Starbucks Shared Planet Program

• Starbucks is committed to minimizing its environmental impact and shares this commitment with its supply chain partners.

Starbucks Shared Planet Program

• This is an environmental commitment recognizing conservation across the supply chain, from coffee growers to recyclers.
• Starbucks has collaborated with Conservation International for 10 years to develop Coffee and Farmer Equity (C.A.F.E.) Practices
• C.A.F.E. consists of 24 measurable standards for sustainable coffee sourcing
• Growers meeting these standards must adhere to criteria for product quality, ethical accounting, social responsibility, and environmental leadership.
• In 2008, 77%, equivalent to 295 million pounds, or 651 kilograms, of Starbucks coffee was sourced from C.A.F.E. Practices approved suppliers.
• The average cost was $1.49 per pound, equivalent to $3.28 per kilogram, 5% above the average price for C-grade Arabica
• This price increases producers' quality of life through improved housing, education, and farm investments
• Income stability reduces the need for producers to migrate for employment
• The premium price enables Starbucks to refund some of the price back to suppliers
• Growers are rewarded for meeting sustainability standards, rather than penalized.
• Growers need third-party verification on the C.A.F.E. Practices Generic Scorecard, reviewed annually
• In 2008, 13% (38 million pounds/17 million kilograms) of C.A.F.E. Practices coffee came from suppliers who improved scores by 10 percentage points
• These suppliers got an additional $1.9 million in premiums over contract prices.
• Starbucks' ecological commitment has ensured sustainable supply sources to meet growing demand and address consumer concerns about social and environmental issues
• The company monitors its greenhouse gas emissions, with 75% associated with electricity for stores, offices and roasting plants.
• 24% is associated with store operations and coffee roasting, and less than 1% with corporate jets and vehicles
• Starbucks aims to use 100% recycled cups by 2015.

Sustainable Supply Cycles

• Supply cycles support all marketing product delivery
• Understanding supply cycles requires appreciating involved organizations and their functions
• Efficiency in supply cycles offers benefits to members
• Benefits can be associated with heightened economic, social, and financial performance.
• Sustainability derives from simultaneous pursuit of performance facets in the triple bottom line.
• Understanding benefits allows for environmentally friendly supply chains
• Functions performed within a channel are ascribed to specific organizations.
• Eliminating a supply cycle organization does not eliminate the value derived from that organizations activities.
• Defining supply cycles as the "set of entities associated with yielding environmental, social, and economic value from resource procurement through resource processing, consumption, and postconsumption
• The definition incorporates the logic of Porter's value chain and supply/distribution channels in logistics and marketing strategy.

Input-Output Process

• Stages of the supply cycle engage in some sort of processing
• Every supply chain entity has two inputs and two outputs
• Inputs are factors processed and resources from the environment.
• Outputs are products and by-products
• Referring to the process of delivering value as a supply cycle demonstrates the relationship between the environment and the product development process.
• Product outputs motivate supply cycle engagement, and in turn become inputs for the next stage or other supply chains
• By-products become inputs for alternate supply chains, or returned to the environment.
• Value chain incorporates consideration of the involvement of the environment

Benefits of Sustainable Supply Chains

• Focusing on the triple bottom line allows addressing the advantages from sustainable supply cycles.

Better Working Conditions, Reduced Turnover, and Improved Product Quality

• Investigating firms and activities allows identification of conditions for transforming raw materials into consumer products.
• Reviewing operations to heightened sustainability can potentially yield in better working conditions.
• Better working conditions yield economic returns such as improving lower employee turnover and enhanced product quality.

Improved Efficiency and Profitability

• Pursuing sustainability in value delivery highlights inputs and outputs associated with every level of the supply cycle
• Focusing on reducing inputs and maximizing outputs can increase profitability.
• Efficient packaging reduces warehouse, distribution, and transportation costs.
• Reusable packaging and automation can also increase efficiency.

Better Management of Risk

• Understanding liabilities can help to limit exposure to risk.
• Lowered risk is associated with cost avoidance, lower insurance premiums, reduced legal and regulatory costs, and preferred rates on loans
• Risk emerges from the value stream, asset considerations, interfirm networks and macroenvironmental issues.
• Cash flow in the computer industry is possibly influenced by software investments in Microsoft and Apple's operating system

Enhanced Brand Reputation

• Investing in sustainable practices in supply chains creates positive brand reputations
• Proactive supply chain management fosters strong supplier relationships and provides value.

Stakeholder Returns Increased

• Organizations focusing on the triple bottom line can anticipate and monitor risk with economic, social, and environmental returns.
• Strong relationships can lower turnover in volatile tech markets

Sustainable Logistics

• Logistics involves planning, allocating, and controlling human and financial resources for physical distribution, manufacturing support, and purchasing.
• Distribution communications, inventory control, materials handling, and other activities are associated with the logistics function.
• Logistics represents nearly 10% of the United States' gross domestic product, or 9.9% of costs to the firm
• Expenditures are associated with transportation, warehousing, and other factors
• Analyzing the logistics function allows assessing assets and their deployment from origin to consumption.
• Reverse logistics traces products back from consumption, addressing concerns about returned goods and disposal
• Returns cost roughly $100 billion, with 70% not defective
• Walmart sought to end defective product returns among its largest suppliers in four years
• In 2007, Staples installed governors on its fleet vehicles, limiting speed to 60 mph, and this led to a 25% increase in fuel saving
• UPS implemented a system training drivers to map routes for right turns, saving 3.1 million gallons of fuel and eliminating 32,000 metric tons of emissions
• Organizations can lower transportation costs by planning the distribution function.
• Procter and Gamble reassessed staging and distribution, reducing distribution centers by 200 locations

Energy Efficiency

• Beyond the costs of transportation, firms can reach higher efficiency levels by controlling energy utilization at distribution/production centers
• New construction facilities limit waste related to heating and cooling losses
• A warehouse for Sainsbury's features photovoltaic panels, solar walls, on-site power plant/recycling, efficient lighting, and air-tight construction

Innovative Technology

• Routing and tracking computer systems
• Inventory management software RFID (radio frequency identification) and GPS (global positioning system) have the potential to affect operations.
• UPS uses an information processing system providing a competitive advantage and delivers customized reports to patrons
• Cosmetics industry uses multi-echelon inventory tools to optimize inventory

RFID and Retailing Logistics

• Inventory, radio frequency identification, has significant applications in logistics and retailing
• RFID tags provide unique product identification codes, read without line of sight
• RFID readers offer benefits in manufacturing, ensuring all assembly items are present
• RFID also simplifies confirming delivery accuracy and determine product positioning
• Retailers can allocate inventory, price products by location, and rotate stock using RFID data
• Products can be tracked, reducing shrinkage

Global Positioning Systems (GPS)

• GPS is an American radio-navigation system for positioning, navigation, and timing.
• Two primary benefits of GPS tracking the ability to monitor drivers and their fleets
• This allow managers to determine potentially more efficient routing of the vehicle

Packaging

• As the means for ensuring products are delivered safely, packaging is an important element of logistics.
• Modifications to packaging procedures reduce package costs while reducing goods in supply cycle.
• Dow Chemical reformulated its packaging, saving $3 billion and reducing energy usage by 22%.
• Truck-based transportation requires balanced pallets, while rail needs secure and stable packaging.
• Supply cycle management recognize carton optimization and other freight packaging techniques

Interorganizational Relationships

• Due to volatility and rate of change in logistics, firms can recognize opportunities thru relationships with third party companies
• Third-party firms enable both manufacturers and retailers to improve sustainability:
• Vehicle enhancements
• Implement strategies to allow enhanced customers service

ISO 14000

• Managers of supply cycles increasingly ask suppliers to provide sustainability metrics, including 3rd party certification
• EMS, Environmental Management Systems, is a set of regulations established ti achieve environmental goals by the ISO, International Organization for Standardization
• The ISO is voluntary standards applied across industries monitor and control interaction with the environment across more than 100 member countries that are represented by industry and government groups.
• Implanting these provides the potential for performance, The Ford Motor Company were first to embrace ISO 14000 and credits them with saving millions since 1998.

Two of Standards in the ISO 14000 Family

• ISO 14001:2004: Provides a framework for organizations to use to implement influence of their activities and provide environmental performance continually thru the continual strategic approach in relations to environmental policy.

More on the ISOs

• ISO 14001:2004 can be applied to many things.
• ISO 14004:2004 provides guidelines of an EMS, it's implementations and issues with its involvement.
• Many desire to have their organizations be a matter of public record, ISO does not offer certification, but it does specify criteria to certify.
• They offer consultation over sustainability efforts .certification indicates auditor ensures the EMS is in accordance with the standard, has 3 year validity