Article Summarized By: Materials Management and Purchasing (14303; OPMT 3660-001, Summer 2015) Team 1: Rockets Ashton, Mohammed, Raed Penfield, Patrick (2014). Transformative Steps for Supply Chain Sustainability. Supply Chain Management Review. 18 (2), 20-25 Article Summarized By: Ashton Campbell

Key Question What steps should an organization take to transform its supply chain in order to successfully walk the path of supply chain sustainability?

What: Supply Chain Sustainability Supply Chain Sustainability is the practice of maximizing a business’s supply chain through the means of: Economics- Maximizing profit margin through supply chain techniques such as lean six sigma among others Environment- The focus of environmental sustainability focuses on reducing our footprint. This comes from reducing wastes, as well as reducing raw material usage through recycling. Social Obligation- Companies have to focus on their social obligation, or image, in the eyes of the consumer. Without maintaining a good image Supply Chain Sustainability cannot be as successful because consumers won’t support the product(s)/ companies involved.

Why: Business Today Businesses today are seeing a generation of unprecedented growth and innovation. This brings up many new markets as well as opportunities. The companies that make themselves flexible are the ones that are thriving in this dynamic market. With extreme growth comes growing pains, the world’s resources are being depleted very quickly. In areas fresh water and resources are becoming very scarce. On top of this pressure on the environment, mother nature strikes back with natural disasters that stretch an already elongated global commerce even thinner. All of these issues point in the direction of Supply Cain Sustainability.

Why: Issues in the Next Century As supply chain becomes the major driver behind market competition in many industries, companies have to ask themselves a couple things. Can we build a supply chain that is flexible enough for future markets? Can we really be prepared for sustainability issues ten years down the road? Future sustainability issues can be broken into four categories: Energy Water Costs Natural Disasters/ Extreme Weather

Why: Energy Supply chain is very susceptible to the lack of energy. Therefore many countries are taking necessary steps to steps to plan for the future, making sure they have enough resources down the road. Studies show that with the increase in natural gas in the U.S. we will only become more dependent on oil products and fossil fuels because low cost will drive out renewable energy.

Why: Water Scarcity Water is crucial to the Supply Chain as well. Without it agricultural systems would fail and it would be very hard to grow enough produce to support the population. In 2014 there was widespread drought around the world that has many people fearing for the future. Fresh water makes up less than 2.5% of the worlds water supply and some projections say it will be more expensive than oil by 2025.

Why: Increase in Cost Businesses and organizations are going to start seeing a rise in costs due to rises in population. The World Population Prospects estimates that the planet will hold 9 billion people by 2050. At the rate that consumers intake natural resources they project we will run out before the turn of the century. It goes back to simple supply and demand, as the resources decline, stock drops, demand rises, and the price skyrockets.

Why: Natural Disasters In recent years there has been a trend to more extreme weather patterns as well as an increase in natural disasters. 2012 brought 1 billion dollars in damage across 11 ‘extreme weather events’ and ScienceDaily claims that the trends won’t end any time soon. As these weather events cause significant damage to key infrastructures on the coast and inland, the global commerce is being stressed. How will the market respond to these issues?

How: 8 Step Plan The research in Supply Chain Sustainability has derived an 8 step plan to help organizations move in the right direction. 1) Leadership Every organization needs leadership, but it is important to change the mindset of the top leaders in a business to move from short term profits to long term goals. Once CEOs and executives understand and implement sustainable supply chain practices, they will see reduced costs and a lessened environmental footprint.

How: 8 Step Plan 2) Sustainability Education 3) Change Agents Successful integration of sustainability stems from educating the employees. This can be done using speakers, conferences, and work shops. 3) Change Agents Now that everyone is educated you need to have a management system in place. Depending on size this can be a VP, senior executive, or even a chief sustainability officer. This person is just in charge of appointing sustainability leaders within the supply chain and making sure the initiative is understood company- wide. 4) Sustainability Measures The implementation plan must first start with an initial assessment of the existing supply chain. This assessment should include things like energy usage, waste to landfill, emissions, and many others. Doing this allows for a good baseline measurement to compare your supply chain to down the road.

How: 8 Step Plan 5) Green Goals 6) Sustainability Actions Now there is a baseline in place its time to set some goals. The company should set some realistic goals, and then implement them with ample communication. Include the employees. Make sure measures are in place to recognize effectiveness and make sure goals are met. 6) Sustainability Actions To meet green goals sustainability measures must be taken. This comes primarily in process changes and designs that have the environment in mind. Many companies also incorporate Lean Six Sigma to standardize work and remove waste from the process.

How: 8 Step Plan 7) Monitor Sustainability Actions and Corrective Action Now that the plan has been implemented successfully, and sustainability goals have been met, it is important to take a look at metrics. Go back and reassess the process, evaluate the same parameters as the original research. Then post the results, show the employees how their efforts stack up. Then use results to see how the company stacked up to its goals and if some were unrealistic. 8) Continuous Improvement The final step in the sustainability integration process is continuous improvement. Now the company is running and adjusting to sustainability but it is hard to stay focused on these efforts at times. The sustainability leaders have to keep analyzing the organization and adapting to its sustainable needs.

Conclusions: In today’s markets and industries sustainable supply chain practices are a must. It can be difficult for any organization to change gears from just a supply chain to Supply Chain Sustainability. The key to a successful transformation is a leader that fully believes in the concept and can manage it all the way through. Extensive research has brought to light the eight step plan listed in this slideshow and honed it to become a guide to successful change.

Lessons: The most successful business today incorporate Supply Chain Sustainability. Without this sustainability, consumers are going to see an increase in product costs because of shortages in resources. With shortages in resources damage to our planet is going to become an issue as well. An organization can follow this eight step plan to help generate ideas and get moving in the right direction for sustainability efforts. Although difficult and maybe not profitable at first, in the long run Supply Chain Sustainability practices will separate the good from the best.