Sustainability of Purchasing and Supply

Sustainability of Purchasing and Supply
Student Name
Institution
Date

1.1 Introduction
The concept of sustainability has in recent years attracted the attention of global
organizations with a majority viewing this as a critical strategic goal. Nonetheless, the perception
of sustainability has evolved over the years on the major themes or ideas that it encompasses. For
instance, whereas environmental compliance did not elicit any major discussions in the 1960s,
the interest on “green marketing” was a major sustainability focus for many organizations in the
1990s, with the objective of using this to gain competitive advantage and economic profitability.
Eventually, sustainability in the supply chain emerged as a critical component of an
organization's overall sustainability objective with an increased focus on such elements as waste
management; regulatory compliance; packaging; and the impact of green purchasing on the
supplier selection of a firm (Johnsen, Miemczyk, & Howard, 2017). While there are various
definitions of sustainability Linton et al. (2007) described sustainability as the usage of available
resources to meet the needs of today while still being mindful of the needs of the future
generation. From this definition, a sustainable organization is one that can generate profits or
increase its shareholders’ wealth while still conserving the environment and enhancing the lives
of the stakeholders with whom it interacts with. The focus of the following report is to explore
the concept of sustainability in the purchasing and supply while focusing on the sustainable
supply management of DHL, an international logistics company.
2.0 Analysis
2.1 Benefits and problems of Sustainable Purchasing
DHL has been recognized as one of the major companies that have recognized and
actively taken initiatives to establish and attain sustainable operations. Besides taking a variety of
actions as a socially responsible organization, DHL has entrenched sustainability goals in its core
organizational goals. One of these goals is dubbed “Mission 2050: zero emissions.” By being of

one of the world’s largest logistics and mail company, DHL recognizes its special responsibility
towards its employees, the environment and the society at large. As such, DHL has established
the GoGreen program that seeks to reduce or avoid the emission of local air pollutants as well as
other greenhouse gases by the year 2050. Specifically, DHL intends to re-invent logistics by way
of reducing logistics-related emissions. This ambitious goal is focused on optimizing the firm’s
supply chain through such ways as using green energy sources and fuels as well as reducing the
firm’s overall energy consumption. In Germany, DHL has begun testing the use of electric
vehicles in Bonn as a means of ensuring it achieves the desired level of carbon print. From this
initiative, DHL has over 10,000 electric vans for making deliveries.
Organizations with sustainable supply chain management stand to benefit in various
ways. In particular, achieving a sustainable supply chain includes focusing on concerns touching
on economic, social, environmental and legal issues in a firm’s supply chain. As such,
organizations with sustainable supply chains are those that adopt socially responsible practices,
thus benefits from some of the following benefits. The first benefit of a sustainable supply chain
is that it reduces the environmental impact that an organization is likely to have. While reducing
environmental impact may be perceived to come at a significantly high cost, such initiatives
ultimately lead to cost savings. For instance, increasing the efficiency of machinery, vehicles,
buildings or processes may come at a cost but this eventually results in better returns. In the case
of DHL, the move to use green energy and adopt the use of electric vehicles is likely to have a
significant impact on lowering its overall operational costs.
Another benefit of sustainable purchasing is that this positively impacts an organization’s
reputation. Customers are more informed than before and access to information has been
established to influence the purchasing decision of many customers. With the increased

awareness of the need to conserve the environment, customers are likely to attract to brands that
are known for initiatives to conserve the environment, provide better working conditions as well
as comply with regulations. As such, firms with sustainable supply chains are likely to benefit
from a good reputation which might translate to improved sales and profits (Wilding et al.,
2012). Besides, organizations with sustainable supply chains are likely to attract new
partnerships especially from organizations with similar values. For instance, in 2009, DHL and
TOTAL entered into a partnership founded on the need to develop sustainable mobility
including low-carbon energy transport and logistics services. The strategic cooperation between
TOTAL and DHL is intended to help the two organizations to achieve their sustainability goals.
While there are immense benefits organizations stand to accrue from having sustainable
supply chain management, there are also some likely problems or challenges that they might
face. Some of the key challenges associated with sustainable supply chain management include
cost increment; difficulties in operationalizing sustainable development; conflicts from key
stakeholders such as customers who are sensitive to price chance but equally demanding for
sustainability. As such, organizations interested in achieving logistics sustainability need to
adequately address these challenges and conflicts. As a means of driving success and achieving
sustainability, DHL has employed a highly diverse team of more than 550,000 people across the
globe, a factor that is highly attributed to its productivity, innovative capacity, and
competitiveness.
2.2 Sustainability and procurement
Sustainable procurement refers to the process where business organizations meet their
needs for services and goods in a manner that maximizes value for money for the organization,
but also in a manner that generates value to the economy, society, and the natural environment