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OMGT2291 : Supply Chain Sustainability

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Course Code: OMGT2291
University: Royal Melbourne Institute Of Technology

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Country: Australia

The purpose of this assessment is to develop your capability to plan, analyse and review supply chain sustainability issues based on the data and information collected from a realworld organisation.Overall, the purpose of the report is to:? describe the current supply chain practices employed by the organisation from the sustainability point of view, the reasons for these practices, their merits and limitations? discuss the gaps and shortcomings of the current practices, and offer solutions to close these gaps? frame the context of the proposed solution(s) to address any limitations/risks present? rationalise your findings using concepts, theory, and models (frameworks) discussed during the course.

The Supply chain management is the group of activities which involve product’s efficient planning, controlling as well as its proper execution in product flow. The recent concept of Green supply chain management (GSCM) is also becoming talk of the town where major emphasis is laid over minimizing wastage at each stage of supply chain. Thus, it is a process of managing entire work process in a cost effective way (Green Jr and et.al., 2012). The current report is based on Green supply chain management where discussion is going to be made over practices related to this aspect. For stated purpose, the major organization of US, Shaklee Corporation has been selected. The company provides protein and nutrient supplements by managing an ideal supply chain management. Moreover, the report will make discussions based on collected data for analysis purpose. Thus, it will help in constructing a strong report to get more information about current practices related to Green supply chain management and potential actions concerned with it in future (Sarkis, Zhu and Lai,  2011). A questionnaire will be attached in the appendix part as well to present the data collected about the company and additional information regarding GSCM.
Company background
The Shaklee Corporation is originally based in California, US which was founded in the year 1956. The major job of the organization is to manufacture as well as distribute nature based nutritional supplements, beauty care, weight managing and household products. In addition to its headquarter at California; the firm operates globally in Japan, China, Canada, Taiwan and many more. The company also bases its marketing operations by claiming that all of its products are natural and environmental friendly. Along with this, the firm also alleges it’s all commodities to be safe, proven and guaranteed (Diabat and Govindan, 2011). All the products undergo a particular screening process which outdoes the US pharmacopeia standards as well. Moreover, the enterprise has 71 patents and more than 120 published papers.
The Shaklee Corporation is a natural nutrition product based entity which is known to be first at global level in acquiring the Climate neutral certification. As per this, it has established itself at the level where it completely sets off emission of carbon dioxide. Thus, it has a zero effect over the environment.  Dr. Forrest C. Shaklee who was the founder of stated venture strongly believed that it is best to live in harmony with nature which is beneficial for everyone to live a healthier life. This concrete belief of Dr. Shaklee inspires entire organization to practice the Green supply chain management within all its operations. In this purpose, the manager ensures to go beyond its reach so as to make every process green and sustainable. Thus, the organization has won many awards for its performance based on green supply management operations. As a result, the mentioned firm sets itself as a standard organization against which all other companies can be compared and measured (Luthra and et.al., 2011).
Current practices in the Shaklee Corporation
The Shaklee Corporation’s business form is primarily based on providing dietary supplements, weight management products, beauty products etc. All these products are necessarily based on providing natural ingredients and maintain green supply chain practices. As per this, the stated corporation made a partnership with ‘Climate Neutral Network’ which aided in creating a profile of company as the first one to offset carbon emissions within environment.

According to Shaklee, most of the industries are indulged in carbon confiscation method so as to meet out the strategy of less green house gases (GHG). While on other hand, as per the current practices of said firm, it uses natural gases in oil fired boilers which helps in getting extensive benefits (Hsu and et.al., 2013). It reduces usage of electricity, decrease in GHG release along with other major polluting gases like NOx, SOx etc. Moreover, this also aided in making substantial savings in the project with more than $250000.
Apart from the above practice towards better and sustainable supply chain practice, more efforts were made towards supply chain management. In the year 2007, the company made an association with Infor as its software partner so that they can avail ERP and supply chain management. As a result, Infor aided in providing solutions for enabling green consumer goods for enterprise. Due to Shaklee’s extensive operations within different countries, they were looking for a partner that can help in supplying scalable supply chain solutions (Sarkis, 2012). Thus, Infor aided by offering upgraded ERP BPCS to Infor ERP LX. The major benefit of this software partner was to accumulate finances into a global system which was more comprehensive than before. Additionally, it assisted in implementing the SCM solutions within advanced planning, replenishment planning, warehouse management, demand planning etc.

Thus, the Shaklee Corporation was mainly in the beneficial position and attained leadership in its contemporary market because of its efficiency to differentiate itself from other similar organizations (Ahi and Searcy, 2013).
Limitations in current practices
As mentioned before, the Shaklee Corporation has a huge product portfolio, it was essential to make research and development on an efficient basis. The distributors for the product were large in number and were growing continuously with increasing operations in different nations. Therefore, it was quite complex to manage the supply chain in appropriate manner with sustainability. In addition to this, there were more than 60000 quality tests that were to be performed on various manufactured products of the company long with their ingredients. Thus, there was a huge burden of managing multiple functions of research, marketing and promotion, collecting sales and customer data and distribute it through effective supply chain (Tseng and Chiu, 2013). The company was using a data warehouse initially but it was quite complex for many of its users. Moreover, it was unable to provide real time data and less accessible at various geographical levels.
Therefore, the organization found its solution at later stages through PivotLink which was much more viable and functional. 90% of business analytics in Shaklee is managed through said software solution. Thus, it helped in faster implementation of diverse tasks and saving large sums.
Another major issue is related to sourcing and marketing of the products which are the two major ends of supply chain management. As per this, while sourcing of products, there is major trouble regarding procurement as there is a single buyer with multiple numbers of suppliers who have the potential to facilitate the required materials. As a result, it is quite complicated for the firm to manage the relation and supply chain in even manner (Govindan and et.al., 2014). Therefore, the Shaklee Corporation found a solution by managing a customized supplier who can aid in smoothening the supply operations. The raw materials supplied are managed according to real demand in the market thereby saving from overburden and unwanted storage of large stocks.
Moreover marketing and distribution of products is also a significant end in sustainable supply chain where various aspects of pricing, promotion and distribution channels are need to be managed. Thus, the Shaklee Corporation manages its relation with large number of distributors who can execute various channels for supplying end products to consumers. The firm has its own contact with the customers through digital channels so as to make direct contact with them (Zhu, Sarkis and Lai, 2012).
Frameworks to manage supply chain
As per the collected data and researches, the Shaklee Corporation makes effort to minimize the wastage of resources and carry out quality tests so as to assure the end consumers with safer products. To manage the resources and raw materials used in manufacturing of all the products, it uses the model of Lean management process. As per the GSCM practices, it is an ideal model, which puts a check over wastage of resources. In addition to this, it is also an ideal way to follow the principle of sustainable supply chain management process (Mathiyazhagan and et.al., 2013). In addition to lean management process which seeks to check wastage of time, effort and money, the production of products is based on lean manufacturing. Thus, entire operation is performed in a systematic manner.
Lean manufacturing: The Lean manufacturing process is ideal way to produce the commodities through optimizing all processes so as to do away with wastage, save cost and add value in finished goods. As a result, it also refers to make continuous improvement in products and maximize the productivity. There are five principles on which entire concept is based and helps in getting perfection (Arimura, Darnall and Katayama, 2011).

Identifying value: As per this, the company must understand the value of products at customers’ end. This aid in ascertaining right way to proceed in pricing of goods and creating highest value from it for both consumer and producer.
Mapping of value: At this stage, the company executes significant function of collecting and examining information flow so that determination of required materials can be made. This helps in identifying the right quantity of raw material from suppliers to manufacture a particular product (Chan and et.al., 2012). It assists in minimizing wastage and finding newer ways to make improvements.
Creation of flow: To maintain flow in various functions and operations of manufacturing is a significant requirement which helps in minimizing wastage. Therefore, the managers must establish ways to eradicate functional interruptions till the delivery process. It will greatly improve the production process and in optimizing the results.
Establishing pull system: The pull system is based on making savings related to products by understanding the demand of goods in market (Lee, Tae Kim and Choi, 2012). The employees in Shaklee make a research in market so as to collect demand information about various products. Thus, the goods are manufacture as and when required in demanded quantity. This eliminates the fear of wastage and storage of large stocks in company.
Pursue continuous improvement: Although the whole lean production is based on continuous improvement process, it is essential to find out the core reasons behind quality issues (Mirhedayatian, Azad and Saen, 2014). Especially in natural products that are meant to improve health and beauty of customers, this aspect becomes really critical. Therefore, adopting different measures related to said model is necessary to be dealt with critical care.

In addition to above stated principles, the Shaklee corporation strives to maintain sustainable practices by concentrating over elimination of excess stock, over production, over processing on a single product and defects within goods. In addition to this, there are 3 Ms of lean which was originally discovered by Toyota Company (De Giovanni and Vinzi, 2012).
Muda: This is basically a type of waste as in this kind of process; no added value can be created within products. Ultimately, it results into waste of time, resource, as well as finance. As a result, there is likelihood of fluctuations in demand of consumers and suppliers.
Mura: This type of wastage can be categorized as inconsistent as there are more possibilities of creating additional stocks and failure in maintaining the flawless demand process.
Muri: This is a type of overburden which is often created by companies over employees or processes (Yang and et.al., 2013). There can be number of reasons for such lean wastage like untrained staff, lack of tools and equipments, no streamlined process of production and many more.
The Shaklee maintain its contacts with a large network of suppliers who are all abide by the principles established by stated enterprise. The company works in cooperation of various environmental bodies, government agencies and leading firms who are committed towards products that are less harmful to the environment. Thus, the current practices of Shaklee ensure to manage the firm in an ideal way to maintain the green supply chain.
Potential courses of action
In the purpose of managing Green supply chain, Green logistics is a major step which creates a win-win situation. In this field, an additional concept of reverse logistics has been introduced (Zhu and et.al., 2011). The green logistics refer towards implementation of different supply chain functions in environmental friendly manner like green storage, transport, packaging etc. The reverse logistics is also referred as closed loop supply chain where there is reverse flow of already used goods for remanufacturing. This is a model where further researches and studies can be performed. To start with this process, there is a need of extensive study about production planning and management of inventories. This will need a model which will base on demand and returns so that all the used products can be returned to the producer for remanufacturing. The said model will aid in reducing the lead times in both manufacturing and remanufacturing. This will require a hybrid structure to examine the effects of manufactured products and remanufactured goods against total cost (Arimura, Darnall and Katayama, 2011).
In this system of reverse logistics, the major barrier can be related to uncertainty of quality. As this is based on recovery system, it is quite difficult to exactly measure the returns as well as demands. For this purpose, there is an issue to disassemble the older ones and reassemble the newly manufactured products. Moreover, it is required that quality products are acquired for remanufacturing so that they can help in cutting down the costs of production. Vast researches are going on over this model of business where Shaklee can also make a milestone after accomplishing the zero impact on environment (Yin, 2011). For this, a quantitative model can be developed which can study the acquisition price of utilized goods and its selling price as well. In addition to this, there can be scope of making more improvements in the product so as to offer more value to the customers.
In addition to above there are some other strategies that can also be taken towards sustainable green supply chain:
Demand driven planning: The companies like Shaklee can instill the methods that can aid in making right forecast about the demand of products and acquiring contingency plan to avoid risks. Said enterprise has effective software partners that help them in knowing right information about inventory, their demand and usage etc. (Christopher, 2016).
Optimizing product designs: Making innovations is quite necessary in every field that is a key factor in successful survival in business environment. For this purpose, it is crucial to manufacture goods at right cost, place as well as time. The researches are extensive that are performed right before and after the production of desired products. Therefore, it is recommendable to optimize the designing of goods for efficient supply, manufacturability and distribution. The quality tests carried upon the produced goods help in determining its quality which must be superior (Dyckhoff, Lackes and Reese, 2013). Hence, the company must ensure to take right decision during early cycles of production that may result into make or break of the products.
Aligning supply chain with organizational goals: In many companies, there are easily noticeable gaps among different operational processes like manufacturing, sales and distribution. Supply of materials is mostly arranged from multiple suppliers to avoid the risk of uneven supply of required materials. Shaklee makes arrangement of material most of the time on its own and import required materials from its trusted supplier who are committed towards the applied practices of Shaklee Corporation. All the participating groups in entire chain are Earth day network, World resources institute, Conservation international etc. who strive to maintain the green supply chain network (Diabat and Govindan, 2011).
Implant sustainability in each operation: The managers in the entire organization need to set sustainability as a core strategy all supply chain process can be maintained more environmental friendly. For this purpose, the basic level strategy should be defined to analyze the resource and energy requirements. This will aid in less GHG emissions, lesser energy consumption and easy refurbishment of the products. Moreover, the element of continuous improvement should always be there so as to make employees engaged towards better performance in all the operations. Moreover, the use of tools and equipments used in exploring the resources, analysis and quality tests should be right and up to date as it will aid in realizing the formulated strategies of company (Monczka and et.al., 2015).
The Green supply chain management is a factor in the present time that is required to be instilled in every company to make practices of manufacturing better and sustainable. The current report has focused over Shaklee Corporation which is a leading firm of US in this field. The major portfolio of business revolves around manufacturing dietary supplements, beauty care and household products that are completely natural and safe to use. In the report, it has been found from the studies that the company is using best practices to mitigate the environmental problems that are generally faced while production process (Diabat and Govindan, 2011). Thereby, it has achieved the leading position as there is a zero adverse impact on nature due to its production process. Thus, the report concludes that there are multiple factors that can be employed upon to make better practices towards the green supply chain management.
Books and journals
Ahi, P. and Searcy, C., 2013. A comparative literature analysis of definitions for green and sustainable supply chain management. Journal of cleaner production, 52, pp.329-341.
Arimura, T.H., Darnall, N. and Katayama, H., 2011. Is ISO 14001 a gateway to more advanced voluntary action? The case of green supply chain management. Journal of environmental economics and management, 61(2), pp.170-182.
Chan, R.Y., He, H., Chan, H.K. and Wang, W.Y., 2012. Environmental orientation and corporate performance: The mediation mechanism of green supply chain management and moderating effect of competitive intensity. Industrial Marketing Management, 41(4), pp.621-630.
Christopher, M., 2016. Logistics & supply chain management. Pearson UK.
De Giovanni, P. and Vinzi, V.E., 2012. Covariance versus component-based estimations of performance in green supply chain management. International Journal of Production Economics, 135(2), pp.907-916.
Diabat, A. and Govindan, K., 2011. An analysis of the drivers affecting the implementation of green supply chain management. Resources, Conservation and Recycling, 55(6), pp.659-667.
Diabat, A. and Govindan, K., 2011. An analysis of the drivers affecting the implementation of green supply chain management. Resources, Conservation and Recycling, 55(6), pp.659-667.
Dyckhoff, H., Lackes, R. and Reese, J. eds., 2013. Supply chain management and reverse logistics. Springer Science & Business Media.
Govindan, K., Kaliyan, M., Kannan, D. and Haq, A.N., 2014. Barriers analysis for green supply chain management implementation in Indian industries using analytic hierarchy process. International Journal of Production Economics, 147, pp.555-568.
Green Jr, K.W., Zelbst, P.J., Meacham, J. and Bhadauria, V.S., 2012. Green supply chain management practices: impact on performance. Supply Chain Management: An International Journal, 17(3), pp.290-305.
Hsu, C.W., Kuo, T.C., Chen, S.H. and Hu, A.H., 2013. Using DEMATEL to develop a carbon management model of supplier selection in green supply chain management. Journal of cleaner production, 56, pp.164-172.
Lee, S.M., Tae Kim, S. and Choi, D., 2012. Green supply chain management and organizational performance. Industrial Management & Data Systems, 112(8), pp.1148-1180.
Luthra, S., Kumar, V., Kumar, S. and Haleem, A., 2011. Barriers to implement green supply chain management in automobile industry using interpretive structural modeling technique-An Indian perspective. Journal of Industrial Engineering and Management, 4(2), pp.231-257.
Mathiyazhagan, K., Govindan, K., NoorulHaq, A. and Geng, Y., 2013. An ISM approach for the barrier analysis in implementing green supply chain management. Journal of Cleaner Production, 47, pp.283-297.
Mirhedayatian, S.M., Azadi, M. and Saen, R.F., 2014. A novel network data envelopment analysis model for evaluating green supply chain management. International Journal of Production Economics, 147, pp.544-554.
Monczka, R.M., Handfield, R.B., Giunipero, L.C. and Patterson, J.L., 2015. Purchasing and supply chain management. Cengage Learning.
Sarkis, J., 2012. A boundaries and flows perspective of green supply chain management. Supply chain management: an international journal, 17(2), pp.202-216.
Sarkis, J., Zhu, Q. and Lai, K.H., 2011. An organizational theoretic review of green supply chain management literature. International Journal of Production Economics, 130(1), pp.1-15.
Tseng, M.L. and Chiu, A.S., 2013. Evaluating firm’s green supply chain management in linguistic preferences. Journal of cleaner production, 40, pp.22-31.
Yang, C.S., Lu, C.S., Haider, J.J. and Marlow, P.B., 2013. The effect of green supply chain management on green performance and firm competitiveness in the context of container shipping in Taiwan. Transportation Research Part E: Logistics and Transportation Review, 55, pp.55-73.
Yin, W., 2011. Reverse Supply Chain Management.
Zhu, Q., Geng, Y., Sarkis, J. and Lai, K.H., 2011. Evaluating green supply chain management among Chinese manufacturers from the ecological modernization perspective. Transportation Research Part E: Logistics and Transportation Review, 47(6), pp.808-821.
Zhu, Q., Sarkis, J. and Lai, K.H., 2012. Examining the effects of green supply chain management practices and their mediations on performance improvements. International journal of production research, 50(5), pp.1377-1394.

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