| Sustainability is defined as the ability to maintain a certain process or state. In the supply chain context, it is the management of raw materials, productions, and services in a manner that considers the social, environmental, and economic impacts of a decision with the end goal of of minimizing negative impacts.
Sustainability is sometimes presumed to be synonymous with corporate social responsibility, carbon management, green, or a combination thereof, since all three initiatives often have sustainable goals, even though a more appropriate definition lies somewhere in the intersection of these initiatives and sound economic planning. Sustainability is an elusive concept for which there is still no commonly accepted definition. The only commonality between definitions is that sustainability, which is viewed by some as more of a journey than a destination, is that the end result of a sustainable initiative should be a revised process that simultaneously improves life while reducing negative environmental, social, and economic impacts. Corporate Social Responsibility, also known as corporate responsibility, corporate accountability, corporate ethics, corporate citizenship, and responsible business, can be defined as the continuing commitment by a business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of that of the local community and society at large. It’s an aspect of sustainability that is focussed on responsible production processes, socially responsible employee relations, community involvement, and sustainability. It’s about doing things right. Major areas of concern include, but are not limited to, labour and workers’ rights, health and safety, community and conduct, and environmental stewardship. More information about Corporate Social Responsibility can be found in the wiki-paper* and the blog posts referenced below. Carbon Management refers to the utilization of processes, methodologies, and technologies to reduce a company’s carbon footprint as part of a movement towards a low carbon economy. A carbon footprint is the total GHG (greenhouse gas) emissions that can be directly or indirectly attributed to an organization. More information about carbon management can be found in the wiki-paper and the blog posts referenced below. Green is a neologism for environmentally friendly and refers to goods and services that are considered to inflict minimal or no harm on the environment and to be produced in an environmentally sustainable manner. It is sometimes used to refer to renewable methods of energy production such as geothermal, hydro, wind, and solar power. Green purchasing techniques are discussed in the wiki-paper* and more information about green in the supply chain context can be found in the blog posts referenced below. Corporate Social Responsibility
Carbon Management
Green Supply Chain
Sustainability
* The e-Sourcing Wiki was created and maintained by Iasta, which was acquired by Selectica in 2014 (which renamed itself Determine in 2015). It was retired by Determine (which did not actively maintain it) before Determine was acquired by Corcentric in 2019 |
Monthly Archives: January 2005
Supply Management
| Supply Management, which is a sub-function of supply chain management, refers to the methods and processes used by institutional buyers to purchase, and insure the availability of, raw materials, parts, and supplies for production, operations, and sales (to distributors, retailers, or end consumers). Supply Management usually encompasses the strategic sourcing and procurement, inventory management, logistics, risk management, and supplier management functions, as well as all of their component sub-functions, in most organizations.
For more information on supply management, please refer to the referenced glossary entries and numerous Sourcing Innovation blog entries. |
Supply Chain Management
| Supply Chain Management (SCM) is the management of a network of interconnected business processes involved in the ultimate provision of product and service packages required by end customers. Encompassing the strategic, tactical, and operational activities of a business, it spans all activities relating to the acquisition, movement, and storage of goods and related services from the point of origin to the ultimate point of consumption.
Strategic elements include, but are not limited to:
Tactical elements include, but are not limited to:
Operational elements include, but are not limited to:
For more information on these functions, see the appropriate glossary definitions and the thousands of relevant blog entries on the Sourcing Innovation blog. |
Supply Chain Forecasting
| Generically speaking, forecasting is the process of estimation in unknown situations. In a supply chain context, it centers on (customer) demand planning, which is a business-planning process used by sales teams to develop demand forecasts as input to service-planning processes, production, inventory planning, revenue and cash-flow planning.
Supply chain demand forecasting is a challenging problem, but it is generally possible to create good forecasts through an intelligent combination of judgmental and statistical methodologies. Statistical models based on solid historical data that take into account current market intelligence and global economic trends provide a good baseline, which, when tweaked by a seasoned expert who has intelligent insight into expected consumer response to a “one-time” event or environmental change can often deliver extremely reliable results on a continuous basis. For more information on supply chain forecasting, see the following posts. |
Supply Chain Finance
| Supply Chain Finance is the optimization of both the availability and cost of capital within a supply chain. The availability and cost of capital is usually optimized through the aggregation, integration, packaging, and utilization of all of the relevant information generated in the supply chain in conjunction with cost analysis, cost management, and various supply chain finance strategies.
There are four primary types of players in supply chain finance. There is the buyer, the supplier, the technology provider, and the financing institution. Buyers are the primary drivers of supply chain finance. As the builder of brands, and associated advertising campaigns, they are largely responsible for shaping consumer demand for the products they wish to sell. Suppliers are the primary beneficiaries of supply chain finance. Technology Providers are the enablers of supply chain finance and financing institutions play the role of lender and offer varies types of financing including Global Asset Based Lending, inventory financing, and insurance. Although often associated with early payment discounting, supply chain finance also includes cash-flow forecasting, inventory optimization, customer relationship management, and process improvements to lower a supplier’s operating costs and cash-flow needs. Strategies employed will include open accounts and letters of credit, early payment and dynamic discounting, inventory optimization, and advanced working capital techniques. Benefits to buyers will include off-balance sheet financing, more payment flexibility, and more control over the procure-to-pay cycle while benefits to suppliers will include below market financing rates, reduced cash-flow uncertainty, and more on-demand access to funding. For more details, benefits, and strategies for success, see the Supply Chain Finance wiki-paper* and the following posts.
* The e-Sourcing Wiki was created and maintained by Iasta, which was acquired by Selectica in 2014 (which renamed itself Determine in 2015). It was retired by Determine (which did not actively maintain it) before Determine was acquired by Corcentric in 2019 |