Logistics & Supply Chain Management ( all inclusive)

Questions in supplier selection

• Does the supplier have a publicly accessible sustainability strategy?
• Is the supplier certified (e.g. for environmental management according to ISO 14001)?
• Does the supplier offer transparency with regard to sustainability (e.g. reporting on the website)?

Measures before entering into a supply relationship

• Examination of sustainability promises through a document review, inspection / interviews
• Preparation of a deviation and initial audit report as a basis for decision-making

Measures in existing supplier management

• Constant dialogue (e.g. through annual meetings, suitable KPIs as part of the supplier scorecard)
• Permanent internal or external controls, inspections and questionnaires (e.g. through audits)
• Use of service providers such as https://www.riskmethods.net/

The following criteria are usually checked or evaluated by auditors:

• Implementation of the requirements of the respective management system, e.g. ISO 26000 (document review, KPI / reporting)
• Implementation of the requirements in everyday life (interviews, inspections)
• Review the role of management (control of management processes)
• Awareness of all employees (interviews, inspections)
• Ability to adapt and improve the management system with respect to sustainability (e.g. through the PDCA cycle).

The following criteria can, but do not have to be, checked (depending upon the standard):

• Occupational safety (separate Health & Safety Audit), environmental protection (separate environmental audit)

The following criteria are usually not checked or evaluated by auditors:

• General Quality level of the supplier

Disposal

• Disposal characterizes the elimination of substances.
  • In business terms, disposal usually means the final disposal of waste (rather landfilling, incineration and composting of waste).
  • In the supply chain, disposal always means a redistribution from the point of origin of the materials to be disposed of (source) to disposal (sink).
• Cost-intensive processes often have to be carried out as scope of disposal:
  • Collection and sorting (especially for non-hazardous substances)
  • Separation (disassembly, filtration, magnetic/optical separation, often manual)
  • Conversion (drained, crushing, solidification)
  • Storage (hazardous substances!, thresholds for hazardous goods, observation, safety zones)
  • Transport (dangerous goods!, safety regulations, transport restrictions)

Recycling

• Recycling refers to the return of materials and energy to the production process through use or recovery.
• Basic principle: «Avoidance before recycling (reuse or recovery) before disposal»
  • Waste may only be disposed of if its reuse or recovery has been excluded.
  • Waste includes:
    • solid wastes (e.g. metal shavings, packaging)
    • liquid wastes (e.g. from rinsing baths)
    • gaseous wastes (e.g. exhausts), light, heat or sound

1. Inventory of material, goods and waste flows
2. Clarification of the legal and organisational responsibility for recycling and waste disposal
3. Composition of waste materials and quantity determination
4. Determination of cost and revenue potential (today and in the future)
5.  Development of alternatives and their financial evaluation (e.g. new technologies, new materials, new processes, new suppliers)
6. Integration into existing processes (e.g. product development, production, customer communication)
7. Agreement of deposit and return concepts with customers
8. Supplier obligations for returns
9. Use of recycling exchanges
10. Continuous, systematic review of procedures and processes for further improvement potential

• Product design to avoid disposal problems (e.g. longevity)
• Defining and procuring suitable materials and reducing the use of materials
• Avoidance of waste generation (e.g. secondary packaging)
• Systematic minimization of waste (e.g. in processes)
• Use of resource-saving alternatives (e.g. noise reduction)
• Re-use (e.g. reusable packaging)
• Continued use (e.g. use for new purposes such as Friday bags)
• Re-utilization (Recovery) (e.g. cans in tinplate production)
• Continued utilization (e.g. production of car parts from plastic waste)
• Energy recovery from processes that generate heat

Note: Savings potential generally increases over time (scarcity of resources).

Packaging

• Special case: Packaging
  • Packaging serves to protect goods and the outside world (new product and disposal).
  • Packaging can exist as disposable or reusable systems.
• Single-use systems
  • Pro: low production costs, low weight, not cleanable, customizable
  • Con: Environmental pollution, disposable mentality
• Multiple use systems (e.g. certified wooden pallets, plastic pallets and collis)
  • Pro: robust and reusable, standardized in handling, cost-efficient when used in a pool shared between several parties
  • Con: high investment costs, higher administrative expenditure, cleaning and maintenance costs

Evaluation of the "CO2 footprint" of products and processes

• Step 1: Identify all greenhouse gas emissions along the (a) life cycle of products and processes in (b) each life cycle phase.
• Step 2: Convert all greenhouse gas emissions into CO2 equivalents.
• Step 3: Disclose, respectively report, in product or process specifications.
• Recalculation when there are changes in the supply chain (procurement, production, sales, ...)
• Provides companies a new KPI to be minimized in sustainable SCM
• Footprinting standards: ISO 14067, ISO 14026, GHG Protocol

• The life cycle assessment examines all elements in the life cycle of a product for possible ecological risks and weak points, to identify optimization potential and options for actions.
• The life cycle assessment examines various criteria (land use, water pollution, health, ...)
• Standards: ISO 14040, ISO 14044
• Schematic approach:
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• Compliance with accounting principles (completeness and clarity).
• Data collection in physical units: Kilograms (substances) and kilowatts (energy), if necessary with supplementary data (e.g. pieces or cubic metres).
• Standardisation and documentation of measurement and survey data (for comparability, location and time).
• Early entry of substance and energy data into an IT system (e.g. hazardous substance database).
• Clear definition of system boundaries (e.g. handling of data from corporate holdings and materials provided).
• Fix survey period and time (based on fiscal year, stock surveys are linked to physical inventory)

• Three pillar model is based on
  • Environmental,
    • Clima protection,
    •  protection of resources
    • Protection of biodiversity
    • Food should be grown organically
    • Use natural resources with caution
  • Economic
    • Business and industry
    • Only find products which are in season on the shortes way possible (no flights)
  • Social considerations
    • Better education and training opportunities
    • Equal right to men and women
    • Fighting poverty
    • Prosperity for the whole of humanity

1. People: end poverty and hunger in all forms and ensure dignity and equality
2. Prosperity: ensure prosperous and fulfilling lives in harmony with nature
3. Peace: foster peacful just and inclusive societies
4. Partnership: implement the agenda through a solid global partnership
5. Planet: protect our planet's natural resourced and climate for future generation

The three target dimensions need to be taken into account (ecolomic, ecological, social) in intercompany collaboration and in the management of material, information and financial flows so that actors in the supply chain must meet a minimum ecological and social standards.

• Social and governmental . Changing value in society and new laws and regulation
• Market significance. Customer demand for sustainability
• Company-related increased costs for disposal and recycling
• External drivers
  • Market pressure
  • Social pressure
  • Regulatory pressure
• Internal drivers
  • Corporate strategy
  • Corporate culture
  • Corporate resoources

The problem areas are economy (cost, quality), ecology (emission, clima) and social (child labor, occupational safety)

Most company's and customer first need to understand what sustainability menas in the supply chain. Then they need to firue out where and when problems with sustainability occur in the supply chain. Further actors in the supply chain have different perspective, motivations and possibilities and need to understand the whole concept and there are different powers that can make problems with influence and control when running through the suply chain to be sustainable.

• Avoidance: elimination of root causes, generally do not act as first-mover (reactive approach)
• Deferment: reduction of root causes, posponement of logistics proesses (reactive approach)
• Hedging: limitation of main causes, currency hedging (preventive approach)
• Diversification: reduction of dependency, dual or triple sourcing (preventive approach)
• Transfer: risk-sharing, multiple user warehouse, aliances (proactive approach)
• Acceptance: Incur (but monitor) risks, accept fluctations in demand (proactive approach)

When a product is economically feasable, socially acceptable and environmental friendly then it is sustainable. The perspectives are Economy (cost reduction through), Ecology(reducing use of resources) and Soiety (minimum standards in occupational safety).

• Reactive strategy, damage containment upon occurrence of loss
• Defensive strategy
• Adapted strategy
• Proactive strategy, mitigation throuugh continuous risk management

Recycling management does look at the waste produced by the supply chain, this waste includes solid wastes, liquid wastes and gaseous waste. Now the recyling managment tries to avoid as much waste as possible, if not avoidable tries to recycle waste and only if there is no further use, then dispose the waste. It concerns the supply chain management on every level. From product design to avoid disposal problems to packaging and enery recovery from generated heat.

Cause when using sustainabl techniques and resources, you also increase efficiency of buildings, vehicles and machinery at a significant cost saving over a longer timepreriod.

SCM decides on all the steps in a production and by choosing sustainable methods the product itself can get sustainable.

The goal of every supply chain is to deliver the right product or service, to the right customer, at the right place, at the right time, to the right conditions for the lowest total cost

SCM represents an integrative functional area which is primarily responsible for the connection of the main business functions and processes within an organization, as well as those of other businesses that are involved in the supply chain, in oder to form a concept in the shape of a consisten and high-performing business model

In order to increase the efficiency of a supply chain, and thus added value, the entire flow of materials, services, information and financial resources must be monitored, measured and steered → Supply Chain Management

• 3D printing
  with 3D printing, production processes can be simplified and accelerated. It can also be used to produce personalized products for customer at lower cost. Complex shapes can be produced that could hardly be produced using conventional methods in the past.
  • Medical, printed titanium implants
  • Mechanical engineering, printed castings
• Robotics automation
  in production, robots on the assembly line have already greatly replaced humans. Now robots are beginning to take on more complex tasks and also also making decistion. Be it finding the fasttest route or reacting to human expressions.
  • Warehousing
  • Care of elderly people
• Industry 4.0
  the central aspect is the complete networking between the machines, the products manufactured or services offered and the environment and people
  • Completely flexible and networked manufacturing at FESTO
  • Fully-networked railway infrastucture belonging to SBB, BLS, RHB
• Wokring and Fighting Machines
  UAVs exand the possibities. Drones can be used as meaqns of transport, bus also as decision support. UAVs are particularly suitable for transporting short distances and time-critical goods. But they also can help in decision making by collectiong data from the air.
  • Transport drones employed by the Swiss Post
  • Agricultural drones for soil analysis

Supplier-centric approach: Supply chain as a network of suppliers producing goods.

Customer-centric approach: a supply chain consists of all the levels required (direct or indirect) to fulfil a customer request.

Combining these approaches leads to more comprehensive approach: Systematic coordination between all required parties.

• to balance supply and demand
• to supply the market with products and services
• Operational goal: lowest possible costs and highest possible speed
• Ultimate goal: Satisfying customer needs

Category management

Usually heavy on inventory

Demand chain focused on the marked demand towards suppliers, the supply chain is steered by demand pull from the customer. Translates a customer goal into instructions for the suppliers.
Decision-making process in four steps.

1. definition of the purpose of the demand chain

1. Planning, e.g. in the form of a category plan
2. Control of consumption and requirements (e.g. inventory management)
3. Purchasing transactions, e.g. a call-off from a frame agreement

You make a frame contract and put everything in it.
e.g. (Rahmenvertrag)
you order a machine and then call off or change something. You make a deal for packages instead so you pay not for the service or parts but for the packages send.

Syloorganisations
Organization-related consideration of the supply chain: Supply chain as a series of organizational units both within a company as well as in other companies (intra- and interorganizational) that produce and deliver goods for and provide services to customers.

How far into depth can I go?
how far into depth do I actually need to go?

Single-stage supply chain: Reflects only direct relationships between suppliers and customers.

Multi-stage supply chain: In extreme cases, it maps all stages, from raw materials through to the disposal or recycling of end-of-life products:

– complexity increases disproportionately with an increasing number of stages

– companies have neither the means nor the resources to monitor all stages.

– companies usually limit themselves to one or two levels

Market decisions determine the nature of the supply chain. Within a supply chain with many supply chain partners, a large number of decisions are made:

– Decisions on investments, strategies for coordination and cooperation with partners, customer service, profit maximization strategies, etc.

– Many market decisions increase complexity and dynamics.

 – Market dynamics increase uncertainty about the impact of decisions (numerous variables have to be taken into account).

Functional Supply Chain: Analysis according to the main activity of the operational functional areas

•  Purchasing activities: raw materials, components, resources and services
• Manufacturing activities: creation of products and services, repair and maintenance
• Movement activities: transport of material and persons
• Warehousing activities: raw materials, intermediates ("Work in Process", WIP), finished products
• Sales activities: market-oriented activities such as marketing and distribution

Alternative now upcomming is process oriented approach. Cause if you loose a function this function is gone, if you loose a process you can fix it..

• Supplier-centric
• Customer-centric
• Demand-side
• Organization-related
• Single-stage
• Multi-stage
• Market-driven
• Functional-side

You have the product and the disposal in one

Material, payment and information flows along the supply chain used to be considered linear and coupled. The use of networked digital technologies such as the Internet has sustainably changed this:

• acceleration of information flows,
• decoupling of information flows from material and payment flows,
• development of traditional supply chains into networked, dynamic supply chains,
• dynamic integration (or exclusion) of partners according to e.g. customer preferences, technological advantages or product life cycle

Information technology enables integrated supply chain processes and new supply chain strategies.

It is always the question as a leader how much freedom you will give your team in the process. The golden line lies in the middle of Top-down and Bottom-up.

Top-down:

 1. Required processes are derived from the strategy and implemented.

2. Information systems are designed according to the requirements of the processes.

Bottom-up:

3. Networked information systems enable innovative integrated processes.

4. New integrated processes lead to innovative networked business models

Dynamic supply chains are a network of organizations that:

–are linked together in both forward and backward directions

–create value within different processes and activities Dynamic supply chains or a network of organizations must place value creation in the center.

–Value creation must be seen both in internal and cross-company terms.

 –Values are ultimately reflected in the products and services delivered to customers.

You have all the different stages and when one part falls out all of the other suffer. So they exchange services.
 

Goods-Dominant Logic (GDL):

• Value is generated in manufacturing.
• Value is provided to customers in transactions (Value-in-Exchange).
• Value is consumed by customers (Consumption).
• Goal: Standardize Products, Services and Processes in order to reduce cost.
   
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Service-Dominant Logic (SDL)

• Providers generate value offers with products.
•  Value is provided to customers in use (Value-in-Use).
• Value is continuously generated by customers (Service).
•  Goal: Establish processes to integrate the resources from providers and customers to create value.