Operations and Sustainability Flashcards
What are the similarities between services and manufacturing?
They both transform/convert “raw material” and inputs into finished goods/outputs
Describe the “raw materials” in service
A person with unsatisfied needs or possessions that require care
Are services performed or produced?
Performed - HOW they are performed is important
Describe how services need to focus on the process as well as the outcome
The customer’s experience is essential to the quality of the service (where was the restaurant location? What was the mood of the staff? How clean was it? Was there a greeter at the door?). They are judged on the quality of work AND the service
Describe how the characteristics of service are different from those of manufacturing
- Intangible: experience is key
- Customized: affects process and layout
- Can’t be stored: inventory
Describe how the customers is part of the process in service jobs
The extent of contact (how much the customer is there while the service is being performed) affects operations and customers relationships: this will change depending on the service being provided
Give some examples of similar services where the extent of contact with the customer is very different
School bus drivers vs. semi truck drivers; chapters vs. amazon; chefs cooking in the kitchen vs. cooking in from of customers
Explain the differences between service and manufacturing in processing vs. outcome
Manufacturing: focused on the end product
Service: focused on the atmosphere and the experience; “total product concept”
Explain the differences between service and manufacturing in performance vs. production
Service: services are performed and are intangible
Manufacturing: physical items are produced
Explain the differences between service and manufacturing in terms of the characteristics of their inputs
Service: inputs are the unsatisfied needs of the consumers
Manufacturing: inputs are raw materials
Describe the demand/capacity trade-off
The trade-off between what you want to sell and what you can sell
How is capacity used in manufacturing?
You set capacity slightly ahead of demand so that you don’t run out of product when people want to buy it
What can happen if capacity is set too low in manufacturing businesses?
In the short term, you have to turn away customers or outsource at lower margins. In the long term, it can be expensive to expand later
What can happen if capacity is set too high in manufacturing businesses?
Resources sit idle, and it limits your flexibility
What can seasonal manufacturing businesses do to prevent the build-up of inventory during off-seasons?
Shift demand and capacity requirements by pricing/promotion: use the equipment to product other products, or develop another product line to offset the lack of use
How is capacity used in service?
If there is low contact between the employees and the customers, set capacity to average demand because the customer is not with you 100% of the time.
If there is high contact between the employees and the customers, set capacity at peak demand so that you can meet all your customers’ needs
How is sustainability measured?
By the triple bottom line: people, planet, profit
What is the “sustainability sweet spot?”
The place where corporate and societal interests intersect
What is sustainability?
Avoiding the depletion of natural resources
What is the goal of sustainability?
Stability - maintaining and preserving resources. We don’t want to compromise future generations by overusing what we have now
Why are the United Nations Sustainable Development Goals (UNSDG) important to consider for business operations?
They are good for corporate social responsibility because they increase CSR and increase brand image
Describe how creating a sustainable company requires investment now for long term benefit
Companies with a long-term mindset consistently outperformed since 2001
What are the actions steps for building a sustainable company?
Focus on defining priorities and setting goals: identify the Global Goals that are the most relevant to your business, evaluate which you can best contribute to, identify the significant risks, identify the potential opportunities, then align business activity and practice your SDG targets and measure impact and performance
What is GRI? Explain its significance
Global reporting initiative: a set of standards and a format for tracking sustainability. It’s been in place since 1997; sustainability is not a new thing, even though some people treat it that way
What is “B” Corps?
A certification issued to sustainable for-profit businesses that meet rigorous standards of social and environmental performance, accountability, and transparency
What is the “flourishing business model canvas?”
It is a different take on the traditional BMC: the thinking is that if you were really running a sustainable company, this canvas is more similar to what your BMC would look like because you would want to be continually improving and contributing to society
What are the four ways that companies can weave sustainability into operations?
- Product design
- Product stewardship
- Sustainability through servicing
- Sustainability of the supply chain
What are the two methods of product design?
- Cradle to Cradle
2. Biomimicry
Describe cradle to cradle design of product design (compared to cradle to grave)
Cradle to Grave is when you take, make, and waste materials, and is a very linear design. Cradle to Cradle is a new approach to producing goods by taking inspiration from nature’s cycles. In the Cradle to Cradle design, there is essentially no waste because the materials get reused to form a new product in all three areas: Nutrients (biological nutrients and technical nutrients), Outputs (every output is safe and beneficial), and Waste (turning old products into new products)
Describe the biomimicry design of product design
Biomimicry is when people are inspired by the engineering of nature, and mimic the natural environment.
Give two examples of biomimicry
- Wind turbine blades have bumps on their leading edges which increased their effectiveness and efficiency: this idea was inspired by humpbacked whales’ fins.
- Japan’s bullet train made a sonic boom every time it exited a tunnel because of its high speed and changing air pressure. Japan’s strict noise laws meant that this needed to change. The chief engineer noticed that the kingfisher was a bird with a long narrow beak that dives into the water to catch fish and produces almost no splash compared to similar sized animals. The engineer applied this concept to the train and making its nose longer and thinner. They were able to save energy, move faster, and product much less noise.
- Velcro: a scientist was out walking with his dog and the burrs got attached to its fur. Found that interesting, studied it and how it sticks to things, found that there were tiny little hooks on the burrs. He mimicked nature and come up with the Velcro design
Give three examples of companies that use the cradle-to-cradle design in their products
- Sunchips: made the compostable bag, a bag that could decompose in nature. It was launched and introduced, but then it was pulled off the shelf because the process of making it biodegradable made the bag really noisy
- NIKE reuse-a-shoe: the technical nutrients of their older shoes go into producing higher value new products
- Adidas + Parley: make shoes out of plastic bottles; they take the waste of lower quality products and produce a higher quality product
What the four main survey insights form the ImagePower Green Brands 2012 survey?
- Being green in valuable, but not critical (not high on the priority list)
- Green products need to be affordable (marketer’s haven’t been focused on WHY it’s more expensive)
- Green reputations are build on products, operations, and labels (has to be a holistic product - the packaging has to match the image)
- Advertising is a helpful source of information (customers want to know your story)
Describe product stewardship
When your company maintains responsibility for what happens to the product throughout its life; as it’s produced, as it’s used, and at the end of its life
What is product stewardship also known as?
Extended producer responsibility
What is an example of a company that should focus on product stewardship?
Strawberry and other berry packaging has been a big controversy; only a specific type of plastic is fully recyclable, and it’s hard to tell what kind it is
What is servicizing?
When the consumer pays to use the product, instead of paying for and owning the product itself. In effect, it’s buying services
Give an example of servicizing (not a specific company)
Paying for printing instead of buying your own printer
What are the benefits of servicizing?
- More intangible
- More customized
- Harder to copy - competitive advantage
Give an example of a company that used the servicizing concept
Xerox: In the 70’s and 80’s they were making bigger and faster photocopiers, but people started wanted to reduce paper use. When they looked that their customers, Xerox found that it was mostly people who had to hold onto their documents for a long time that were buying their products (lawyers, educators, etc.). They decided to give consulting services and advice on handling and storing those documents instead of just producing bigger and faster photocopiers, which was much more valuable to those customers
What is the traditional supply chain?
A network of facilities that procure raw materials, transform them into intermediate goods and then final products, and deliver the products to customers through a distribution system
What is the new supply chain?
The management of raw materials and services from suppliers to manufacturer/service provider to customer and back with improvement of the social and environmental impacts explicitly considered
What is the key thing to remember when outsourcing aspects of your business operations?
Outsourcing business operations doesn’t mean outsourcing responsibilities or risks: sustainable supply chain management is key to the integrity of the brand. You have to remember that you are still connected to your outsourcing company; you have to be aware of how that company operates. Your brand/reputation is only as strong as the weakest link in your chain. You have to be aware of ALL of the companies who are being outsourced to, including those after your direct outsourcing companies
What are some examples of companies that have a sustainable supply chain?
- Walmart: they have had really good connections and efficiency with their supply chain, and are also looking really explicitly at the environmental nature of the supply chain. Eg. the secret life of sour cream: worked with the dairy farmers to create the methane digester, which converts the methane released from cow manure into electricity
- Timberland: the boots are designed for dissembled, so 80% of the parts can be reused or recycled, it’s parts are made from recycled and/or organic materials
What is greenwashing?
The act of misleading consumers regarding the environmental benefits of a product or service
What do you need to do to prevent yourself from greenwashing?
Make sure that people know about what you are doing to help the environment, but don’t exaggerate how green your products are
How does greenwashing affect your relationships with your customers? (i.e. how does the cycle work?)
Your customers won’t trust you anymore, and they will stop buying your products. Then other companies don’t see an incentive to make similar products because they customers aren’t buying them, even though it’s because of the greenwashing and not the product itself. After that there are fewer green products available, so customers don’t feel that they have those options and they don’t buy other green products either
What are the seven sins of greenwashing?
- Hidden trade-off
- No proof
- Vagueness
- Irrelevance
- Fibbing
- Lesser of two evils
- Worshipping false labels
Describe and give an example of the sin of the hidden trade-off
Suggesting a product is “green’ based on a very narrow set of attributes. Eg. paper might come from a sustainably harvested forest, but might not take other environmental issues into account
Describe the sin of no proof
An environmental claim that cannot be substantiated by a third party or by easily accessible information.
Describe the sin of vagueness
When companies use terms that are poorly defined or very broad to mislead consumers
Describe and give an example of the sin of irrelevance
When products display information that is unimportant or unhelpful in order to sway consumers into purchasing their products. Eg. insecticides, lubricants, and disinfectants label their products “CFC-Free” when CFCs have been banned for decades
Describe the sin of the lesser of two evils
When companies argue that their product is more environmentally sustainable than other products in the same category, which distracts the consumer from the general sustainability of the entire product category
Describe the sin of fibbing
When companies make false claims (that their products meet certain criteria, for example)
Describe the sin of worshipping false labels
When products allude to a third party endorsement where no such endorsement exists (i.e. for being green, for being organic, etc.)
What is an example of a company that integrates good green marketing into their business?
Ikea incorporates all three strategies for good green marketing
What are the three strategies for good green marketing?
- Be self-honest about the whole, lifecycle-based, environmental impacts of your product. Acknowledge them and address them one step at a time
- Make, claim, and ask your customers to support stepwise progress. But don’t overstate your progress
- Ask your customers to join you on a journey to ever more sustainable products
