Chapter 8
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1. The document discusses Starbucks' Shared Planet program which aims to minimize environmental impact throughout the supply chain, from coffee farmers to recyclers. It involves standards for suppliers to become sustainable coffee sources. 2. Sustainable supply cycles can provide economic, social, and environmental benefits like better working conditions, improved quality and efficiency, and enhanced reputation. 3. Logistics is the process of planning and controlling resources for distribution, and sustainable logistics focuses on strategies like fleet optimization, energy efficiency, and innovative technologies.
Chapter 8
- 1. CHAPTER 8 Delivering Value via Sustainable Supply Cycle Strategies 1 ©2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. ©2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
- 2. CHAPTER 8: DELIVERING VALUE VIA SUSTAINABLE SUPPLY CYCLE STRATEGIES A. Introduction B. Diagnosing the Elements of Sustainable Supply Cycles C. Benefits of Sustainable Supply Cycles D. Sustainable Logistics E. ISO 14000 2 ©2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
- 3. A. INTRODUCTION 3 ©2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
- 4. A. INTRODUCTION STARBUCKS Consumers can buy coffee anywhere, but there is no mistaking the ambiance and aroma that surround a Starbucks. The company that revolutionized the way we buy coffee has also been working behind the scenes to ensure that its rich coffee will continue to be available in more than 40 countries across the globe for a long time. The company is committed to minimizing its impact on the planet, and it is passionate about sharing this commitment with its partners throughout the supply chain. The Starbucks Shared Planet program is an environmental commitment that recognizes that conservation should occur throughout the supply chain—from coffee growers in Guatemala to recyclers in Seattle. On the supply side, Starbucks has worked in conjunction with Conservation International for 10 years to develop Coffee and Farmer Equity (C.A.F.E.) Practices. CAFE consists of 24 comprehensive, measurable standards designed to enable suppliers and farmers to become sustainable sources of coffee. Growers are required to meet criteria for product quality, ethical accounting, social responsibility, and environmental leadership. The program has paid huge dividends for growers, who become able to strengthen their marketplace positions and exercise some control over transformation of their organizations and operations. 4 ©2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
- 5. A. INTRODUCTION STARBUCKS 1. Shared Planet program a. environmental commitment which recognizes that conservation needs to occur throughout the supply chain b. work in conjunction with Conservation International for ten years to develop Coffee and Farmer Equity (C.A.F.E.) practices 5 ©2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
- 6. A. INTRODUCTION 1. Shared Planet program c. CAFÉ 1. 24 comprehensive, measurable standards designed to enable suppliers and farmers to become sustainable sources of coffee. d. 2008, 77% – 295 million pounds of coffee purchased from suppliers verified and approved under C.A.F.E e. Average cost of $1.49 per pound is 5% above the average price for C grade Arabica 6 ©2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
- 7. B. DIAGNOSING THE ELEMENTS OF SUSTAINABLE SUPPLY CYCLES 1. Supply cycles a. organizations involved in making a product available for sale b. functions performed by these organizations. 2. triple bottom line benefits associated with economic, social, and financial performance 7 ©2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
- 8. B. DIAGNOSING THE ELEMENTS OF SUSTAINABLE SUPPLY CYCLES 3. Three perspectives on the delivery of value a. Channel: a set of organizations involved in the process of making a product available for consumption b. Logistics: the supply chain is a set of organizations linked directly to the flow of products and information from a source to the a consumer c. Porter: value chain is the set of primary and support activities performed by the firm to serve as sources of competitive advantage 8 ©2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
- 9. B. DIAGNOSING THE ELEMENTS OF SUSTAINABLE SUPPLY CYCLES Inputs & Outputs at One Stage of the Supply Cycle Processed Inputs Products Processing Un-processed inputs By-products Iron ore Steel coils Steel manufacturing Slag Compressed Air Carbon dioxide 9 ©2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
- 10. B. DIAGNOSING THE ELEMENTS OF SUSTAINABLE SUPPLY CYCLES 6. We refer to process of delivering value as a supply cycle due to the relationship between the environment and the product development process Iron ore Steel bicycle retailer consumer disposal Wal-mart : sustainability scorecard identifies fourteen categories of products or processes with the greatest environmental impact 10 ©2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
- 11. C. BENEFITS OF SUSTAINABLE SUPPLY CYCLES 1.Better working Conditions 2.Reduced Turnover 3.Improved Product Quality 4.Improved Efficiency and Profitability 11 ©2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
- 12. C. BENEFITS OF SUSTAINABLE SUPPLY CYCLES 5. Better Management of Risk 6. Enhanced Brand Reputation 7. Stakeholder Returns Increased 12 ©2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
- 13. D. SUSTAINABLE LOGISTICS 1. Logistics: a. process of planning, Inventory Transportation, Carrrying allocating, and Cost, 20.4% 44.9% controlling human and financial resources dedicated to physical Administrative Costs, 4.1% distribution, manufacturing support, and purchasing operations b. reverse logistics: Order Entry/ 1. Strategies that trace Customer Service, 10.2% Warehousing, 20.4% product back from the point of consumption 13 ©2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
- 14. D. SUSTAINABLE LOGISTICS 1. Fleet Optimization 2. Energy Efficiency 3. Innovative Technology a. routing and tracking computer system b. Inventory management software c. RFID (radio frequency identification) d. Global Positioning Systems (GPS) 14 ©2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
- 15. D. SUSTAINABLE LOGISTICS 4. Packaging 5. Interorganizational Relationships a. Enhance vehicle performance b. Reduce total supply cycle costs c. Enhanced Customer Service 15 ©2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
- 16. E. ISO 14000 1. environmental management systems (EMS) a. set of regulations established to achieve environmental goals 2. ISO a. family of standards applied across industries to monitor and control interaction with the environment b. Two of the primary standards 1. ISO 14001: 2004 – outlines the guidelines associated with the firm’s approach to sustainability, and it provides a strategic approach to the organization’s environmental policy 2. ISO 14004:2004 – provides guidelines on the elements of an EMS, its implementation, and the principal issues involved 16 ©2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
- 17. E. ISO 14000 3. Benefits a. competitive advantage over other firms in a market b. lower toxic emissions c. lowered resource usage d. higher energy savings e. lowered costs of waste disposal f. provide assurance to stakeholders that the firm is committed to sustainability g. provides a strong response to customers and suppliers that place environmental demands on 17 the firm ©2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.