Environmental Issues

Critically review the possibility of an integrated approach to purchasing  supply chain (sourcing) management

Introduction
In the contemporary business environment, firms are perceived to be important actors in development of sustainability, and in the current business practice, many focal firms are being held responsible for the environmental problems that have been caused by their suppliers.  The effects have led to the loss of reputations of some firms, and consequently loss of revenues.  Thus, to avert these problems, firms are increasingly incorporating environmental aspects into their supply chain management by amending their purchasing processes. With   intensifications of pressures from different stakeholders, many organisations have taken positive steps in their supply chains to enhance their sustainable profiles. It is essential to realise that   the trends towards globalisation has made firms to seek for different suppliers to sources for raw materials, and to enhance corporate public reputations. Firms need to efficiently manage its supply chain in order to enhance sustainability. Teuteberg and Wittstruck (2010) defined sustainability as the integration of environmental, social and economic issues in the organisational policy. However, supply chain management is defined as the management of a network of interconnected businesses involved in the ultimate provision of product and service packages required by end customers. (Teuteberg, and Wittstruck, 2010, p 1001).

Tan and Zailani (2009) also defined supply chain as processes of   life cycle that supports the movement of products and services from suppliers to customers through the physical, financial, and information aspects of moving products. On the other hand, the definition of supply chain could be attributed to the activities and system of people that involved creating a product through given resources and information before moving it to customers. To achieve long-term economic, environmental and social dimensions, firm needs to integrate sustainable supply chain in the business policy. Sustainable supply chain is defined as the coordination of inter-organisation business process in order to create value network among individual company. Essentially, sustainability focuses on the improvement of the peoples quality of life without the increase in the use of natural resources.  The bid to enhance global sustainability, many stakeholders suddenly take an entire new look on the tradition manufacturing process.  In addition, there are growing pressures on firms for the implementation on the green supply chain practices. Thus, sustainable business practices are no longer optional to corporate organisations. The businesses have realised that in order to create value, there is need to adopt innovative business practices and the implementation of special skills to adopt sustainable development. These initiatives start from raw material procurement to the systematic product designing, packaging, assembling, and manufacturing and logistics stages in the distribution networks. (Tan, Zailani 2009).

The objective of this paper is to describe and discuss the development of purchasing a supply chain (sourcing) management and coherent sustainability conditionscriteria.

Thus, to enhance greater understanding of sustainability in purchasing and supply chain, the paper provides development of purchasing and supply chain with special emphasis to sustainability conditions.

Development of Purchasing and Supply chain and coherent sustainability conditions
In the contemporary business environment, the survival of any business is the achievement of   short and long-term goals. However, the pressures from different stakeholders on organisations to implement sustainable supply chain in order to create values. Firms have taken steps to implement sustainability especially sustainable logistics. Essentially, the traditional logistics only involves the process, planning, and procurement of raw materials from the point of origin and distribute the products to the point of consumption. Although, the logistics aspect is one of the critical aspect of the company activities in order to ensure that the goods reach the desired customers. However, the traditional logistics activities do not take into consideration of sustainability for the efficient procurement of raw materials and distribution of goods. It is essential to realise that truck vehicles used for distribution of goods and materials contribute to the high percentage of carbon emission that lead to environmental degradation. Niwa (2008) argued that transport sector contributed to the 17 of environmental degradation, which reveals that logistics activities have contributed to the environmental problems.

However, with pressures from different stakeholders to protect environment, firms have taken steps to implement green logistics in the supply chain management. (Zhu, Sharkis, Lai, et al, 2007). Thus, the Green logistics involve undertaking the network planning for the flow of materials and finished goods to be sustainable in nature. Thus, the development of green logistics attempts to address the problems caused by the traditional logistics activities. For example, there was launching of Green Logistics Partnership Promotion Program in 2008 to address the problems caused by the carbon dioxide emission, which has been caused by the logistics activities. ( Niwa, 2009).

Moreover, many companies are still implementing the traditional purchasing and supply chain management in their business activities. The major objectives of purchasing and supply chain is to achieve efficient procurement of material for the companys use at a minimum costs. Although, many companies have been able to achieve their objectives in sourcing, evaluating and selecting  different suppliers for efficient sources of materials. However, contrary to the environmental regulations, that involves the protection of environment many organisations have not yet implemented sustainability in sourcing for materials. For example, many suppliers do not comply with ISO 14001 (International Environmental Management Standard) environmental standards before supplying materials to companies. In addition, many companies in the UK do not check the requirement of their suppliers whether they meet environmental standard before contracting them.  Thus, the overall result of this is the increase in environmental problems caused from using materials that are not environmental friendly in the production of   goods. Thus, with the intensification national and international regulations, the concept of Green Supply Chain Management (GSCM) or Sustainable Supply Chain Management (GSCM), which its focus, is to undertake environmental quality when sourcing for materials has come into focus. Thus, the GSCM is to ensure that firms make use of   non-toxic materials for production process, and all materials are sourced from suppliers who abide with environmental standard. In other word, the GSCM employ firms to incorporate effective utilisation of non-toxic materials in order to produce the green outputs. ( Darnall, Jolley,  Handfield, 2008, Emmett,  Sood,2010).

Typically, many regulations have been passed to make GSCM to be effective. For example, REGULATION (EC) No 19072006, which was based on the chemical policy on the registration and evaluation of chemical in order to ensure the chemicals meet EU standards, was passed. Since many governments  have  started passing regulations to employ firms to implement sustainability in their production process, the next section provides the possibility of an integrated approach to purchasing and supply chain (sourcing) management that may allow for transition to real sustainability.

Possibility of an integrated approach to purchasing  supply chain (sourcing) management that may allow for transition to real sustainability

There are various methods firms could employ to integrate sustainable purchasing and supply chain in their management policies.

First, management could integrate traditional logistics activities into the green logistics. It is essential to realise that green logistics involve using transportation to procure raw materials and distribute companys products to enhance sustainability.  Typically, distribution of goods to consumers and procurement of materials need to be implemented in a sustainable way   to reduce energy produced through trucks that are being used for distribution. For example, it is advisable for organisations to start using the hybrid trucks that have been noted to produce lesser energy during the transportation process. (Sbihi, Eglese, 2007). It is essential to realise that the carbon dioxide produced in the transportation sector contribute to the large percentage of the total carbon dioxide produced. Thus, since hybrid vehicles produce lesser carbon dioxide, corporate organisations could   start implementing the use of hybrid vehicles for logistics activities.

Another method corporate organisation could implement sustainable purchasing and supply chain management is to reduce the number of vehicles being used for logistics activities. Organisation can achieve this by efficiently routing their transport networks to reduce transport distances and simplify their route of vehicle delivery. The implementation of this will reduce the carbon dioxide emission being produced by vehicle as a result of reduction of number of vehicles.

Moreover, corporate organisation could employ modal shift in their logistics activities in order to achieve sustainable purchasing and supply chain. The modal shift involves shifting from using vehicles for logistics activities to railway. Empirical research revealed that railway generates lesser carbon dioxide. For example, the trucks emit seven times of carbon dioxide than railway. (Niwa, 2009). Thus, by employing modal shift for logistics activities, organisations could enhance sustainability in their purchasing and supply chain. However, firms need to ensure maximum care when employing modal shift. Although, modal shift has the benefits of reducing carbon dioxide emission, there is needed to take the issues of cost, quality and lead time into consideration. The company could employ modal shift for customers that can accept their goods to be delivered at a slightly longer period. (Niwa, 2009).

Another method corporate organisation could integrate   sustainability in the supply chain is to design the products that are environmental friendly. To achieve this objective, corporate organisations could use raw materials that are less toxic in designing their products. The designing method will change the company product to green product, and this will enhance EcoDesign for the products. Thus, purchasing and supply department should only source for materials that can be used for EcoDesign in order to produce products that are environmental friendly. It is essential to realise that to source for raw materials that are less toxic, there is need high degree of cooperation from the company potential suppliers. Typically, Organisation needs to develop policy and planning to ensure that suppliers meet certain standard before being contracted. Typically, organisations must evaluate all suppliers and scrutinise which suppliers meet all the requirements and standard laid down by all the stakeholders with regard to logistics, and manufacturing. To ensure that firms sources for right suppliers. A corporate firm should ensure that all suppliers contracted comply with ISO 14001 certification.

Moreover, firms could make use of recycle products in the packaging, and products design. Typically, the recycle product and reuse materials decrease the harmful and carbon dioxide emission. The commitment of corporate organisations to make use of 100 renewable and recycle products will reduce energy emission and increase sustainable purchasing and supply chain. (Khiewnavawongsa, Schmidt, 2008).

Finally, firm could redesign its store in order to comply with sustainability. For example, all materials used in the store could be changed to achieve environmental protection. For example, all light in the store should be changed to the light that produces lesser energy by 30 -40. Moreover, the store frame could be changed from steel to the sustainable timber frame in order to generate lesser energy in the store.  (Leahy, 2007).

Although, the integration of sustainability is advantageous to firms because it can lead to costs reduction and increase in firm competitive market performances. However, firm must take extra care before integrating sustainability in the purchasing and supply chain. There is need to employ systematic method in the integration process in order for the management to achieve full benefits in the sustainable purchasing and supply chain management.

Conclusion
This paper discusses the purchasing and supply chain with special emphasis to the coherent sustainability. Typically, in the contemporary business environment, business organisations are not just adopting and implementing policies based on the interests of only the executives. However, the executives must consider external factors when making decision concerning the products manufacturing, packaging and supply. With increase in pollution, carbon emission, and other production activities leading to the environmental degradations, many external forces are making pressures on the corporate organisations to abide to sustainability in order to achieve value creation in the supply chain. With realisation of what firms stand to lose in the contemporary business environment, which can lead to revenue loss, many firms are implementing sustainable supply chain in order to create value. This paper has demonstrated that purchasing and supply chain could lead to improvement of company image and reduce level of green house emission generated by corporate firms. With the advantages that firms  could realise from purchasing and supply chain implementation, the paper provide the methods firm could integrate purchasing and supply chain in order to enhance sustainability.  One of the critical approach discuss in the paper is to ensure that all suppliers meet the standard laid down by the corporate firms and part of the requirements is to meet the standard laid down by the ISO 14001. Moreover, firm needs to integrate traditional logistics into green logistics in order to achieve sustainability.