Today, it is important for an organization to put in place a strategic sourcing program that can ensure necessary as it strive to meet is responsibilities to the environment as well as deliver its services. The expectations for the supply chain are to deliver breakthrough results that can incorporate environmental responsibilities into the business model by helping the companies reduce costs. Green sourcing has become a reliable solution to raw materials/input sourcing process. Green sourcing takes into consideration the environmental outcomes of particular sourcing choices such as transportation, energy sources (require to transport as well as convert inputs to outputs), materials, or packaging design, on the ecological footprint made by the organization’s production and sales processes. This proposal aims at developing a green sourcing process for Alcatel-Lucent Company in pursuit of improvement of its sourcing processes for the production and sales of finished products. Also, proposal addresses the benefits of the green sourcing, elements for building green sourcing capability, and recommendations for a sustainable green sourcing strategy for Alcatel-Lucent.
Green sourcing comes with several benefits for a company. The benefits include enabling organizations to meet cost reduction goals. The green component of sourcing acts as a catalyst for facilitate the renewal and expansion of the production margins, as well as, facilitating cooperation among stakeholders. A green sourcing process helps in cost reduction by conducting a comprehensive assessment of how the company uses resources and eliminating or significantly reducing non-essential process, buying of non-essential inputs, and production of unnecessary products. Unnecessary products include product that are not require in the market and waste generated during the production processes. Another vital cost minimization action in green sourcing is utilizing waste minimization or reduction opportunities. Green sourcing reduces operational costs of the company by optimizing expenditure on water, energy, packaging and transportation (John et al., 2008). Other company costs that the company can cut by going green include costs associated with hazardous material management, waste disposal, repairs and replacements, and health and safety. Another benefit of green sourcing is that it enhances the brand image of the organization. An organization with green sourcing structure is considered as a good corporate citizen and such reputation improves its public image in (Sieb, 2011). Green sourcing considers customer concerns, which helps in increasing the organization's customer satisfaction and subsequently enhance customer retention. Green sourcing has a direct impact on revenues, whereby the green sourcing opportunities are utilized to drive top-line revenue. Some ways in which the company can generate profits include turning waste products into sources of income or raw material through recycling.
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For Alcatel-Lucent Company to yield benefits provided by the green sourcing, it is crucial to understand the process for translating green sourcing stratagem into workable tactical steps. The green sourcing process presented by this proposal is developed in a six phase process. The phases include the opportunity of assessing the process, internal supply chain assessment, supply market assessment, sourcing strategy development, implementation of the sourcing stratagem, and institutionalization of the stratagem. The steps have been enhanced to integrate an environmental focus as a means of transforming the old-fashioned sourcing process to a new green strategic sourcing procedure.
Step 1: Opportunity Assessment
This step involves recognizing and understanding multiple opportunities available to the organization in order to prioritize them. The opportunity assessment phase involves how Alcatel-Lucent expenditure in a given category, such as supplies, logistics, and maintenance overheads. Most common relevant areas that should be taken into account comprise electric power and addition energy costs, water, commodity substitution, recycling, waste disposal, and packaging.
Step 2: Internal Supply Chain Stakeholders Engagement
This phase of green sourcing involves the process of developing an understanding of the organization’s business strategies, specification of products, and perspectives inherent in the internal stakeholders (Truman-Iasta, 2014). To attain sustainable sourcing, the organization compares its products to the current factors in the industry regarding efficiency, sustainability, and technology. An organization in this phase should identify its most environmentally sound goods and services.
Step 3: Assess the Supply Market
In this phase, Alcatel-Lucent engages new and current vendors. The company should mention green prospects and conceivable product or service substitutions and innovative manufacturing procedures in the Request for Information (RFI). An organization should ensure that the supply base includes merchants who focus more on sustainable and efficient products that can embrace green sourcing benefits.
Step 4: Develop the Sourcing Strategy
This phase is critical for green sourcing procedure since it relies on the quality of data collected to establish the implementation, outcomes, and the sustained triumph of green sourcing procedure, which subsequently determine the company’s success at implementing the green sourcing strategy (John et al., 2008). The qualitative and quantitative principles that are employed in evaluating the sourcing process are established in this step. The organization should ensure that the strategy is converted into actionable steps that directly relate to the Alcatel-Lucent company’s larger sustainability objectives.
Step 5: Implement the Sourcing Strategy
In this phase, the bid appraisal commences after the bid proposals from vendors are collected. The selection of vendors and products for Alcatel-Lucent business processes is conducted in this step with the help of appraisal criteria and quantitative frameworks conceptualized in Step 4. The Alcatel-Lucent ought to ensure evaluation criteria are identified and communicated to gain the acceptances from the diverse stakeholders involved in the green sourcing process.
Step 6: Institutionalize the Sourcing Strategy
This process begins after Alcatel-Lucent finalizes the vendor selection and contractual requirements. In this phase, the metrics for achieving sustainability are keenly tracked and audited as part of supplier relationship and performance management (Truman- Iasta, 2014). The metrics obtained are defined based on the supplier performance and compliance in consideration of the Alcatel-Lucent Company sustainability objectives and the sourcing process outcomes. Therefore, the key to success is choosing the metrics appropriately.
Building green sourcing capability framework that is strategically accommodate all components of sourcing will enable Alcatel-Lucent to reap many benefits. However, there are several elements sourcing strategy that the company should tackle to ensure the green sourcing initiative creates benefits. The first element of green sourcing that the company should be concerned with is vision setting. Green sourcing initiatives enable the creation of the internal and external identity of a company. An organization should consider its brand image, history, and mission in the creation of the green vision (Turner & Houston, 2008). Another element important for green sourcing is for the company action determination. After the company vision setting it is provided with two categories of action that define the activities that will make the vision a reality. The first category, which is mostly referred to as “strategic,” involves broad, all-encompassing activities that back the execution and branding of greenness at the company level. The activities in this category act as measures that enable the organization to meets its outlined vision objectives. Example of the "strategic" activities is the marketing of green efforts, whose purpose is to generate recognition and goodwill among stakeholders. The second category of determining action is through operational and tactical activities that aim at driving business and increasing revenue and profits for a brand, product, or service.
Another element for building green sourcing capability that an organization should focus on is managing demand. The company should ensure it specifies the right product to meet customers' needs while adhering to a more stringent set of specifications. Therefore, the company should develop a green strategy based on a clear and close understanding of its customers' needs (Turner & Houston, 2008). The company should conduct a cradle-to-cradle life-cycle analysis of products and services. The analysis involves the examination of production, distribution, and disposing of processes of the products or services and the environmental impact associated with them. The company should also implement material, technology, and process innovation as an element of marinating a green sourcing strategy. With the right kinds of technology such as those with more energy-efficient; materials with high recycled content; and processes that utilize end-to-end perspective on production and service costs, the company green sourcing capability would remain stable.
This proposal has provided various recommendations to Alcatel-Lucent Company concerning the green source processes. The first recommendation is for the company to seek for green sourcing compatible products from the suppliers. The potential suppliers should be able to adhere to the green sourcing goals set. Alcatel-Lucent Company should ensure that the supplies purchased are the most environmentally sound products, with high quality and considerable price. An organization is recommended to create a checklist that indicates the green sourcing parameter the raw materials and the suppliers must meet. The organization should adhere to the provision of the checklist to spell the expected behaviors regarding production, GHG emissions, handling of wastes, and labor (Goode, 2010). Another recommendation that the company should implement is conducting education on its supply base, production, and sales departments concerning green sourcing. The Alcatel-Lucent’s Corporate Social Responsibility (CSR) department can be used to provide training on the external aspects of the company, such as sponsoring online reining programs for suppliers. Alcatel-Lucent can also increase its green sourcing sustainability by rewarding good behavior. The suppliers being one of the essential aspects of organization business processes, keeping taps on them is necessary. Therefore, Alcatel-Lucent should encourage its supplier to commit more on responding to the Carbon Disclosure Project (CDP) and operating more sustainability through rewarding their efforts.
In conclusion, green sourcing costs and benefits are significant to an organization production and sales process but only when well utilized. For relevant green sourcing process to be achieved, the appropriate tools and process should be implemented to augment the output of the sourcing cycle at the business level. The elements that boost the sourcing processes are also essential in helping the company understand and exploit complexity related to green sourcing strategic process.
References
Goode, R. (2010, November 11). 5 Simple Ways to Create a Green Procurement Program. Green Biz . Retrieved from https://www.greenbiz.com/blog/2010/11/11/5-simple-ways-create-green-procurement-program
John, C., Christopher, P., Earl, S., Max, G., & Jayanth, I. (2008, November 1). A practical guide to green sourcing. Peerless Media, LLC . Retrieved from https://www.thefreelibrary.com/A+practical+guide+to+green+sourcing.-a0189743144
Sieb, A. (2011, November 29). Five Benefits of Green Procurement. eSourcing Forum . Retrieved from http://www.esourcingforum.com/archives/2011/11/29/five-benefits-of-green-procurement/
Truman- Iasta, C. (2014, April 22). 6 Steps to Green Sourcing. eSourcing Forum . Retrieved from http://www.esourcingforum.com/archives/2014/04/22/6-steps-to-green-sourcing/
Turner, M., & Houston, P. (2008, June 10). Start with Sourcing. strategy+business . Retrieved from https://www.strategy-business.com/article/08206?gko=7a254
