OMGT2291 Supply Chain Sustainability: Shaklee Corporation Analysis

This report examines Shaklee Corporation's green supply chain management practices, including its commitment to natural products and environmental sustainability. It details current practices such as partnering with the Climate Neutral Network and using Infor ERP solutions, while also addressing limitations like managing a large distributor network and complex data analysis. The report highlights the use of Lean management and manufacturing principles to minimize waste and improve efficiency. It further discusses potential courses of action for enhancing sustainability and maintaining a green supply chain, emphasizing the importance of collaboration with environmental bodies and adherence to stringent environmental standards. The report includes an analysis of the company's efforts to reduce carbon emissions and improve resource management, positioning Shaklee as a leader in sustainable supply chain practices. The questionnaire attached in the appendix provides additional data collected about the company and additional information regarding GSCM.

SUPPLY CHAIN
MANAGEMENT

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
Company background..................................................................................................................3
Current practices in the Shaklee Corporation..............................................................................4
Frameworks to manage supply chain..........................................................................................6
Potential courses of action...........................................................................................................8
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11
APPENDIX....................................................................................................................................14

INTRODUCTION
The Supply chain management is the group of activities which involve product’s efficient
planning, controlling as well as its proper execution in product flow. The recent concept of
Green supply chain management (GSCM) is also becoming talk of the town where major
emphasis is laid over minimizing wastage at each stage of supply chain. Thus, it is a process of
managing entire work process in a cost effective way (Green Jr and et.al., 2012). The current
report is based on Green supply chain management where discussion is going to be made over
practices related to this aspect. For stated purpose, the major organization of US, Shaklee
Corporation has been selected. The company provides protein and nutrient supplements by
managing an ideal supply chain management. Moreover, the report will make discussions based
on collected data for analysis purpose. Thus, it will help in constructing a strong report to get
more information about current practices related to Green supply chain management and
potential actions concerned with it in future (Sarkis, Zhu and Lai, 2011). A questionnaire will be
attached in the appendix part as well to present the data collected about the company and
additional information regarding GSCM.
Company background
The Shaklee Corporation is originally based in California, US which was founded in the
year 1956. The major job of the organization is to manufacture as well as distribute nature based
nutritional supplements, beauty care, weight managing and household products. In addition to its
headquarter at California; the firm operates globally in Japan, China, Canada, Taiwan and many
more. The company also bases its marketing operations by claiming that all of its products are
natural and environmental friendly. Along with this, the firm also alleges it’s all commodities to
be safe, proven and guaranteed (Diabat and Govindan, 2011). All the products undergo a
particular screening process which outdoes the US pharmacopeia standards as well. Moreover,
the enterprise has 71 patents and more than 120 published papers.
The Shaklee Corporation is a natural nutrition product based entity which is known to be
first at global level in acquiring the Climate neutral certification. As per this, it has established
itself at the level where it completely sets off emission of carbon dioxide. Thus, it has a zero
effect over the environment. Dr. Forrest C. Shaklee who was the founder of stated venture

strongly believed that it is best to live in harmony with nature which is beneficial for everyone to
live a healthier life. This concrete belief of Dr. Shaklee inspires entire organization to practice
the Green supply chain management within all its operations. In this purpose, the manager
ensures to go beyond its reach so as to make every process green and sustainable. Thus, the
organization has won many awards for its performance based on green supply management
operations. As a result, the mentioned firm sets itself as a standard organization against which all
other companies can be compared and measured (Luthra and et.al., 2011).
Current practices in the Shaklee Corporation
The Shaklee Corporation’s business form is primarily based on providing dietary
supplements, weight management products, beauty products etc. All these products are
necessarily based on providing natural ingredients and maintain green supply chain practices. As
per this, the stated corporation made a partnership with ‘Climate Neutral Network’ which aided
in creating a profile of company as the first one to offset carbon emissions within environment.
 According to Shaklee, most of the industries are indulged in carbon confiscation method
so as to meet out the strategy of less green house gases (GHG). While on other hand, as
per the current practices of said firm, it uses natural gases in oil fired boilers which helps
in getting extensive benefits (Hsu and et.al., 2013). It reduces usage of electricity,
decrease in GHG release along with other major polluting gases like NOx, SOx etc.
Moreover, this also aided in making substantial savings in the project with more than
$250000.
 Apart from the above practice towards better and sustainable supply chain practice, more
efforts were made towards supply chain management. In the year 2007, the company
made an association with Infor as its software partner so that they can avail ERP and
supply chain management. As a result, Infor aided in providing solutions for enabling
green consumer goods for enterprise. Due to Shaklee’s extensive operations within
different countries, they were looking for a partner that can help in supplying scalable
supply chain solutions (Sarkis, 2012). Thus, Infor aided by offering upgraded ERP BPCS
to Infor ERP LX. The major benefit of this software partner was to accumulate finances
into a global system which was more comprehensive than before. Additionally, it assisted

in implementing the SCM solutions within advanced planning, replenishment planning,
warehouse management, demand planning etc.
Thus, the Shaklee Corporation was mainly in the beneficial position and attained leadership
in its contemporary market because of its efficiency to differentiate itself from other similar
organizations (Ahi and Searcy, 2013).
Limitations in current practices
As mentioned before, the Shaklee Corporation has a huge product portfolio, it was
essential to make research and development on an efficient basis. The distributors for the product
were large in number and were growing continuously with increasing operations in different
nations. Therefore, it was quite complex to manage the supply chain in appropriate manner with
sustainability. In addition to this, there were more than 60000 quality tests that were to be
performed on various manufactured products of the company long with their ingredients. Thus,
there was a huge burden of managing multiple functions of research, marketing and promotion,
collecting sales and customer data and distribute it through effective supply chain (Tseng and
Chiu, 2013). The company was using a data warehouse initially but it was quite complex for
many of its users. Moreover, it was unable to provide real time data and less accessible at various
geographical levels.
Therefore, the organization found its solution at later stages through PivotLink which was
much more viable and functional. 90% of business analytics in Shaklee is managed through said
software solution. Thus, it helped in faster implementation of diverse tasks and saving large
sums.
Another major issue is related to sourcing and marketing of the products which are the
two major ends of supply chain management. As per this, while sourcing of products, there is
major trouble regarding procurement as there is a single buyer with multiple numbers of
suppliers who have the potential to facilitate the required materials. As a result, it is quite
complicated for the firm to manage the relation and supply chain in even manner (Govindan and
et.al., 2014). Therefore, the Shaklee Corporation found a solution by managing a customized
supplier who can aid in smoothening the supply operations. The raw materials supplied are

managed according to real demand in the market thereby saving from overburden and unwanted
storage of large stocks.
Moreover marketing and distribution of products is also a significant end in sustainable
supply chain where various aspects of pricing, promotion and distribution channels are need to
be managed. Thus, the Shaklee Corporation manages its relation with large number of
distributors who can execute various channels for supplying end products to consumers. The firm
has its own contact with the customers through digital channels so as to make direct contact with
them (Zhu, Sarkis and Lai, 2012).
Frameworks to manage supply chain
As per the collected data and researches, the Shaklee Corporation makes effort to
minimize the wastage of resources and carry out quality tests so as to assure the end consumers
with safer products. To manage the resources and raw materials used in manufacturing of all the
products, it uses the model of Lean management process. As per the GSCM practices, it is an
ideal model, which puts a check over wastage of resources. In addition to this, it is also an ideal
way to follow the principle of sustainable supply chain management process (Mathiyazhagan and
et.al., 2013). In addition to lean management process which seeks to check wastage of time,
effort and money, the production of products is based on lean manufacturing. Thus, entire
operation is performed in a systematic manner.
Lean manufacturing: The Lean manufacturing process is ideal way to produce the commodities
through optimizing all processes so as to do away with wastage, save cost and add value in
finished goods. As a result, it also refers to make continuous improvement in products and
maximize the productivity. There are five principles on which entire concept is based and helps
in getting perfection (Arimura, Darnall and Katayama, 2011).
 Identifying value: As per this, the company must understand the value of products at
customers’ end. This aid in ascertaining right way to proceed in pricing of goods and
creating highest value from it for both consumer and producer.
 Mapping of value: At this stage, the company executes significant function of collecting
and examining information flow so that determination of required materials can be made.
This helps in identifying the right quantity of raw material from suppliers to manufacture

a particular product (Chan and et.al., 2012). It assists in minimizing wastage and finding
newer ways to make improvements.
 Creation of flow: To maintain flow in various functions and operations of manufacturing
is a significant requirement which helps in minimizing wastage. Therefore, the managers
must establish ways to eradicate functional interruptions till the delivery process. It will
greatly improve the production process and in optimizing the results.
 Establishing pull system: The pull system is based on making savings related to products
by understanding the demand of goods in market (Lee, Tae Kim and Choi, 2012). The
employees in Shaklee make a research in market so as to collect demand information
about various products. Thus, the goods are manufacture as and when required in
demanded quantity. This eliminates the fear of wastage and storage of large stocks in
company.
 Pursue continuous improvement: Although the whole lean production is based on
continuous improvement process, it is essential to find out the core reasons behind quality
issues (Mirhedayatian, Azad and Saen, 2014). Especially in natural products that are
meant to improve health and beauty of customers, this aspect becomes really critical.
Therefore, adopting different measures related to said model is necessary to be dealt with
critical care.
In addition to above stated principles, the Shaklee corporation strives to maintain
sustainable practices by concentrating over elimination of excess stock, over production, over
processing on a single product and defects within goods. In addition to this, there are 3 Ms of
lean which was originally discovered by Toyota Company (De Giovanni and Vinzi, 2012).
Muda: This is basically a type of waste as in this kind of process; no added value can be created
within products. Ultimately, it results into waste of time, resource, as well as finance. As a result,
there is likelihood of fluctuations in demand of consumers and suppliers.
Mura: This type of wastage can be categorized as inconsistent as there are more possibilities of
creating additional stocks and failure in maintaining the flawless demand process.
Muri: This is a type of overburden which is often created by companies over employees or
processes (Yang and et.al., 2013). There can be number of reasons for such lean wastage like

untrained staff, lack of tools and equipments, no streamlined process of production and many
more.
The Shaklee maintain its contacts with a large network of suppliers who are all abide by
the principles established by stated enterprise. The company works in cooperation of various
environmental bodies, government agencies and leading firms who are committed towards
products that are less harmful to the environment. Thus, the current practices of Shaklee ensure
to manage the firm in an ideal way to maintain the green supply chain.
Potential courses of action
In the purpose of managing Green supply chain, Green logistics is a major step which
creates a win-win situation. In this field, an additional concept of reverse logistics has been
introduced (Zhu and et.al., 2011). The green logistics refer towards implementation of different
supply chain functions in environmental friendly manner like green storage, transport, packaging
etc. The reverse logistics is also referred as closed loop supply chain where there is reverse flow
of already used goods for remanufacturing. This is a model where further researches and studies
can be performed. To start with this process, there is a need of extensive study about production
planning and management of inventories. This will need a model which will base on demand and
returns so that all the used products can be returned to the producer for remanufacturing. The
said model will aid in reducing the lead times in both manufacturing and remanufacturing. This
will require a hybrid structure to examine the effects of manufactured products and
remanufactured goods against total cost (Arimura, Darnall and Katayama, 2011).
In this system of reverse logistics, the major barrier can be related to uncertainty of
quality. As this is based on recovery system, it is quite difficult to exactly measure the returns as
well as demands. For this purpose, there is an issue to disassemble the older ones and reassemble
the newly manufactured products. Moreover, it is required that quality products are acquired for
remanufacturing so that they can help in cutting down the costs of production. Vast researches
are going on over this model of business where Shaklee can also make a milestone after
accomplishing the zero impact on environment (Yin, 2011). For this, a quantitative model can be
developed which can study the acquisition price of utilized goods and its selling price as well. In
addition to this, there can be scope of making more improvements in the product so as to offer
more value to the customers.

In addition to above there are some other strategies that can also be taken towards
sustainable green supply chain:
Demand driven planning: The companies like Shaklee can instill the methods that can aid in
making right forecast about the demand of products and acquiring contingency plan to avoid
risks. Said enterprise has effective software partners that help them in knowing right information
about inventory, their demand and usage etc. (Christopher, 2016).
Optimizing product designs: Making innovations is quite necessary in every field that is a key
factor in successful survival in business environment. For this purpose, it is crucial to
manufacture goods at right cost, place as well as time. The researches are extensive that are
performed right before and after the production of desired products. Therefore, it is
recommendable to optimize the designing of goods for efficient supply, manufacturability and
distribution. The quality tests carried upon the produced goods help in determining its quality
which must be superior (Dyckhoff, Lackes and Reese, 2013). Hence, the company must ensure
to take right decision during early cycles of production that may result into make or break of the
products.
Aligning supply chain with organizational goals: In many companies, there are easily noticeable
gaps among different operational processes like manufacturing, sales and distribution. Supply of
materials is mostly arranged from multiple suppliers to avoid the risk of uneven supply of
required materials. Shaklee makes arrangement of material most of the time on its own and
import required materials from its trusted supplier who are committed towards the applied
practices of Shaklee Corporation. All the participating groups in entire chain are Earth day
network, World resources institute, Conservation international etc. who strive to maintain the
green supply chain network (Diabat and Govindan, 2011).
Implant sustainability in each operation: The managers in the entire organization need to set
sustainability as a core strategy all supply chain process can be maintained more environmental
friendly. For this purpose, the basic level strategy should be defined to analyze the resource and
energy requirements. This will aid in less GHG emissions, lesser energy consumption and easy
refurbishment of the products. Moreover, the element of continuous improvement should always
be there so as to make employees engaged towards better performance in all the operations.

Moreover, the use of tools and equipments used in exploring the resources, analysis and quality
tests should be right and up to date as it will aid in realizing the formulated strategies of company
(Monczka and et.al., 2015).
CONCLUSION
The Green supply chain management is a factor in the present time that is required to be
instilled in every company to make practices of manufacturing better and sustainable. The
current report has focused over Shaklee Corporation which is a leading firm of US in this field.
The major portfolio of business revolves around manufacturing dietary supplements, beauty care
and household products that are completely natural and safe to use. In the report, it has been
found from the studies that the company is using best practices to mitigate the environmental
problems that are generally faced while production process (Diabat and Govindan, 2011).
Thereby, it has achieved the leading position as there is a zero adverse impact on nature due to
its production process. Thus, the report concludes that there are multiple factors that can be
employed upon to make better practices towards the green supply chain management.

REFERENCES
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