In implement an effective and efficient supply

In
summary, an own definition is created which is valid for this report. It serves
as the basis of the following definition of supply chain management (SCM) as
well as the sustainable supply chain management (SSCM).

 

Definition of
supply chain: The supply
chain integrated all businesses who take part in the value creation process.
The range is from the raw material supplier to the producer to the retailer
until the end customer or consumer and includes the material-, financial-, and
information that occur between all businesses involved.

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There
are several challenges todays supply chain has to overcome. Some of those are
the change of operation flows due to increasing costs and decreasing availability
of resources as well as the creation of a fair framework. To tackle all those
challenges it is crucial to implement an effective and efficient supply chain
management (SMC).

The
SCM is the management of relationships and flows which occur within the supply
chain. There are a number of different definitions from different authors and
scholars.

 

 

 

For this report
the definition that is the most suitable is the one from Handfield/Nichols
(1999),
“The supply chain encompasses all
activities associated with the flow and transformation of goods from the raw
materials stage (extraction), through to the end user, as well as the
associated information flows. Material and information flow both up and down
the supply chain. Supply chain management is the integration of these
activities through improved supply chain relationships, to achieve a
sustainable competitive advantage.”

 

The
goal of SCM is to make the whole supply chain more effective and efficient so
that every step is adding value. That can create advantages for all supply
chain partners, since a successful supply chain can create a cost advantage of
up to 30% or more compared to companies is no or a very poor SCM. Inventory can
be significant decrease through transparent joint venture plans based on
customer demand. This can decrease or prevent fluctuations and the resulting
bullwhip effect. High product quality can be ensured through quality control
and by working together to create a better information system orders and
information can travel faster within the supply chain, which increase the
respond time between businesses and leads to shorter waiting time for
customers.

 

2.2                   Definition of sustainability through
the three pillars of sustainability

Economical
sustainability

The
goal at a macro economical level is to maintain or increase the quality of
life. This means that the wealth of society should not decrease. To do that is
it necessary that there is a stable and sustainable economic growth, innovation
and investment, as well as the maintenance of the capital stock. At a micro
economical level the goal is capital preservation, adequate return on capital
and capital distribution, sales, increasing market share and profit growth, and
the safeguarding of quality and know-how.

 

Environmental
sustainability

Being
the most discussed topic in recent years, environmental sustainability is about
the use of renewable resources only to the extent of their natural reproduction
or the creation of substitutes, the creation of substitutes for all
non-renewable resources consumed, the emission of harmful waste only to the
capacity of the environment and the prevention of risks of human health. Other
goals include reducing the carbon footprint, using renewable energy for the
production process, and to protection of endangers species. This is
accomplished through reducing packaging waste, water consumption, and use of
recyclable materials or of overall recycling which is implemented in the
production process.

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