QSO 328 SNHU Sustainable supply chain operation discussion In your post, discuss the difficulty of establishing a sustainable supply chain operation while

QSO 328 SNHU Sustainable supply chain operation discussion In your post, discuss the difficulty of establishing a sustainable supply chain operation while trying to maintain a balanced triple bottom line.

Consider how you would overcome the following:

Compromises with either financial, environmental, or social sustainability
Resistance from management to change that may affect the financial sustainability

What is the current state of sustainable operations in regard to the triple bottom line for the industry of the company you used to complete your Final Project?

Finally, what one key element do you believe is critical for the success of your industry to keep pace with the coming technological and sustainment advancements? Running head: NESTLE
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Nestle
Dwon Tagger
SNHU
Nestle
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Nestle
Introduction
Since its formation in 1866, Nestle has been the largest food and beverage producer in the
world operating in 189 states. Nestle has made significant sustainability efforts in maintaining its
financial sustainability. It is continuously increasing its products in the market to maintain and
increase its profit margin. The organization provides a wide array of products such as: coffee,
milk products, bottled water, ice cream and baby food. Nestle is continuously widening its
operational base by entering new markets worldwide. By this, it reduces its operational cost
while increasing profits. In addition, Nestle uses product adaptation and standardization
strategies when entering new markets. It uses local names for its products and repackages them
for the convenience of the customer.
Nestle strives to be a leading health and wellness firm by producing its products in a
clean environmentally friendly way. Nestle has reduced the packaging weight of its products
since 1991 to date by 600 million kilograms. It has also enacted a reusing policy whereby all its
packages are reprocessed and reused. Nestle’s research team is working together with ISO to
produce more environmentally friendly packages for its products. Furthermore, it announces the
carbon dioxide emissions of its company in a bid to be transparent to customers and respective
governments.
All of Nestle’s products are aimed at maintaining the social fabric of today’s society. Products
such as coffee are aimed at keeping families together by sharing a cup together and it is also a
core value in many societies and keeps age old traditions alive.
Why choose Nestle
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Since 1866, Nestle has been at the forefront of the food and beverage industry and is well versed
in maintaining its company sustainability throughout the 152 years it has been in existence. It is
also a multi-national company with branches in most countries worldwide. It therefore has the
knowledge of the diverse cultures and tribes of the world and what they demand in their
products.
Nestle is a nutrition, health and wellness organization that has grown to be very famous
in different parts of the world because of the manufacture, production, and supply of foodstuffs
that they do. Just like most of the business organizations and companies are making attempts to
embrace modern technologies in this digital era, Nestle has not been left out on this. This food
production and supply company have heavily invested in technology from research to
manufacturing and supply of their products (Saluja, & Mahajan, 2017). This has led to a number
of benefits compared to how they used to carry out their activities a long time ago. There are
quite a number of emerging technologies they use that have affected their environmental and
social sustainability efforts in a positive manner.
Today, technologies are a vital part of the Nestle Company. There are many engineers
working in R&D in many fields that exist from packaging and equipment to manufacturing new
beverage systems such as Nescafe Dolce Gusto, Nespreco, BabyNes and many more. Apart from
the engineers, the company’s food scientists have developed processes and technologies that
facilitate the development of safe and nutritious foods and beverages. These are also
environmentally friendly and hence, meets the company’s goals which are to produce safe
products for consumption and environmentally friendly (Kumar, 2018). The company also uses a
number of technologies to recycle their packages which is environmentally friendly. An example
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of a technology that has seen Nestle be at the top is the fermentation and probiotics. Research
done by Nestle was the first to look at the molecular interaction of probiotics with intestinal
walls.
The company has also developed a technology to use less sugar in chocolate. The
researcher discovered a way of restructuring sugar that has allowed the company to reduce sugar
in most of their products by about 40 percent. This has highly boosted the social sustainability
effort as diseases caused by sugar has been reduced by some percentage of people who use
manufactured food products. It reduces the risks of obesity, type 2 diabetes, and more diseases.
As a matter of fact, these technologies have also affected the financial bottom line of the Nestle
company positively. The products that they produce with the help of these technologies have
been received well by customers from different parts of the world, and this has led to an increase
in their revenues. In 2018, the company received an organic growth of 2.8% in the first half. Real
internal growth was (RIG) was 2.5% as the company remained at the top of the food and
beverage industry. Total sales increased by 2.3 % on the reported basis of CHF 43.9 billion.
Question 2
Moreover, the Nestle company collaborates with its customers and suppliers in various
aspects. The company has different suppliers from different regions depending on where their
industries are located. These range of people and companies supply them with fresh agricultural
products, water, apparatus, spare parts and many more. There is a good collaboration between
the company and their suppliers as they even train farmers on how to produce quality products
and help some of them with water supply so that they can produce the best surplus. On the other
hand, the supply chain professionals also play a vital role in ensuring that the quality products
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produced from the quality raw materials from the suppliers also reaches the customers and
consumers (Wijesinghe, 2018). The company collaborates with their suppliers from different
regions to ensure responsibly sourced materials, and this improves environmental sustainability
across the entire supply chain. All these are shown by the balanced inventory levels that establish
the right supply of the products within the company. It is also justified by the competitive edge
that the company has gained to remain at the top among their competitors.
Question 3
Furthermore, there are various metrics that have been used by Nestle Company to assess
how they are meeting their environmental and social impact goals. The first metric is from the
external assessments given by the world leading ranking and rating agencies. Nestle was ranked
first among the 22-world beverage and food manufacturers in 2018 by Access to Nutrition Index
agency. The data used to support these metrics were quantitative data from major outlets that sell
Nestle’s products. Qualitative data from consumers are also used to support the metrics. The
other metric used by the company is the annual revenue reports. These are basically measured of
profits made and are collected from the different books of accounts. For instance, the underlying
trading operating profit for the company increased by 3.5% to CHF 7.1 billion in 2018 from
2017 products (Saluja, & Mahajan, 2017). The metrics from the agencies was chosen because it
is a survey that comes directly from the consumers’ views. The annual accounts reports are
chosen because it balances all the expenses and sells made to show whether a profit or loss is
made after a given period of time.
Profitability is vital for every company. However, for there to be guaranteed sustainability, a
company should strive to strike a balance between profitability, and conservation of both the
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physical and social environment it operates in. For the case of XYZ Company, the management
has failed to realize this, which could end up fatal to the sustainability of the company.
Therefore, the purpose of this milestone is to ascertain how technologies and best practices for
XYZ can help meet or hinder its environmental and social sustainability goals, effects of
collaboration with suppliers and customers on enhancing environmental and social sustainability
and metrics to be used in assessing how well the company is meetings its goals.
Technologies
Some of the best practices include exceeding all EPA and other environmental regulatory
standards in its supply chain, for instance, investing in more efficient machinery such as
upgrading to electric-powered trucks, and manufacturing machines if they use fossil fuel
powered. Not only will these practices increase the production efficiency, but they will also be a
huge step towards the company’s goal of achieving 50% carbon footprint reduction.
Additionally, XYZ can source green energy through solar panels to power its manufacturing
processes. As concluded by McKinsey Corporation’s research (Henderson, 2015), all these
practices are viable business opportunities which the company can take advantage of in the
future to expand its operations.
However, adoption of solar power and electric powered machinery may become
inefficient in the case of power loss. This can cause it to halt its production process. A better
option would be to combine solar power with main-grid power. Consequently, the company’s
operations would be powered by solar panels on normal occasions, and the main-grid power
being used only when there are shortages. The metric system for measuring these emissions
should be in kilograms of carbon (IV) oxide emitted per kilogram of final products produced.
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Carbon (IV) oxide can be measured using the Carbon Emission Calculator (ACE), which allows
for inclusion of energy use, waste, refrigerant loss, and travel (Sustainable Business Network,
n.d.) The data collected should then be compared with the amount of final produce within the
same period of time. This method is effective as it not only accounts for production machines’
emissions, but also other indirect emissions by the company’s factors of production.
Collaboration with Suppliers
XYZ Company needs to liaise with all the suppliers across the supply chain to ensure
they too meet and exceed EPA and other environmental regulatory standards. An excellent
example would be developing an environmental sustainability assessment procedure to be used
in assessing and selecting new suppliers. Additionally, it can organize annual environmental
sustainability audits of their suppliers to keep them in check. The objective of this approach is to
enable the company to act as a pacesetter in sustainable production. It can also go a long way in
ensuring all materials procured are of high quality; hence reducing wastage and unnecessary
emissions. Similarly, the metric system for measuring these emissions should be the kilograms of
carbon (IV) oxide emitted per kilogram of final products produced. However, the calculation
should include emissions from all suppliers in the supply chain. This method is effective as it
treats all suppliers and the company itself as a single organization.
Collaboration with Customers
XYZ Company should work with its consumers down the supply chain in maintaining
environmental sustainability. It can achieve this by launching programs that make their
consumers get interested in preserving or recycling their products just like Nudie Jeans
Company, Patagonia, and Adidas (Espito, Tse, & Soufani, 2016). Additionally, it can initiate a
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waste take-back program with the aim of reprocessing the waste like Best Buy and Samsung.
However, if XYZ relies on outside distributors, it can partner with retailers in collecting in
collecting old parts from final consumers. For example, how DeWalt partners with Lowes and
Napa Auto Parts to collect old items from customers (Espito et al., 2016).
Measuring Environmental and Social Impact Goals
Engaging in recycling activities can be a great step in preventing dumping of their final
product’s waste, and also prevent the unnecessary manufacturing of new parts. Consequently, the
company will achieve environmental sustainability as a result of fewer emissions that would
occur if new parts were to be manufactured, reduce water usage, and waste production (Espito,
Tse, & Soufani, 2016). In terms of social sustainability, XYZ’s reputation will improve enabling
it to win more customers (Beder, 2002). The metric system used should be in kilograms of waste
recycled compared kilograms of final products sold. A recorded of all items collected for
recycling should be recorded in different time phases, and compared with the number of final
products that were sold during that period. This method is effective as it compares the total
number of items owned by the customers with those that have been brought back for recycling.
Employee retention is crucial to the sustainability of XYZ Company. XYZ can retain and
attract top talent by implementing the three R’s of employee retention; Respect, Recognition, and
Rewards (Mathimaran & Kumar, 2017). Respect involves raising employees’ esteem, paying
special regard, and consideration of individuality. Recognition involves paying special notice of
employees, while reward is appreciating performance. The retention rate should be calculated in
terms of percentage of retained employees at the end of the year, over total employees at the
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beginning of the year less those employed during the year. This method is effective in comparing
the employee retention rate in a year without the inclusion of new employees.
The consequences of a company’s environmental and social sustainability to its financial
viability can best be explained through the value-creation and value-destroying theories.
Notably, a company’s adoption of environmental and social sustainability measures improves its
financial position since it gains competitive advantage through efficient utilization of natural
resources in the long term (Chen, 2015). Additionally, environmental sustainability practices
foster innovation in a company, which in turn lead to increased market share and greater
financial gains (Chen, 2015). This is in line with the Stakeholder theory, resource dependence
theory, and the ecological modernization theory.
On the contrary, environmental and social sustainability initiatives increase the
operational costs of a company, which in turn results in an increase in prices; therefore, causing a
company to lose its market share and reduced profitability (Chen, 2015).
Implications of Emerging Social and Environmental Best Practices
Referencing the work of Bob Willard, the five factors of emerging practices are pollution
and health, climate change, erosion of trust, energy crunch, and globalization backlash (Khare,
2005). Consequently, these factors cause business risks such as market risks, Sustainability risks,
capital cost risks, operating risks, and balance sheet risks. Comparing with XYZ, it faces
potential threats of closure or lawsuits from the Environmental Protection Agency which can
lead to increased cost, and reduced market share as a result of poor relations with customer focus
groups leading to lower profits. Additionally, it risks lost business opportunities due to lack of
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innovation into the green energy industry leading to reduced profits; and poor operations as a
result of “brain drain” which will lead to increased hiring and training cost.
Best Practices of Sustainability
The current XYZ Company’s financial, social, and environmental plans do not represent
the best practices of sustainability. The management is only concerned with profits without
considering the environmental and social sustainability strategies of the company. On the other
hand, the reference company does include environmental and social sustainability in its
operations such as better employee retention, community development through participating in
improved public health projects and promoting local economic development projects.
Balancing the Triple Bottom Line
According to Haanaes, Michael, Jurgens, and Rangan (2013), there are three ways a
company can make environmental sustainability profitable. These are: investing in moreexpensive technology and methods of sustainable operations which are guaranteed to lower
production costs in the long run. Secondly, starting with tiny changes to the sustainable process
that generate significant cost savings, and then using the savings generated to advance the
processes. Thirdly, spreading sustainability operation efforts to suppliers and customers, which
enables a company to devise new business models in the process that competitors might find it
difficult to copy. XYZ Company can adopt one of these measures in meeting its long-term
environmental and social sustainability goals. These steps are guaranteed to ensure no negative
impact will be experienced on either the financial or social functions of the company. This is
proven by the tremendous success Ibrahim Abouleish the founder of Sekem Company
experienced after adopting these steps (Haanaes et al., 2013).
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Key Milestones
The first milestone is meeting all EPA and other environmental regulatory standards as
expected by the VP of sales. As explained in the previous assignment, the second milestone
should be a successful upgrade to environmentally friendly machinery and methods of operation,
which will be a huge step to the company achieving its 50% carbon footprint reduction. For
example, upgrading to electric powered vehicles, solar power, and electric powered machines.
Just like our reference company, the other milestone should be collaborating with the key
suppliers to ensure that they adopt environmentally sustainable operation systems. On the part of
employee retention, the company’s first-year milestone should be an increase in the employee
retention rate of 40%. This is similar to the strategy the reference the company took.
Conclusion
To sum up, it is the task of every organization to participate in community development,
and XYZ is no exception. It should engage in projects such as cleaning the environment,
providing employment opportunity to local communities, and offering humanitarian assistance to
the poor in the community.
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References
Botta, F., Bain, G., Ogundare,A., He, Y., & Li, Y.(2018). Ethical Principles Highlited by Nestle
Chen, L. (2015). Sustainability and company performance: Evidence from the manufacturing
industry. Retrieved from https://www.divaportal.org/smash/get/diva2:851142/FULLTEXT01.pdf
Haanaes, K., Rangan, S., Jurgens, J., & Michael, D. (2013, March 1). Making Sustainability
Profitable. Retrieved from https://hbr.org/2013/03/making-sustainability-profitable
Khare, A. (2005). Emerging Dimensions of Environmental Sustainability. Retrieved from
http://www.gerenciamento.ufba.br/Downloads/Emerging%20Dimensions%20of%20Envi
ronment%20Sustainability.pdf
Wintson, A. (2011, January 19). Ford’s Impressive Sustainability Strategy. Retrieved from
https://hbr.org/2011/01/fords-impressive-sustainabilit.html
Wijesinghe, P. (2018). Human Rights Violations by Multinational Corporations: Nestle as the
Culprit.
Kumar, M. S. P. (2018). Brand Awareness and Selection Criteria.
Saluja, N., & Mahajan, V. (2017). Profitability, Efficiency and Risk Analysis of Nestle India
Limited. Choice, 6(1).
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Beder, S. (2002). ‘Environmentalists Help Manage Corporate Reputation: Changing Perceptions
not Behaviour’, Ecopolitics 1(4), Spring, pp. 60-72. Retrieved from
https://www.uow.edu.au/~sharonb/Reputation.html
Economic and Community Development Project Strategies. (n.d.). Retrieved from
file:///C:/Users/ken/Downloads/619_economic_community_development_project_strateg
ies_en.pdf
Esposito, M., Terence, E., & Soufani, T. (2016, June 7). Companies Are Working with
Consumers to Reduce Waste. Retrieved from https://hbr.org/2016/06/companies-areworking-with-consumers-to-reduce-waste
Henderson, R. (2015, February 19). Making the Business Case for Environmental Sustainability.
Retrieved from https://www.hbs.edu/faculty/Publication%20Files/15-068_c417331e2146-40b6-8dfc-aa9a029db119.pdf
Mathimaran, K. B., & Kumar, A. A. (2017). Employee Re…
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