1. CHAPTER 8 Delivering
Value via
Sustainable
Supply Cycle
Strategies
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©2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

2. CHAPTER 8: DELIVERING VALUE VIA
SUSTAINABLE SUPPLY CYCLE STRATEGIES
A. Introduction
B. Diagnosing the Elements of
Sustainable Supply Cycles
C. Benefits of Sustainable Supply
Cycles
D. Sustainable Logistics
E. ISO 14000
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3. A. INTRODUCTION
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4. A. INTRODUCTION
STARBUCKS
Consumers can buy coffee anywhere, but there is no mistaking the ambiance
and aroma that surround a Starbucks. The company that revolutionized the
way we buy coffee has also been working behind the scenes to ensure that
its rich coffee will continue to be available in more than 40 countries across
the globe for a long time. The company is committed to minimizing its impact
on the planet, and it is passionate about sharing this commitment with its
partners throughout the supply chain.
The Starbucks Shared Planet program is an environmental commitment that
recognizes that conservation should occur throughout the supply chain—from
coffee growers in Guatemala to recyclers in Seattle. On the supply side,
Starbucks has worked in conjunction with Conservation International for 10
years to develop Coffee and Farmer Equity (C.A.F.E.) Practices. CAFE
consists of 24 comprehensive, measurable standards designed to enable
suppliers and farmers to become sustainable sources of coffee. Growers are
required to meet criteria for product quality, ethical accounting, social
responsibility, and environmental leadership. The program has paid huge
dividends for growers, who become able to strengthen their marketplace
positions and exercise some control over transformation of their
organizations and operations.
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5. A. INTRODUCTION
STARBUCKS
1. Shared Planet program
a. environmental commitment
which recognizes that
conservation needs to occur
throughout the supply chain
b. work in conjunction with
Conservation International for
ten years to develop Coffee
and Farmer Equity (C.A.F.E.)
practices
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6. A. INTRODUCTION
1. Shared Planet program
c. CAFÉ
1. 24 comprehensive, measurable
standards designed to enable
suppliers and farmers to become
sustainable sources of coffee.
d. 2008, 77% – 295 million pounds of coffee
purchased from suppliers verified and
approved under C.A.F.E
e. Average cost of $1.49 per pound is 5%
above the average price for C grade
Arabica
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7. B. DIAGNOSING THE ELEMENTS OF
SUSTAINABLE SUPPLY CYCLES
1. Supply cycles
a. organizations involved in making a product
available for sale
b. functions performed by these organizations.
2. triple bottom line benefits associated with
economic, social, and financial
performance
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8. B. DIAGNOSING THE ELEMENTS OF
SUSTAINABLE SUPPLY CYCLES
3. Three perspectives on the delivery of value
a. Channel: a set of organizations involved in the
process of making a product available for
consumption
b. Logistics: the supply chain is a set of
organizations linked directly to the flow of
products and information from a source to the a
consumer
c. Porter: value chain is the set of primary and
support activities performed by the firm to
serve as sources of competitive advantage
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9. B. DIAGNOSING THE ELEMENTS OF
SUSTAINABLE SUPPLY CYCLES
Inputs & Outputs at One Stage of the Supply Cycle
Processed Inputs Products
Processing
Un-processed inputs By-products
Iron ore Steel coils
Steel manufacturing Slag
Compressed Air Carbon dioxide
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10. B. DIAGNOSING THE ELEMENTS OF SUSTAINABLE
SUPPLY CYCLES
6. We refer to process of delivering value as a
supply cycle due to the relationship between
the environment and the product development
process
Iron ore Steel bicycle retailer consumer disposal
Wal-mart : sustainability scorecard
identifies fourteen categories of products or processes with the greatest
environmental impact
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11. C. BENEFITS OF SUSTAINABLE SUPPLY
CYCLES
1.Better working Conditions
2.Reduced Turnover
3.Improved Product Quality
4.Improved Efficiency and
Profitability
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12. C. BENEFITS OF SUSTAINABLE SUPPLY
CYCLES
5. Better Management of Risk
6. Enhanced Brand Reputation
7. Stakeholder Returns
Increased
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13. D. SUSTAINABLE LOGISTICS
1. Logistics:
a. process of planning, Inventory
Transportation,
Carrrying
allocating, and Cost, 20.4% 44.9%
controlling human and
financial resources
dedicated to physical Administrative
Costs, 4.1%
distribution,
manufacturing support,
and purchasing
operations
b. reverse logistics:
Order Entry/
1. Strategies that trace Customer
Service, 10.2%
Warehousing,
20.4%
product back from
the point of
consumption
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14. D. SUSTAINABLE LOGISTICS
1. Fleet Optimization
2. Energy Efficiency
3. Innovative Technology
a. routing and tracking computer
system
b. Inventory management software
c. RFID (radio frequency identification)
d. Global Positioning Systems (GPS)
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15. D. SUSTAINABLE LOGISTICS
4. Packaging
5. Interorganizational
Relationships
a. Enhance vehicle performance
b. Reduce total supply cycle costs
c. Enhanced Customer Service
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16. E. ISO 14000
1. environmental management systems (EMS)
a. set of regulations established to achieve environmental goals
2. ISO
a. family of standards applied across industries to monitor and
control interaction with the environment
b. Two of the primary standards
1. ISO 14001: 2004
– outlines the guidelines associated with the firm’s
approach to sustainability, and it provides a strategic
approach to the organization’s environmental policy
2. ISO 14004:2004
– provides guidelines on the elements of an EMS, its
implementation, and the principal issues involved
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17. E. ISO 14000
3. Benefits
a. competitive advantage over other firms in a
market
b. lower toxic emissions
c. lowered resource usage
d. higher energy savings
e. lowered costs of waste disposal
f. provide assurance to stakeholders that the firm
is committed to sustainability
g. provides a strong response to customers and
suppliers that place environmental demands on
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the firm
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