Supply Chain sustainability.

Supply Chain sustainability.


The customer is always right. Every salesman dies a little inside when he hears those words. However, group of customers all can be profited from, thus they are always right. People do not drive business. Their money does. A firm’s main goal is to turn a profit among competing companies. Competition in business is fierce and companies always look to be the first to uncover ‘the next big thing’.  Once upon a time it was customer satisfaction, then it was marketing, and most recently, globalization.


This land is your land. However, today, the globe is a small place. No longer is globalization a ‘new’ area that companies are diving into, many are veterans and some are titans. An inconvenient truth is that the economy is no longer local, regional, or even national. An American based company that sells coffee cannot afford to ignore the political, labor, and environmental conditions of the African or South American Country that provides the coffee beans.


This land is my land. I was green before it was cool. McDonalds, a global titan, has a heavy focus on sustainability.  In Europe McDonalds sources 100% of its non-decaf coffee beans from farms that carry Rainforest certified beans (McDonalds). However, in America that number drops to 15%. Simply, American consumers are not yet interested, on a mainstream level, about sustainability.


This land was made for you and me. I foresee that sustainability, within the next decade, will be the new ‘it’ thing for companies. Once the ‘titan’ companies feel the effects of non-sustainable business practices via reduced profits. Hopefully brought on by consumers interested in a sustainable and renewable quality of life the rest of the smaller companies will follow in their footsteps.


The problem is competition and prices. Will consumers be willing to pay more for a cup of coffee if it comes from a sustainable bean? I don’t think so. Not until the attitude of the consumer base changes. Being sustainable means nothing to me if I do not understand it. I think what must first happen is a public perception shift away from the current one to a more environmentally conscious one. We can see the first ripples of this today. I am willing to pay a little more for organic fruit than non organic, I am willing to spend a little more money on clothes that are of better quality than not. I see this with many of my peers as well. It seems that money to today’s youth, as in the cost of products (to a degree) is not as important as it was to our parents. Fewer people I know today look at the cost of the product first. Rather they look for source, quality, and environmental sustainability when making their choices.


McDonald’s only has 15% its coffee beans sourced from rainforest certified suppliers not because it is a bad company, but because we as consumers do not demand them to. At the moment we simply cannot be bothered to care. This, I feel, will change.  The youth and 20somethings growing up around the country are a lot more community and people focused than our parents were. The world is becoming a warmer place.




What do you feel is the next step in sustainability and supply chain for companies?


Are you more interested in sustainable products, if so is pricing a big factor to you? Let’s say the product becomes about 5% more expensive.




Big Box Retail Stores going the way of the dodo?

I remember when I was a few years younger about 18 at the time and needed money for whatever an 18 year old needs money for. I had a sales associate job with a company whose name I will not divulge for the privacy of the company. Although I can tell you that the name rhymes with ‘Best Buy’. The job was one of the less enjoyable ones that I have held, I always thought this was a problem because of bad management but now I realize that the problem was bigger than the store management. The problem with the company was how the operations were structured; the operations encouraged a high rate of turn over and a low level of employee morale. I was of course, an employee.


As a sales associate my job was to sell product for the store. Sales were tracked by the amount of units an associate sold, but this was not the most important statistic that was viewed. You see, computers are not very profitable for a store to sell. The store either breaks even or looses a few dollars when selling a unit. “Mario, then how does a store stay in business with such an unprofitable model?” Well I’m glad you asked! You see, the managers instill in the employees that every single computer should be sold with an extended warranty, geek squad recovery discs, or a home instillation by a geek squad member. Best Buy all of these services are basically pure profit for the store and are the statistics that the managers are interested in. This is all fine. A company needs to make a profit, which is the essence of capitalism.


However, where the company falters is how these goals are incentivized. Managers view the ‘attachment’ numbers of employees like gospel. Employees that can sell are given more hours and ones who do not are phased out. There is a very high rate of employee turn over. The employees make an hourly rate no matter how much they sell or don’t sell. The managers earn a bonus depending on how many attachments are sold with the computers and how profitable these attachments are.  As one can infer this would create a rather hostile working environment between employees who can care less if a customer does not want recovery discs with their laptop because it does not affect them directly. While at the same time managers can be seen swooning whenever a customer declines additional services. Ultimately harsh words are said to the employee and the day goes on. As expected morale and company loyalty are either deplorable or nonexistent.


So, what do my fellow students think about the operations structure of this company? Do you agree with the structure to work employees with no incentive, a bad environment and bad morale? Or do you have any suggestions on how a company can go about to remedy this issue.  Can this be fixed or do you foresee more companies going the way of the dodo and Circuit City?