Introduction to Supply Chain Management
Sustainability is issue that affect supply chain related to environment, risk and cost. Supply chain management (SCM) is management of material, information and finance that move from various stages as supplier to manufacturer to wholesaler to retailer to final consumer. It helps to co-ordinates these flows within companies so that better production can be made. SSCF (Sustainable Supply Chain Foundation) conduct research that is related to sustainability. This works to identify, best practices and emerging technologies so that effectiveness in every aspect of SCM can be maintained (Barney, 2012). Toyota Motor Manufacturing (UK) Ltd. Is company that offers their services in vehicle manufacture and this company established in UK in 1989 with large investment in this industry. They have car and engine manufacturing plant. There are various materials that they buy from their supplier so that they can provide better services to their customers. This company has great market value because they always have one goal to provide standard product and services.
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Sustainability in Supply chain management
It is one of the important term in every organisation. It is required for business to have sustainability in their operation so that they can offer better services to others. This is also related to Supply chain management. There are various things that are essential for better production. It is not only related to material only but also requires finance and information so that better production can be made by company. Toyota Motor is company that has its operation in different countries. This company has started their functioning in UK related to manufacturing of cars and engines.
There are three Pillars of Sustainability:-
Economic development:- this is important task for every company to contribute to economic growth. It is required to provide incentives for businesses so that they can come back in impactful manner (Christopher, 2016). There are many resource required to Toyota company to meet demand and supply of people. Economic development is about giving people what they want without any compromise of quality of life.
Social development:- It is essential for cited organisation to make focus on social people. This required to identify issues that are caused due to working of this business. This is important to spread awareness related to legislation that provides protection to health of people from hazardous activities. It is also required for this company to maintain quality at their workplace so that they can make effective production.
Environmental protection:- This is key task for this business to reduce impact of its operation on environment. It can be possible when environmental protection measures are used by this company. To prevent environment from pollution and keep carbon emission low is essential part Toyota so that their vehicle can not pollute surroundings. There are many legislation came in force and it is important for them to follow its guidelines and conditions so that their production can not cause harm (Coffman and Umemoto, 2010).
These area contribute to sustainable development and growth of any industry. It is required for such business to cover these aspect so that they can last for long time. There are various information required in the working of any business. It is required to have suitability in this so that organisation can make focus on economic, social and environmental development.
Sustainable SCM involves segregation of environmental and financial practices into supply chain life-cycle. There are various stages in life cycle of cars and engine as design and development, material selection, manufacturing, transportation, return and disposal etc. Environmental sustainability SCM provide assistance to reduce use of carbon emission and to optimise their operation so that cost and expenses that are incurred in this regard get minimize. It helps to enhance the profitability of organisation. Supply chain can be optimized by incorporating effective practices (Fawcett, Ellram and Ogden, 2014).
Sustainability in SCM has focus on various points as:-
- Environmental position.
- Conservation of resources.
- Reduction of pollution.
- Financial viability.
- Social responsibility.
It has vast impact on environment instead of other operation of organisation. Corporate have full focus on sustainable profile of product. There is requirement to understand the issue that may arise to user and to resolve such factors so that their product can be accepted at large. It is required for cited company to use effective sources for gathering information of market so that they can cover aspect of market and provide better services as comparison to their competitor. SCM is management of all the related resources that are required for operation of company so this is impact to make focus on quality sources so that better production can be made.
Supply chain consideration and decision
Many factors are required to consider in SCM so that their may be effective flow of material and information. It helps to enhance production capacity of organsation. There are various components that are considered in it as inventory, central purchasing, risk management, relationship with supplier etc. On the basis of these factors, decision can be taken so that effective SCM can be establised (Gimenez, Sierra and Rodon, 2012). It is required to consider every element in decision making process so that it can not affect future operation of company.
Impact of decision making on organsation and supply chain management
SCM is affected by decision that are taken by the management. There are certain situation where it is required for company to take strict decision so that they can have effective production. It has impact over product development, customers, manufacturing unit, vendors etc. decision are taken so that efficiency can be improved and it is required for organisation to follow such order so tat their operation can not affect. Sometime, it limits the operation of company to certain area and they can not make improvements. Decsion have impact over orgnasation and it is required for the company to work accoprding to decision that are taken by management so that it can not create problem in operation.
Triple Bottom line (TBL)
Sustainability is mentioned goal and objective of business. But measuring degree of it and to measure sustainable growth of organisation is difficult task. Accounting method is used by them to measure it i.e. Triple bottom line. It is the measure that is beyond traditional measures of profit, return on investment (ROI) and shareholder value. This is important segment that can be used to support sustainability goals (Goel, 2010). Tate,Ellramnd Kirchoff,2010 . It is growing to profit, non-profit and government sector organisation. This is used to evaluate performance of their business and there are three attribute in this regard as social, economical, financial. It is different from traditional framework because it covers ecological and social measures and it is difficult to define measurement of performance. TBL dimension also know as Ps that includes planet, people and profit.
Elkington said sustainability as Triple bottom line. He says that sustainability can be captured by measuring impact of operation of company in world by including various aspect as profitability, shareholder value, social, human and environmental capital.
Calculation of TBL
It can be calculated in term of index. In this, universally acceptable way can be used where comparison between similar company, cities and development project or other benchmark can be made. This is important to consider how component of index can be weighted? Is each P get equal weighting? About sub-component and its equality? Is people more important than planet? Level of entity, type of project and geographic scope have impact over what are the factors required to consider in measures (Hall, 2011). Different measures are determined by stakeholder and experts. There is a literature on measures that can be used for sustainability at various level.
Factors in SCM to achieve triple bottom line
Economic variable deals with bottom line and money flow. It covers various component as income and expenditure, taxes, climate aspects, employment, diversity factors etc.
- Personal income.
- Employment Vessel.
- Size of organisation.
- Growth of Job.
- Distribution by sector.
- Share of firm in each sector.
- Revenue by sector that contribute to gross state product.
Such variable should represent measurement of natural resources and its influence to viability. This is required to incorporate air, water, energy consumed, resources, toxic wastage, use of land for operation etc (Luand and Swaminathan, 2015). long range trend have impact over environment variables and it provides assistance to identify impact of operation on different area of environment.
- Selection of pollutants.
- Consumption of electricity.
- Fuel consumption.
- Harmful wastage management.
- Changes in land that is used.
This variable includes dimension of society and covers measurement of social group as education, equity, social resources, health, well beings of others, quality of life (Luthra and et. al., 2011).
- Unemployment rate.
- Force participation rate,
- Average commute time.
- Health and life expectancy.
Improvement of triple bottom line in Toyota Motor Manufacturing
Steps in social development:-
Toyota takes active participation in development of social group. There are various seminars and programmes organised by this company that provide assistance to enhance social standard of people. Social and cultural points are added to its priority sector for social contribution activities (Mangan and Lalwani, 2016). Different programmes are organised so that so that maximum use of know-how of Toyota and resources can be made. In cultural support, this company provides support to music, theatre and other related programmes. For social development, they provide assistance by organising Toyota support mecenat programs, social welfare and promoted effective communication among them so that social group can be developed.
Many activities are undertaken by cited company to promote social development as Toyota Youth Orchestra Camp (To raise future Amateur Orchestra leaders), providing medical services in area where improvement can be made, technology support programs so that awareness can be spread regarding improvised technology. This organisation is enable to provide maximum assistance to people so that they can be developed by the time. They contribute part of their profit for social development as their responsibility (Nikolaou, Evangelinos and Allan, 2014).
Steps in economic development
Toyota contributed best effort for economic development. This company has invested much money to upgrade UK car plant. Japanese car maker will make manufacturing in Britain after its separation from EU. This move of Toyota is supported by UK government and they also have provided assistance to this sector. There are improvement possible in Toyota's site so that they can win in future as car maker. This is important to compete its car maker plant with each other so that they can build new design and model.
Component that are used in manufacturing of car also dependent on European market so it is required for this company to develop its own plant to manufacture vehicle component. It will help to provide support for growth and development of this industry. This step is very effective because after separation of EU, this will provide support to overall economy of their nation. It is better opportunity for them to make production of all the parts of car within their country so that there is no need for import and it will also help to control the cost. When new plants are implemented then it will provide assistance to enhance economic base and employment rate will also be increased (Sherman, 2012).
Steps in environmental development
For environmental area, this company organises various seminars and support programs, reforestation so that they can spread awareness regarding environment protection. Forest is one of the important part for surrounding. This company carries out ownership and preservation of forest under effective management team. They have implemented many environmental activities in UK and have established collaboration with society and regions. Their employees have undertaken volunteer actions so that they can provide maximum assistance for preservation of environment.
There are many improvements that can be used by this company in their production so that they can provide maximum support to surroundings. This is important for organisation to use quality measures in production of car and engines so that they can offer better services to public. They use effective pollution control measures so that they production can not s[spread pollution in environment. Government support should be provided so that they can arrange training, research and development, improvement of its plant's environmental performance (Sitnikov, 2013).
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Tension and harmonies in different factors
Economic factor:- Many issue can be faced by this company when they operate their business in new sector. For economic development, it is required for them to implement new plants so that they don't need to import component of car from various market.
Challenges that can be faced by cited company related to economy as:-
Competitive in new era of globalization- When new sectors are opened by this company then it may be possible that they can face new challenges. There are some existing companies that are offering their services in this regard so it is possible that they can face more competition.
Global imbalance- Toyota is one of the leading company in market. When this company adopt new area of production then it is possible that it will increase cost of production which may create global imbalance.
Rise of new powers- When company enters into new sector then the existing organisations many create some issue for their growth. There is also possibility that new powers can be developed which hinder growth of the company.
Harmony through economic development:-
Social standard: When they build new plant for production of parts as engine and motor then it will help to enhance global recognition in market. Market sector of their business will also increased (Stadtler, 2015).
Improvement of technology and infrastructure: Many developed measures are taken by this organisation so that they can enhance their services. When they will start new plants then improved technology can be used.
Reduction of poverty: Economic development provides assistance to create new jobs. This is most effective way that provides assistance eliminate poverty in nation.
Social factor: It is possible that due to development, the operation may have positive as well as negative impact over social group. Problems in this regard:-
It is required for this company to make social development. There are many activities that can be considered by them to make development of society. There are some issue that can be faced by Toyota in this regard as:-
- To fulfil demand- When social group is developed then it may be possible that the expectation of people may also increase. It is possible that there may be variation in demand and supply (Fawcett, Ellram and Ogden, 2014).
- Increase in expenses- For social development, company require to expand money so it enhances burden in hand of organisation. Sometime, financial viability of company is reduced.
Harmony through social improvement:-
- Reach to large number of people- It help organisation to reach to many customers. When social standard of individual get increased then Toyota car will be accepted at large.
- Revenue generation- When product of Toyota will be accepted at large then it helps to enhance revenue of the company because many people can take the advantage of it.
Problems through environmental factors:-
Change in organisational capacity- Company operates in definite way and when new change took place then it is difficult for the business to use new version. For this, it is required for them to organise training and it increases expenses (Coffman and Umemoto, 2010).
Variation in management structure- when there is change in environment then it has impact of management. It is required to adopt such various so that it can be affected in adverse manner.
Harmonies through Environmental development:-
Encouraging innovation- When environment is developed then there are certain new opportunity that arise in business. It is effective part for company to use such opportunity so that new innovation can take place.
Increased efficiency- When new factors came in force then it will increase the efficiency of organisation. They can operate in new sector effectively which help to enhance productivity and portability (Christopher, 2016).
The factors of supply chain management has some positive and improvement in TBL can be achieved by making development of social, economic and environmental factors. There are various recommendation that can be used by company to make necessary improvement. It is required for this organisation to use effective measures so that they can make appropriate innovation in their business. There are many opportunity that are available to business while making these development (Barney, 2012). Toyota can make new innovation in their operation so that they can target many people. Many various can be taken into consideration so that they can offer various services to other. This is important for them to make production support components as motor, engine so that it is not required for company to import from any other country. Triple bottom line can be improved by this company by making development of economic, social and environmental factors. The company can adopt social development strategy so that they can reach to maximum people. This is key part for organisational growth and development because it helps to enhance market base of organisation and their product and services will be accepted at large.
As per above discussion it can be concluded that Supply chain management is important segment for every business. It is required for Toyota Motor Manufacturing (UK) Limited to use it effectively so that they can offer better product and services to others. Triple bottom line is one of the important segment that is required to consider by the business. It cover three aspect as economic, social and environmental factors. These are important factors that are required to consider by business so that they can make growth and development. There are certain measures that can be adopted by company to enhance their services and product. These development opportunity help the company to target more people and to provide their services at large level. Suitability in SCM is one of the important task that is required to consider by business so that they can get complete and all relevant information related topic. It provides assistance to complete task inn effective manner. These factors have impact over operation of Toyota and it provides growth opportunity to business.
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