Germany vs South Korea environmental issues to identify critical implications for Supply chains and Logistics operations.
Unlike many countries, South Korea is one of the largest companies when it comes to supply chain. South Korea also has one of the biggest automakers in the world such as Hyundai, Kia, and Daewoo. Some environmental issues faced in South Korea happened to one of the automakers. Hyundai wanted to focus on fostering the environmental capabilities of suppliers by utilizing green procurement and green supplier development.
These initiatives addressed climate change which is an increasingly important topic. The emphasis was placed on transferring best practices in carbon inventory, management, and measurement to supply management. As more executives adopt environmental practices, supply chain strategies will only increase in importance. With companies increasingly relying on their supplier’s environmental performance managers are coming to understand that environmental compliance is not sufficient; governments and consumers require better environmental supervisors. With environmental regulations taking effect worldwide, Green Supply Chain Management has risen to prominence due to its emphasis on tackling complex environmental processes while improving the bottom-line performance.
Environmental supply chain management involves introducing and integrating environmental issues and concerns into supply chain management processes by auditing and assessing suppliers on environmental performance metrics.
Germany on the other hand is also one of the largest companies in supply chain. Like south Korea, Germany is also home to worldwide automakers such as Audi, BMW, Mercedes- Benz, and much more. Environmental impacts are presented using the four key terms: greenhouse gases, air pollution, water consumption and land use.
In addition to other environmental issues, this also includes fields of action such as human rights, labor practices, or fair business and operating practices. Growing emissions of greenhouse gases accelerates climate change. The primary cause is the combustion of fossil fuels for the pro- duction of energy. As part of sustainable supply chain management, companies take account of the risks associated with their greenhouse gasses emissions. Many governments are working to implement structural change and to strengthen the competitiveness of those companies that consistently reduce their emissions at both production and product level. There are risks for companies and their supply chains in land use. In addition, the loss of natural areas and the shrinking of habitats can lead to reputation risks for those companies whose supply chains entail a high level of land use.
In clothing and food retailing, the supply chain accounts for almost 100% of water consumption. The environmental impacts of the fashion retailing sector are many times higher for the supply chain than at the companies’ own locations. Water consumption in the supply chain is mainly caused by raw material extraction. Supply chains that are optimized for cost in an increasingly globalized and technologically advanced economy typically yield three outcomes: 1) more transportation, 2) less environmental governance, and 3) more global consumption. If the supply chain is designed and operated to deliver lowest-priced goods, it may be expected that consumption rates increase because of simple relationships between economic supply and demand. In general, however, supply chain management brings considerable efficiency to a linear production system that encourages higher rates of consumption for better or worse.
Considerable progress is needed to understand fully the relationship between supply chain management and the environment. Companies should include environmental protection issues in framework contracts or in a supplier Code of Conduct.