Greening the supply chain for Advantage


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Dr. Miles Weaver, Senior Lecturer at Leicester Business School invited to talk at the:

Leicester first festival on 'sustainable' living held at De Montfort University.

Miles contributes to a module titled 'Green Business' in Leicester Business School, UK.

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  • The route to competitive advantage lies through the supply chain ……….lower costs and/or greater differentiation can be achieved through the inter-connections between organisations in a networkBecause of the complexity of today's supply chains; due in part to out-sourcing and globalisation, the way in which these relationships are structured and managed can make the difference between profit and loss Many marketplaces are now highly volatile and demand is difficult to predictChristopher and Towill argue that the focus in supply chain management must shift from the idea of cost as the order winner to responsiveness as the market winner(Christopher and Towill, 2000)Many marketplaces are now highly volatile and demand is difficult to predict. The acceleration of technological and fashion changes has resulted in extremely short product life cycles. In this new environment, non-availability means that in the event of non-supply the particular sales opportunity is lost forever [4]. Consequently, the focus in supply chain management must shift from the idea of cost as the order winner to responsiveness as the market winner. The implication is that the emphasis in supply chain management in the future must be on agility. Agility implies the ability of the supply chain to react quickly to changes in market demand - be they change in volume, variety or mix. The characteristics of the agile supply chain have been described elsewhere [51, but it is useful to contrast agility with the philosophy of lean operations. Lean thinking is most often associated with the car assembly industry and Japan in particular. Agility and leanness are not opposing philosophies, rather they work best in certain contexts as Table 1 suggests A Trend to Offshore Sourcing As we have previously noted, offshore sourcing and manufacturing has been an increasing trend across much of the Western industry for several decades. The motivation for this tendency to offshore sourcing has been primarily cost. However, it could be argued that the concept of cost that has been employed in those decisions is narrow in the extreme because the cost criteria employed is essentially the unit cost of manufacture or purchase. Costs such as those associated with today's wider view of the supply chain are often ignored. Thus, rarely is a realistic charge placed upon the additional inventory that inevitably will be created as pipelines lengthen, neither is a cost placed upon the risk that this might generate in terms of obsolescence, equally the impact on the firm's agility is not factored into the equation. True supply chain costs need to incorporate such elements as: * Inventory carrying costs. - Cost of markdowns. - Cost of loss sales. * Transaction costs (including letters of credit, customs clearance). Transportation (including emergency airfreight). * Warehousing. * Duties.
  • Greening the supply chain for Advantage

    1. 1. Greening the Supply Chain for Advantage: The case of the rock hammer, coffee drinker and the graduate<br />Dr. Miles Weaver, <br />Senior Lecturer in Strategic Management,<br />Leicester Business School, UK.<br /><br />
    2. 2. Outline<br />Research interests and motivation<br />Context of the ‘state of play’ in general attitudes towards developing ‘environmental’ strategies<br />Discussion on ‘competing’ through a supply chain view, rather than a company<br />Core themes:<br />Managing and ‘adding value’ through the supply chain<br />‘Ownership’ and ‘control’<br />Setting the ‘boundary’ to measure performance gains<br />Why those three illustrations?<br />Rock hammer in ‘Shawshank Redemption’; ‘coffee’ and the ‘graduate’!<br />
    3. 3. My areas of interest …<br />Weaver and Nunes (2007)<br />Taylor et al., (2008)<br />Niranjan and Weaver (2010)<br />3<br />
    4. 4. The ‘socially responsible’ and/or ‘source’ of competitive advantage?<br />Banerjee (2001) provide evidence that increasing number of firms now accept that environmental protection is normal part of doing business<br />Employee focus<br />Manufacturing focus<br />Corporate focus<br />Marketing focus<br />But is it necessarily a ‘source’ of competitive advantage?<br />
    5. 5. State of play ... (1)<br />Cross-sector/industry study assessed managerial attitudes (250 firms) towards environmental strategies. Findings suggested:<br />recycling was most commonly performed activity<br />most actions focused around manufacturing ( especially where cost advantage possible)<br />evidence of focus at other levels including corporate strategy level (e.g. R&D)<br />variations in environmental activity according to industry (e.g. chemical, pharmaceutical, and utilities firms had wider range of environmental activities - higher impact businesses - and greater corporate focus)<br />regulatory forces appeared to be major factor influencing company environmental strategy<br />evidence of perception that link existed between environmental action and competitive gains - (especially in high environmental impact industries)<br />
    6. 6. State of play ... (2)<br />With regard to the latter point, study points to 3 emergent themes amongst managers:<br />environmental issues were a source of business opportunity and could lead to competitive advantage<br />both market and non-market forces important in shaping environmental strategies (e.g. customers, regulatory agencies)<br />link between concepts of ‘quality’ and environmental action<br />Study by Ghobadian et al (1995) of environmental strategy among top UK corporations suggests that key influences on adoption of corporate environmental policies were:<br />legal compliance<br />public perception of organisation<br />
    7. 7. State of play ... (3)<br />Authors argue that motivations tend to be largely reactive and dependent on expected development of environmental legislation. Not much evidence of seeking environmental leadership positions<br />Moreover while competitive advantage was a concern, primacy given to questions of waste reduction and resource utilisation<br />
    8. 8. Ah, all good, but, not enough?<br />"supply chains compete, not companies" (Christopher, 2002)<br />Supply strategies significantlyimpactupon a firms performance <br />(Christopher and Ryals, 1999, Keah-Choon et al., 1999)<br />Companies have far too often attempted to optimisetheir own value chains, without considering the effect of these decisions on their suppliers or customers<br />(Chopra and Meindl, 2004)<br />
    9. 9. Some considerations for future competitive gains ....<br />What is the ‘boundary’ of a supply chain? Can/Should it be defined?<br />Who ‘controls’ a supply chain? Is there a need?<br />How can value be created through managing the ‘total’supply chain for advantage?<br />Discussion and illustration?<br />Bean to cup?<br />‘Adding value’ in HE for employability?<br />
    10. 10. ‘Green’ supply chains compete, not companies<br />Any questions ….?<br />Feedback and ideas @DrMilesWeaver<br />