Lecture 7: Sustainability in a globalized world

Question 1

What are supply chain managers managing?

Answer 1

The flow of materials (products/services), information (knowledge), and finances across the supplier network, integrated enterprise (procurement, manufacturing, development, distribution, PR), and distributive network— ensuring alignment with external environments and resource capacities (information, competencies, capital, human resources).

Question 2

Explain the Venetian (16th-18th century).

Answer 2

Key takeaway:

• A large and sophisticated naval shipyard complex in Venice, Italy.
• One of the earliest examples of a structured, semi-industrial production system - essentially a pre-modern assembly line for warships.
• A pioneering model of integrated logistics and supply chain management, centuries before the Industrial Revolution. It represents a historical benchmark in lean production and organized workflow.

Significance:

• Mass Production: The Venetian Arsenal could reportedly produce one ship per day at its peak, an extraordinary feat for the time.
• Division of Labor: Each section had a dedicated function, making it one of the earliest known examples of systematic job specialization.

Question 3

Explain the milk supply chain.

Answer 3

The supply chain starts with feedstock farmers supplying feed to milk farmers, who produce raw milk for dairies to process. The milk is then sent to retailers and sold to customers.

Flows:

• Materials move downstream (e.g., milk).
• Money flows upstream (from customer to farm).
• Information flows both ways.
• Returns (e.g., packaging or complaints) go back upstream.

Question 4

Explain the “narrow” view of supply chain management.

Answer 4

Sees the supply chain as a closed, controllable system.

Managers focus only on direct interconnections (like suppliers and distributors), often ignoring broader external influences such as environmental or societal factors. They treat the supply chain like a machine - manageable and fixable during crises, assuming it functions predictably.

Question 5

How relevant should “sustainability” be for
supply chain managers?

Answer 5

Highly relevant - sustainability must move from “nice-to-have” to a core performance objective.

A modern supply chain manager should treat sustainability metrics (carbon, water, labor conditions, circularity) with the same rigor as cost, quality, and service - integrating them into sourcing, network design, and performance KPIs.

Question 6

Can you think of negative or positive impacts from (global) supply chains?

Answer 6

Positive Impacts:

• Economic Growth & Job Creation: Enables developing countries to participate in global trade, and creates employment in manufacturing, logistics, and services.
• Lower Costs & Product Variety: Consumers benefit from cheaper goods and more choices, and businesses access diverse materials and talent globally.
• Efficiency & Innovation: Encourages lean practices, specialization, and technological advancement.
• Knowledge & Technology Transfer: Promotes skill development and knowledge sharing across borders.

Negative Impacts:

• Environmental Damage: Long transport distances (high carbon emissions), and resource extraction and waste generation often occur with minimal regulation.
• Social Injustice & Labor Exploitation: Poor working conditions, child labor, and unsafe factories in low-wage countries, and weak enforcement of human rights in tier 2/3 suppliers.
• Economic Dependence & Inequality: Vulnerability to foreign market shocks and price volatility, and concentration of value in multinational corporations.
• Supply Chain Fragility: Global disruptions (e.g., COVID-19, wars, climate events) reveal lack of resilience, and just-in-time models reduce buffers and increase vulnerability.