SUPPLY CHAIN OPERATIONS
By Justin Pagotto
This book is a collection of seven chapters on supply chain operations followed by three case studies. The central thesis of this text is that business is not about making profits alone; how those profits are made and at what cost to the employees, the environment and the society at large also do matter.
According to Naheeda Rashid, Associate Director of Hermes Equity Ownership Services, supply chain mismanagement can cause serious damage to profitability, shareholder fund value and reputation both in the short and long terms. Suppliers must obey ethical norms, assume corporate responsibility, look after workplace health and safety, compliance with the law, etc. Failure to look outside the organization can have dire consequences for the firm.
The goal in supply chain management will be to provide clientele with all the information about a product throughout its life cycle. To do this, technology has to be updated continuously so as to yield transparency about a firm’s supply chain operations so as to ensure accountability.
Sustainable supply chain management involves the integration of environmental, economic and social management practices into the product life cycle through good corporate governance. The supply chain becomes an important way for a firm to promote human rights, fair labor practices, environmental protection on and anti-corruption practices.
There are many kinds of corporate social responsibility but none is as important to a firm as its supply chain. Therefore, ethical and social procurement may be the most potent form of social responsibility.
Ethical procurement protects environmental sustainability and human rights in the labor market through the purchasing process. Moreover, ethical procurement destroys human trafficking and discrimination against labor on the basis of religion, sexuality and gender. This is important when we consider that modern slavery generates 150 billion dollars annually in supply chains.
Profitability and social responsibility are not mutually exclusive goals. Where there is social responsibility, increased employee engagement and long term staff retention are obtained. Typically, people are looking for employment opportunities with firms that are committed to environmental sustainability, a cause to support, no bonded labor or slavery, community engagement and a value-driven culture.
Supply chain spending is at the core of a firm’s culture and it is non-negotiable. Since every business needs energy, property, telephone lines, internet, printing, stationery, etc., ethical and social procurement leads to a social outcome simply by procuring these materials from ethical suppliers. The magnitude of supply chain spending makes for an opportunity to do much social good.
Ethical spending provides a firm with an innovative method of creating value. It addresses social problems such as environmental degradation and poverty and it does so as a business proposition. This is a far better way than making profits and donating to charities.
Each business leaves behind a social footprint and the goal of every firm is to improve upon it. The best way this can be done is through ethical spending and “buying social.” This ensures competitive advantage and brand loyalty for a firm’s products.
The author of this text is a passionate community reformer and advocate for transforming existing charities into more fund raising models. In this nifty book he has done an excellent job of exploring supply chain operations and how supply chain logistics and services can be run sustainably. Above all, Justin Pagotto is full of hope and idealism which are quite infectious. Hopefully, more such books will be forthcoming from his gifted pen.