Sustainable Supply Chain

Sustainable supply chain management or SSCM is among the concepts that are currently dominating the debates regarding companies. On the wake of environmental degradation as well as social and economical shortcomings associated with supply chains organizations are being pressured to adopt sustainable strategies. Essentially the Western Australian grain suppliers serve both the Suaid Arabia and Japan. The Saudi Arabians require that their grins be added carmoisine a food additive whereas Japan forbids substances such as carmoisine. This case study involves the detection of carmoisine food additive on grains delivered to Japan. The Western Australia grain suppliers faced problems with regard to the unsustainable grains delivered to Japan and which may have been avoided if proper measures were incorporated. Adopting sustainable supply chain strategies require benefiting the community, economy and most importantly the ecosystem. Environmental concerns are at times intricately associated with varying aspects of the supply chain. The awareness regarding such aspects is shown within the contemporary business setting. Companies are urged to adopt a comprehensive strategy that will incorporate views of all stakeholders so as to make effectual and long-lasting. Adoption of technology by Western Australia suppliers in line with employing sustainable supply chain management is one way that ensures its success.  The company also requires to at times examining the suppliers tendencies towards adhering to the sustainability set supply chain strategies.

Introduction

The effects as well as consequences of change in climate and the requirement to adopt an evolution to a sustainable, reduced carbon emission practices are significant drivers of supply chains transformation. Sustainability points to the balanced usage of natural, economic and social capital to ensure the continued wellbeing of companies, the world as well as future generations. The corporate sustainability allows enterprises along with their supply chain associates with the establishments towards systematic techniques of reducing energy and environmental wastes, reducing unnecessary materials along with regulatory overheads, as well as generates enhanced cash flow, every one which is extremely important during this period of economic downturn. In this case study involving the Australian grain exporters and the Japanese importers sustainability refers to supplying items which are cannot extend negative health issues to the consumer. If a product would make the consumer unwell then this product is unsustainable. Adopting fresh methods for instance innovative management methods, quality manufacturing systems and emerging technology will definitely affect the various elements of supply chain management; these include supplying policies, production operations, items and inventory management as well as distribution. The challenge of establishing a flourishing and sustainable supply chain through an allowable low carbon in addition to other pollutant emissions requires widespread research or studies, networked collaboration as well as remarkable innovation. the Western Australian Suppliers had a duty to ensure satisfaction of their clients sustainability needs without conflict with either.

Factors leading of relationships between Australia and Japan

The detection of carmoisine (a food color additive) on Australia’s noodle wheat shipment initiated the relationship breakdown between the two nations.  Carmoisine is a food additive which is banned in Japan as well as other states such as the US for the reason that it increases infants’ hypersensitivity. The issue surrounding the carmoisine additive concerns the shipment which was delivered to Japan containing that additive. The events leading to the contamination were that grains delivered to Saudi Arabia are usually added the carmoisine. The conveyer belts loading the ship are usually sprayed with carmoisine to make them unique and differentiate them from those of the black market. However, after loading the Saudi destined shipment the conveyer belts were not thoroughly cleaned or decontaminated, this lead to Japan’s shipment contacting the carmoisine on the conveyer belts. The stringent quality tests in Japan detected the additive’s presence which generated a huge row and lack of quality outcry regarding Australia’s exports. Consequently, Japan rejected the entire shipment leading to huge losses being experienced on the side of Australian exporters.  To make the matters even after the assurances of Australia regarding their quality checks this incident happened again. Another shipment of noodle wheat was detected having the carmoisine additive; this incident worsened the relations between Japan and Australia.

Sustainability and SCM  

From the 1980s sustainability phrase has been used to point more on human sustainability, which is in regard with the protecting the world. This has led to the definition of sustainable development as being development which meets the requirements of the present devoid of compromising the capability of future generations.  In this document sustainability shall be linked with operations along with SCM through studying its establishment within the time dimension. Thus, sustainability will be defined as an organization’s processes, services and products being aligned in ways that are socially, environmentally as well as economically responsible (Hoejmose, Brammer &Millington, 2013).

Business demands trust along with integrity amongst partners within a supply chain. Thus sustainability associates with the extent the environment concern, including utilization of nonrenewable resources as well as reduction of unsafe waste where its adoption success mainly lies on collaboration within the supply chain associates. Within SCM, sustainability refers to the idea that corporations may assists guarantee that markets, technology, commerce as well as finance advance in ways which benefits societies, economies, stakeholders and most importantly the ecosystem (Amaeshi, Osuji &Nnodim, 2008).

Within the sustainable supply chain context, manufacturers should seek to transform the production methods, decrease the environmental products and services footprint, along with combining environmentally responsive decisions with efficient supply chain practices. Therefore the phrase corporate sustainability covers greater than physical environmental factors linked so as to sustain a viable organization. The sustainability implementation within a production supply chain comprises of the following major aspects (Wolf, 2011):

1. Process innovation aimed at introducing fresh processes along with improvements to match evolving market as well as consumer’s sustainability needs
2. Clean production entails waste reduction in addition to avoidance, reclaiming products, reusing of waste products, reducing or eradicating pollution, replacing toxic as well as hazardous material, and eliminating waste along with potential pollutants within service and products including transportation to the market and marketplaces.
3. Closed-loop production refers to a system through which a product is manufactured by the use renewable energy resulting to no pollutant output and no waste (Rottig, Koufteros & Umphress, 2011)
4. Reverse logistics entails planning, adopting as well as controlling or regulating the flow of finished products, raw materials as well as associated information or data from the customer to the manufacturing for the proper disposal or value recapturing purposes.
5. Sustainable procurement points procuring goods as well as services which possesses less impact towards the environment compared to other goods along with services accomplishing equivalent performance needs.
6. Life cycle management or LCM supervises the environmental aspects along with potential impacts linked with a product, service or process, as from the level of raw materials acquirement to production, customer use as well as disposal, that generally symbolizes a cycle of a service product or process (Rottig, Koufteros & Umphress, 2011)

Supply chain solutions that would have prevented the second contamination

Owing to the fact that the supply chain members were aware of the fact that Japan disallows carmoisine from the relationship breakdown due to the first contamination, the second contamination was avoidable. Both the marketer and the bulk handler declined or failed to collaborate in order to prevent a second contamination. The two parties would have coordinated a more responsive and comprehensive approach to ensure that Japan’s cargo is never again contaminated. To start with, a separate loading conveyer should have been used to load cargo destined for Japan and the one destined for Saudi Arabia. This would have reduced the chances of carmoisine contamination. Secondly, thorough cleaning as well as decontamination measures should have been employed after every Saudi shipment is loaded. Other measures include:

a)      Supply chain operations Reference or SCOR sustainability model

A characteristic production supply chain possesses numerous participants that comprise a number of distinct but interrelated operational as well as managerial activities, and within producers are invariably positioned centrally supervising the product flow, information, finance and material (Leppelt, Foerstl & Hartmann 2013). These activities may be categorized into primary management processes namely: plan, source, create or make, deliver as well as return and which are sourced in supply chain process model or SCOR. SCOR processes extend as from supplier’s supplier up to customer’s customer within the supply chain. These involve such operations management aspects for instance, procurement, inventory, manufacturing, transportation as well as orders. Thus the SCOR model environmental element offers a structure for describing linked environmental metrics in operating as well as supervising supply chains towards more sustainable activities by assessing: air pollutant emissions, solid waste generated, recycled waste a well as carbon emissions within a company’s chain processes with an objective of environmental improvement (Amaeshi, Osuji &Nnodim, 2008).  SCOR should have been adopted by the marketer as well as the bulk loader to adopt a more sustainable supply of products by assessing the existence of any pollutants.

The capacity of managing varying supply chain activities within a suitable along with cost effectual manner has become progressively more significant to producers so as to remain competitive within their markets. The electronically-enabled manufacturing supply chains or EMSC provide potential to attain the objectives by allowing business partners within the manufacturing supply chains to incorporate their information resources as well as speed the decision making within varying SCM processes which ultimately improve efficiency as well as the firms’ competitiveness. The blame game experienced in Australia resulted from communication breakdown the EMSC would have bridged the gap to by enabling effectual information exchange between the marketer and the bulk loader. Thus with the ICT emergence along with its underlying structures EMSC is gradually but steadily being adopted by producers to make their supply chain more sustainable (Majumdar & Nishant, 2008).

b)      Corporate social responsibility adoption as a business innovation

   After the first carmoisine case was registered the Australian supply chain partners should have initiated the adoption of innovation as well as technology in handling cargo testing in order for addressing sustainability issues. Adopting sustainability within the supply chains enterprises introduces changes to both manufacturing operations as well as other areas, for instance, supplier coordination along with selection that may comprise establishing linked information systems within varying business units along with reengineering the daily activities. To aid the Australian marketer as well as bulk handler in generating right decisions throughout the whole resolution process the Innovation Diffusion Theory or IDT may be helpful (Spence & Bourlakis, 2011). IDT stresses that the resolutions to adopting innovations is impacted by factors which lead to diverse effects hierarchy.  To ensure that supply chain members generate appropriate decisions all through their whole sustainability adoption process the Innovation Decision Process or IDP can be utilized. IDP divides the process into a five levels namely; knowledge, influence, decision, adoption as well as confirmation. An adopter normally passes through the first level of awareness, to generating a mind-set towards innovation, then to a resolution to implement or rejection, to adoption of new idea and lastly the idea confirmation. The adoption of sustainability process may take lengthy period especially within implementation and confirmation. Manufacturing companies should therefore make sure that their partners fully implement sustainability measures to ensure a successful business (Jørgensen, 2003).

Importance of collaboration in the international agri-food market supply chain

Collaboration refers to the act of working together between the supplier and the client including all other stakeholders. A stakeholder in this case refers to any individual or entity that may affect or be affected by the firm’s operations. Stakeholders may involve suppliers, clients, regulators and farmers. To begin with the Australia section of the supply chain would have requested that a Japanese official be stationed at their port as show of commitment towards quality goods delivery. The upstream supply chain associates incorporation is very significant. Supplier integration entails fundamental competencies associated to synchronization with crucial suppliers. The objective of working with suppliers is to be able to generate product as well as process sustainability innovation (Rottig, Koufteros & Umphress, 2011). For instance if a firm requires making a high quality sustainable car, they then require partnering with key suppliers during the development of the vehicle. To be able to partner with effectual suppliers a company must at all times vet their suppliers. The government should have started to demand that the marketer and grain handler shares crucial information regarding their processes at all times. For instance, they may be requested to give information regarding the data acquired during the testing for contaminative substances as well as the methods used. Partnering and incorporating the Japanese supply chain partners views into the sustainable supply chain integration along with ensuring that they at all times conform with the set regulations then a manufacturing firm will be able to adopt a lasting sustainable supply chain (Tripathi & Petro, 2011).

The impacts of a Supplier’s failure to adhere to sustainable supply chain

The impacts of the failure by the Australian suppliers to adhere to the agreed quality guidelines led to lose of business as well as trust between the trading partners. The most crucial party in ensuring a sustainable supply chain is the suppliers. This is because more than any other stakeholder the supplier’s materials may extensively damage the reputation of a firm (Wolf, 2011). Research has confirmed that suppliers role within the supply channel is huge and thus there compliance as well as adherence to the set strategies is crucial. It is a reality that manufacturing companies cannot dedicate unlimited resources towards regulating supplier sustainability upstream thus ensuring that a company partners with sustainable renowned suppliers is imperative. The realization of the dangers that supplier irresponsibility has prompted many companies becomes more cautious.  A majority of organizations have been forced to revisit the existing compliance as well as adherence to CSR-based measures. The Australian suppliers lost a business with a very reliable client due to negligence. The fact that the carmoisine contaminated foods were located for the second consecutive time means that  a clear carelessness of the suppliers.

 (Rottig, Koufteros & Umphress, 2011).

Contributions of the management in sustainability

For sustainability to be successful the top management has a duty to support and foster its implementation. Lack of support from the top management, means that the sustainability goal might not be attained. A conducive environment must be created for the stuff to acquire the awareness regarding what they are expected to do; this requires to be steered by the management (Wolf, 2011). Additionally, sustainable products demand constant innovation of products that are efficient; this climate can only be extended by the top management. Participative leadership need to be established to ensure that every person contributes to the debate of how well the organization may adopt a sustainable supply chain. Research has indicated that administration’s treatment and handling determines how the companies attain their CSR objectives. Negative employee treatment will mean their reduced concern towards observance of the sustainability requirements. Further the ethical issues within the management determine whether the company persists its adherence to sustainable supply chain. Particular administration persons might also collude with suppliers to deliver unsustainable raw materials or engage in unsustainable production purposes. Clearly the management has a crucial role in ensuring that a firm holds on its objective of adopting and maintaining a sustainable supply chain (Salam, 2009). 

Justification of quality for the Australian grain suppliers

It would be argued that the Australian suppliers had effectual and robust quality management measures. This is for the reason that the suppliers had for many years been observing the quality issue and not once did the carmoisine contamination occur. Secondly, after the first contamination occurred commitment was made to observe and prevent future contamination. And one may conclude the second contamination was by accident. Further, the contamination occurred in the process of ensuring quality for another client’s cargo. Thus the issue was not that Australian suppliers lacked proper quality standards, the issue was that quality definitions and expectations of the two suppliers conflicted.

Recommendations

Adopting a sustainable supply chain in the contemporary times is inevitable for supplier. Some firms however have adopted ineffectual sustainable supply chains: others have yet to accomplish the urgent requirement. Thus for a company to adopt a sustainable supply chain a number of elements require to be adopted

• A firm must realign its production towards sustainable activities such as using decreasing gas emissions as well as waste production minimization.
•  Every company must make sure that its suppliers adhere to the set sustainable production and delivery of their materials (Tripathi & Petro, 2011)
• Whilst establishing a sustainable supply chain a manufacturing company must incorporate all stakeholders’ views. This enables adopt a strategy that has no conflicts
• Adoption of technology is an essential aspect of a firm that requires guaranteeing the persistence of a sustainable supply chain. Technology will ensure the assessing issues such as emissions and quality of products is acquired devoid of error (Rottig, Koufteros & Umphress, 2011)
• Companies must make annual reviews of the performance of the available sustainable supply chain  strategy to determine its success; such that if unsuccessful modifications should be effected
• Materials from suppliers must be examined to confirm their sustainable nature and this guarantees that the product to be manufactured will largely be sustainable
• All employees require training to ensure that their knowledge s aligned with that of sustainable supply chain strategy. This is among the major steps towards realizing a successful supply chain which is sustainable (Morali & Searcy, 2013).
• The top administration in a company requires being oriented first with regard to the significance of a sustainable supply chain. This will ensure its successful implementation.

Conclusion

The Western Australian grain suppliers faced numerous problems due to their unsustainable supply chain conduct. This was as a result of negligence since it happened twice. Companies are increasingly being required to adopt a sustainable supply chain management. Though some companies previously deemed this to be an expensive endeavor currently they do not have much of a choice. The stakeholders are increasingly placing pressure of companies to ensure a sustainable production of products. It is presently clear that many companies have adopted the sustainable supply chain however most the supply chains are largely unsuccessful. According to this research manufacturing companies should incorporate the views as well as interest of all stakeholders. Lack of involvement of stakeholders views leads to an effectual sustainability since it might be biased. Formerly, manufacturing firms have only been considering as well as incorporating solely the views of the consumer forgetting that they are not the only stakeholders. It is imperative for the Australian suppliers incorporate the views and expectations of their consumers to safeguard other stakeholders such as farmers and the government from losses. All stakeholders such as suppliers, regulators, NGOs and others require to be incorporated towards building a sustainable supply chain. A number of companies have encountered problems after their suppliers supply them with unsustainable materials, which has led to damaging of a company’s reputation.   It is important that the top management is initially oriented with the importance of adopting the sustainable supply chain to ensure its success since at all times employees look upon their superiors’ attitudes as well as behaviors. The Western Australia grain suppliers have a duty to satisfy the needs as well as demands of both their clients without offending the other.

References

Amaeshi, K. M., Osuji, O. K., & Nnodim, P., 2008. Corporate Social Responsibility in Supply Chains of Global Brands: A Boundaryless Responsibility? Clarifications, Exceptions and Implications. Journal Of Business Ethics, 81(1), 223-234. doi:10.1007/s10551-007-9490-5

Hoejmose, S., Brammer, S., & Millington, A., 2013. An empirical examination of the relationship between business strategy and socially responsible supply chain management. International Journal Of Operations & Production Management, 33(5), 589. doi:10.1108/01443571311322733

Jørgensen, H., 2003. Strengthening implementation of corporate social responsibility in global supply chains (1st ed.). Washington, D.C.: World Bank.

Leppelt, T., Foerstl, K., & Hartmann, E., 2013. Corporate Social Responsibility in Buyer-Supplier Relationships: Is it Beneficial for Top-Tier Suppliers to Market their Capability to Ensure a Responsible Supply Chain?. Business Research, 6(2), 126-152.

Majumdar, S., & Nishant, R., 2008. Sustainable entrepreneurial support (in supply chain) as corporate social responsibility initiative of large organizations: a conceptual framework. The Icfai University Journal Of Entrepreneurship Development, 5(3).

Morali, O., & Searcy, C., 2013. A Review of Sustainable Supply Chain Management Practices in Canada. Journal Of Business Ethics, 117(3), 635-658. doi:10.1007/s10551-012-1539-4

Rottig, D., Koufteros, X., & Umphress, E., 2011. Formal Infrastructure and Ethical Decision Making: An Empirical Investigation and Implications for Supply Management. Decision Sciences, 42(1), 163. doi:10.1111/j.1540-5915.2010.00305.x

Salam, M., 2009. RETRACTED ARTICLE: Corporate Social Responsibility in Purchasing and Supply Chain. Journal Of Business Ethics, 85(2), 355–370.

Spence, L., & Bourlakis, M., 2011. 11. Social responsibility in the supply chain: CSR or corporate social watchdogs?. Business Ethics And Corporate Sustainability, 164.

Tripathi, S., & Petro, G., 2011. Evolving Green Procurement and Sustainable Supply Chain Practices in the Organizations: A Framework to Align Functional Strategy Implementation to Organization’s Corporate Social Responsibility (CSR) Objectives. Management Convergence, 1(1), 24–32.

 Wolf, J., 2011. Sustainable Supply Chain Management Integration: A Qualitative Analysis of the German Manufacturing Industry. Journal Of Business Ethics, 102(2), 221-235. doi:10.1007/s10551-011-0806-0