In today's competitive world, it is essential for organization to perform their practices in a legal and ethical manner in order to gain success in business. Now days, the level of general awareness has been increasing rapidly that influence the customers to get connected with company which adopts the method of sustainability and environment friendly (Walker and Jones, 2012). In the modern era, suitability has been become one of the crucial criteria for the judgement of industries and businesses. By considering this approach, organization can develop their brand image among public as well as enhance their reputation.
Due to this aspect, the present report is focused on describing the impact of sustainable supply and procurement on the development and growth of business. Along with this, it includes description about the performance of two companies regarding the sustainable purchasing of raw materials, manufacturing processes and delivering of products. For better understanding of this report, Marks & Spencer and Unilever have been taken into consideration.
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Presentation of global and national data in the respect of given topic
In order to gain success in this competitive world, it is mostly required for commercial entity to adopt the concept of sustainability in their business practices because modern customers are more aware about the safety and welfare of environment, society and human beings (Attaran and Attaran, 2007). Due to this aspect, sustainable supply and procurement is necessary for the organization to perform their business activities in a legal manner. Sustainable supply of products and purchasing of raw materials is beneficial for the business entity to achieve its goals and objectives. Along with that, it is helpful for customers by getting better quality of products. In accordance to the concept of sustainability, management of company needs to focus on the following factors such as economic, environmental and social at the time of buying and selling products and services (Wagner and Svensson, 2010). Along with this, it is required for them to consider the quality, quantity and price of goods and services which will be served to customers.
By considering the sustainable procurement, organization will be able to conduct better relationship with suppliers in national and international level (De Brito, Carbone and Blanquart, 2008). In the global market, contract negotiation must be ethical in order to perform supply and procurement in a better way. As per the recent scenario, there are so many chances of fraud, human trafficking, child labour, modern-day slavery and corruption. These all criminal offences must be eliminated by the management of company for making their business legal and sustainable (Khan, Christopher and Burnes, 2008). Along with this, it is needed for organization to consider the following activities such as cost effectiveness, collaborative waste reduction and environment friendly solutions for service and production problems as well as for the environmental sound innovation.
In accordance the view points of Abbasi and Nilsson (2012), fulfilling the requirements of customers is one of the major objectives of sustainable supply which can be achieved by rendering better quality of products and services at the reasonable price. As per the study of Walker and Brammer, 2009, it has been observed that there are following major issues in the sustainable supply which are related to cost increase, challenging cultures and mindset, operational of sustainable development, barriers in management and control of trade offs and uncertainties etc. Availability of these challenges leads to decrease the effectiveness of sustainable supply and procurement (Challenges in sustainable supply and procurement, 2015).
In the modern era, import and export in between countries have been increasing continuously which is focused on enhancing the level of transportation. Transportation is the major cause for enhancement in pollution which may have negative impact on the safety and welfare of environment (Berry and McCarthy, 2011). Other than this, the wastage extracted from industries also put their huge impact on the hygiene of environment. For ensuring the safety of environment, organization needs to adopt the innovative method and technology along with using the sustainable fuel, chemicals and other minerals.
Overview of two companies with comparing their performance
Marks & Spencer
Marks & Spencer is one of the leading multinational British companies which operates in retail market and is headquartered in London. Main aim of this organization is to deliver high quality of sustainable products to its customers such as home products, clothing and luxury food products (Wagner and Svensson, 2010). In order to maintain the sustainability in their business practices, management of company is focused on adopting new and innovative technology on regular basis. Availability of technology innovation is the best advantage for company to attract more number of customers by enhancing their quality of services in an effectual manner.
In order to render benefits to society and environment, Plan A has been launched by the management of company. Main aim of this plan is to enhance the number of jobs for thousands of people by increasing their number of stores, programmes, customers and products. Working with Plan A is one of the major steps of company to make their success more ethical and sustainable (Sustainable practices adopted by Marks & Spencer, 2015). The plan includes three international challenges such as raising pressure on our planet's limited resources, increment in social inequality as well as demand of healthier and sustainable lifestyles. Adopting plan A was one of the big opportunities for organization by which its brand image and number of customers have been increased.
Marks & Spencer is focused on rendering the sustainable products to its customers. Therefore, it purchases products from the producers that adopt the sustainable method and growing standard at the time of production. The impact of palm oil on tropical forests is firstly recognized by this organization which is the main example of sustainable practices that are adopted by the management of company (Nikoloyuk, Burns and de Man, 2010). With producing sustainable products, organization always focus to donate the available unsold food products to the communities with the help of its charitable partners such as food cycle, fare share, neighbourly and company shop. With the help of donation, business entity can deal effectively with food poverty by fulfilling the food needs of poor people.
In order to get better clothing products, Marks & Spencer helps the farmers of India to develop appropriate ways for producing cotton by using less pesticides and water. Availability of fewer pesticides is beneficial for the health of community of cotton farming and for the safety of environment (Walker and Brammer, 2009). Due to this aspect, better cotton initiatives (BCI) and WWF techniques have been suggested to cotton farmers by which 70% of company's cotton comes from the sustainable sources. Furthermore, business entity is planning to decrease the volume of food wastage by 20% by 2020.
Unilever is one of the leading British multinational Companies headquartered in Netherlands, Rotterdam, United Kingdom and London. This organization deals in consumer products such as cosmetics, beverages, food and cleaning agents and works with around 190 countries in all over the world. In accordance to the total revenue, it got third rank among the world's largest consumer goods companies (Berry and McCarthy, 2011). It is one of the oldest firms in consumer goods which is focused on rendering better quality of products to its customers by considering the methods of sustainability.
With providing better services, organization is focused on developing innovative practices for the welfare of communities and for creating their brighter future. Along with this, it always tries to meet people's desires by enhancing the availability of more sustainable products. In accordance with the sustainable plan of Unilever, its aim is to achieve the vision of company related to decrease its environmental footprint and to enhance its positive impact on society (Khan, Christopher and Burnes, 2008). In order to create sustainable supply and procurement, management of company is focused on developing better partnership with other businesses, suppliers, society and government. With the help of expanding businesses through partnership, it is beneficial for the growth of both company and communities.
For reducing the impact of business on environment, there are some performance objectives that have been designed by the management of company. These are mentioned below as:
- The main objective of organization is to deal effectively with climate changes by eliminating the chances of deforestation.
- Maintaining the development of agriculture and growth of farmers in a sustainable manner.
- Focusing on the welfare of consumers through using fewer energy, less water and by including the concept of recycling in its production (Practices adopted by Unilever to reduce the impact of business on environment, 2015).
- Adopting the methods of ozone-friendly and eco-friendly in production and distribution of products.
- Promoting public policy at the time of tackling the changes of climate.
Due to availability of these performance objectives, there are following changes that came into the performance of business entity in the recent years. These changes are as follows:
- Using of sustainable sources for getting agriculture raw materials has been increased from 14% to 55% in between the year from 2010 to 2014.
- Consuming quantity of water in consumer products has been decreased by 2% from 2010 to 2014.
- From 2010 to 2014, green house gas emission of Unilever products has been enhanced by 4% (Plambeck, 2012).
- Availability of wastage with the disposal of goods has been reduced by 12% at the end of 2014.
- From 2008 to recent year, Co2 emission extracted from energy has been decreased by 37% and water abstraction in manufacturing process has been reduced by 32%.
- Since 2008, the cost of company has been avoided by €400 million (Smith, 2008).
Evaluating the performance of companies and giving appropriate recommendations
In accordance with the plan A, Marks & Spencer is focusing on enhancing the knowledge of farmers regarding better ways of cotton farming through using less pesticides and less water for reducing the agriculture impact on environment (Marks & Spencer Plan A, 2015). With suggesting better ways, it is also required for the management of company to render proper training to them in order to deal effectively with environment safety and climate changes. In order to enhance the success chances of plan A, management of company needs to involve the stakeholders in their planning process by which they can get better suggestions and ideas for them.
On the other hand, it is necessary for the management of Unilever to set their performance objectives in such a manner which must be realistic, feasible, time bound, specific and attentive (Practices adopted by Unilever to reduce the impact of business on environment, 2015). These objectives must be measured by company after a fixed period of time. By evaluating, organization can understand the availability of loopholes that exist in their performance. In accordance to my observation, both companies are performing their supply and procurement practices in more sustainable manner. But there are some recommendations for them that can be used at the time of performing their purchasing and supplying activities. Due to aspect of sustainability, it is mostly needed for company to maintain their quality of services by adopting better technology as per the recent trends. With maintaining quality, it is also required to set reasonable prices for delivering products to customers in an ethical manner.
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According to my perception, there must be comprehensive understanding of the impact of sustainability on business. Better enhancement of sustainability in business practices leads to enhance the reputation of company among general public. In the earlier stage of sustainable supply, there must be non-availability of corruption and bribery at the time of developing relationship with suppliers, partners and government. Along with this, discrimination should be avoided at the time of delivering products and services. Further, management of company needs to follow the laws and regulations of government regarding supply and procurement. By considering the regulation of UK government, it is needed for both companies to consider the principles of globally recognized standard named BS 8903:2010. This standard is focused on assisting the management of organization in their sustainable procurement and supply of products.
In order to improve sustainability and for adopting other changes throughout the supply chain, transferring knowledge and information across the whole supply chain is an effective way. In order to exchange knowledge, management can use the methods of conferences, online training, capacity building campaigns and case studies.
In accordance to the above study, it can be concluded that sustainability is one of the crucial aspects of business development which is focused on conducting business practices in a legal and ethical manner. Adopting the concept of sustainability is beneficial for business entity by maintaining strong relationship with customers, employees, suppliers, partners and government. As per the recent scenario, sustainable supply and procurement is necessary for commercial entity to gain competitive advantage along with developing their positive image in the population. By considering the aspect of sustainability, organization can maintain their quality of products and services which is the key factor for success of business.
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