Introduction

Sheer Elegance Lotion Corporation is a reputable lotion manufacturing company who specializes in
body lotions of all kinds. The company is also known for its contribution to society which not only
helps them with sales but ensures a constantly growing customer base.

Their competitive advantage needs to be improved upon and environmental awareness has to be
increased and thus Sheer Elegance has asked their newly promoted packaging manager, Mr. Jurgen
Scherer to develop an environmentally conscious supply chain for a new line of products which Sheer
Elegance wants to release.

Being the Packaging manager, Mr. Scherer has to focus on numerous factors relating to
environmental awareness in order to achieve a competitive advantage and to maintain that Sheer
Elegance still has the environment as a priority. Mr. Scherer has to focus on five aspects, namely:

1. Developing a chain from Mother Earth, through upstream suppliers, to Sheer Elegance,
through its distributors, to the end user and, finally, return of the packaging to recycling
or to Mother Earth.

2. He will identify points at which pollution may enter the value chain which, to some
extent, are under the control of Sheer Elegance.

3. He will also show how pollution can be avoided or reduced throughout Sheer Elegance’s
value chain

4. The actions he would recommend in order to achieve the company’s wants from this
project.

5. He will also identify what the supply manager’s role is in this project and what role
supply management plays in achieving this effort.
Mr. Scherer has to do research into environmentally friendly packaging alternatives, as well
as focusing on creating a new supply chain which will ensure that the best, most
environmentally friendly methods are used in the manufacturing and supply and most
importantly the packaging of the new products and at the same time creating the least
pollution. He will have to find the most environmentally friendly ways to produce and create
the packaging for the products and has to pay special attention in all categories to the
pollution Sheer’s products can cause and a way to reduce that pollution. This includes
examining the recycling process for the product’s packaging, making sure that the materials
used can be recycled and also seeing how he can eliminate the pollution which the packaging
could cause.

The Environmentally Friendly Supply Chain Process

One of the hardest parts of this particular project is the first step Mr. Scherer has to take and
that involves developing a supply chain form Mother Earth, through upstream suppliers, to
Sheer Elegance and then it has to continue through its distributors and then to its end users.
The problem is that the onus is on Sheer Elegance to also ensure that the packaging of their
products are recycled and broken down into components which can be absorbed by Mother
Earth again after the product is used. This means that not only does Mr. Scherer have to work
out and establish an environmentally friendly supply chain for the product but also has to
ensure that the packaging is created in an environmentally friendly way so as to avoid
pollution and so that the packaging be recyclable to the point that no harm or as little harm as
possible is dealt to the environment after the use of the product. This means that the regular
products used in the packaging process and the creation of packaging be re-evaluated and a
new way of packaging be created.

The other problem this poses to Sheer Elegance and Mr. Scherer is that the re-evaluation and
new methods used have to fall within budget and cannot cost Sheer Elegance a lot as this will
cripple their cash flow and might just cause the project to fail. Maintaining costs is also
essential to this project and has to always be thought about when re-evaluating steps and
procedures and creating new processes and buying new materials.
Costs must be kept low as there will be no reward derived from this project if the costs
accumulate to more than when the company is not so environmentally focused. Adversarial
cost incurrence can hamper the performance of the firm and the project and will prove to be a
waste of resources. (Martin, R; 1998)

The other factor that must always be thought about is that of quality. Sheer Elegance needs to
maintain their quality levels for which they are known and at the same time keep the brand
image up. They must also ensure that the products use more environmentally friendly
ingredients but at the same time fulfill the expectations of customers.

Mr. Scherer first needs to evaluate the products used and Sheer, being a lotion company,
already uses numerous ingredients which are derived for the earth. The ingredients used are
all extracted from clean sources of nature and generally from plants, weeds and other exotic
flora with known beneficial qualities. Being the environmentally aware company that Sheer
is, the extraction methods used also cause the least harm and damage to the environment and
at the same time cost the least. No tools and equipment needed for this extraction will be
procured as Sheer Elegance already has the necessary equipment and at the same time also
maintains the necessary skills needed for this. Should extra equipment or skills be needed,
outsourcing form other firms will be the most cost effective way to go about doing this.

Mr. Scherer will also need to ensure that the ingredients are not endangered and that the
ingredients can be transported to the suppliers in the most ethical, cost effective, efficient and
environmentally friendly way possible (Martin, R; 1998). Mr. Scherer will have to analyze
the best means by which this can be achieved. He will have to re-evaluate the methods of
transport, find an efficient new way of transporting and will have to create a new logistics
management route to take. Along with this, Mr. Scherer has to ensure that the packaging
materials used to create the packaging and the production materials for the product flow
through the suppliers and in to Sheer Elegance in an environmentally friendly manner.
(Bosman, R; 2009)

This is an important factor as it will all be a worthless effort if the company achieves the
production of the product and packaging in a supposedly friendly way but in actual fact
causes more harm to the environment as the processes and wastage have been increased as a
result of the new methods used. Mr. Scherer has to set out a basic guideline and rules to
adhere to for Sheer Elegance and for the upstream suppliers who are responsible for the
overall production and through whom the materials flow form Mother Earth. The suppliers
must conform to quality and production methods which are deemed acceptable and
environmentally friendly and must be crossed-checked with the regulations which are set out
by Sheer Elegance. (Bosman, R; 2009)

An important way to maintain environmental standards throughout a supply chain form the
actual extraction of the materials through to the production, sales and then usage by the end
user and then finally recycling is to conform and maintain the standards set out by the
International Organization for Standardization (ISO). The ISO sets out standards for all
companies in all industries and if the standards are met with, the company can revel in the
fact that they are conforming to the highest standards set out and it grants them a competitive
advantage. With regards to the environment, the ISO has set out a rule of standards titled ISO
14001. The ISO 14001 standards are aimed at all companies wishing to play a role in
environmental friendly production and reduce our carbon footprint and stop global warming
and the deterioration of the earth and its resources. The ISO 14001 specifies the actual
requirements for an environmental management system. It applies to those environmental
aspects which the organization has control and over which it can be expected to have an
influence. This standard is applicable to any organization that wishes to:

 implement, maintain and improve an environmental management system

 assure itself of its conformance with its own stated environmental policy (those policy
commitments of course must be made)
 demonstrate conformance
 ensure compliance with environmental laws and regulations
 seek certification of its environmental management system by an external third party
organization
 make a self-determination of conformance

(Martin, R; 1998)

Sheer Elegance needs to establish a method that will allow them to conform to all the
standards and procedures set out by the ISO 14001 guidelines and Mr. Scherer must also
establish that the companies whom help in the production of the product and most
importantly the production of the packaging conform to these standards as well (Martin, R;
1998).
The distribution of the product can also pose more problems to the environment. Transport
companies and distributors alike are all aiming to become more ‘green’ and this can help
when Mr. Scherer is conducting research. Distributors and transport companies must also be
ISO 14001 certified or at least conform to the standards and quality requirements Mr. Scherer
has set out. A comparison of all the different distributors and logistics providers must then be
performed and then a rating system should be used, such as the weighted points evaluation
method. If Sheer does not want to source distributors then the current ones it uses can be
compared and tested to see if they meet the requirements for environmentally friendly
distribution. An argument Mr. Scherer can use to aid the distributors becoming ‘green’ is that
it will give them a competitive advantage, ensure sales, help with production, distribution and
logistics strategies and cut costs. New logistics routes can be established with new equipment
and vehicles. This can also bring about cost reductions and save the environment similar to
what The Body Shop has experienced. They found that by using a form of hybrid and
Bluemotion Diesel Trucks and vans (Bluemotion diesels existing in Europe for now), they
found that they were reducing their carbon footprint and saving money in logistics as the fuel
used was reduced. They also re-evaluated the routes they took and found shorter routes or
ones which used less fuel and found a saving of approximately £1700000. Mr. Scherer should
evaluate the current routes and equipment used and find alternatives in an effort to make the
process more environmentally friendly and at the same time reducing costs and increasing the
savings of the company. (Bosman, R; 2009)

The most important aspect of this project is that of packaging. The manufacturing and
development of packaging is important when environmental awareness of the company is
attached directly to the packaging issue. Mr. Scherer has to develop new methods of
packaging and at the same time develop packaging that is not harmful to the environment and
can be recycled and broken down and absorbed by the earth easily. Numerous companies
such as The Body Shop, Tesco, Spar and their competitors are now using organic packets and
plastics for their products and carrier bags but most importantly are also using packaging of a
similar design and production process for their own individual brands. Their plastics are
made form a starch, generally corn or potato, which makes it easier for the plastic to
breakdown and be absorbed into the earth once it is discarded. The process of extracting this
starch is also environmentally friendly as it is simple manufacturing of the waste material
remaining after the corn or potatoes are used in another process (generally it is derived from
the waste of corn and potatoes which have been peeled to make chips, syrups and parts of
tools e.g. Fibers for ropes and utility belts). This waste becomes a by-product rather than stay
classified as waste and serves more than one purpose with the added advantage of being able
to break down and be immersed in to the earth. (Bosman, R; 2009)

The Body Shop has also made some breakthroughs in the packaging industry with the use of
hemp and other plant fibers. As hemp is easily available, requires no maintenance and is
generally unwanted, The Body Shop explored its abilities and strength of its fibers. They
found that they can make numerous types of plastics and ‘organic/natural textured’ packaging
solutions. They resorted to using hemp as a form of paper bag as carrier bags for their
customers and then also processed it such that it formed the texture of a soft plastic and used
that as containers for their cosmetics, lotions and balms. The Body Shop has found that the
best decision they have made in recent years was the exploration into creating by-products
from plants and other flora (No Author; 2008). They have consistently shown significant
financial returns as a result of maintaining an edge over their competitors with the use of
natural ingredients in their products and packaging. They have found that their focus and
awareness of issues which affect people such as the opposition to animal testing and
maintaining environmental awareness has given them a considerable competitive advantage
for the past three decades and it has grown exponentially since their major focus on
environmentally friendly products arose. The use of palm oil in the manufacturing process
would also be advantageous as it is low cost, extracted and refined for the use of lotions and
other cosmetics in Malaysia and transported via sea and rail. (Bosman, R; 2009)

Spar has also found an increase in customer base since they started their Organic range which
consists of completely ‘green’ production of their own brand of products. This includes
growing the ingredients organically by using no pesticides which harm the environment and
diminish the quality of the food. They also go so far as to market their products in an
environmentally friendly way such as using recycled cardboard and paper and even
packaging them in recycled and environmentally friendly plastic and cardboard by-products
and giving customers environmentally friendly and recyclable carrier bags. All these
aforementioned companies are also passed numerous quality tests and conform to ISO 14001
requirements. Mr. Scherer can adopt these policies and formulate his own such as further
research into the use or organic ingredients for Sheer Elegance’s products and packaging
materials. Dermalogica, a well known skin care company, uses recyclable foils for their
products as well as an aluminium composite for some of their packaging as it is easy to
recycle. They also extract aluminium and other materials used in the packaging o their
products, separate them and re-use the aluminium and discard the rest so that it may be
absorbed into the earth. Mr. Scherer can also examine the usage of flora by-products such as
hemp, wheat and barley which can also be used in the production of cosmetics packaging and
does not require glue, which takes years to break down and still pollutes the earth (Bosman,
R; 2009).

Once he has examined all possible alternatives, Mr. Scherer needs to examine the possible
ways in which pollution may occur in the new alternatives he has found. With regards to
extraction of the ingredients, pollution can occur through the use of machinery. Machines
need to burn fuel in order to run, as this occurs, carbon monoxide goes into the atmosphere
and thus pollution occurs because the trees cannot absorb the other chemicals that go with it
and thus air pollution occurs (Martin, R; 1998). By finding new places to extract from only
means that these places which were safe from air pollution will now by polluted and although
it is not a large amount of pollution, other companies wanting to do the same will start to
occupy the area and surrounding areas and collectively can deteriorate the air, which can
affect the environment in that area on a large basis. To remedy this problem, environmentally
friendly machinery should be used such as low emissions machinery and those which have
been approved by the ISO 14001 regulations and the use of more labour can also reduce the
carbon footprint left by Sheer Elegance.

Effective restoration plans such as the immediate replacement of topsoil and vegetation
should be incorporated into the extraction process. The safeguarding of natural water supplies
should be a priority and instated into the process and by achieving this, the habitat in that area
can immediately recover and flourish again. Waste removal and management should be a
high priority and waste should be handled with care towards designated recycling and
disposal plants. Spillage and leakage of the products and by-products must be avoided by
instating vigorous rules that prevent it from occurring. This means that controls, drawn up by
Mr. Scherer must be passed on to subcontractors and enforced without compromise.

Mr. Scherer must focus on a ‘green’ logistics strategy. He needs to incorporate the use of fuel
saving trucks and vans and the use of lower emissions vehicles, as is compulsory now in the
European Union. The use of rail transport and freight services is also necessary in order to
reduce the consumption of fuel and costs related to transport. In a similar way, as commuters
in Europe utilise public transport.
This further reduces emissions by reducing the number of vehicles used in the logistics
strategy and takes advantage of an under-utilized railway service.

Maritime transport (shipping) must comply with international shipping laws in terms of the
strength of containment facilities, emissions and risk of sea pollution via fuel leaks (No
Author; 2009).

Efficiency of routes must be a priority of the shipping companies used and they must also
comply with ISO 14001 requirements and those regulations set out by the WHO (World
Health Organisation) and most importantly the World Wildlife Fund (WWF) who have set
out stringent regulations due to the risk of spillage of oil and other hazardous materials into
the ocean and other environments, which directly and indirectly affect wildlife and
ecosystems. It should be noted that older companies or companies using older ships offer a
greater risk of contravening the above. (Kidd, M; 2008)

The transport of the products throughout the supply chain from the extraction points to the
manufacturer, to Sheer Elegance, towards the distributor and then onto the end user, should
all be done in accordance with the ‘green’ logistics strategy which Mr. Scherer must
establish. The objective of this logistics strategy outlined above is that not only must costs be
reduced and efficiency increased, but essentially the carbon footprint of the entire supply
chain must be significantly reduced.

With regards to packaging, Mr. Scherer has to analyse the best alternative natural and
biodegradable materials to be used. The usage of hemp, corn- and potato-starch and wheat
by-products prove to be excellent ideas but at the same time the manufacturing process must
be monitored for weaknesses and inefficiencies to minimize wastage and maximize the
amounts of resources available so that ultimate efficiency is achieved with the least pollution
and wastage. Pollution can occur through this project with the use of inefficient machinery,
misuse of the pesticides, growth aids, fertiliser and other chemicals used in the production of
these materials. This can not only bring about air pollution, but also land pollution which can
in turn damage the eco-system in that particular area. Plant life, animal life and the overall
vegetation can suffer, the water-table is also affected by the pesticides and fertilizers and thus
the environment of area suffers as a result. Sheer Elegance can prevent this from happening
by instituting organic farming which does without the use of pesticides, artificial fertilizers,
growth aids and other chemicals and creates completely natural products for the use of Sheer
Elegance’s packaging. (Berger, K; 2009)

Where possible, harvesting methods should be as labour intensive as is practical and at the
same time must be efficient and reduce costs, fuel consumption, maintenance expense and
emissions. The printing process used in the description of the products and the information
provided should utilize the same good manufacturing principles set out above. The ink should
be devoid of hazardous material/chemicals such that when disposed of or sent in for recycling
the impact is minimal. The ink should also be derived from environmentally friendly
materials such as maximum water dilution, non-toxic chemical ingredients and the company
manufacturing the ink should also comply with environmental regulations as set out by the
ISO 14001, WHO, EU regulations and local or governmental legislature which are also set
out by the Environmental Protection Agency (EPA). (Kidd, M; 2008)

Mr. Scherer must set out that the packaging of both the actual product and the box in which it
is encased must be made of a biodegradable recyclable composition. This means that
essentially not only are the materials used in the products extracted and manufactured
through an environmentally friendly process but so too will the packaging in which it is
contained. The problem Mr. Scherer will find is that the packaging will essentially be
discarded by the end user but with these new regulations in place, the packaging will be of a
recyclable nature (No Author; 1997).

The packaging can be recycled and thus used in a new manufacturing process. The remainder
of the packaging will degrade and be absorbed by the earth and into the elements. Each item
of packaging will have inscribed on it an order to recycle and instructions on how to do so
and they briefly describe the benefits, which shows the end user that the company is
environmentally aware and this in return helps maintain a constant customer base and gives
Sheer Elegance a competitive advantage in its industry (No Author; 1997).

In regular recycling processes, the unrecyclable materials generate unusable waste. With the
processes used by Mr. Scherer with regards to the ingredients used in the packaging, all
products can be recycled and also produce by-products which are also recycled and can assist
in the production of goods and services in other sectors and industries (No Author; 2008). As
mentioned earlier, ink will be of a non-toxic nature and as such in the disposal or recycling
process will create little or no hazardous waste. Sheer Elegance should make use of noted
recycling plants that are recognized by the consumer base and by the regulatory boards (No
Author; 1997).

A disaster recovery plan must also be formulated and kept on hand by Mr. Scherer in the
event of, for example, spillages of a consignment of palm oil off the coast of a sensitive
ecosystem. Adequate resources and labour should be set aside should such an event occur and
the relevant authorities should be aware of, screen and approve such plans and also be
available to assist in the implementation of such plans. Included in the disaster recovery plan
should be provisions for restoration as mentioned earlier (Waller, D; 2003).

The supply manager’s role is in essence to conduct a SWOT analysis (Strengths,

Weaknesses, Opportunities and Threats) of the value chain. By following the aforementioned
guideline, Mr. Scherer or any other supply manager will have directly or indirectly conducted
a SWOT analysis as the guidelines require him to do just that. Once this is done, the chosen
and preordained methods and procedures to follow will lead any supply manager in the right
direction. The supply manager needs to first conduct a SWOT analysis before taking action in
order to establish in which direction to go. Once this is completed, the supply manager (who
has to plan, organize, lead and control) needs to set about planning around threats and
weaknesses focusing on strengths and seizing opportunities. (Hugo, WNJ; 2006)

For example; in the logistics strategy, use of efficient low emission vehicles would be the
company’s strength. An inherent weakness would be driver fatigue and this would have to be
thwarted with a driver schedule. An opportunity exists where the company can market itself,
by virtue of the fact that its vehicles are on public roads. A threat would be closure of the
most efficient route which would increase costs and have an adverse effect on the
environment. The supply manager would have to organize resources in a manner that is the
most effective and efficient so as to minimise costs, maximize profit and have as little effect
possible on the environment. The Supply manager should lead from the front by creating a
strong control environment whereby he clearly conveys the objectives of the company
highlighting its environmentally friendly practices to all employees and associates (Hugo,
WNJ; 2006). In order to control what the company has on hand, the supply manager must
constantly monitor such activities and rectify where necessary. This further enforces the
control environment.
In conclusion, Sheer Elegance would no doubt achieve a competitive advantage by adopting
the aforementioned supply strategy. From the point of extraction from Mother Earth right to
the end user and beyond, it has taken every effort to ensure the most environmentally friendly
outcome. In so doing, not only does the company become more efficient, it will increase
revenue and profit and continually market itself to a now more environmentally conscious
market. Thus, pleasing its present customer base and enticing numerous potential consumers.
Reference List

1. Berger, K. (2009). Consumer Choices Can Reduce Packaging Waste. University of

Florida IFAS Extention. 1 (1), p1-3.
2. Bosman, R. (2009). The New Supply Chain Challenge: Risk Management in a Global
Economy. FM Global. 1 (1), p8-11.

3. Hugo WNJ ., Badenhorst-Weiss, JA., van Biljoen, EHB (2006). Purchasing and
Supply Management. 3rd ed. Pretoria: Van Schaik. 59-61.

4. Kidd, M (2008). Environmental Law. Pretoria: Juta. 66-67.

5. Martin, R. (1998). ISO 14001 Guidance Manual. National Center for Environmental
Decision Making. 1 (1), p1-97.
6. No Author. (2009). Virtues in Having a 'Green' Supply Chain. Available:
http://green.hktdc.com/content.aspx?
data=Green_content_en&contentid=1069552&SRC=IN_RepAna&w_sid=194&w_pi
d=842&w_nid=11039&w_cid=1069552&w_idt=1900-01-01&w_oid=111&w_jid=.
Last accessed 27 March 2009.
7. No Author. (2008). Organic has environmentally-friendly packaging in the (ideas)
bag. Biological Farmers of Australia. 1 (1), p1-3.
8. No Author. (1997). Packaging Waste Reduction. Focus. 6 (3), p1-10.
9. No Author. (2008). Reduce packaging waste-Green Mileage campaign begins. Korea
Zero Waste Movement Network. 1 (1), p1-2.

10. Waller, D (2003). Operations Management; a supply chain approach. 2nd ed. New
York:Cengage Learning EMEA. 17-84.
 SCMA 311

Group Assignment 1

Sheer Elegance Lotion Corporation

Name: Student Number:

Asmall, O 206508498

Ganie, A 206506000