ISQA 439539

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ISQA 439/539

• Grad Presentations
• Sustainability
• Other Stuff

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The State of the Sustainable Supply World

• Global Sustainability Focus
• Hottest Topic in Business
• China, Japan, Europe
• The Traditional Model of Sustainability Stands on
  Three Legs
• Environmental Sustainability
• Social Responsibility
• Organizational Sustainability
• Add a Fourth Leg National Sustainability

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Top Three Reasons for Green Focus

• Improve Customer Relations
• Improve Public Relations
• Reduce Fuel Consumption and Cost
• Greenwashing
• Motivation for Change
• Cost Reduction?
• Sustainability?

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Sustainability Foundations

• Sustainability Starts with Design
• Design of Firm
• Design of Products and Equipment
• Design of Practices
• END
• The Body Shop
• Foss Maritime
• Porteon

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Environmental Sustainability
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The Global Example

• UN Forecast
• World Population 2007 6.78 Billion
• World Population 2050 9.2 Billion
• Today Half of Population in Urban
• 2050 70 in Urban Areas
• 2050 27 Mega-Cities of Over 10 Million

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Environmental Sustainability Index, 2005 Rankings

• Index by Yale and Columbia Universities
• Air Quality
• Water Quality
• Climate Change (Greenhouse Gasses)
• Land Change (Protection Conservation)
• http//www.yale.edu/esi/b_countryprofiles.pdf

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Environmental Sustainability Index, 2005 Top Ten

• 1. Finland 75.1
• 2. Norway 73.4
• 3. Uruguay 71.8
• 4. Sweden 71.7
• 5. Iceland 70.8

• 6. Canada 64.4
• 7. Switzerland 63.7
• 8. Guyana 62.9
• 9. Argrentina 62.7
• 10. Austria 62.7
• 45. United States 52.9

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Environmental Sustainability Index, 2005
Rankings Trading Partners

• 13. Australia 61.0
• 30. Japan 57.3
• 31. Germany 56.9
• 33. Russia 56.1
• 45. United States 52.9
• 65. U.K. 50.2
• 69. Italy 50.1
• 82. Venezuela 48.1
• 95. Mexico 46.2

• 98. Nigeria 45.4
• 101. India 45.2
• 110. UAE 44.6
• 122. S. Korea 43.0
• 133. China 38.6
• 136. S. Arabia 37.8
• 145. Taiwan 32.7
• Last N. Korea 29.2

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Sustainable Supply Management

• Increased Scope
• Environmental
• Energy
• Process Wastes
• Supplier and Carrier Selection (and Elimination)

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Sustainable Supply Management

• Recycle
• Buy and Use
• Encourage
• Minimize Waste
• Energy Conservation
• Seek Suppliers With Sustainable Practices
• ISO 14000 - A Qualifier?

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Sustainability in Transportation

• Low Sulfur Fuels
• Alternative Fuels
• Ethanol
• Biodiesel
• Long Term Solutions
• Fuel Cells
• Solar/Electrical
• Others?

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Sustainability in Transportation

• Wind Energy
• Solar
• Electrical Vehicles
• Hybrid Logistical Applications
• Trucks
• Tugboats
• Ferries

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Wind-Powered Cargo Ships
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Zero Emissions Truck
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Hybrid Trucks
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Hybrid Tugboat
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Car Carrier for Toyota
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What Does This Mean for Supply Management?

• Increasing Emphasis on Sustainability and Green
  Activities
• Changes in How We Source
• Changes in Inventory Policies
• Changes in How We Use Transportation and
  Logistics
• Increased Scope of the Supply Function

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The Environment and Supply Management

• Planning for Population Explosion
• Resource Scarcity
• Increased Pressure on Supply Managers to Provide
  Positive Environmental Results.

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Social Responsibility
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Social Responsibility

• Workforce
• Immigration
• Education

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Sustainability and Social Responsibility

• An Entity Has Social Responsibility to Society
• Child Labor
• Excessive Hours
• Less Than Living Wages
• Any Forms of Exploitation
• Gender Inequity
• Business Ethics
• All Facets of Human Rights

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Retirements and Labor Concerns

• Labor Shortage
• Loss of Institutional Memory
• Loss of Practical Knowledge
• Education of Replacements
• Need Focus on Processes to Capture Knowledge
• Need to Attract New Employees
• Immigration

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National and Organizational Sustainability
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Reverse Outsourcing

• Increased Logistics Costs
• Customs Clearance Delays
• Long Lead Times
• Hidden Costs
• Firms Move Production from Asia to Closer to Home

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National and Organizational Sustainability

• Infrastructure
• Sourcing and Reverse Outsourcing
• Industry Consolidation and Privatization
• Inflation and Economic Concerns
• Technology
• Retirements
• Education

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To Maintain National Sustainability

• Invest in Basic Research
• Invest in Infrastructure
• Invest in Technology
• Invest in Education

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Organizational Sustainability

• Adopt the Philosophy of Sustainability as a
  Corporate Culture
• Similar to TQM
• Design the Organization, its Products and
  Processes to be Sustainable
• Apply Philosophy of Continuous Improvement to
  Sustainability Practices

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Risk Management
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Risk Management Some Types of Supply and
Logistics Risk

• Origin Risk Analysis
• Natural Disasters
• Labor Issues
• Political Issues
• Logistics Risk
• Capacity
• In-transit Loss or Damage
• Labor Issues
• Clearance Delays
• Infrastructure Constraints

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Risk Management Some Types of Supply and
Logistics Risk

• Inventory Risk
• Loss or Damage
• Obsolescence
• Shrinkage
• Technology Risk
• Bad Selection Process
• Lack of Training
• Late Adoptor

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Risk Management

• Global Supply Chains Increase Risk
• Continuity (Risk) Planning
• Suppliers Plans
• Carriers
• Numbers of Suppliers
• Emergency Inventory

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Risk Management

• Supplier Selection
• With Whom
• How Many
• Disaster Planning
• Natural Disasters
• Supplier Failures
• Financial
• Labor Interruptions
• Supply Chain Risks
• Security
• Conformance

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Risk Mitigation Strategies

• Good Forecasting
• Intense Market Study
• Careful Supplier Selection
• Superior Supplier and Carrier Communication
• Problem Prevention Plans