Sustainability in International Logistics
The new trend in business
Supply chain management has become a major interest in which has grown rapidly over the past several years and still continue onward. This trend has been going on due to numbers of forces that has impacted on.
Firstly, in recent years, companies are seeking out a wat to reduce their cost especially manufacturing costs and the key to that issues was found in an effective planning and managing their suppliers. For example large organisation like Wal-Mart has successfully implemented their new strategic partnerships with their suppliers and a new logistics startegy.
Secondly, with our ever going and evolving technologies has made it much easier for information to flow smoothly and acquire faster. Furthermore, communication system has been established and widely implemented throughout the supple chain in order to keep the operation functions effectively. Moreover, the internet and e-commerce also made a tremendous impact in business practice. Company such as Amazon have become a major distributor for many big and small organisations to sell their products across the glove with easy and simple online shopping.
Sustainable supply chain management
The supply chain can defined as the upstream portion of the organisation’s value chain: value chain is a series of process that will add value to good and service beginning from the raw materials to the end customer, and including all parties whether it is directly or indirectly involved in order to fulfill a customer request. Supply chain consists of the manufacturer and suppliers but also expand to logistics, warehouse, retailers and customers.
As supply chain management has become strategically importance for any organisations, it also certain that sustainable supply chain management will soon or may have already exercise by many companies in order achieve the long term goal as long as maintaining the profit.
On the economics aspect, supply chain play strategic role in the company sustainability as well as performance. Supply chain management is can make the manufacturing become more efficient therefore will be more cost effective and enable company to utilize it resources better. For example, company can adopt different supply chain strategies such as lean or agile supply chains in which will help the company keeping up with the rising demand on goods and service from customers. In addition, with an effective supply chain management and strategies, performance will likely improve. For example, by implement lean strategy, the company can reduce stock and cut down unnecessary process therefore be more efficient and can deliver the products to customers faster with less time consume. Moreover, as we can see company like Toyota that implemented just-in-time has saves the cost from warehouses and storage which result in higher value added and greater profit. It is vital for company that aim toward sustainability to become more efficient and cost effective in resources and capacities, a good supply chain management will ensure for the company to become better therefore become sustainable in the long-term.
On environmental aspect, environmental friendly has been a great concern for people but also for any business to lean toward. Waste management has become important in company policies in order to be green, it has contribute toward the idea of integrating into supply chain management as environmental friendly. Green supply chain management is vital to the company as it can gain competitive advantage over other companies within the market. For example, company will focus more on green design that will attract customers to purchase their products as they believe it to be more environmental friendly. Green operations will involve green manufacturing and re-manufacturing, waste management, adding more value with recycling and return product for re-manufacture so that it can become sustainable. Furthermore, it create reverse logistics in which the stream of goods and service is from raw materials to end products will flow backwards in which can create more profit as well as cost effective. Recycling will products will utilities wasted materials and resources and add extra value to them so they can generate profit to the company, however it’s can also be a concern if the amount of return product is significant then that can be due to manufacturers faulty and that will increase the cost instead of decreasing.
Ultimately supply chain management has become mainstream as well as strategically importance for any organisations in improving themselves and be more efficient. It’s without a doubt in order to create sustainability business as well as better performance, company need to pay attention to their supply chain management while determine their long-term goals and objectives that they want to achieve as there is a major influence to the strategy management level with the supply chain. Company will soon or may have already start to execute toward sustainable supply chain management. Moreover, there also a link between supply chain management and sustainable and performance as in order for the business to maintain its sustainability, there need to be the help of supply chain management in managing the ‘trade-off’ that can affect the business and also improve performance with more efficient process. In the case study has shown that there is a ‘trade-off’ that company has to make so that they can improve performance of one dimensions but also has argue that they can still trying to maintain other activities performance to meet the requirement and be acceptable for the company. Furthermore, we can also see that supply chain has play a vital role in managing those ‘trade-off’ that the company made so that it can be sustainable through efficient and environment but still able to keep themselves cost effective with low-cost products in mind when presenting to the customers.