supply chain 2000 word essay

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ethics_and_csr.ppt
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Level Two
Supply Chain Management

Ethics and CSR in SCM

Learning Objectives

  • To understand the relationship between ethics and CSR and SCM
  • To appreciate the considerations that need to be made within supply chains
  • To further consider environmental and sustainability issues.

CSR – Corporate Social Responsibility

Key CSR Themes

  • Responsibility
  • Ethics
  • Voluntary actions
  • Commitment
  • Sustainable development
  • Meeting needs of stakeholders

Five Dimensions of CSR

  • The environmental dimension
  • The social dimension
  • The economic dimension
  • The stakeholder dimension
  • The voluntary dimension

Environmental

  • Sustainability
  • Acting in the best interests of the environment
  • Green operations and logistics
  • Pollution e.g. oil disasters
  • Recycling

Social

  • The relationship between business and society
  • Global community
  • Business should:
  • Not be disadvantaging individuals or other businesses
  • Look to work with the local community
  • Local sourcing
  • Supplier and customer relationships

Social continued

  • Social considerations:
  • Safety
  • Social impact of products
  • Employment implications for location, closures or integration
  • Honesty in supplier relationships
  • Non-exploitation of suppliers
  • Prompt payments

Economic

  • Positive and negative financial implications
  • Contribution to economic development
  • Investment in CSR practices
  • Returns on CSR projects and investments
  • Perception and stakeholder opinion on CSR activities influencing investments

Economic continued

  • Input costs – auditing process for ensuring CSR practices within various suppliers
  • Processing costs – energy consumption reduction, waste reduction costs
  • Output costs – end of life responsibility (consumer pressure or legislation)

Stakeholder

  • Question....can you think of examples of stakeholders in relation to SCM?
  • How should we interact with stakeholders?
  • Global considerations

Voluntary

  • Should companies undertake the minimum CSR requirements?
  • Or volunteer to go beyond?
  • Balance between regulatory requirements and social responsibility

Sustainability & Environmental Issues

Sustainability

  • “Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs.” Bruntland Commission (1987)

  • Business responsibility for CSR

Environmental Sustainability

  • Operational failures tend to be at the centre of pollution disasters.
  • Need to examine the entire supply change not just manufacturing

Environmental Sustainability

Environmental considerations and issues:

  • Recycling
  • Energy consumption
  • Waste generation
  • Environmental impact of facility location
  • Transportation of materials and staff
  • Material utilisation and waste

Sustainable Supply Chains

  • How sustainable are supply chains as we know them?
  • Globalisation vs localisation
  • Need for greater levels of responsibility throughout

Sustainable Supply Chains

  • When considering automotive end of life directives:
  • Can we still focus on process improvement?
  • How do we integrate the need to recycle?
  • Potential issues with lean sustainability

Question.....

How does the need for sustainability change SCM?

Ethics

What is Ethics?

  • Moral principles to govern behaviour
  • Can be used to distinguish from others within the industry
  • Reasons for ethical supply chain management:
  • Brand image and customer perception
  • Legislation
  • Environmental concerns

Fairtrade

  • Fair and stable price for products
  • Extra income for farmers to improve their lives
  • Greater respect for the environment
  • Stronger position in the world market for small farmers
  • Closer link between consumers and producers

Ethical Supply Chains

  • Fairtrade is one example
  • However in current market conditions businesses need to take into consideration:
  • Customer demands and financial ability
  • Responsibility of developed nations to those still developing

Summary

  • It is clear that we have a responsibility not only to those we work with but also wider society and future generations.
  • Ethics and CSR are becoming of greater importance and consideration within SCM

To Do

  • Reading
  • Refer to weekly reading list

Today.....

  • To understand the relationship between ethics and CSR and SCM
  • To appreciate the considerations that need to be made within supply chains
  • To further consider environmental and sustainability issues.

References & Further Reading

World Commission on Environment and Development. (1987) Our Common Future. Oxford: Oxford University Press