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OK, we are now back for week 7, and this is actually officially past the halfway
point of the subject. So, congratulations, or potentially commiserations depending
on how you're faring with this subject and all of the other subjects and
assessments. But we are basically at a stage now where we're going to begin to kind
of look at more specialist issues within supply chain management. So across the
previous number of weeks I've kind of set the scene of what some, I suppose, major
considerations of supply chain management are. So you should feel like in the
position at the moment that you can, Almost use your observational skills to look
at any supply chain that you engage with, whether it's through work or as a
consumer, or just, you know, one that you see out in the world, and begin to go and
identify elements that we've talked about within the subject that you're seeing out
there. So you might drive past, I don't know, a construction site, and you might
look at it and go, OK, well, you know, There's going to be a consideration around
the supply chain design for how they're getting materials there, there's going to
be, you know, this is going to be a project, maybe it falls into the process
discussions that we talked about, about like a project process, etc. you know, I'm
not expecting you to, Do it perfectly for every single example, but just being able
to go, OK, I can see how these ideas, you know, can be transferred to, In other
context, you might go, you know, you might have a project at home, let's say you're
really into sewing and you go, OK, well, for me to actually sew, I don't know, a
blanket or a shirt or pants, I need a set amount of materials, I need an idea of
what I'm gonna get, I need a strategy around that. Even if you don't use that
language per se, those things are still existing. So, I guess, before we dive into
sustainability, the big takeaway I want you to have at the moment is that whilst we
use a lot of these words around strategy, design, You know, even supply chain, or
even in this case, sustainability, ultimately, these are just words. So there's
gonna be things that are already being done that might not use this language. It
doesn't mean that you need to then adopt this language. The point I'm trying to say
is just, it's about what's being done, not the phrases that we're using to define
it. However, this week we're talking about sustainability. Now, for some of you,
this will be something you're really passionate about. For many of you, it's gonna
be something that you might be like, oh, yet another lecture talking about
sustainability. And if you do have that degree of, I suppose, almost indifference
to it or you feel like it's just being talked about nonstop, that's a really
interesting perspective that I want you to hold on to whilst we're going through
this, in particular when we unpack a bit of a more critical perspective on this
within the last video. That kind of hesitancy or, you know, frustration that you
might feel, I think there's a legitimately good reason behind it. So what I'm gonna
talk about within this week is basically a supply chain perspective on both
environmental and social elements with regards to sustainability, um, and in
particular talk about this idea called the triple bottom line, um, which many of
you may know about, um, which is essentially this foundational, Baseline of which
many organizations, governments, etc. approach this idea of sustainability, um, and
within that as well we're gonna take a deeper dive in some of the critiques,
particularly within that last video. So, Sustainability, however, we've talked
about already. Remember back when we talked about supply chain design, we
introduced designing for economic performance, designing for social performance,
designing for environmental performance. So this isn't something that's going to be
fundamentally new to us. We've already done parts of this within the subject so
far. So when we talked about, you know, economic performance, we talked about
things like, you know, running processes competently, ensuring things that are
designed that, You know, to be the lowest possible cost. When we talked about
social, we talked about the social impact. Similarly, when we talked about
environment, we talked about environmental impact. We kind of know what these ideas
are loosely, it's just that we're going to take a bit of a deep dive into these,
particularly from a more critical perspective. Um, so what I mean by critical
perspective, and I did put a little, um, little bit on noodle about this when I was
writing it, is essentially it's looking at, Not only how these three ideas sort of
intersect, but also how some problems emerge from different perspectives as to what
these ideas are. So, you watching this, when you hear economic performance, you
individually are going to think of particular things. When you hear social
performance, you individually, I can define it for you, but you're already gonna
have some degree of preconceived notions of what these might be, even if that
preconceived notion is, I'm not really sure. But where this becomes important for
us is that these different preconceived notions, you know, think about it, are
going to be infinite. Every single person around the world is going to have a
preconceived notion about some of these ideas. You know, maybe not every single
person, but I think you can allow me that indulgence, um, but. It isn't so much
about trying to understand every single perspective on something, right? Because
that's gonna be arguably impossible. But when we take a more critical perspective,
we go, well, what are some of the more dominant perspectives and why are they the
dominant perspectives? And I think that's a really healthy attitude for us to have
when it comes to sustainability. So that then means this week's leading question is
going to be a little bit different. So when I started off, we were doing leading
questions which were really about kind of, you know, building a fun case for us to
look at. Then, within the last few leading questions, I'm really trying to focus on
your perspective on something because what my goal is is to really help you develop
those healthy critical, uh, critical analysis skills. So, the leading question that
I want us to think about and reflect on this week is should businesses, and
therefore by proxy supply chains, actually engage with this idea of sustainability?
Now, you know, if you ask anyone who works particularly, and I've chosen this image
on purpose in a lot of corporate-based, um, organizations, they'll say, yeah, you
know, sustainability is the future, we need to act in a sustainable way. What does
this mean? Not only what does it mean, but why? Why do they need to do it? And I've
chosen this image of, you know, the more traditional view of the corporate world.
Because this is where some of our critique is gonna come into it, is around whether
or not this idea of sustainability is something that's being done to legitimately
address the real environmental and social concerns, or is it something that's kind
of just like a, you know, look, look at us, look at what we're doing, and, you
know, buy our products because you know that they're coming for us in a more
ethical, they're coming to you in a more ethical way. And importantly, is that a
good or a bad thing? So, in order to unpack this discussion in a more, I suppose,
nuanced and methodical manner, we really need to start with this idea of what's
called the triple bottom line. So I want you to think about, You know, maybe I'm
familiar with the phrase, um, so you might just want to pause and Google, but think
about the idea of bottom line. And giving you a few seconds to think about it.
Bottom line, what does that mean to you? You know, it's kind of, At least within
Australian English, occasionally it is like a colloquial expression, you know, the
bottom line is blah blah blah. It's kind of like, I don't know, I'm trying to think
of an example off the top of my head for it, that we use in like a colloquial way.
It's kind of like the base level, the base level meaning. So the bottom line
traditionally comes from this, um, more orthodox economics view of it being, The
financial and economic basis of which an organization exists. So the financial
bottom line essentially is what are the metrics that a company is using to engage,
how much things cost, how much money is being brought in. So the bottom line, you
know, is essentially the analysis of the inputs. And the outputs, or the costs, or
the income or the deficits, whatever you want language you want to use for it. So
for those of you who have already done a lot of the more, um, like accounting and
finance-based subjects, that's kind of that traditional approach, right? So, if we
then had this idea of a triple bottom line, as you can see from my diagram, the
blue is obviously financial cause it's got, you know, a dollar sign there. But then
we have the green representing environmental bottom line, and, The red identifying
like social or people bottom line. So if we translate that to go, OK, well, a
financial bottom line has, you know, our usual metrics, which we're about to go
into, don't worry, I'm about to deep dive into these more. Um, 3 bottom lines means
3 versions of that, right? In practice, yes, that's generally what occurs. So we're
going to, and I'm probably gonna say this phrase quite a bit um throughout the
lecture videos is around this idea of metrification, or just developing metrics,
developing ways of measuring things. So a bottom line for a financial bottom line.
Is a way of measuring things in terms of financial performance, so therefore, The
basic idea of a triple bottom line is potentially going, oh OK, then we need ways
of measuring environmental performance. We need ways of measuring social
performance. And
that is what happens. You Google any big company, they'll have a sustainability
report that talks about all of their ways of measuring performance in different
ways of environmental and social sustainability. However, this really wasn't the
intention behind the triple bottom line approach. I'm gonna talk about that in the
last video, um, but I want you to kind of keep in mind that a lot of these ideas
I'm gonna talk through were not really what the author had in mind when he proposed
this idea in the mid-nineties. However, Economic and financial bottom line is kind
of, you know, the number one often consideration that businesses will have. You
know, at the end of the day, regardless of if you're, you know, a for-profit
enterprise or you're, you know, a homelessness service providing meals to people
living on the streets, you will want to understand how much is it costing you to
provide a product or service. Additionally, what revenues are you receiving either
from sales or from other sources as well. So, you know, it's quite basic, right?
You look at the example of a, um, restaurant that I've got on the right there,
that's, you know, people go in, they pay for a meal, and they receive that meal and
exchange money for it. It's a very basic idea. So that's essentially what the
economic bottom lines try to do. We can absolutely then complicate this. Massively
and for legitimate reasons too, where you start getting into the more like, you
know, accounting and financial complexities associated with that. If you look at
any company's annual report, you know, you'll get what I mean for that. Um, but
often within this bottom line as well, you try to capture, you know, the
investments and how effective investments, in particular operational resources are
going. So for example, if you have a restaurant and you've just invested in, Maybe,
you know, a replacement of everything within the kitchen, you'd want to have a
measure of how much that costs you, but also ways of tracking the effectiveness of
that, so how much increased income or improved or reduction of costs has it
brought. Um, things like supply and supply costs, you can have now, there's
different ways that companies will measure risk, um, and the cost of risk as well.
So ways of dealing with, for example, cybersecurity risks and the costs that that
has, um, and maybe if there's been any breaches or any issues with supply due to
other risks, etc. Essentially, this is, you know, one slide that represents
multiple disciplines and, you know, thousands upon thousands of different ways that
you can measure. I think we get the idea though, that the idea is around that
financial bottom line. How much money is an organization spending, how much is it
bringing in? And for some, they want to bring in more than they spend, so, you
know, a profit. For others, they don't want it. They want to maintain, you know,
that they have kind of a balance between the two. Or perhaps legally, they can't
bring in a profit, like, you know, a not for profit. So, As we can see from these,
this is really around the idea of like more traditional metrics. So, I use the word
traditional metrics because that's kind of, you know, the way that things have been
done and are still being done. I don't think there's any controversy in that, in
that ultimately a business is going to measure how much it spends. So, we're gonna
talk about the other metrics now when we look at, um, environmental and social
issues. So, just what I want to give you is just a bit of a baseline understanding
of where this bottom line approach comes from before we now dive into it in a bit
more detail.