Ethical Supply Chain Management

Ethical supply chain management is among the most neglected areas of our field. One of the issues covered by ethical SCM are animal rights, which are not covered by social SCM, a closely related area. An interesting application of ethical SCM comes from KAT, the Association for Controlled Alternative Animal Husbandry, “the inspection body in Germany and neighbouring EU countries for the scrutiny of eggs from alternative forms of hen rearing (free-range, barn and organic rearing)”. The system helps to put visibility into the supply chain. According to KAT, “[v]irtually all eggs offered for sale on the German market in the food retail trade bear the KAT inspection label”. You can, for example, use the code 0-DE-1234567 to test the system and will then be able to see pictures of the farm and also a map. “What is on the egg?” has also been released as a free app for mobile phones.

Supply Chain Management Books

I recently conducted a survey with leading supply chain management researchers and asked them a simple question: “If you were teaching a doctoral seminar, what would you assign as the [...] most important books for the academic field of SCM (‘must-reads’)?” The following six books were recommended most often: (1) Supply Chain Management: Strategy, Planning, and Operation by Sunil Chopra and Peter Meindl, (2) Logistics & Supply Chain Management by Martin Christopher, (3) Designing and Managing the Supply Chain: Concepts, Strategies and Case Studies by David Simchi-Levi, Philip Kaminsky and Edith Simchi-Levi, (4) Supply Chain Management: Design, Coordination and Operation by A. G. de Kok & Stephen C. Graves, (5) Purchasing & Supply Chain Management by Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero and James L. Patterson, and (6) Foundations of Inventory Theory by Paul Zipkin. This list compares well with a list of the 10 Greatest Supply Chain Management Books of All Time identified based on Google Scholar.

Logistics Performance Index 2014

Today, the World Bank has released its Logistics Performance Index 2014. The report is titled “Connecting to Compete 2014: Trade Logistics in the Global Economy”. The index, which is based on survey data collected from more than 1,000 logistics managers, allows a comparison of 160 countries in terms of trade dimensions, such as infrastructure quality, customs performance and timeliness of shipments. It is a valuable resource for researchers, business executives and politicians to analyze the current state of logistics in the world. The results of the new report “point to Germany as the best performing country with an LPI score of 4.12 [...] (on a scale of 1 to 5)”. Moreover, “15 of 28 European Union (EU) member states and 23 of 34 Organisation for Economic Co-operation and Development (OECD) members were among the top 30 countries”. The report highlights that “[s]upply chains—only as strong as their weakest links—are becoming more and more complex, often spanning many countries while remaining critical to national competitiveness”.

Academic English on the “Paragraph Level”

Some time ago, I showed that a combination of correctly spelled English words (“word level”) does not automatically generate a good sentence (“sentence level”). This time, I will broaden the scope even further by discussing the “paragraph level”. With respect to paragraph structure, several languages are less restrictive than academic English. I often observe that speakers of these languages mistakenly transfer the freedom of their own language to texts written in academic English. A paragraph almost always starts with a topic sentence, which expresses a single controlling idea. This sentence is followed by supporting sentences, which explain the idea of the first sentence. A paragraph typically ends with a concluding sentence, which summarizes the current paragraph and/or transitions to the idea of the next one. The web page of the Writing Center, University of North Carolina at Chapel Hill provides further information on paragraph writing, including examples.

CDP Supply Chain Report 2014

The Carbon Disclosure Project (CDP) “is an international, not-for-profit organization providing the only global system for companies and cities to measure, disclose, manage and share vital environmental information”. Written by Accenture, the CDP Supply Chain Report 2014 has now been published. Its subtitle, Collaborative Action on Climate Risk, indicates the direction of the report’s journey. Indeed, the report, which is based on data collected from 2,868 companies responding to a supplier information request in 2013, builds on “a wealth of data on how suppliers and their customers are collaborating to drive down carbon emissions, mitigating water risk, seizing opportunities, and building revenue and brand along the way”. It turns out that “[s]uppliers report that both climate risk and opportunity are at high levels” and that “consumers are becoming more receptive to low-carbon products and services”. Moreover, suppliers “realized savings of US$11.5 billion from emissions reduction investments [...], down from US$13.7 billion in 2012″.

Climate Extremes Will Challenge Our Supply Chains (Guest Post by Anders Levermann, PIK)

In his recent Nature article, Climate Economics: Make Supply Chains Climate-smart, Anders Levermann argues that supply chains need to adapt to extreme weather. He discusses this topic in the following guest post.

Extreme weather events are likely to intensify the more greenhouse-gases we emit – and these extremes are more than just a local risk. Links in global economic chains and world markets mean that flooding or heat-waves in one place can have repercussions elsewhere. Extreme rainfall and typhoon Yasi paralyzed the world’s fourth largest coal exploration site in Australia in 2010/11. Coking coal prices went up by 25% in 2011. In order to estimate the impact of climate change on our society we need to understand both future weather extremes and our global economic network. In Potsdam we recently set up a website to collect and analyze this data. Everyone can register and contribute expertise. In a similar fashion as Wikipedia we hope to gradually generate a global community that creates a system of checks and balances to obtain an up-to-date database of high quality and detail to induce a global adaptation of our supply chains. For news follow @ZEEANit on Twitter or register at zeean.net.

Anders Levermann is a physics professor for the dynamics of the climate system and co-chair of the research domain Sustainable Solutions at the Potsdam Institute for Climate Impact Research.

Levermann, A. (2014). Climate Economics: Make Supply Chains Climate-smart. Nature, 506, 27-29 DOI: 10.1038/506027a

The Rise of Interconnected Risks

Risks related to business interruption and supply chains are the principal risks faced by global companies, the new Allianz Risk Barometer 2014 finds. According to the report, losses related to business interruption and supply chains “account for around 50-70% of all insured property losses, as much as $26bn a year for the insurance industry based on 2013 data”. Paul Carter, Global Head of Risk Consulting, Allianz Global Corporate & Specialty (AGCS), asks: “There is a need to examine beyond the identification of so-called ‘critical’ suppliers. How do these companies manage their own supply chain exposures?” Other top global business risks are natural catastrophes, fire/explosion, changes in legislation/regulation, and market stagnation or decline, the research finds. The survey “was conducted among risk consultants, underwriters, senior managers and claims experts in the corporate insurance segment of both [AGCS] and local Allianz entities”. Download the full report: Allianz Risk Barometer 2014 (PDF).

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