Sustainable approaches for Supply Chain Management
3 Credits | 200 Level | 38 Contact hours
DESCRIPTION
Before raising concerns about many social&environment issues, supply chain
management (SCM) merely considered the effectiveness and responsiveness of a
system from receiving raw materials and production procedures to delivering
products to end-users (Giunipero et al., 2012). But the changes experienced due to
society’s awareness of the threatening activities of industries are forcing
practitioners to modify those processes that have been the main cause of the vast
creation of solid and liquid trash, pollution, global warming, and decreases in the
world’s non-renewable resources and critical materials for many years.
In this scenario, companies have
to adopt best practices to fulfil the stakeholders’ expectations and ensure that the
whole value chain is sustainable in a holonic sense, ranging from Human Rights
issues to ethical and environmental concerns.
A clear example is the recent concept of “Due diligence,” which implies that
companies need to ensure that the suppliers they work with are not involved in non-
desirable practices (e.g. exploitation, child labor, corruption and bribery, or
environmental damage...), and therefore must track them to identify any potential
risks associated. This is a concept evolved from the classical “Extended Producer
Responsibility”, typically included in former CSR frameworks and standards, but with
a crucial difference: it is not any more voluntary and now implies new legal
obligations for eligible companies, having to identify and, where necessary, prevent
or mitigate adverse impacts; and not only within their processes but along their
entire supply chains.
LEARNING GOALS
Upon successful completion of this course, students will be able to:
• Explain the sustainability challenges and opportunities facing supply chains
today and master relevant vocabulary and tools.
• Know the factors that are contributing to the adoption of sustainability
strategies, such as legislations that penalize the negative
environmental&social impacts, and the expectations of companies in terms
of health, human rights and the environment.
• Demonstrate that today's supply chains cannot be concerned just with
creating shareholders worth; as its performance is also measured in social,
environmental and economic terms impact;
• Lead the introduction/adoption/scaling up of sustainability practices in their
field of work.
• Build awareness of their Responsibility as decision makers, analysing the
environmental&social side effects of OM decisions and their strategic link.
• Link the business area of the companies with the Sustainable Development
Goals and Due Diligence frameworks and standards.
PROGRAM CONTEXT
As it happened with previous accountability standards, this Due diligence
approach (that was initially inspired by pioneer legislations of countries like France
or Germany) is progressively spreading out to wider regions; building a whole
portfolio of indicators for those desirable sustainable policies that are important to
track and promote.
Unfortunately, this trend is unknown by many Operations managers, who still
make their daily decisions only focused on lowering costs without any consideration
for the affected stakeholders, often resulting in irreparable environmental or social
damage. And regarding the actual awareness and social media pressure, these
impacts damage the company's reputation, affecting not only the stakeholders but
the shareholders.
More and more investors, faced with the risk of a sudden drop in the stock
market that a scandal could entail, are betting on companies with solid profits, but
Cristóbal Miralles Sustainable&Efficient approaches for SCM
not generated due to ignoring certain legal and/or moral limits. Instead, most prefer
to invest in companies with a truly robust and sustainable position in the market,
whose supply chains are also compliant. And this becomes a real new paradigm
overcoming the classical assumption of a ‘fixed pie’, where the shareholder value
can only grow at the expense of stakeholder value. In fact, many studies show how
the increase in Employee satisfaction (Edmans, 2012), and other sustainability issues
(Flammer 2015, Khan et al. 2016,) finally suppose a better (long-term) shareholder
value.
This approach is even more beneficial for those companies that go beyond
current environmental&labor legislation regarding the stakeholders. By doing so,
they end up in a position of competitive advantage when, effectively, legislation
spreads...and there are legal advances that inexorably happens: it can be a
lowering of the permitted limit of CO2 emissions, a ban on materials that were
known to be unsustainable, the increase of quotas for workers with disabilities,
specific Gender incentives, or whatever other legal modification...but those
companies that are surprised by an eventual raise of standards are then forced to
quickly reshape their strategies, becoming in clear disadvantage; whereas those
firms that had adopted sustainable practices a priori, are placed in the best possible
competitive position.
This is the core idea of this course, which starts by provoking internal debates
on the collateral effects of many Operations Management decisions whose long
term effects are often ignored. Only through a deep analysis of these decisions, it is
possible to be aware of their real impacts, and to understand the tools and solutions
that can minimize them; which are later progressively exposed during the sessions.
ASSESSMENT/GRADES
Although the evaluation system can be discussed and fine-tunned, initially the
final grade for the course will be determined according to the following weights:
TASK 1 – ETHICAL DILEMMA 10%
TASK 2 – INTERACTIVE ROLE PLAYING 15%
TASK 3 – CASE STUDY 15%
TASK 4 – PRESENTATION PRODUCT REDESIGN 15%
FINAL EXAM 40%
ACTIVE PARTICIPATION AND PREREQUIRED ACTIVITIES 5%
