s
• Shortage wood was noticed since 1984
• For sustained supply of its raw material SPB
set up a Sugar Mill as its sister company for
supply of bagasse (the famous non-wood fiber
in India)
• SPB promoted a Lift Irrigation Society for
effective utilization of its treated effluent for
cultivation of sugar cane in the near by villages

27. 27
Raw Material Supply Chain
• The Potential of Wood Fibers and Non-Wood
Fibre
Wood Fibre Non-Wood Fiber
• Energy input More Less
• Chemical input More Less
• Environmental impact More Less
• Social benefits Less More
• Employment benefit Less More

28. 28
Sustainable Supply Chain
TreatedEffluent
Ponni Sugars
FARMERS
Seshasayee Paper
SugarCane
Bagasse

29. 29
Raw Material Supply Chain
• Tripartite agreement (Paper Mill - local farmer
society - Sugar Mill)
• Treated water from paper mill is supplied to
local farmers for the cultivation of sugarcane
in 1500 acres of nearby elevated land
• The farmers supply sugarcane to Sugar Mill
• Sugar Mill produce sugar and supplies its by-
product bagasse to Paper Mill

30. 30
Raw Material Supply Chain
• This unique method has won the
admiration of nations worldwide.
• The transportation of sugar cane reduced
from 200 KM to the mere 3 KM distance.
• Thus the CO2 emission by this
transportation has been avoided.
• The Green Belt acts as a carbon sink.

31. 31DELEGATES FROM THAILAND, VISIT TO

32. 32
Summing Up
• Sustainability Management in
Manufacturing & Supply Chain

33. 33
Summing Up
• “Role of the Industry was not to
put money in the hands of few
people,
• but Industry should
– serve in the larger interest of
society
– serve rural development,
– serve in the cause of
poverty alleviation,
– enhance employee welfare
and work for social
upliftment.”
S Viswanathan -
Founder Chairman
of SPB