The adoption of green purchasing in supply chain and business operations is a reliable tool in mitigating waste, air and water pollution. The actions directed to all incorporates and consumers comprise green marketing, a broad range of marketing activities e.
Green marketing practice promotes the products with environmental friendly properties [ 8 , 37 ]. It contains the activities that can satisfy human desires of minimum negative effects on the environmental beauty.
Green management practices GMP provide a firm with supplementary sources of information that can enhance their business and environmental objectives [ 39 ]. Adoption of green management practices help with improved firm image, increased efficiency, environmental compliance improvement, cost savings, achievement of societal commitment and reduction of carbon emissions etc. Green distribution and warehousing can reduce the waste and play an important role in energy reduction and value addition of green products in warehousing significantly improve overall performance of organization with better corporate image [ 7 ].
Green distribution helps enterprises to obtain superior financial and environmental performance [ 42 , 43 ]. Green manufacturing practices are to implement socially and environmentally accountable practices to mitigate harmful effects of manufacturing and increased profitability of firms [ 8 , 29 ].
Green practices in production improve efficiency of processes [ 33 ]. Lean and green manufacturing industry both are working for eliminating waste and improving the efficiency of manufacturing processes [ 43 ]. Baines et al. Luthra et al. Ecological design incorporates many ideas such like using cleaner technology processes, green raw material and components [ 28 , 44 ].
Green design of products reduces ecological impacts of products during their life [ 8 , 45 ]. In addition, green design of products also supports reusing, recycling and remanufacturing of products, which not only helps firms to improve their environmental performance but also provide opportunity to reduce their costs [ 1 ].
Green transportation and reverser logistics practices provide opportunity to organizations, to improve their image and reduce their costs [ 46 ]. The logistics activities integrated with rehabilitation comprise the practice of reverse logistics reusing, recycling, and remanufacturing , which can produce the products that can be used again for customers [ 29 ]. Green logistics practice helps firms to reduce their environmental impacts with improved quality and cost reductions [ 47 ].
Undeniably, global logistical and supply chain operations mainly depend on energy as well as fossil fuel, which are the main cause of climate change, global warming and pollution with greater carbon and greenhouse gas emissions [ 46 ]. Renewable energy and biofuels are required in supply chain operations so as to obtain sustainable environmental and economic growth [ 48 ]. Anable et al. The demand for electric vehicles is set to grow in the coming years. However, Tesla still holds a huge share of the U.
Market Trends According to the Market trend for the electric vehicle segment, it is yet to catch up with its gasoline counterparts. This rise is demand is depicted in Annexure: 10, which is mainly due to advancements in battery technology due to which electric vehicles will become affordable. People are getting environmentally conscious as well and more investors are placing their bet on the EV segment.
In the future, Autonomous driving will become a part of our lives and is more compatible with electric vehicles. Annexure: 11 shows the market trends scenario of the future. Main Current Supply Chain Challenges Climate change: Tesla is making efforts in the sustainable energy area by making products which are eco-friendly by nature, which is their mission.
The challenges with regards to climate change must be addressed by using electricity which is produced by sustainable options such as solar or wind, rather than from coal or fossil fuel. Political instability: Tesla has an international presence and is penetrating to different countries such as having a delivery hub in Beijing, China or an administrative centre in Amsterdam, Netherlands.
It may also have to face challenges with respect to political instability in the countries it is located, as it may cause disruption in the supply chain leading to financial loss. Also, it has many sourcing partners from around the world whose supply depends on the political stability of the respective country and the foreign relationship the country has with America.
Economy: The economic factors such as market growth, currency exchange, trade levels and other variables can have an impact on its growth Kissinger, Free trade agreements with other countries can increase the opportunities to expand into further locations, but it should investigate the economic facets too.
Another important aspect to consider is the spending power of people in the countries it is penetrating to, as most of the middle-class people would consider buying cars they can afford. Raw material Scarcity: Tesla uses many raw materials especially for its battery production. As the demand for electric vehicles will grow in the future, it will also result in raw material crisis. In , The U. S Geological Survey concluded that the world has enough reserves for the current production rate as of of Lithium for the next years.
Labour aspects: Tesla is strong in-terms of labour aspects with a total of 45, employees. This will also help Tesla manage risks and contingencies by implementing strategies of lean management, thereby reducing lead times and also reducing the carbon footprint. Involving all the stakeholders by actively engaging them and creating a feedback mechanism can enhance the supply chain performance to a drastic level.
And finally, developing a strategy and culture which is intertwined to sustainability initiatives should be the focus. Technological Developments: Material Science: Tesla must invest in material science especially with regards to new sustainable options for battery production. Sustainable Energy: Tesla is creating an ecosystem around sustainable energy options with their subsidiaries like SolarCity which takes care of the issue regarding climate change.
They should also invest in wind energy as a potential enabler to further expand into sustainable options. As they are into vertical integration, it makes sense to make processes more efficient by investing in Robotics and AI. Theory of Constraints: A methodology that identifies the largest limiting factor in production, then finding a way to remove it to improve the efficiency of the entire production.
It adds an extra layer of complexity and costs to SCM for those involved in chains with those minerals. Third-party audits of supply chains are an important part of keeping in step with these regulations. Transparency: Though protecting data is important, certain measures of transparency can improve company performance. Among consumer products, many younger, disruptive brands make their supply chain a selling point in marketing by being upfront about how and where they get their components, and where they make their products.
The reasoning goes, if a company is hiding something, there must be an unethical component to it. Sustainability Measures: As major companies and countries around the globe move towards sustainable production, all supply chains become impacted. Whether due to changing regulations or seeking good PR, many companies are working to reduce pollution and other issues in their chain. The future of SCM is bright, but certainly evolving.
Over the next decade, we will see massive and disruptive forms of innovation both in terms of technology that expedites the speed at which customers receive their products drone delivery as well as technologies that drastically enhances the online shopping experience for customers, virtual reality.
While these and other technologies no doubt have the opportunity to significantly change the landscape of online shopping and the supply chain, I expect we will see firms diverge on two different strategies. Some will rush to implement these costly new technologies in order to drive down the total time between an order being placed and last mile delivery, while other firms will stand by the current landscape for most B2C online sellers of product delivery in approximately two-days, acting cautiously, particularly in regards to the cost of these new technologies versus their impact on the overall value chain for consumers.
Certainly, there are niche industries where significant investments in drone delivery technology will provide a distinct competitive advantage, but I predict that for many B2C online sellers, the impact on the overall value chain of these new technologies will be misaligned with a consumer's perception of value, and therefore make the initial cost of these new technologies unjustified.
Embracing big data is an essential principle of modern SCM, specifically real-time data which has the potential to improve the efficiency of a supply chain and negate potential risks to strategy. We know that logistics optimization through technological innovations and data integration can make supply chains more efficient and more financially sound.
The future of the multi-modal SCM depends on successful integration with data and systems to achieve synchromodality. To achieve this, there needs to be a connection to all available transport modalities in the form of a real-time data flow. Once any issues with connectivity are addressed, a ranking system is required to consider a variety of variables such as dock schedules and material restrictions.
Pricing data is another integral component. The way we understand it, SCM is changing because now an efficient supply chain can be a competitive asset as opposed to a cost center. Probably the most dynamic link in the supply chain in recent years has been the "last mile": that movement of goods from a DC to a final destination in the home.
E-commerce king Amazon has done much to challenge and ultimately rewrite the rules of last mile delivery. Last mile delivery has also produced a new warehousing subsector: the locker. Studies show that online shoppers not only want their packages now, they also want their packages delivered to places other than their homes.
These lockers can be viewed as "micro warehouses" and will come with additional costs. We expect many to be operated by an emerging sector of third-party logistics 3PL providers specializing in this particular segment of the supply chain. Lockers are now common in Europe, where densely populated and congested urban centers make them a natural fit. Amazon already has automated lockers in six states, while the U. Postal Service has lockers located within post offices in the Washington, D.
Upstart third-party logistics providers will be looking for sites where they can locate lockers, such as in transit centers, apartment buildings, convenience stores, or any establishment that provides off-hours access for picking up packages. Also, the growing online meals industry is expected to fuel the need for temperature-controlled lockers for the delivery of perishables.
With a bright future filled with unique challenges, a career in SCM is a strong choice. Look at these industry stats:. What kind of positions can you take on in supply chain management? Live and breathe efficiency.
Purchasing Specialist: Work out deals with suppliers and compare bids to minimize cost across the supply chain. Procurement Manager: Research, evaluate, and purchase large quantities of products for companies to resell or use in operations. Operations Analyst: Evaluate, report on, and improve the management of activities that generate recurring revenue for your organization, i. Supply management does not have much of an impact on the bottom line.
SM does not require change driven by upper management. World-class supply managers need not improve supply processes before the processes have been implemented. When a group or network of firms collaborates in a partnership alliance fashion; the collaboration is sometimes referred to as a tactical network.
When the group of firms view each other as partners and collaborate effectively for the good of the larger group, then they leave established a transactional relationship. Strategic sourcing requires one-way improvement efforts where the buying firm tells the supplying firm what is best.
The concept of a supply chain means we analyze and manage: A a chain or network of upstream suppliers B converters C original equipment manufacturers OEM D extractors E key suppliers Answer: A The term value chain means we include the supply chain in our analysis and management with: A end consumer B the downstream portion of the chain and distribution, such as marketing C channels of distribution D financial impact studies E opportunity cost Answer: B When we add the term networks to the supply and value chains, we are emphasizing the need to focus on and interactively communicate with: A suppliers B distributors C final consumers D tiers of suppliers E all support organizations Answer: C The term extended enterprise is an extension of supply networks, we now have: A true value creation B real value maintenance C innovative and virtual integration D a network of firms collaborating in partnership E adaptive networks Answer: D Which statement about SM is not true?
Which action is not necessary in implementing SM? A Senior management must recognize supply management's critical nature to the firm B Senior management must support the required transformation of supply management to world class C Firms must know where they are in relation to where they want to be D Firms must benchmark best-in-class practices and develop metrics E Firms must force their suppliers into world-class compliance Answer: E Which bullet is not true of the clerical stage of SM?
Which bullet is not true of the mechanical stage of SM? Which bullet is not true of the proactive stage of SM? A Near defect free materials and services B Emphasis: cost, quality and timeliness C Reporting: low level D Relationships: transactional and collaborative E Bottom line impact: profit contributor Answer: C Which bullet is not true of the world-class stage of SM? A React to requisitions B Relationships: transactional, collaborative and alliance C Bottom line impact: increase shareholder value D Reporting: member, executive group E Data: facilitates strategic planning Answer: A Which is not true about supply chains and networks?
Which of the following is generally not true about supply management and the bottom line? A Purchased items account for a large percentage of the cost of goods sold. Hence, a reduction in cost of purchased goods has a major impact on the bottom line B A Euro increase in sales is equivalent to a Euro decrease in materials cost in impacting the bottom line C Outsourcing allows firms to focus on their core competencies, which reduced potential for waste, which then can improve the bottom line D A dollar saved in materials cost is usually considered a dollar increase in profit, which directly translates into bottom line savings E Supply management can work collaboratively with suppliers to discover opportunities to lower costs, which ultimately improves the bottom line Answer: B Which of the following bullets is not true about supply management systems?
A Supply management systems require software optimization models to run effectively B Virtually all firms have supply management systems C A cross-functional approach to supply management systems enables the lowest total cost D Carefully selected suppliers should also join in-house cross-functional teams in developing supply management systems E Supply management systems that include reverse auctions, exchanges, and real-time electronic transmissions only increase the importance of supply management Answer: A Which of the following is not a strategic supply management activity?
The lower purchasing is on the organization chart, the less impact the supply function will have on corporate strategy. The degree of competition for critical materials will be a key factor in the importance of supply management. Even in a firm, which primarily purchases small numbers of standard production parts, the supply department can be a significant value as a profit center. The smaller the organization, the less likely the purchasing operations will be strategic.
Supplier relationship management includes motivation, assistance, incentives, cooperation, collaboration and on occasion, penalties. Managing supplier relationships is a strategic responsibility. Managing contract and blanket order releases are operational responsibilities. Consolidation provides the opportunity to standardize, simplify and leverage material purchases. Hybrid organizational structures often use cross functional teams to achieve the best of both centralized and decentralized decision making.
E-commerce has strengthened the case for decentralization of purchasing. The materials management organization structure is now obsolete. Supply chain management expanded the materials management structure functions to include all the stake holders and total demand management. Cross function teams are often the key step in a firms evolution to supply chain management. Aside from the benefits of synergy, cross functional teams provides input from all affected functions.
One of the big challenges and problems with cross functional teams is the lack of time for the team member participation and role conflict. Cross functional teams operate best when they use the brainstorming approach to innovative thinking. The key first step in establishing cross functional teams is obtaining executive sponsorship.
One of the key skills for any leader is to be an effective listener. Answer: True Multiple Choice Questions The importance of supply management in any specific firm is determined by the following factors: A availability of materials and services B absolute dollar volume of purchases C percentage of product cost represented by materials and services D types of materials and services purchased F All of the above Answer: E Aside from reducing potential duplication of efforts, the major advantage of centralized purchasing is: : A improved inventory control B leveraged volume purchasing C consolidation G D transportation savings H E lower administrative costs I Answer: B The most significant advantage of the supply chain management structure is: : A it facilitated a total systems approach to stimulate integration B it uses the internet to extract key information C it increases the visibility of the purchasing department S D it focuses management attention on quality T E it reveals that inventory costs are often understated U Answer: A Cross functional teams have proven to help: : A break down functional silos B reduce new product development time C facilitate integrated planning and coordination V D stimulate engineering change management control W E all of the above X Answer: E Systematically selected supply alliances built on institutional trust help organizations complete their evolution to SM.
Answer: True 2.
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