Sustainable Supply Chain Case of Bae System

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SustainableSupply Chain: Case of Bae System

SustainableSupply Chain: Case of Bae System

Thebusiness environment has become competitive over time, which hasforced organizations to adopt theoretical concepts that can help themenhance their competitive advantage. Currently, organizations arefocusing on enhancing the sustainability of their supply chains,which help companies attain long-term profitability and integratechoices that are socially and environmentally sound Jaegler (2014, p.3) defined a sustainable supply chain as the art of managingfinances, product flow, and information with the goal of integratingenvironmental and social concerns. The concept of a sustainablesupply chain encapsulates several priorities, including theconservation of resources, environmental stewardship, financialsavings, reducing carbon footprint, and social responsibility(Linton, 2007, p. 1-2). In overall, a sustainable supply chain hasthree key dimensions, namely economic, environmental, and socialdimension. In the case of BAe Systems, environmental pollution ismajor hindrance to the establishment of a sustainable supply chainsince its operations depend on raw materials that are exploited fromthe ground and transported to distant manufacturing plants(Gopalakrishman, 2012, p. 197). The proposed study will mainly focuson the key initiatives taken by BAe Systems to control environmentalpollution associated with raw materials supplied to its manufacturingplants that specialize in the production of airplanes for militaryoperations.

Background

BAeSystems is a U.K. based company that has a key interest in the fieldsof security, defense, and aerospace. BAe Systems was founded in theyear 1999 with its headquarters in London, but it currently operatesin several other countries, including India, Sweden, U.S.A., SouthAfrica, and Saudi Arabia (BAe Systems, 2015, p. 1). BAe Systems’workforce is composed of about 84,000 employees with differentspecialties. Since its foundation, BAe Systems has been manufacturingand selling products for naval, air, and land forces. The key areasof enterprise for BAe Systems include intelligence, armament,information technology solutions, and electronics. Given a smallnumber of potential customers in these business areas, BAe Systemshas to focus on meeting customer demands and enhancing its reputationin order to retain customer loyalty. BAe Systems achieve customerloyalty and enhance its reputation through on-schedule delivery andoffering services and products that meet the international standards(BAe Systems, 2015, p. 1). BAe Systems’ supply chain can beconsidered to be truly global given that its operations extend to allcontinents. An extensive supply chain presents BAe Systems with thechallenge of achieving its economic goals while remaining sociallyand environmentally friendly.

Problemstatement

Nearlyall multinational corporations (including the BAe Systems) claim intheir CRS policies that they protect environment in different ways.BAe Systems works with a large number of suppliers from differentparts of the world, which increase the carbon footprint sincematerials have to be moved to its manufacturing plants(Gopalakrishman, 2012, p. 200). For example, plants for themanufacturing of airplanes for military operations require differentraw materials (such as metals) that are sources from differentsuppliers and from different locations. Therefore, the present casestudy will investigate the initiatives that BAe Systems has taken tocontrol environmental pollution that results from raw materials thatare supplied by its suppliers to the airplane manufacturing plants.

Rationale

Currently,it is certain that people are continually becoming environmentallyconscious and more aware of the companies’ community needs (Tuna,2012, p. 131 and Karatas, 2013, p. 234). However, it is stilluncertain to the majority of business, whether investing inenvironmental protection programs and community programs can reflectdirectly on company’s profit margins and the sustainability of thesupply chain (Jiao, 2013, p. 32). This justifies the need to have acase study of a company that has successfully integrated the threefacets (environment, social, and economic) of a supply chain toachieve sustainability. The case study of BAe System will address howthe company’s management has applied different initiatives withinthe three facets to strengthen its supply chain. A successfulcompletion of the case study will provide a body of knowledge thatwill clear existing uncertainties about the effectiveness of beingactive in environmental protection and being socially responsible increating a sustainable supply chain.

Literaturereview

Keydrivers of supply chain sustainability

Pressurefor a low carbon economy

Emissionof carbon dioxide into the atmosphere is currently considered asamong the key contributors to climate change. The supply chaincontributes about 10 % of the total carbon emission, wheretransportation of raw materials accounts for 80 % of the carbonemitted along the supply chain (Aivazidou, 2013, p. 314). Althoughthe relationship between carbon emission and climate change present aglobal challenge, it creates a platform for organizations to competewith each other in enhancing their brand images. Pressure from theenvironmental groups, government agencies, and other stakeholdershave forced organizations to integrate measures for reducing carbonemission in their procurement, inventory management, and productiondecisions (Benjaafar, 2014, p. 1-2). The high demand for a low carboneconomy introduces a new trend where organizations will be competingto offer quality products to their clients, but at the least carbonfootprint.

Pressurefrom the key stakeholders

Stakeholders(including the shareholders, customers, and employees) are impressedby organizations that are able to achieve their economic goals andaddress the needs of the current generation while saving theenvironment for the future generation (Perk, 2010, p. 2). A surveyhas shown that about 25-43 % of the population in the developednations constitute of consumers who are concerned about theenvironmental impact caused by manufacturers and suppliers of theproducts that they use (Saxena, 2008, p. 5). Similarly, studies haveshown that employees of organizations that allow them to participatein the development of corporate mission and strategic objectivesinsist on eco-friendly strategic measures (Chang, 2013, p. 201).Pressure from different stakeholders explains the ongoing trend wherecompanies are making reserve budgets for environment protectioninitiatives and making press release when launching products that areperceived to be environmentally friendly in any way (Short, 2012, p.2). Therefore, the integration of eco-friendly initiatives in thesupply chain is increasingly becoming a significant tool forenhancing the company’s image.

Socialresponsibility

Socialresponsibility of an organization is indicated by several factorsthat include fair working and trading practices, the sense ofrighteousness to the community, and viable workplace conditions.Currently, employee satisfaction is considered as one of the keydrivers of a sustainable supply chain. Studies have shown thatcompanies are seeking to enhance the sustainability of their supplychains by improving workplace benefits, workplace safety, staffengagement, and creating a culture that accommodates a diverseworkforce (Hasan, 2013, p. 44). Participation in community programs(such as fund-raising and other types of charitable activities) isanother type of dimension that is increasingly gaining popularitywith time (Holweg, 2010, p. 20). Taking part in activities that seekto enhance the welfare of a given community improves the image of theorganization, thus increasing its market share and profitability.

Pressurefrom environmental standards

Theincrease in competition among business has made a significantcontribution towards environmental degradation as companies try toexpand their market share and maximize profitability. This has forcedthe government to formulate environmental regulations and increaseenvironmental protection standards (Ho, 2009, p. 3). Although most ofthe modern organizations understand their responsibility ofprotecting the environment, very few of them are willing to incuradditional costs for environmental protection initiative, especiallywhen such programs are voluntary. The intervention of the governmentguides these organizations and pressures them to adoptenvironmentally friendly supply strategies, which benefits thecommunity by providing it with a safe environment and the business byenhancing the sustainability of its supply chain (Ho, 2009, p. 4). Inaddition, environmental standards and regulations are not only set toforce organizations to protect the environment, but also to offerthem with the guidance they need to achieve environmental objectivesthat they set in their voluntary initiatives.

Relationshipbetween sustainability and financial performance

Therelationship between the sustainability of the supply chain and thefinancial performance of an organization is till controversial. Thecurrent body of research provides contradicting findings where someindicate that an integration of social and environmental facets of asustainable supply chain leads to economic benefits, but otherstudies show an opposite relationship. For example, a study conductedby Hirigoyen (2015, p. 38-39) in 329 listed companies revealed thatenvironmental and social facets do not result in economic benefits(such as financial performance) in an organization. The cash outflowthat is associated with environmental and social initiatives leads toan inverse relationship between financial performance and attemptsmade to enhance corporate responsibility this is becauseenvironmental and social initiatives are expensive undertakings thatdo not guarantee financial returns. Other studies have shown thatengaging in environmental protection and social initiatives helporganizations build a positive image in the market, create aperception that the company is concerned about issues affecting thesociety besides making huge profits (Rajput, 2012, p. 82). This makesthe stakeholders feel part of the company, thus increase customerloyalty and sustainable financial performance.

Researchobjectives

Asustainable supply chain integrates three facets (including theenvironmental, social, and economic) whereby environmentalinitiatives and social programs are expected to help the organizationachieve economic stability through enhanced profitability and revenuegeneration capacity (Gopalakrishman, 2012, p. 193). However,literature review contains contradicting findings on the relationshipbetween the three facets. In the case of BAe Systems, it is difficultto avoid working with suppliers who extract materials (such as metalsfrom the ground and transport them to distant locations, thuspolluting the environment. The objective of the proposed case studyis to investigate strategies the management of BAe Systems have putin place to ensure that suppliers of raw materials to its airplanemanufacturing plants comply with environmental protection standards.

Researchquestions

Whatinitiatives have BAe Systems taken to control environmental pollutionthat results from the raw materials supplied to its air planemanufacturing plants?

Methodology

Studydesign

Theobjectives of the proposed study will be accomplished using a casestudy design. A case study design is used to explore, describe, ordescribe different phenomena in actual contexts in which they occurs(Crowe, 2011, p. 5). This implies that the case study design willhelp the researcher investigate the complex relationship existingbetween different facets of a sustainable supply chain and theircontext. In addition, a case study design allows researchers toconduct an in-depth investigation of a given phenomenon and collectdetails that may not be collected when using other types of researchdesign (Baxter, 2008, p. 546).

Datacollection

Thecase study will be accomplished using both the secondary and primarydata. Primary data will be obtained from the management of BAe Systemusing a structured questionnaire. The questionnaire will seek forinformation about the management’s perception about the issue ofenvironmental pollution, measures that have already been taken tocontrol pollution, and what the management intends to do in thefuture to control pollution in the part of its supply chain thatbring raw materials into the manufacturing plants. One of thebenefits associated with the use of a questionnaire is the collectionof data in a standard format, which will simplify the process ofanalyzing the data (Bird, 2009, p. 1311). Moreover, a questionnaireallows the researcher to collect data from the any number ofparticipants within a short time. Therefore, the questionnaire is afaster and a cost effective tool for data collection in the proposedcase study. The secondary part of the data will be obtained frompublished articles that address the key initiatives taken by BAeSystems to manage suppliers and pollution that cause as their sourceand bring raw materials to the airplane manufacturing plants.

Dataanalysis

Theprocess of analyzing the data will follow three major steps. Thefirst step will involve focusing the analysis on the main purposethat the case study intends to achieve. Secondly, the data will beput into categories, where one category will focus on responding tothe first objective of establishing the relationship between facetsof sustainable supply chain and the organization’s performancewhile the second category will focus on the effective initiatives(Tylor, 2003, p. 2-6). The third step will involve the identificationof connections and relationships within each category. Lastly, thedata will be interpreted in a manner that responds to theaforementioned research questions.

Ethics

Observingethical standards is a basic requirement in research. Permission willbe obtained from the management of BAe Systems before commencing theproposed case study. In addition, the study participants will beinformed about the rights (including the right to join, withdrawwithout repercussions, and the ways in which the information theyprovide will be used), which is part of an informed concept (Grimes,2009, p. 29). The data collected about BAe Systems will only be usedfor the stated objectives. The information will not be used forfinancial generating purposes, but to expand the body of knowledgeabout the sustainability of the supply chain.

Conclusion

Theproposed research will make a significant contribution to the body ofknowledge that explains the key initiatives that organizations in themanufacturing sector can take to control environmental pollution thatresults from suppliers who source and bring raw materials to theirplants. In addition, there exist many alternative initiatives thatorganizations can use to enhance the sustainability of the supplychains, but the present study will identify the most effective onesthat can help the organization enhance sustainability of theirsupplychains and encourage its suppliers do their businessresponsibly. To achieve these research goals, a case study designwill be used to investigate how BAe Systems have dealt with the issueof environmental pollution that result from the sourcing and thesupply of raw materials to its airplane manufacturing plants.

Timescale

Theproposed case study will take six months starting from November 2015to April 2016. Activities will be distributed as shown in Table 1.

Table1: Distribution of activities and time

Activity

Time

Preparation and submission of a research proposal

November 2015

Literature review

December 2015

Contacting BAe System’s management

December 2015

Conducting an interview

January 2016

Data analysis

February 2016

Prepare the draft paper

March 2016

Prepare the final paper

March 2016

Present the findings

April 216

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