Question

PLEASE REPOND TO THE FOLLOWING QUESTIONS

Question 1 :

What are some benefits to improved sustainability of a supply chain?

Question 2:

What are some challenges that limit the effort put in by supply chains to improve sustainability?

Question 3:

Describe the “tragedy of the commons” in the context of supply chain sustainability. What are some “mutually coercive” mechanisms that could be implemented to encourage supply chain sustainability?

Question 4:

What are some problems with firms reporting their sustainability performance based on metrics that do not consider their extended supply chain?

Answer 1

What are some benefits to improved sustainability of a supplychain?

Public image is a huge benefit to this. Customers will see the different things a company and its supply chain are doing for better sustainability and it boost the companies reputation a lot in the eye of the public. The more people who value a company in this way the more likely they will be to buy a product from this company so an increase in sales and revenue could be seen from simply improving sustainability.

What are some challenges that limit the effort put in by supplychains to improve sustainability?

A big factor is cost. Increased sustainability usually raises a company’s cost and one of the drivers of a supply chain is to remain cost effective and lower costs as much as possible to stay competitive in the market. Learning to think out of the box and to be able to increase sustainability without increasing costs a significant amount is the goal of most companies and their supply chains.

Describe the "tragedy of the commons" in the context of supply chain sustainability. What are some "mutually coercive" mechanisms that could be implemented to encourage supply chain sustainability?

Tragedy of the commons is the problem arising when the common good does not align perfectly with the good of individual entities. Some mutually coercive mechanisms that could be implemented to encourage supply chain sustainability is emission taxes and cap and trade methods.

What are some problems with firms reporting their sustainability performance based on metrics that do not consider their extended supply chain?

There are two major challenges on social and environmental metrics that present with companies and impacting their sustainability performance on metrics in the supply chain. Firstly, the scope of measurement for a given category. As an example, if a company’s metrics only report their own internal energy consumption, it doesn’t reflect any outsourcing activities or resulting impact on the entire supply chain. Since companies frequently make in-sourcing and outsourcing decisions, the impact on the supply chain could easily be overlooked if only internal metrics are reported. With this outsourcing, the subcontracted company then is using energy and resources, therefore, leaving the original company appearing to be lowering the energy consumption. This gives a misleading report. Secondly, relates to the use of absolute or relative measures of performance. Companies should report both absolute and relative metrics to take into consideration all the variables impacting the supply chain to get a true indication of performance. Hence, absolute measures the total amount of energy consumed and relative measurement looks at the consumption per unit of output. The absolute measurement does not account for a drop in supply chain sales and production will show lower energy used even if nothing changes. This will also lead to a better appearance of overall results rather than the per unit consumption. The relative measurement differs in variety such as dollars of sales, kilogram outputs or square feet per unit. As recommended that a mix together of metrics are to be used, so that extended supply chain and the CSR pillars that find success can be effortlessly joined to economic success. Therefore, consistently measure across the extended supply chain is challenging and achievable.