Supply chain management - Essay Example

Running head: supply chain management Supply chain management Supply chain management deals with management of all interrelated businesses that aim to provide a specific end product or service to the customers. This process involves various activities dealing with movement, storage, inventory management, and handling the finished goods from production point to the customers’ point. Organizations have come up with various innovative methods in all these process, which not only provide good SCM but also add value to their businesses as well as the environment including their suppliers, society as well as economy.

Supply chain strategy is critical to its sustainability. Carter and Rogers (2008) define Sustainable Supply Chain Management (SSCM) as the strategic, transparent integration and achievement of an organization’s social, environmental, and economic goals in the systematic coordination of key interoganziational business processes for improving the long-term economic performance of the individual company and its supply chains (cited in Panayiotou & Aravosis, 2011; p.59). Two supply chain types have been identified such as supply-chains driven by lean, cost, and efficiency and supply chains driven by agility, pace and service (Cetinkaya et al, 2011).

In order for companies to stay competitive in their SCM, it is important that they customize their supply chains according to the need and competition. The most widely recognized SSCM approach is the triple-bottom line approach which consider the economic, environmental and social contributions or impact that supply chains can make. The best known example of such a SSCM is that followed by Starbucks Corporation. Starbucks’ purchasing philosophy has brought a complete shift in the way supply chain operated.

Their purchasing philosophy considers their farmers, their customers and their business through their Coffee And Farmer Equity Practices (C.A.F.E). This initiative is based on three principles, a sustainable supply of high quality coffee beans, provided by a stable source of coffee farms with farmers who are not exploited by their trading partners; lands farmed with environmentally sound methods; and families that live in healthy, secure and supportive societies (Duda et al, 2007). C.A.F.E practices allow growth of the economy by providing better business to the farmers and based on fair practices.

Secondly, these practices ensure high-quality coffee beans are grown through environmentally safe practices and are funded by Starbucks. Thirdly, these practices provide good trade opportunities for the farmers, which contribute to the betterment of the society as it improves the living and trading standards of the farmers (Duda et al, 2007). However, premium costs of coffee products can be detrimental to its competitiveness in the market; this would also reduce its customers and impact on its profit and performance.

Sustaining the same SCM strategy would then be a challenge. This aspect needs to be considered by Starbucks before focusing on only one type of SCM strategy. In conclusion, SCM is an important function of business that can add great value to its success and profits. However, sustainable SCM practices are the deciding factors. The triple-bottom line approaches that focus on economy, society and environment can provide considerable sustainability for long term; however, organizations need to be prepared to face the challenges of competition by constantly changing the strategies according to the need.

References Cetinkaya, B et al. (2011). Sustainable Supply Chain Management: Practical Ideas for Moving Towards Best Practice. Springer: New York. Duda, S et al. (2007). Starbucks Corporation Building a Sustainable Supply Chain. Global Supply Chain Management Forum. Stanford Graduate School of Business Case, GS-54, May 2007. Retrieved from, http://www.gsb.stanford.edu/scforum/login/abstracts/documents/GS54.pdf Panayiotou, N and Aravosis, K.G. (2010). Supply Chain Management. Idowu, S.O and Louche, C (eds.) Theory and Practice of Corporate Social Responsibility.

Springer: London.