Process of Green Sourcing
Question :
In an effort to enhance their image in the eyes of an eco-friendly consumer, your chosen company has hired you to provide specific recommendations for completing each step of their Green Sourcing process.
Conduct research to capture a clear view of the company's Green Sourcing processes. Then, create an outline of the Green Sourcing process. Your outline should include the information defined within each step of the Green Sourcing process that is relevant to sourcing for the production and sale of the company product.
Develop a white paper to discuss the company options. It should include an introduction that contains the purpose statement for your work and the steps to be followed in the narrative. This will demonstrate your understanding of how to approach the assignment, including the literature review and recommendations for action by the company.
Answer :
Introduction
This paper has been developed to study one of the significant concepts called green sourcing that has gained significant importance in recent era due to the call of eco-friendly goods and services. People all around the world have been environmentally conscious and hence they are looking for or prefer eco-friendly goods and services. If the product or service of an organization is found not to be eco-friendly, it directly affects the image and reputation of the organization in the eyes of the customer (Duan et al., 2020). Hence, it is important to focus on developing an eco-friendly product or service to improve and maintain a good public image of the company. This paper outlines the process of green sourcing that the organization can use to focus on producing eco-friendly products for the eco-friendly consumer.
Green sourcing
Green sourcing can be defined as a process of acquiring products or services in a way that is the most environmentally friendly. It implies the purchase of goods and services that have significantly less adverse impacts on health as well as the environment. It makes an organization responsible for the action and decision and its consequences on the environment (Min & Choi, 2019). It requires the organization to consider environmental factors in decision making. It is necessary to consider the environmental factors while making a decision about product and service.
The process of green sourcing
The organization can focus on producing eco-friendly goods and services for the eco-friendly consumer by following the following steps. There is a six-step process of green sourcing that helps the organization to produce eco-friendly goods and services.
1. Assess opportunity: the organization should assess the possible opportunity to go green. It is important to analyze the cost of going green. The organization should understand the expenditure in a given category such as logistics cost, material cost, and maintenance cost. There is five most area that should be considered by the organization such as the cost of electricity and other energy, packaging, recycling and disposal, commodity substitution, as well as water. As the organization identifies these costs, it can incorporate these costs into the analysis of expenditure.
2. Assess internal supply chain: in this step of the green sourcing, the organization engages its stakeholders of the internal supply chain. It is necessary for the organization to understand the requirement of the business, the perspective of the internal stakeholders, and product specification in the supply chain of the organization (Wong et al., 2019). The organization should know what is the most environmentally sound product or service in the industry. The organization can be benefited by ensuring the product specification reflects the latest offering of the industry.
3. Assess supply market: in this step, the organization needs to engage new vendors as well as existing vendors. The organization also needs to make sure to cite green opportunities, the new process for manufacturing goods and services, as well as commodity substitution within an RFI. The organization should make sure that the supply base of the organization includes vendors who are specialized in a more sustainable and efficient product in order to embrace the advantages of green sourcing.
4. Develop sourcing strategy: this is one of the most important steps in the process of green sourcing. The effectiveness of the strategy depends on the quality of the information collected in the RFI. It also helps in determining the result, implementation, as well as consistent success of the process of green sourcing.
5. Implement the sourcing strategy: after developing the green sourcing strategy, the organization should implement the strategy in order to enjoy the benefits of it. The organization should quantify the benefit as well as the cost of sustainability attributes (van den Brink et al., 2019). Apart from this, the organization should also clearly identify as well as communicate the evaluation criteria because it is necessary to gain the support of diverse stakeholders in the process of green sourcing.
6. Institutionalize the sourcing strategy: after selecting the vendor and finalizing the contract, the organization should start the process of procurement. Apart from this, the organization needs to closely monitor and track the sustainability attributes throughout this step. The organization should also define the metrics for the supplier on the basis of performance, compliance, as well as delivery. The organization should also consider its sustainability goals as well as the outcomes of the green sourcing process while setting the metrics.
Company’s option
It is important for the organization to focus on producing eco-friendly products and services in order to build a positive image of the company in the eyes of eco-friendly consumers. If the organization does not focus on eco-friendly products and services, the image of the organization will be severely affected. The organization will lose the trust of its potential consumers in the market. The customer of the organization will switch to the competitors' product or service. Thus, the organization will lose its customer base and hence the profitability of the organization will also be severely affected (Golini et al., 2016). Therefore, the only option that the organization has is to adopt green souring and develop eco-friendly products and services to improve the image of the organization and gain the trust of the eco-friendly consumer.
Recommendations
The organization should follow the following recommendations to improve its image in the eyes of consumers and market share.
The organization should gain or obtain support from all its key stakeholders in order to adopt and implement a green sourcing process. Without gaining the support of the key stakeholders, the organization cannot achieve its sustainability objective. Thus, the organization should communicate the plan of implementing green sourcing within the organization effectively throughout the organization and convince everyone to support the initiative.
The organization should conduct the self-assessment of the procurement requirement. It is necessary to analyze the requirement of the procurement in order to fulfill it effectively and efficiently (Martínez‐Ros & Kunapatarawong, 2019). Without analyzing or identifying the requirement, the organization cannot provide the required resources to produce eco-friendly products or services that may lead to creating a negative image of the organization in the eyes of eco-friendly consumers.
It is also important to set a specific target as well as a priority in order to improve the image of the organization in the market. Setting specific target and priorities help the organization to direct all its resources and strategies in a specific direction to achieve the target and priorities.
The organization should also develop a green procurement program and implement it within the organization to achieve sustainability goals and objectives. Apart from this, it is also very important to monitor and evaluate the process so that the target can be achieved without any error or mistakes.
Conclusion
Green sourcing is an essential formula to build a positive image of the organization in the eyes of eco-friendly consumers. It helps the organization to improve its image and reputation in the market that will boost the sales of the organization. Thus, with the help of a green sourcing initiative, the performance and productivity of the organization will improve significantly along with the image and reputation of the organization.
References
Duan, Y., Cao, G., & Edwards, J. S. (2020). Understanding the impact of business analytics on innovation. European Journal of Operational Research, 281(3), 673-686.
Golini, R., Gualandris, J., & Kalchschmidt, M. G. M. (2016). Sustainable production and sourcing: the importance of integration within manufacturing networks.
Martínez‐Ros, E., & Kunapatarawong, R. (2019). Green innovation and knowledge: The role of size. Business Strategy and the Environment, 28(6), 1045-1059.
Min, H., & Choi, S. B. (2019). Green sourcing practices in Korea. Management Research Review.
van den Brink, S., Kleijn, R., Tukker, A., & Huisman, J. (2019). Approaches to responsible sourcing in mineral supply chains. Resources, Conservation and Recycling, 145, 389-398.
Wong, C. W., Lai, K. H., Pang, Y., Lee, H. S. Y., & Cheng, T. C. E. (2019). Sourcing green makes green: Evidence from the BRICs. Industrial Marketing Management.
