Managing Within Your Organisation

Learning Goals

By reading this chapter you will:

• Learn about the general connection between the management of internal affairs, sustainability and logistics best practice

• Get to know the relevant management fields reflecting the internal enablers of sustainable Supply Chain Management (SCM)

• Be able to understand and apply the way how to select or prioritise the internal enablers of sustainable SCM

• Be capable of analysing and critically reflecting your own situation compared to logistics best practice

These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

1 Under Your Managerial Control

After dealing with issues of strategy and performance in the context of sustainable SCM in general, in the preceding two chapters, we will now shed some light on the best practice of those relevant management fields of sustainable SCM, which are typically prone to be more or less under direct influence of the companies involved in a supply chain. Since the usual sphere of direct managerial influence lies within the boundaries of a company, we intentionally labelled this chapter “under your control – managing inside your organisation”. Intentionally we arrange this chapter before “managing outside your organisation” (see next Chap. 5), because many experienced practitioners told us that especially best practice companies have learned to develop managerial excellence regarding their own operations first before going beyond the companies boundaries, trying to actively manage the supply chain of related suppliers and customers – simply expressed by the well known motto: Get your own house in order before you go tearing others’ houses down. From our countless discussions with hands-on practitioners, general industry experts, association representatives, academics, and respective politicians, which we conducted in the dedicated workshops, via the bestLog online platform and in the case collection interviews during the bestLog project, we have identified 5 distinctive internal management fields, which have figured out to converge to major internal levers or enablers of sustainable SCM. The following Fig. 4.1 gives an overview of these respective management fields.

Fig. 4.1

Internal Enabler of Sustainable SCM

Though obviously being rather general in nature, the identified management fields offer direct levers for the establishment of sustainable SCM within and between companies. Initially, we were surprised about these results, but we had to learn especially from our manifold talks with experienced practitioners and appropriate academics, that sustainability is not a management task sui generis, but has rather to be interpreted as a cross-functional/cross-company philosophy or a common supply chain spirit, which should pervade all relevant fields of general management and SCM, respectively. By this, the responsible managers are essentially enabled to integrate concerns of sustainability into their day to day business decisions, as they will manage (i.e. design, plan, organise, implement, supervise and control) processes, products, knowledge, infrastructure, and people & teams accounting for the overall balance of social, economical, and environmental objectives. However, as a direct consequence of their general and pervasive character, the management fields of sustainable SCM challenge managers to select which of the internal enablers should be in focus, respectively. Since we cannot manage all these things at once there has to be an applicable guideline which helps to identify, evaluate, prioritise and finally select the respective enablers to be set in place for each company specific situation (Fig. 4.2).

Fig. 4.2

Structure of the chapter

The next five Sects. 4.2–4.6 will consecutively deal with each of the aforementioned management fields, following a rather straightforward “easy to read” composition. In line with the major goal of bestLog, the “promotion and dissemination” of best logistics practice, we thereby avoid and deliberately abstain from scientific elaborateness in order to assure comprehensibility of a preferably broad and practically oriented target audience. Hence, each section will give a short description of the particular management field with regard to its basic domain(s), management tasks, related management concepts and their respective relations to sustainability. Subsequently specific guidelines of enforcing sustainable SCM are presented, which can be understood as the quintessence or concentrate of the bestLog learnings, reflecting the experiences of those companies showing a best logistics practice. These findings will to some extend be illustrated by sensible extracts of the bestLog case collection in dedicated text boxes. In Sect. 4.7 we will finally present a simple check list that could appropriately help to analyse your current situation, find out respective gaps and prioritise the relevant management fields in order to achieve a more sustainable SCM. Section 4.8 will close this section by summarising the main findings and giving some overall conclusions.

2 Managing Processes

In general, every company consists of numerous (sequentially) interlinked business processes, such as procurement, production, distribution or logistics processes, which directly or indirectly contribute to its overall (economical, ecological and social) performance. Thereby, processes represent multiple series of logically and timely interlinked operative and administrative activities adding value to a (intermediary or final) product or service. The strategic importance of processes as enabler for sustainable competitive advantage has been stressed by the well known value chain approach of Michael E. Porter which gives some interesting hints in order to structure internal processes (Fig. 4.3).

Fig. 4.3

Value chain by Porter (1985)

This value chain differs between primary activities and support processes and activities. Activities like human resource management, procurement and technological development rank among the support activities, whereas production, procurement and distribution represent primary activities. Each activity can be a strong enabler in terms of competitive advantage and can therefore – in our terms – also be strong enablers in terms of sustainable SCM within a company. Additionally, being part of a supply chain, companies are connected by inter-company processes, which eventually affect the performance of overall supply chains. Here also Porter offers the extended value chain of inter-company networks (Fig. 4.4).

Fig. 4.4

The value system (Porter 1985)

In general, against the background of intensified competition, higher customer demands, rising cost pressure, and increasing environmental and social awareness of developed societies, managing processes in a well considered and systematic way is generally considered a “must have” competence of best practice companies. Hence, it is not surprising for us that all of the companies involved in the bestLog inquiry for best practice cases somehow deal with the management of processes, albeit in more or less sophisticated ways.

Managing processes encompasses the tasks of intentionally planning, designing, organising, controlling and performance-monitoring of business processes. Therefore, the term process management denotes the application of specific methods, tools, techniques and systems that visualize, define, measure, control, report and improve processes in order to profitably meet customer requirements. Thereby, process management aims at increasing information transparency, reducing physical and informational interfaces and establishing flow consistency in order to improve the overall efficiency of a value network. The typical outcome of process management is faster processes inducing lower costs and less use of resources. However, originally the concept of process management focused on mere economic goals. Nowadays, additionally considering ecological (e.g. carbon emissions induced by a process) and social (e.g. working conditions induced by a process) aspects within Process Management will lead to a sustainable company performance and sustainable supply chain performance, respectively, in the bestLog sense of best logistics practice.

This means that process management will be successful especially by taking a holistic view of the company and the respective supply chain context(s) which the company is involved in. Furthermore, the application of a total impact approach to process management, i.e. considering economic (e.g. service levels and costs), environmental (e.g. emissions) and social (e.g. working conditions) aspects, bears significant potential with regard to sustainable process design solutions. Eventually, integrating customer oriented thinking – in the sense of internal as well as external customers – is pivotal to the establishment of consistent and transparent flows of materials, products and related information. As a consequence, managing processes in a well considered and systematic way is an eminently strong enabler for the establishment, maintenance, and improvement of sustainable business concepts in logistics and supply chain management. Against this background and in view of the multiple expert discussions, as well as the besLog case collection the following six guidelines for “managing processes” can be derived, which basically reflect the experiences of those companies showing a best logistics practice.

2.1 Know Your Processes

The first step on the way to sustainable process excellence is to be familiar with what your company is currently doing in your supply chain. Best practice companies therefore know their processes as they map and continuously update at least their critical supply chain processes, as well as the relevant process interfaces to customers and suppliers by using meaningful reference models. Next to others, like the previously presented value chain approach, one prominent example of such a reference model is the Supply Chain Operations Reference (SCOR) Model (see Fig. 4.5) developed and regularly updated by the Supply Chain Council (see: www.supply-chain.org). This model provides a standardised methodical toolset, based on the simple process logic of plan, source, make, deliver and return, in order to map all relevant supply chain processes and the interrelationships of potential actors in a supply chain, such as suppliers, logistics service providers, manufacturers, distributors and customers on different hierarchical levels. Other (typically software-based) tools available are e.g. ARIS-Toolset (see: http://www.aris.com) or Unified Modeling Language (UML)-activity diagrams (see: http://www.uml.org), which also rely on generic modelling standards and thereby support the original mapping, analysis and purposeful redesign of processes. However, no matter which tool is in use, the typical output are process-flowcharts, visualising the respective interrelationships from diverse perspectives (e.g. organisation-, process-, information perspective). Regardless, which concrete reference model is applied, the reasonably detailed information about the current process landscape in place is the cornerstone for sustainable improvements on the way to best logistics practice.

Fig. 4.5

Structure of the SCOR-Model (the supply chain council at www.supply-chain.org)

2.2 Analyse and Monitor Systematically

The next step on the way to sustainable process excellence consists of a systematic analysis of the mapped processes in order to find out how your processes perform individually and how the system of interrelated processes performs as a whole. By using an appropriate set of quantitative (monetary, e.g. transportation costs, and non monetary, e.g. lead times) key performance indicators (KPI) input, throughput, and output indicators are measured and monitored on a regular basis. Here, next to other means, the toolbox of the SCOR-Model also offers predefined KPI-metrics for performance measurement. In general, such an analysis enables best practice companies to understand the value contribution of each internal and external business process involved, as well as their value tradeoffs systematically. Furthermore, this systematic analysis reveals the impact of critical processes on other processes’ performance and the performance of the whole process system. Especially with regard to sustainable SCM the best practice companies do not only monitor and analyse their economical performance. Additionally, they accurately shape a system of social and environmental KPIs. Based on the popular “balanced scorecard” a yet emerging tool applicable here is the Sustainable Supply Chain Scorecard (SSC)-Scorecard (more about SSC-Scorecard was presented in Chap. 2), which aims at the integration of economical, social and environmental goals by combining respective KPIs on a process perspective.

2.3 Improve Continuously

Knowing (i.e. mapping) and understanding (i.e. analysing and measuring) your processes are essential prerequisites for improvement on the way to sustainable process excellence. Hence, best practice companies are never satisfied with the status quo, but continuously question their current practices and consequently strive for change, if e.g. environmental, technical or competitive factors have changed. The well known, process based philosophy of KAIZEN, originated in the concept of the Toyota Production System is an example for this strive towards process excellence. Another prominent method applicable here is benchmarking. Usually, in search for process improvement, the identified processes and their performance are compared with corresponding measures from other organisational units and/or other companies depending on the benchmarking approach (internal/external benchmarking). Identified performance gaps are then analysed in depth in order to find out the relevant areas for process improvement. Certainly, best practice companies strive for process improvements with regard to economical, social, and environmental goals, simultaneously. These improvements are ideally motivated by a high involvement of the affected employees. Therefore, the involvement of self-motivated and creative employees requires concerted trainings and an overall spirit of leadership dedicated to people. We will focus on these aspects later on in this chapter.

2.4 Know Your Customers

Another critical prerequisite for reaching sustainable process excellence in a SCM-context is a thorough understanding of your respective customer’s needs. By applying the approach of process management, best practice companies have figured out, that next to the final (external) customer, which are typically in the primary focus, there are many intermediary (internal) customers to be served by every process in place. In that sense – the original supply chain is rather a chain of customers or a demand chain in which the products are pulled through each process. Obviously, organisations are more and more watched closely, regarding their efforts for sustainability. Nevertheless, companies can promote sustainability efforts of their partners and eventually, the final customer. Therefore, in order to design and improve processes, you have to define your customers thoroughly and to understand the respective requirements of your multiple customers – internally and externally. Only if all internal customers are served with high quality, the final customer will be served with high quality as well.

2.5 Segment Your Supply Chain

Companies showing sustainable process excellence reveal the fundamental understanding that one single supply chain process cannot fit to all business models or competitive strategies. Therefore, these best practice companies execute a strategic process alignment by segmenting the supply chain according to consistent combinations or bundles of product characteristics and customer requirements. For example, with regard to the kind of product and its demand pattern supply chains are segmented into responsive or agile supply chains for innovative products (e.g. fashion apparel) and cost efficient or lean supply chains for functional products (e.g. milk). Lean supply chains are cost-oriented to economies of scale in production and transportation in order to provide reasonable prices. The design of agile supply chains needs to be able to quickly react to unpredictable demand variations. Therefore, agile supply chains typically use fast (and mostly more pollutive) means of transport in order to keep the risk of stock outs or overstocks to a minimum. Hence, creating sustainable supply chain management process in agile supply chains poses major challenges, since agile supply chains ask for quick and thereby often environmentally questionable means of transport. In order to reduce the environmental burden of agile supply chains, best practice companies apply the latest technologies such as new generation trucks, telematics or RFID to enhance energy efficiency and information transparency in the supply chain. Apart from technological improvements the “re-invention” of higher stock-keeping and better forecasting-methods lead to less pollutive supply strategies and the according means of transportation.

2.6 Enhance Efficiency and Minimize Environmental Impact

As mentioned before, traditional best practices concepts of process management originally exclusively referred to economical benefits of process improvements. However, nowadays this has changed, since best practice companies additionally consider the environmental and social impacts of their sustainable process solutions. For the advanced trailblazers, sustainability, which is implemented in a serious way in the configuration of their processes, initially offers the opportunity to distinguish themselves within the market. We found out that customers gladly use environmental transports – as long as this specific transport is not more expensive than the original, more polluting one. Hence, viewed over the long term, sustainability will move from being a distinguishing feature to the standard, so that it is inevitable that those protagonists that today adopt a passive or defensive stance will have to fear for their existence in the long term.

Case: IKEA – Reconfiguration of the Supply Chain Structure

One of the main learnings here was that the reconfiguration of the supply chain structure is basically a process oriented endeavour which has huge influence on other supply chain areas, i.e. transport, warehousing, procurement, and distribution.

(See Case Collection in Part IV of this book)

Case: Shell Chemicals Europe and Bertschi AG

One of the main learnings here was that the joint definition and monitoring of KPIs and the quick reaction to their developments is a critical success factor.

(See Case Collection in Part IV of this book)

Case: IKEA – Air Hunting Competition

One of the main learnings here was that small but continuous improvements will yield better overall improvements and cost benefits than a small number of large projects that are more likely to fail to achieve their goals.

(See Case Collection in Part IV of this book)

Case: Cargo Domizil – Intermodal Less Than Truckload Transport

One of the main success factors here was that custo-mers preferred “green” transport to conventional road haulage, but only when offered at the same price.

(See Case Collection in Part IV of this book)

7 Managing Products

Products represent the major output and the “raison d'être” of any market oriented company. By the kinds of products offered to different target customers and markets, a company decisively determines its branch of business, the associated resource requirements, as well as the originalities of the competitive environment and its respective profitability. In this regard, with the term “product” we denote both, i.e. tangible (physical) products (e.g. cars) and intangible products, commonly labelled as services (e.g. consultancy). The capability to purposively invent, design and efficiently provide products according to the customers desires is key to sustainable profitability of any company. In addition, especially in a supply chain environment of interlinked companies the characteristics of a product, e.g. its functionality, compatibility, handling or packaging, etc., can heavily influence the overall process performance of the whole supply chain.

Managing products generally deals with the respective tasks of intentionally inventing, designing and providing the appropriate product range of a company. In the context of sustainable SCM, managing products encompasses the systematic application of specific methods, tools, techniques and systems in order to ensure an economically, environmentally and socially efficient flow of raw materials, semi fished goods and final products through the supply chain. By this means, aspects of purchasing, manufacturing, distribution and logistics have already to be taken into consideration at an early stages of product design. Furthermore, the individuality, as well as the variety of the range of products has to be monitored and adjusted continuously.

As a consequence, managing products in a well considered and systematic way is an eminently strong enabler for the establishment, maintenance, and improvement of sustainable business concepts in logistics and supply chain management. Against this background and in view of the multiple expert discussions as well as the bestLog case collection, the following four guidelines for “managing products” can be derived, which basically reflect the experiences of those companies showing a best logistics practice in the sense of bestLog.

7.1 Adjust Your Product Customisation

Offering suitable and appealing products is a critical task for any company, since it is crucial for survival, and most customers willingly and frivolously state highly individual desires. As a consequence, many companies are very vulnerable to over-individualise and over-engineer their products in order to offer a broad variety of products without considering the possible (negative) impacts to the supply chain. However, best practice companies show, that the degree of product customization can be the result of a deliberate balancing process between definitely required individualisation, possible product standardisation, confined process design and supply chain performance. For example the commonly known and rather simple ABC analysis could be used as a guideline to explore the necessary degree of product customization vs. standardization. Products from category “A” – i.e. low volume proportion of about 10–20% and a high value proportion about 60–80% from total – usually need a high degree of customisation by individual product features enhancing diversity. By contrast, “C”-products show a rather high potential for product standardisation and low diversity. Though defining product customisation and respective product diversity is a very company individual task and it is therefore hard to give an commonly applicable advice, the general guideline for best practice should be: Thoroughly adjust the necessary product customisation in order to keep product diversity to a manageable level.

7.2 Estimate and Actively Manage Product Life Cycles

Apart from some exceptions, no product lives forever and products typically show some sort of life cycle in terms of the phases of introduction, growth, consolidation, decline and removing from the market. Each of these phases exhibit different performance requirements of the product to logistics and SCM. Hence, best practice companies systematically analyse and actively manage their product portfolio in terms of the respective product life cycles in order to align adequate logistics operations throughout the supply chain. For example, products revealing characteristics of the growth phase, are apparently needed in higher quantities, than products in the declining phase. Furthermore, the estimation of products according to its life cycle helps these companies to identify strategic gaps in the product portfolio, needing a replacement. As a consequence best practice companies systematically integrate the life cycle view into the management of their product portfolio.

7.3 Establish an Integral “Design for Sustainable SCM-Concept”

During the product design process many characteristics of a product are defined, which frequently cannot easily be modified later on. Hence, in order to avoid costly design changes during the product life cycle, it is crucial to anticipate as many possible requirements with regard to e.g. manufacturing/assembly, logistics, packaging or disassembling/recycling. Best practice companies, therefore know the diverse “Design for ‘…’-concepts in place” (e.g. “Design for Manufacturing”, “Design for Assembly”, “Design for Disassembly/Recycling”, “Design for Logistics”) and smartly combine them in order to an integral “Design for Sustainable SCM-Concept”. Aspects of sustainability should therefore pervade all design activities affecting the product during its life time – starting at the selection of the right raw materials, social, economical and environmental aspects of production, packaging and transportation, ending at the redistribution, disassembly and recycling of the product. Best practice companies nowadays typically approach this topic by establishing an integrated calculation of a “carbon footprint”. Needless to say that this is a very high demanding task which has to integrate nearly all functions of the supply chain.

7.4 Control Parts Variety

Next to the variety of final products, the variety of parts plays a further major role in coping with complexity and supply chain performance, respectively. Best practice companies strive for control here, because rising parts variety increases complexity and cost. Controlling parts variety encompasses all those means for organising a parts pyramid of a product assembled from many similar parts each comprising a combination of a multiplicity of component parts. One prominent concept here is modularity of parts and components, e.g. applied in the mass-customisation production. Hence, in their general search for simplicity, best practice companies carefully evaluate and control the impact of rising or decreasing parts variety. The concept is also applicable to services or service modules which can be attached to the products (e.g. installation services) or can be a product on their own (e.g. in logistics service providing).

Case: Inditex Pro-Kyoto Project

One part of the “Kyoto-Pro” project of Inditex is the measurement of the carbon footprint of the relevant processes in the supply chain.

(See Case Collection in Part IV of this book)

9 Managing Knowledge

Nowadays knowledge has become a key factor for the sustainable competitiveness of companies. Every innovation in an economical, ecological or social way is only possible by using and creating specific knowledge. Hereby knowledge is not a classical tangible factor of production, but rather inherent in people and thus intangible. The term knowledge originally means the linking and decoding of specific information by people. Hence, it can be derived that each person not only has individual knowledge, but different kinds of knowledge. Especially in the post-industrial society, characterized by globalization, augmented competition and highly sophisticated technologies, the fields of knowledge became and still become more and more differentiated and complex. This sets new challenges for companies in the future. An organization meeting these emerging demands in an adequate manner needs to possess differentiated knowledge on processes, products and infrastructure. As a logical consequence of the risen complexity and comprehensiveness of knowledge, knowledge is usually embodied in generalists on the one hand and in specialists on the other hand. This implies two different kinds of depth of knowledge – either bound in generalists or in specialists. Generalists deal with comprehensive knowledge and are able to separate the knowledge according to the degree of importance. Specialists are able to apply in-depth knowledge and thereby typically enhance the knowledge base.

The growing complexity of knowledge as well as the according importance for the continuous existence of a company requires processes for professional dealing with knowledge in terms of the so called knowledge management. Knowledge management is a term for all operations and management tasks, aiming at an optimal dealing with knowledge in terms of targeted development of knowledge. Knowledge management hereby intends to provide specific tools to collect, save, systematically prepare and eventually disseminate knowledge throughout the organization and the supply chain. Therefore, in order to maintain and enhance knowledge in a company it has to be kept “alive”. Hence, knowledge management aims on fostering and offering an incentive for transferring know-how to spread relevant knowledge within a company and motivate people to share their learnings and experiences with their corporate colleagues as well as the relevant supply chain members.

Starting from the internal perspective on passing on and spreading of know-how, companies can extend these proceedings to the whole supply chain in order to receive enhancements and sustainability thinking with all their supply chain partners. Knowledge on sustainability driving aspects, like e.g. process optimization, applied in the entire supply chain lead to more effective and competitive supply chains. Sharing knowledge needs enhanced communication between the supply chain partners, which provides the opportunity to use these communication channels to act in a concerted way through the whole supply chain and hereby improves efficiency and hence sustainability. Sustainability in terms of social aspects are additionally met by an enhanced skill level of the employees due to augmented knowledge in the supply chain, leading to sound satisfaction of the employees and enhanced chances for a personal continuous development.

Consequently, managing knowledge in an integral and progressive way is a fundamental enabler for the sustainable businesses in the supply chain management context. Against this background and the view of numerous expert discussions as well as the bestLog case collection, the succeeding five guidelines for “managing knowledge” have been derived, which basically reflect the experiences of those companies showing a best logistics practice in the sense of bestLog.

9.1 Define and Develop Relevant Fields of Knowledge

The initial step on the way to managing knowledge with a sustainability background is to understand what will be critical to know in the future. Generally, the knowledge of the world is growing rapidly given the fact that the amount of knowledge doubles within increasing shorter time periods, generating increased complexity of knowledge. In order to cope with the risen complexity of knowledge, best practice companies strive for a clear definition and development of relevant fields of knowledge. These fields are often strongly interlinked to or influenced by the company’s individual or supply chain’s strategy, as strategy describes the roadmap to the company’s future. According to the strategy the relevant fields of knowledge have to be developed. Here, best practice companies usually rather define their strategy first and then map their existing knowledge. Nevertheless, a strong interrelation between the existing knowledge and the fields to be developed can be assumed. These existing knowledge fields are then developed according to the aim of an organisation.

If an organisation strives for an enhanced performance in sustainable supply chain management, relevant fields of knowledge have been identified in the following areas:

• Leadership and communication

• Technology

• Process optimization

Methods of leadership and communication describe a highly relevant field of knowledge as it is important to effectively anchor sustainability thinking into the staffs’ mind. Communication skills and know-how hereby serve as a means of facilitating the anchoring not only within ones company but throughout the entire supply chain.

Technologies as an essential field of knowledge for sustainability orientation in a supply chain context are characterized by e.g. efficiency driven enhancements and the use of less polluting means of production. For example the use of telematics not only provides better information on the truck fleet for the dispatcher but also animates the truck drivers to save on gas and lorry wear out. Additionally, in terms of the social aspect of sustainability, telematics related systems ameliorate safety for the drivers for example by radar electronics securing the right space to the truck driving in front.

Know-how on process optimization has shown to be a vitally field of knowledge as it enables efficient structures and procedures saving on time, energy and money (Please see Sect. 4.2).

More detailed knowledge fields can exemplary be identified in form of generating knowledge for example on external stakeholder integration, cross-functional integration or cultural framing. External stakeholder integration allows to access external knowledge and credibility needed for a comprehensive design of sustainability initiatives. Cross-functional integration blends the different organizational functions and helps to design feasible, process-oriented sustainability initiatives. Cultural framing enables companies to question business practices and communicate the sustainability initiative’s benefits to influential stakeholder segments.

Nevertheless, defining the relevant fields of knowledge hereby is highly individual for each company and usually a strategic task. Supply chain managers may support the general management by providing the according information.

9.2 Transform Tacit Knowledge into Explicit Knowledge

On the search for relevant knowledge fields one has to bear in mind, that there are two types of knowledge to differentiate. One type is the so called explicit knowledge and the other one is called tacit knowledge. Explicit knowledge, on the one hand is an evidently existing knowledge which can be codified, transmitted to and shared with other individuals. Differing from explicit knowledge, tacit knowledge on the other hand is rather a kind of knowledge, which people have but consciously do not know, i.e. they are not able to articulate it in formal language and communicate it to other individuals or write it down – they just know. As tacit knowledge is usually characterized by personal experiences or reflected by intuition, it is obviously difficult to share this kind of knowledge. Nevertheless, especially this form of knowledge usually is of high value for companies. In order to foster the sharing of this knowledge, understanding the process of knowledge creation is important. Knowledge creation and development between people is usually done, when people articulate what they think and clarify their “view of the world”. This process of transforming tacit knowledge into explicit knowledge is known as codification or articulation. Best practice companies stand out for being particularly able to transform tacit into explicit knowledge as they are able to enhance the knowledge flow through the whole supply chain.

Techniques to support the process of capturing tacit knowledge are for example e-learning tools. E-learning comprises the use of digital media for presentation and distribution of learning material in order to support communication between employees. A rudimentary and quite affordable mode of transferring tacit knowledge to explicit knowledge and additionally making it accessible for other members of the organization are database-based knowledge platforms. The scheme of these databases works fairly easy as each employee is able to post information on specific topics on the homepage or the company wide intranet. Other members of the organisation can easily access the information and additionally contact the author to gain deeper knowledge in face-to-face interaction. There are further divers professional knowledge management tools available on the market like “Tacit software”, “hummingbird”, “backweb” and many more. Each company here needs to identify their knowledge management system according to their specific needs and their branch.

9.3 Motivate Communication

As knowledge is highly linked to people and their way of thinking it cannot easily be “copied and forwarded”. Rather interaction between employees and supply chain members is necessary to forward and also generate knowledge. In order to motivate this interaction, communication is crucial. The kind of communication and the willingness to share knowledge is highly linked to the culture of a company and in the supply chain context linked to the trust between supply chain partners and the possibilities for the employees to interact with each other. Communication and the trustful intercourse is a major lever for implementing sustainability programmes and concepts through the entire supply chain. Here management and especially supply chain managers play a major role as they are part of the external contact of a company. Hence, the management is responsible for an open culture of fruitful communication and exchange within and outside an organisation. Motivation for communication is important in order to keep specific knowledge in a company or a supply chain alive and usable. This avoids the loss of knowledge when employees leave the company to work with someone else or retire. On a supply chain scale maintaining knowledge means being able to fill the gap and not loose know-how if supply chain partners are switched. Best practice companies enhance communication by cross-organisational events and information flow through the supply chain. Informal interaction an communication between employees, supported by informal events, has proven to be a good native soil for conjoint projects for sustainability.

9.4 Establish a Culture of Lifelong Learning

Apart from sharing knowledge, the generation and development of new knowledge is essential for successful companies. Here it is particularly important to establish a culture of lifelong learning. This means that each employee keeps his knowledge up to date no matter at what age he is. On the one hand, this is an important benefit for the company as new knowledge is created or carried into the company. On the other hand, lifelong learning is crucial for the qualification and the future chances of employees. Additionally creativity is encouraged by a continuous learning and also contributes to the employee’s satisfaction as he actually fells like a irreplaceable member of the organisation. Especially when talking about the social side of sustainability, job satisfaction reflects a major goal of sustainable enterprises. For example, lifelong learning can be supported by providing the opportunity to get access to training- and educational programs according to the employee’s interest and job focus. Especially as sustainability know how is growing more and more important, education with respect to the three dimensions (economic, ecological and social) offers chances to establish a culture of lifelong learning with sustainability background. A wider focus as well as alternate and defiant challenges are established by implementing job rotation mechanisms, where employees switch jobs with their colleagues for a specific term in order to understand his work and possibly create new solutions by transferring their experiences to the “new” job. By this, innovation is fostered due to transferring know-how from one division to another.

Here also the identified relevant knowledge fields are reflected in the process of lifelong learning. The culture of learning and communication offers the opportunity for elder employees to pass on their knowledge on the experiential driven fields of leadership and effective communication processes while younger employees can share the knowledge on new technologies and process improvement approaches (Please see Sect. 4.2).

9.5 Enable Information Transparency by IT-Tools

As mentioned before, the passing on of information is crucial for dealing with knowledge in companies as well as in supply chains. Evidently it is impossible, that each employee passes on his knowledge to every other employee. The long distances which are the basis of the worldwide division of labour and global supply chain management, are a familiar obstacle for the sharing of knowledge. In order to cope with this challenge, best practice companies use technological instruments, especially IT-tools, as those serve as a mode of spreading knowledge to areal dislocated employees and throughout the supply chain. In particular against the background of the need to enhance sustainability, travelling can be reduced and natural resources thereby be saved.

IT-tools can especially serve as means of spreading information and knowledge to spatial dislocated parts of the company. Particularly if an organization already dealt with a certain topic in a specific region, the learnings could be useful for other subsidiaries or supply chain partners to avoid the repetition of a time consuming learning process. IT hereby helps to save, systematically structure and provide information on specific processes and proceedings and spread this information in real-time throughout the supply chain. Employees and interested parties can independently acquire access to databases and enhance their knowledge. This augments effectiveness and reduces time consumption for developing knowledge twice.

As examples for IT-tools that enhance information transparency video conferences, document management systems and data warehouse systems can be named.

Case: Telematics at SMEs

Sieber decided to use progressive technologies for their truck fleet. So together with a professional provider of telematic systems they developed knowledge in this specific field and can now save on fuel and enhance customer satisfaction by further IT-functions. Additionally they enhanced their employees’ motivation as well as level of education

(See Case Collection in Part IV of this book)

Case: Telematics at SMEs

When Sieber implemented their telematics system, it was important to ensure the employees commitment and understanding. Hence, special trainers communicate their know-how on efficient driving all the time to the drivers, assuring enhanced knowledge for the drivers. This procedure was intentionally launched by the management to motivate communication and thereby diffusing knowledge.

(See Case Collection in Part IV of this book)

12 Managing Infrastructure

From a supply chain management’s point of view, managing infrastructure comprises much more than connecting buildings to roads, highways, water and energy supply. Managing infrastructure, as a lever of managing inside your organisation, has to ensure the construction and maintenance of all property, plant and equipment which contribute to fulfilling a company’s objectives and hereby cope with current economic, ecological and social requirements. Thus, the management of infrastructure spans all tasks of designing, planning, maintenance, controlling and monitoring of facilities and information systems. It denotes the implementation of methods and instruments to ensure the availability of all physical resources, besides raw materials and other supplies. Objects of infrastructure management are usually characterized by a long-term character. Hence, managing infrastructure has a strong component of anticipating future developments and according needs for infrastructure.

Especially when dealing with supply chain management, infrastructure plays a major role for prevailing sustainability issues. To give an example one could instance the working conditions defining character of infrastructures, as the buildings etc. used in supply chains have a major influence on the employees’ safety and health as well as job satisfaction. As an outcome of bestLog, especially planning of locations and facilities has to take environmental issues into consideration. In a supply chain context, environmental effects can be reduced by a careful selection of the adequate location and the respective building. The availability of external infrastructure or proximity to suppliers and customers directly impact environmental effects. As the requirements in the business environment and accordingly in supply chains varies constantly, a major aim of managing infrastructure is, according to bestLog results, the assurance of flexibility for the usage of infrastructure; i.e. that space can be used for multiple purposes. E.g. a warehouse is constructed and built in the way that allows to store any product, independent from size and weight. As no special space for a single product needs to be reserved and hold available, the space can be used in multipurpose, leading to smaller warehouses and less need for land and less sealing of the soil surface.

Hence concluding, managing infrastructure in a sound and structured way is a clear and long-term lever for sustainability in logistics and SCM. In this regard and in the light of the multiple expert discussions, as well as the learnings from the bestLog case collection the following guidelines for managing infrastructure were derived, which again reflect the experiences of those companies showing a best logistics practice.

12.1 Map and Improve Your Location in the Supply Chain Network

Supply chain networks consist of a system of companies respectively organisations involved in the value-added process. The network ranges from the supplier’s supplier to the customer’s customer. Mapping the own position in this supply chain network is crucial to evaluate the current strategic position within the supply chain. The visualization of supply chain networks by the aid of modelling instruments supports organizations in sketching out upstream and downstream processes. An allocation of infrastructural characteristics can improve not only the own position, but the position of suppliers and customers in the supply chain network, too.

Infrastructure management also deals with classic tasks of supply chain network design, where each facility role is determined by defining all procedures in each location. Based on this, the facility locations are determined. When specifying facility locations one needs to bear in mind, which products and which capacities are provided by each facility. Thesefore, each company has to identify, what kind of market at which location should be served and by which facility. Additionally, the supply sources for each facility are determined and located. Best practice companies showed, that these principal considerations for building a supply chain are run through over and over again, questioning constantly the actual location of each supply chain member. This constant process allows to enhance the logistics network with small steps rather than fundamental reorganization as a reaction to changed circumstances in the business environment.

12.2 Level Your Capacities to Supply and Demand

Subsequently to mapping one’s location in the supply chain network, best practice companies level their capacities to supply and demand in order to avoid unused capacities and infrastructure resulting in poor efficiency and hence sustainability performance.

The degree of utilization of existing capacities is above all determined by the demand side on the one hand and the supply side on the other hand. Capacities should always be oriented to the demand in order to keep the stocks on a low level and produce the right product for the right customer at the right time and the right amount. But satisfying the demand with the according products can only be met, if the right supply is assured. Utilization of capacity then is the bound between supply and demand and essentially influenced by these two dimensions.

Especially when dealing with sustainable supply chain management, the right capacities at the right time at the right place are fundamental for efficiency and reducing waste.

Levers for influencing the capacity according to the demand are long-term and precise demand forecasts, as they are essential for an effective management of capacities and hence infrastructure. As for best practice companies this action is accompanied by active and agile sales teams to anticipate the demand for the future by being able to listen to the needs of the market carefully. Dependable forecast allows to adjust the capacities and the supply. Adjusting supply is mainly done by allowing quick reactions of the supplier base through instant information sharing. Allowing an intense information flow between supply chain partners requires close relationships between your company and the suppliers.

Infrastructure management then needs to take care of the respective information and technique equipment for sharing the information through the supply chain. Best practice companies show to be capable of providing modern and flexible IT-infrastructures. As there are usually various IT-systems in use throughout the supply chain, these IT-infrastructures need to be easy adoptable to the supply chain partners IT in order to allow a barrier free information flow.

Apart from the outside-defined dimensions demand and supply, best practice companies are able to provide flexible structures in capacities. Flexible capacities can for example be realized by implementing flexible working conditions for the employees. We deal with this in Sect. 4.5.4 of this chapter.

12.3 Design and Maintain Your Infrastructure According to Ecological Standards

As mentioned above physical infrastructure plays a major role for improvements in terms of sustainability issues. Especially when building new infrastructure, sustainability concerns can easily be taken into account as widely recognized ecological standards and enhancements for infrastructure have been made available in the past. But not only the new design of infrastructure holds the opportunity to improve sustainability in supply chain sites. Adjusting all internal infrastructures to recent ecological standards or the usage of renewable energy seems expensive on the short run, but usually reduces energy cost in long-term. Moreover, governmental legislation influences infrastructure management introducing technical and ecological standards. A proactive management of infrastructure in terms of ecological and technical standards can then form a competitive advantage. The example of chemical industry illustrates this point: to fulfil governmental standards, extremely high capital investments in filter systems for industrial wastewater are required. By proactively implementing filters, companies were able to outperform competitors that could not adopt the technology fast enough. By the time using filter systems became obligatory due to a change in legislation the proactively engaged companies already used the standard and did not have to implement it near-term and thereby more expensive as competitors did.

Other levers in terms of ecological standards for designing infrastructure are for example:

• The avoidance of soil sealing by redirecting the rainwater being gathered at e.g. warehouse roofs is redirected to the surrounding oil instead of the sewer.

• Applying better isolation to safe on energy and heating/air-conditioning costs

• Proactively apply safety instructions for dangerous goods

As pointed out in the example above, designing and maintaining infrastructures according to ecological standards helps sustainability-driven companies to gain a competitive advantage in the market which for instance could use the fulfilment of these standards as a marketing effect. In terms of a supply chain orientation, best practice companies ask for compliance of all supply chain partners to ecological and social standards.

12.4 Assure Flexible Usage of Infrastructure

In order to meet sustainability issues, infrastructure must be able to be adopted flexibly to changes in the business environment and demand. Flexible usage allows to reduce over-capacity for decreasing demand and at the same time rapidly satisfy rising demands. Apart from this, especially in a supply chain management context, flexible usage can also be related to the multimodal connection to external infrastructure allowing to transport goods either by road, water or railway. Changing cost structures in road-, rail- and waterway transport can be utilized for the company’s benefit and also sustainability performance.

• In general, flexible infrastructure unites attributes like:

• Multifunctional applicable (e.g. use of standardized boxes)

• Mobile (not bound to one location)

• Demand-driven (only allocates the amount that is demanded by the market)

• Multimodality (allows all kinds of transportation concepts)

In order to assure flexible usage of infrastructure companies usually can revert to specific concepts. These concepts can be segmented into three dimensions:

• Technological

• Social

• Procedural

The tree types of concepts will be illustrated by an example for each. Technological concepts for flexible infrastructures are for example the implementation of standardised containers to assure the use for multiple versions of products. A social concept for the flexible use of infrastructures is flexible working schedules, adjusted to the actual demand for the products. Procedural concepts are for example the joint use of one warehouse by two competitors in order to save on fixed costs for both. This requires a change in strategy but enhances the sustainability performance of both companies.

Case: Hamé Distribution Centre

Hamé mapped its location in the supply chain network and built a new customized distribution facility resulting in less kilometres driven, damaged goods rate, error rate, and time the goods stay in the DC

(See Case Collection in Part IV of this book)

Case: Consolidation of Transports

The customer of the LSP Sieber required additional capacities for warehousing due to risen demand. These capacities could either be realized by an own, new warehouse or sourced out. In order to have the best levelled capacity to the supply and demand Sieber provided an adaptable warehouse leading to less costs for the costumer and additionally avoiding construction costs for the new warehouse. Information sharing proved to be crucial for this relationship

(See Case Collection in Part IV of this book)

Case: Migros – Biofuel Trucks

The retailer Migros uses biofuel trucks for the supply of their stores. The required biofuel is produced with organic waste at a nearby plant. This organic waste is delivered by the Migros stores, where the organic waste earlier needed to be disposed of.

(See Case Collection in Part IV of this book)

Case: Bertschi – Supply Chain Redesign

When the LSP Bertschi took over shells chemical storage they applied a new idea of keeping the flexible storage in form of interchangeable tanks instead of silos. By doing so, LSP could provide the maximum in flexibility at comparably low costs.

(See Case Collection in Part IV of this book)

17 Managing People and Teams

Companies just as supply chains do not only consist of “inanimate” processes, activities, facilities or organisational units but resemble dynamic and “living” entities composed of people and collaborative team relations. Especially people with their personal talents, beliefs, capabilities and professional know-how represent the main parameters of company or organisational life. This critical aspect of people and teams as “task bearers” who finally execute the diverse activities, who make decisions etc. has too often been neglected by practitioners and management theorists alike. Thereby, management is essentially not only driven by people but also focused on people, just as Mary Parker Follet¹ prominently stated “Management is the art of getting things done through people”. Hence, people as well as collaborative teams are the decisive enabler but can also be discriminating barriers to managerial change, organisational SC-development and (inter-)company performance. This has to be taken into serious consideration when pursuing and implementing sustainable SCM concepts.

Since the main focus of bestLog is on inspiring ideas for enhancing sustainability in the intra- and intercompany supply chain context and – as a logical consequence – all collected cases more or less show the change of previous (unsatisfactory) practices into new (more satisfactory) practice, it was therefore not surprising for us that the management field “people and teams” has overall been evaluated as a very important management field throughout the industry workshops, the online forum and the case collection, respectively. Additionally, what we have experienced throughout the whole bestLog endeavour is, that different people/teams play different roles with different stakes on sustainable supply chain performance. Against this background, best practice management of people & teams in the context of sustainable logistics and SCM means a stakeholder aligned management within and between companies.

In general we could identify four basic stakeholder groups as shown in Fig. 4.6. In order to successfully develop and implement sustainable supply chain concepts – or in the words of Follet “to get the things done”, the responsible supply chain manager has to be able to manage each stakeholder group in a certain “target group oriented” way. In view of the role-specific requirements, perspectives or political power of each group, the supply chain manager her- or himself plays the role of a “neutral” integration platform, trying to align the different supply chain perspectives as best as he can – employing an overall “birds eye” point of view. The management board at the top of the organisation, for example requires aggregated financial data of supply chain performance upon which important strategic decisions for new investments can be made. Employees doing the operative tasks on the other hand need clear instructions and to get the things done efficiently and to be motivated for innovation at the same time. Beyond the companies boundaries the supply chain manager has to manage supply chain relations to customers as well as to suppliers. It is obvious that this is a very demanding and sensible task, since each group’s targets, requirements and power constellations have to be thoroughly understood, the groups have to be involved at the right times and supply chain actions have to be wisely communicated!

Fig. 4.6

Four Basic Stakeholder Groups in SCM

Hence concluding, managing people and teams in a structured, participative and sensitive way is a clear enabler for the development and implementation of collectively accepted sustainability concepts in logistics and SCM. In this regard and in the light of the multiple expert discussions, as well as the bestLog case collection the following four guidelines for managing people and teams can be derived, which again reflect the experiences of those companies showing a best logistics practice.

17.1 Understand and Speak your Board’s Language

The management board of a company represents the highest decision making authority, taking the responsibility for all strategic decisions with high financial and political/cultural impact. Thus, for the successful enforcement of sustainable supply chain concepts and the associated change activities, financial investments, etc. the commitment of the (top) management board is a mandatory and indispensible necessity. Nearly all of our cases reveal this essential need – though not always explicitly mentioned. As a consequence supply chain initiatives have to be promoted to the management board by the best way possible, just to attract the top managements political commitment and financial backup. This also means that supply chain initiatives have to be adequately communicated in the typical language of the top management – i.e. in terms of aggregated financial key performance indicators, investment and payback calculations etc. The intelligent aggregation of key facts is a core characteristic of language here, since top management usually does not have the time and the capacity to deal with all the operational details of a matter. What we learned from many project managers in the context of logistics and SCM is that, in order to successfully develop and implement sustainable supply chain solutions, a supply chain manager has to have the competence to understand and speak the board’s language – otherwise the commitment of top management for substantial sustainability initiatives will be rather weak.

17.2 Involve and Consult Your Staff

In general, the staff enables implementation success but can also be a major barrier to accomplish sustainable solutions in SCM. Since roughly every initiative to sustainable SCM is associated with change in some way or the other (e.g. technical, organisational, spatial change), the concerned employees have to be involved very early in order to catch as broad overall acceptance as possible. In this regard it is crucial to consult the expertise of respective employees not only to gain consensual acceptance (e.g. by the “political leaders”) but also to get the best internal information (e.g. of the “functional experts”) one can afford for the development of new solutions. The recommendation to involve and consult your staff impressively reflects the two basic rules of life, that you can’t change the habits of a lifetime and that you can’t reckon without one’s host. Thereby, a culture of continuous consultation and involvement of the staff into the ongoing change matters helps to generate a constructive climate of creative innovation, change awareness and implementation support. Last but not least, from a social sustainability point of view, a team oriented involvement and the offensive appreciation of staff initiatives (e.g. suggestion scheme incentives) leads to increased job satisfaction and strengthens the solidarity with the company. At the end of the day it is a question of social sustainability to be able to attract competent and capable staff which have the potential, the will and the power to make your company even more sustainable in the future.

17.3 Team Up with Your Principal Suppliers

Since suppliers typically are independent companies outside your organisation, they are not exposed to your direct managerial control within your organisation. But, as we have learned in bestLog and alike is also proposed in the SCM literature, best practice companies team up with their principal suppliers and thereby try to enfold a direct managerial control in the Supply Chain. Thereby, building strong supply chain relationships with major suppliers is a strong enabler to implement inter-company sustainability initiatives in the upstream supply chain. Ideally this can be achieved by intercompany teams, which are composed of experts from both partner companies – forming a quasi-integrated organisation. With regard to enforcing sustainable supply chain initiatives the aims of teaming up with the principal suppliers are twofold here. On the one hand, a cooperative supplier management motivates and encourages the suppliers to act in a sustainable way and to support as well as to contribute to sustainability initiatives. When claiming to be “green” or “social”, for example, the compliance to this commitment throughout the whole supply chain must be safeguarded in order to avoid counterproductive effects initiated by a negative public image (e.g. Childwork, tropical deforrestation, etc.). On the other hand, sustainability in supply chains also means not to exploit the suppliers. A long term supplier-partnership promises cost efficient results which will not cannibalise the associated social and environmental goals.

17.4 Team Up with Your Principal Customers

By the same token best practice companies team up with their principal customers just as with their key suppliers. Hitherto, for many companies it has been a basic element of their marketing campaigns to join into customer driven sustainability initiatives. But, what best practice companies show is that sustainability in its core is not a marketing driven topic alone. For best practice companies, teaming up with their principal customers means building strong supply chain relationships in order to enable and enforce inter-company sustainability initiatives in the downstream supply chain with a clear customer focus. This extended company-spanning engagement encompasses the joint development of sustainable supply chain solutions in e.g. distribution, transportation, warehousing, product development, IT, etc. Ideally, these intercompany teams enfold the character of quasi-integrated organisations consisting of experts from the partnering companies. Finding joint sustainable solutions in cooperation with the principal customers thereby enhances the chance of rising service quality without restricting the associated economic, social and environmental goals of sustainability. With regard to economic sustainability this joint engagement last but not least leads to better position in terms of competitive advantage, since reliable and sustainable products and services are the building blocks of a stable supply chain relationship with your current customers. Attracting new customers is by far more difficult than developing the present ones.

Case: Sieber – Telematics at SMEs

One of the main challenges here was that implementing new telematic system needed the handling of employees’ fears. As employees are often scared of changes, and especially of the monitoring tools provided by telematics, it is crucial to effectively communicate the rationale for the solution.

(See Case Collection in Part IV of this book)

Case: SIEMENS – e-Supplier Integration

One of the main learnings here was that including suppliers in joint activities is profitable for all parties because sharing information and collaborating improves their performance.

(See Case Collection in Part IV of this book)

Case: Sieber – Consolidation of Transports

One of the main learnings here was that collaboration with the customer is essential in order that both partners understand each other‘s needs and develop mutual beneficial solutions.

(See Case Collection in Part IV of this book)

21 Managerial Challenge: Find and Prioritize your Internal Sustainability Gap

In this chapter we dealt with five areas of internal management for developing sustainability. Additionally we provided diverse levers in each area to enhance sustainability in supply chains by managing primarily inside your organization. As organizations have different stages of maturity concerning their sustainability status in SCM, there are areas where there is still potential for improvement while others are already satisfyingly fulfilled. Additionally, the identification of the major lever is always dependent on the specific situation of a company. Hence, each organization has to find its own prioritization in order to fill the sustainability gap. In the following we will provide a guided gap analysis based on the identified management fields.

The responsible managers need to map their company's current sustainability status and identify the respective gap. The following Table 4.1 will help you to identify the gap. The table is based on the different sections we dealt with before. Those areas as well as the respective levers can be used to first of all identify the gap and finally close it by implementing the mentioned measures. The identification of the company’s sustainability status is done by analysing the areas and levers with regard to the actual status of the company.

Table 4.1 Gap-analysis for internal enablers

Additionally, as a tribute to individual contexts and situations, by putting an individual weight on each enabler (depending on industry, company size, company strategy, etc.) managers receive a ranking of their individual internal enablers. Based on this ranking managers may tackle the most urgent ones and hereby improve sustainability from an internal perspective step by step.

The result of this analysis can subsequently be illustrated in a chart like in (Fig. 4.7) (here only exemplary).

Fig. 4.7

Identifying the sustainability gap

This analysis should be undertaken with different stakeholders from different perspectives. The results of this analysis can then be compared with the different stakeholders in order to find different perceptions of certain issues and enablers. Figure 4.8 gives an illustration.

Fig. 4.8

Integrating different stakeholders

After identifying the internal sustainability gap managers may start with the prioritized improvement of sustainability in their supply chain.

Obviously there is no general checklist or procedure for improving sustainability for each company. In fact each company needs to develop its own measures. The described enablers in this chapter can hereby serve as a guideline.

Generally, in order to analyse the gap supply chain managers need to develop awareness, where internal reasons for a sustainability gaps can arise from. Possible sources may come from conflicts between economical and ecological aspects. Though sustainability aims at balancing and improving each dimension in terms of ecological, economic and social there may still be a conflict of aims when trying to enhance a single dimension. Additionally myopia in management may lead to a sustainability gap, as incentive systems may not reward sustainable thinking; e.g. high variable rewards for managers based on short-run performance indicators abet adoption of figures quarterly without bearing in mind the long-term survival of the company.

As part of a company’s culture missing impulses for changes or sustainable and long-term thinking can be another reason for a sustainability gap. Either certain persons are missing which give the according impulses and implement this special way of thinking or knowledge on sustainability aspects is still quite rare and the awareness that caring about long-term aspects and ecological as well as social concerns are not put on a par with economical concerns. Anchored sustainability thinking hereby offers a major chance to enhance all three dimensions.

Nevertheless, apart from the deductions of this chapter, the bestLog case collection identified a couple of general levers to enhance sustainability. We will deal with those in an exemplary way in the following:

Especially a change in incentive systems turned out to be a major lever for a general orientation towards sustainability within a company. A reasonable way to build the desired mindset towards sustainability aspects is the integration of sustainability measures in the overall performance measurement of managers and a renunciation from the short term orientation of exclusively economical figures.

An advanced system is also suitable for employees. Based on the classic suggestion system, employees can be rewarded for new ideas and suggestions in context of sustainability.

Communicating the importance of sustainability to all stakeholders is essential for the general acceptance.

For covering the costs of implementing such systems a creative search for financial support is helpful. Novel and integral ideas and concepts may for example be financed or subsided by the E.U.

Additionally, valuable inputs come from other companies and organisations. For inspiration and transferring best practices, Part III in this book provides best practice case studies from companies throughout Europe.

22 Summary and Conclusions

When dealing with sustainable SCM from the internal view – i.e. within your organisation – multiple enablers were identified. Concentration on processes, products, knowledge, infrastructure and people hereby reflect the main levers for enhancements in terms of sustainable supply chain management. Though promising achievements can be obtained by applying these levers, managers may have to deal with obstacles. As in most businesses “people” is a factor that has to be considered especially as they can on the one hand form a certain kind of blocking for implementing sustainable SCM measures and on the other hand provide the major lever for a successful implementation. In order to achieve the latter, managers have to motivate employees to support the changes due to a stronger sustainability orientation in the supply chain. In order to do so, they have to clarify their decisions and allow transparency. As well as the employees, likewise the board has to understand the measures taken and support them. Here it may especially be important to argue the long term strategy of sustainability actions, as an impact on financial figures may not be directly and in short term visible. The commitment of the top management is also crucial for investments, required for sustainability concepts, as the revenues are often not directly observable (Fig. 4.9).

Fig. 4.9

Specific fields of action for internal SCM for sustainability

As exemplified in this chapter, there are certain hints to sustainable supply chain management but there are only few “ready to implement”-solutions to buy in the market. Managers aiming at sustainability actions rather have to create individual concepts in order to create new and sustainable solutions for the supply chain. Thereby, it is usually hard to disengage from day-to-day business and take the time to re-think concepts and be creative for sustainable supply chain solutions.

In order to integrate the creative thinking of employees, the installation of a company suggestion plan and the building of trust in the skills and creativeness of employees offers a chance to enhance sustainability in supply chains. Concerning the direct interfaces to the internal management dimensions, managers need sensitise the customers for sustainability issues and integrate them in concepts and sustainable thinking. One major device for integrating and developing enhancements is the use of information sharing systems. Nowadays, technology can provide the distribution of quick and structured information, allowing coordinating and consolidating in order to reduce wastage.

To wrap it up in a nutshell, the use of information systems as well as integration and intended rise of awareness are major levers for enhancing sustainable supply chain management from an organisations inside perspective.

Tasks:

• 1) Using Table 4.1 rate the sustainability status of your chosen company. Put an individual weight on each enabler to reflect the individual context of your chosen organisation (depending on industry, company size, company strategy, etc.), as well as your individual ranking where appropriate. Transfer the results of your analysis to a chart similar to Figure 4.7.

• 2) Compare and contrast the analysis in task 1 for different stakeholders in the supply chain.

• 3) Identify and discuss the priorities for improving the sustainability of your chosen supply chain, given the analyses in tasks 1 and 2, especially with respect to balancing economic, social and environmental goals.