Supply chain management is based on the flow of products and services with a significant process that alters the raw materials in the ultimate products. It focuses on the maximization of customer value through the most effective supply activities and earns a competitive advantage (Christopher 2016). Sustainable supply chain network emphasizes the effective financial and environmental practices that work with the supply chain lifecycle, material selection, designing, and development of the product, transportation, manufacturing, and packaging through effective measures. The selection of materials and relevant suppliers helps to protect the supply chain management and promotes environmental conservation that leads to the environmental performance of the organization (Chin Tat and Sulaiman2015).
Increasing legislation and regulations bring pressure on the companies to adopt suitable policies and manage environmental performance to gain sustainability in the organization. Potential environmental impact can be identified by the organizations through their supply chain and the use of materials in manufacturing. Environmental consciousness is increasing among consumers to promote environmentally friendly practices with the selection of material suppliers. Improvement in profitability is based on environmental performance which is proven through several studies (Walmart 2019). The significance of environmental performance in the supply chain management can be seen through green products and demand of customers towards environmental-based products (Nguyen 2017).
IBM and Walmart have focused on its supply chain network to maintain sustainability through effective strategies. Increasing understanding of consumers for environmental protection leads the organizations to adapt environmental performance in the supply base. Walmart deals with more than 100,000 suppliers in the world which requires the mitigation of several risks in the supply chain (Knagorsk 2017). Through a global sustainability index system, Walmart focuses on the social and environmental impact of production and distribution. It encourages retail companies to perform their environmental accountability. In terms of revenue, Walmart is considered as the largest organization with approx. $480 billion earnings (Marshall, McCarthy, Heavey, and McGrath 2015). Using renewable energy promotes the supply of products.
Walmart focuses on the environmental initiatives to improve its supply chain management based on the environmentally friendly solutions through new technologies, use of renewable energy, fuel cells, wind, off-site and on-site solar techniques to maintain the use of 100% renewable energy(Nguyen 2017). It helps to reduce the amount of waste through environmentally friendly solutions. The goal of Walmart for zero waste is achieved by the innovative ideas and strategies based on the reduction of wastes and divert the materials and food from revolving into waste. Safety regulations for employees and customers are followed by Walmart that promotes the trust of customers. Through the expansion for monitoring and identification of product and supplier compliance, it adheres to the specified standards. A safe and healthy environment for men and women is expected by the company from its suppliers to maintain safety regulations(Knagorsk 2017).
Walmart is identified as a sustainable company that promotes the use of environment-friendly techniques in the supply base to achieve competitive advantage and gain the trust of its customers. It is popular as a sustainable leader in the world through its sustainability index and environmental performance(Walmart 2019). Walmart has implemented new practices for supply chain management to improve environmental performance. These practices include the designing of goals for maintaining environmental performance with the process and products used by suppliers, certification for the eco-labelled products is provided by the organization to its suppliers, a specified quantity of the products are purchased to promote innovative techniques, used cooperative supply chain management techniques to reduce the environmental impacts and motivate suppliers. Through a sustainable supply chain network, Walmart has improved its relationship with suppliers. Better management of supply strategies promotes eco-friendly products among consumers and helps to gain better profits with improved customer satisfaction(Knagorsk 2017; Nguyen 2017).
IBM is concentrated towards environmental leadership in the world that promotes the suppliers as social and environmentally responsible. It helps to ensure the requirements of the suppliers and build a healthy environment for the employees. Through the global environmental management system, IBM focuses on three-stage supplier environmental evaluation to execute the process used by suppliers based on the equipment and chemicals (IBM n.d.). The potential impact of the environmental performance of the organization can be seen in the operations of the supplier to meet the defined regulations and maintain consistent efforts with sustainable processes and products. The supplier management system is affected by the environmental evaluation of IBM through its longstanding commitment. It includes the evaluation of suppliers through:
Different activities are conducted by the suppliers that are documented and reported through supply chain management which includes spill prevention, chemical management, chemical content, and health and safety of employees. Three-stage supplier evaluation of IBM helps the organization to analyze the risks associated with the operations of the supplier and its hazardous impacts on the environment. Through the evaluation, IBM emphasized managing different programs to ensure the applicability of legal requirements and maintaining an environmental management system (IBM 2020). Through the hazardous waste process, IBM concentrates on the disposal location, recycling, and final treatment of the products to maintain effective operations in the environment and reduce environmental impacts. Suppliers of IBM managed to track the hazardous materials and used the recycling technique. Through collective ideas and solutions for the disposal of products, sustainable procedures are identified that promotes a suitable facility in the organization and meet the requirements of IBM through recycling, disposal, and treatment. To meet the customer's demand, increase visibility in the organization, and controlling costs for different products, a sustainable supply chain network is necessary that fulfills the needs of the suppliers and the organization as well(Marshall, McCarthy, Heavey and McGrath 2015).
It can be identified that Walmart and IBM use a sustainable supply chain network through maintain environmental performance. The decisions of environmental performance improvement significantly impact the supply chain network and supplier relationship management strategies(IBM 2020). A positive impact of sustainable supply chain networks is identified in the relationship with suppliers. Through environment-friendly products and processes, suppliers maintain consistent improvement in quality and reduce their cost which provides different benefits to both suppliers and the organization. In the time of globalization, a risk of safety and health of employees is also reduced by effective suppler relationship management that promotes the fulfilment of legal requirements and concentrates on managing mutual trust(IBM n.d.).
Just-in-time (JIT) manufacturing technique is based on a near-zero or zero inventory system with the identification of the required quantity to complete the manufacturing process. It is based on the adequate quantity necessary to maintain finished goods through work-in-progress materials (Wagner, Herrmann and Thiede 2017). This is a production approach that reduces the additional costs and wastes to fulfil the management commitment. In the car manufacturing industry, the JIT approach is considered as the most significant that improves the quality of the product. It is effective for the purchasing process in all the steps. With the identification of specifications, this approach can help in meeting the suitable needs of the consumers and emphasize quality based products. Suppliers can identify the required resources to maintain time and costs. The manufacturing process of JIT impacts the purchasing process through positive relationships between suppliers and the organization. The organizational design changes with the formal approach of the management to integrate specialized services and promote purchasing decisions (Wild 2017).
As a process technology, the JIT approach adds value to the supplier chain management and increases production with the specified products that are necessary for the supply process. The purchasing process becomes easier through the JIT process as it involves an effective relationship with the buyer and promotes the maximum capacity in the production process. Based on the efficient use of materials, specifications can be easily determined by the supplier. Thus it can be said that JIT leaves a positive impact on ‘determining specifications’ in the purchasing process(Wagner, Herrmann and Thiede 2017).
A procurement system helps the organization to maintain inventory and the purchase of goods and services through an automated process. It promotes the management of all purchase related processes. The role of technology is increasing in the organization to innovate the processes and procedures (Barngetuny and Kimutai 2015). Over time, the practice of purchasing management is changed through operational and administrative activities. In the 'contracting' step of the purchasing management process, the prices are negotiated by the organization to conclude with a contractual agreement with the suppliers. E-procurement provides an opportunity to maintain purchasing solutions through technology such as the internet. Different commercial transactions of the organization are based on technology such as logistics, ordering, and managing systems. Through e-procurement, an organization can attain different benefits which can lead to cost and time saving of decisions (MohdNawi et al. 2016).
Improvement in the control over the purchasing process can be identified through the e-procurement technique that represents the use of purchasing decisions effectively to utilize the resources efficiently. E-procurement provides a positive impact on the purchasing process including "contracting" step-through improved relationship with suppliers in the business that enhances the purchasing power and allows the organization to consumer lower costs and time on purchasing the materials. E-procurement is considered as the most suitable technique to enhance the purchasing process in each step and take advantage of reduced costs. It can be used in all the phases of the purchasing process to attain the most significant outcomes (Barngetuny and Kimutai 2015).
Enterprise resource planning (ERP) is referred to as an ability to provide an assimilated collection of business applications. Different tools of ERP helps to manage the data model and process through deep operational techniques such as manufacturing, finance distribution, supply chain, and human resources. Simplification of the business workflows and reduction in manual labour is the major purpose of ERP (Parhizkar and Comuzzi 2017). The purchasing process involves several steps that help to maintain an effective decision in the organization. ERP is concentrated towards a technology-based purchase that promotes the automation of the ordering process and manages time in the collection of needs. The purchasing process becomes easier in the care manufacturing industry through managing the potential suppliers and evaluating the quotes of suppliers to get the most suitable products. Invoice and payment management can also become quick and easier through ERP that enhances the 'ordering' step in the purchasing process. Positive and reliable techniques of ERP enhances the purchase decisions through reduction ins time and management of billing process to analyze the minute details of the purchases(Wagner, Herrmann and Thiede 2017; Parhizkar and Comuzzi 2017).
Different tools of ERP are available for the purchase management process and managing the resources through efficient utilization of time and cost. The needs of inventory can be added to the ERP software to maintain purchase needs and analyze suitable purchase decisions through effective monitoring and reporting system of inventories. Focusing on the purchase decisions is the most crucial task for an organization which can be enhanced through an automated purchasing system the maintain effective communication in the organization and with different departments. A flexible and accurate ERP system brings effective decisions for ordering the specific quantities and within a suitable time through estimating the purchasing cost based on the defined quantity of orders. Thus, it can be said that the ERP system makes the purchasing process easy including the 'ordering' step (Wagner, Herrmann and Thiede 2017; Parhizkar and Comuzzi 2017).
Lean is considered as an approach that helps in the manufacturing process and its improvement. Through mass production in the automobile industry, this approach focuses on the reduction of waste that can be identified in different forms. Through the elimination of wasteful actions in the manufacturing process, the quality of the product increases that promotes subsequent changes in the process. Effective business practices are based on the systematic productivity improvement that can be derived through lean principles. Different lean principles are defining value, map value stream, establish pull, create flow, and pursuit perfection that enhances the organizational decisions (Wagner, Herrmann and Thiede 2017). Better value of the products can be provided to customers through the effective use of lean principles.
These principles are effective for purchasing decisions through their increased profitability and fulfilment of the customer needs. Through the reduction of waste in the 'expediting and evaluation' step of the purchasing process, the effectiveness of the decisions can be analyzed that can help in identifying the most suitable and reliable purchase decisions. Each lean principle works for the wastes in the production system while through the identification of waste in the process, a defined quantity can be purchased that can lead to optimum results and run a smooth operation. The purchase decisions are based on the actual needs of the customers while through lean principles, customer value can be increased that can directly impact the purchasing power step ‘expediting and evaluation’. Thus, it can be said that lean principles promote effective customer value and reduces waste in the manufacturing process in the automobile industry and leaves a positive impact on the purchasing process (Wild 2017).
Barngetuny, D.C. and Kimutai, G. 2015. Effects of e-procurement on supply chain management performance in Elgeyo-Marakwet County. International Academic Journal of Procurement and Supply Chain Management, 1(5), pp.99-120.
Chin, T.A., Tat, H.H. and Sulaiman, Z. 2015. Green supply chain management, environmental collaboration and sustainability performance. Procedia Cirp, 26, pp.695-699.
Christopher, M. 2016. Logistics & supply chain management. Pearson UK.: UK.
IBM. 2020. Environmental evaluations of suppliers. [Online]. Available at: https://www.ibm.com/ibm/environment/supply/evaluations.shtml [Accessed on: 18th June 2020].
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Marshall, D., McCarthy, L., Heavey, C. and McGrath, P. 2015. Environmental and social supply chain management sustainability practices: construct development and measurement. Production Planning & Control, 26(8), pp.673-690.
MohdNawi, M.N., Roslan, S., Salleh, N.A., Zulhumadi, F. and Harun, A.N. 2016. The benefits and challenges of E-procurement implementation: a case study of Malaysian company. International Journal of Economics and Financial Issues, 6(S7), pp.329-332.
Nguyen, T.T.H. 2017. Wal-Mart’s successfully integrated supply chain and the necessity of establishing the Triple-A supply chain in the 21st century. Journal of Economics & Management, 29, pp.102-117.
Parhizkar, M. and Comuzzi, M. 2017. Impact analysis of ERP post-implementation modifications: Design, tool support and evaluation. Computers in Industry, 84, pp.25-38.
Wagner, T., Herrmann, C. and Thiede, S. 2017. Industry 4.0 impacts on lean production systems. Procedia Cirp, 63, pp.125-131.
Walmart. 2019. Environmental, social and governance report. [Online]. Available at:https://corporate.walmart.com/media-library/document/2019-environmental-social-governance-report/_proxyDocument?id=0000016c-20b5-d46a-afff-f5bdafd30000 [Accessed on: 18th June 2020].
Wild, T. 2017. Best practice in inventory management. Routledge: New York.
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