978-1-4244-7330-4/10/$26.00 ©2010 IEEE 1458

The Green Supply Chain-The Case Of The Body Shop

Li Ting1, Li Yanfeng2, Ye Qiongwei3 1. Dept of logistics. Business school, Yunnan University of Finance and Economics, Kunming, Yunnan，650221

E-mail: tingli_usyd@yahoo.com

2. Dept of logistics. Business school, Yunnan University of Finance and Economics, Kunming, Yunnan，650221 E-mail: liyanfeng2001@163.com

3. Dept of E-commerce. Business school, Yunnan University of Finance and Economics, Kunming, Yunnan，650221 E-mail: yeqiongwei@163.com

Abstract: This article illustrates the global Cosmetic retailer---The Body Shop’s successful transformation from its old mission statement (Green its product line) to the new mission statement (Green its entire supply chain). Firstly, it gives a brief introduction about the background of case study. Then it analyses trade-offs of benefits and costs of green supply chain. Following this, The Body Shop’s Strategies to Achieve Green Supply Chain are described, they’re: Partnership strategy, Information Technology (IT) strategy, Waste Minimize Strategy and Transportation Strategy. Finally, Conclusion is made as an ending. Key Words: The Body Shop, Green Supply Chain

I. INTRODUCTION Concurrently, there has been increasing public attention placed on the overall condition of the natural environment. The most commonly perceived enemy to environmental protection is manufacturing and production operations. This paper use the a case study about the famous cosmetic manufacturer and retailer of The Body Shop International who runs a new mission form green product line to green supply chain to explain the importance of green supply chain and the strategies to achieve it.

II. THE BACKGROUND OF CASE STUDY

A. Background

Body shop is basically cosmetic chain retailers operate in 50 countries with about 2,000 outlets. Body Shop is headquartered in Littlehampton, UK and employs about 5900 people. They position themselves to be “massive” sell relative lower cost than competitors while maintain the prestige of brand. The company has a strong product development program which enables it to maintain a healthy pipeline of products. The Body Shop is committed to environmental protection and respect for human rights and developing trading relationships with communities in need.

B. Old mission statement- Green the product line

Famous for creating a niche market sector for naturally inspired skin and hair care products, The Body Shop introduced a generation of consumers to the benefits of a wide range of best sellers. All the products of The Body Shop are made from exotic natural ingredients, the company purchases such ingredients as blue corn from the Pueblo Indians in New Mexico and Brazil nut oil from the Kayapo Indians of the Amazon River Basin, and thus proves to be environmental beneficial. The Body Shop always tries to make its products 100 percent natural and environmental.

C. New mission statement- Green the entire supply chain

Environmental management is gaining increasing interest among researchers in supply chain management. By coordinating the development of environmentally-conscious technologies with their upstream suppliers and their downstream customers, manufacturers can introduce significant improvements in both productivity and environmental performance. (Fiksel, Joseph, 1995) As Porter and van der Linde (1995) mentioned, the basic reasoning is that investments in greening can be resource saving, waste eliminating and productivity improving. The Body Shop realized that it's far from enough to just “green its product line”, they should green its entire supply chain, By forming a strategic alliance with its supplier, The Body Shop intends to create a marketing edge by using greening as a unique selling point with environmentally conscious customers; hence, it starts to courageously ensure that their business is ecologically sustainable: meeting the needs of the present without compromising the future.

D. Trade-offs of benefits and costs of green supply chain

Body shop needs to prudently consider the several issues regarding the implementation of green supply chain. The manager needs to understand the impacts and implications of their decision on logistical activities, which affect other functions in the entire supply chain, to the environment (Wu and Dunn, 1995). A portion of major logistics decision that affects the environment is illustrated as followers

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FIGURE Ⅰ. A PORTION OF MAJOR LOGISTICS DECISION THAT AFFECTS THE ENVIRONMENT

The difficult task is balancing environmental concern with efficiency of supply chain functions that generate economic benefit to the firm. The scope of issues is widely range from the creation to the disposal of the product in which involves all entities in the supply chain.

III. STRATEGIES TO ACHIEVE THE GREEN SUPPLY

CHAIN

There exist a lot of strategies to achieve the green supply chain form the different angles and parts within the whole supply chain. Considering the current situations concerning The Body Shop, several strategies will more efficiently achieve the mission as following:

A. Partnership Strategy

The Body Shop has a preference of purchasing raw material from environmental friendly suppliers, and they have developed their own evaluation system for selecting the eligible supplier.

The Body Shop International adopts partnership strategy by working together with its suppliers and encouraging them to improve their environmental management and performance, hence fulfill its new mission statement- green its supply chain, moreover, by forming a strategic alliance with its supplier, The Body Shop creates a marketing edge by using greening as a unique selling point with environmentally conscious customers; The UK Round table on sustainable development (1997) recommends that: All organizations-but especially large companies and public sector organizations- should use procurement as a way of encouraging those in the supply chain to improve environment performance. Noci (1997) argues that supply chain management is the most advanced stage of green management. He recommends defining a green strategy, identifying supplier environmental performance indicators and formally measuring and selecting suppliers. The Body Shop works with suppliers in meeting standards as defined in “Technical, Quality and Ethical Specifications for

Suppliers” documents. A precondition for positive engagement is that a supplier is willing to work on a Continuous Improvement Plan within and agreed time frame. By working closely with partners, The Body Shop benefits significantly from this strategic relationship, it was elected as the second trusted brand in UK, and meanwhile, it gains good profit. On the other hand, suppliers are also happy with the strategic alliance, their performance is improved and they got revenue growth. It is a tailored business relationship based on mutual trust, openness, shared risk and rewards that yields a strategic competitive advantage.

B. Information Technology (IT) strategy

IT strategy is developed to support green initiative as competitive initiative. The coordination between Body Shop and trading partners would be enhanced. The information sharing and visibility throughout the supply chain would raise the scope of supply chain efficiency in term of lower energy consumption, waste generate and material used, which result in increased profit margin and improve customer satisfaction. Furthermore, the supply chain of The Body Shop will be changed due to the introducing of E-commerce.

a) E-commerce

At present, Body Shop is successfully capturing the direct sell market, the new opportunity of shoppers who ready to increase their spending when shopping through the comfort of online purchasing (Datamonitor, 2004). Body Shop operates its e-tailing business separately from traditional business (brick-and-mortar stores). The advantages enable the business to speed up its decision-making and maintain high degree of flexibility. Since, marketing communications can be conducted effectively on web (Hoey, 1998). The green marketing program is electronically present in an attractive fashion on web in which substantially reduce the waste generation of fabulous packaging and the paper consumption for paper-based catalogue and mails. In e-commerce, Body Shop will play an active role in outbound logistics so the used of refill package can be more effective to offer to the customers which translate to the reuse-container. A comparison between traditional body shop global supply chain and new supply chain is made as follows:

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FIGURE Ⅱ. TRADITIONAL BODY SHOP GLOBAL SUPPLY CHAIN

FIGURE Ⅲ. IMPROVED BODY SHOP GLOBAL SUPPLY CHAIN

b) E- logistics

The impact of e-commerce eliminates the need for intermediary in supply chain configurations in which the benefit of the traditional structure is the cost saving on outbound logistics as customers provide transport from the Body Shop store to their own homes. Under the new distribution structure, Body Shop will ship the product directly from its corresponding warehouse to customer's home in the acceptable waiting time. This new requirement has the implication for providing transport to fulfill smaller shipment to be more frequently (Christopher, 2005; Copacino, 1997). The new requirement of outbound logistics of e-commerce is seemingly undesirable for Body Shop's environmental principle as the new scheme of delivery is anticipated to generate the increased traffic congestion as well air pollutions. However, this concern is removed since internet can create a medium to closely connect Body Shop and logistics provider

in real time. By posting transport demand information on website, carriers can access to the internet can view this information in real-time. The real time sharing of customer order information is crucial for delivery planning and effective shipment consolidation. The instant information update is used to plan to fully utilize transport network and distribution centres.

C. Waste Minimize Strategy

Waste management principles must be incorporated into environmental restoration activities to ensure the greatest environmental and financial benefits. (Wilson et al, 2002) The Body Shop uses the Waste minimization activities reduce the demand for treatment and disposal capacity resulting in less regulatory involvement and reduced costs and achieve a better performance of operation. Application of Waste Minimization Strategy into The Body Shop are discussed as follows:

Step 1: identify the waste created by The Body Shop

As a retail business, many of The Body Shop activities that involve bringing products to the marketplace have a direct impact on the environment. Examples include fuel used to distribute goods, waste generated by office activities, and store design, the disposal of packaging waste at the end of a product's use. Therefore before adopting the waste minimization strategies in waste management, the first step is identifying the waste which created from the operation of The Body Shop. According to the annual report of The Body Shop, we can identify the waste of The Body Shop into three categories as follows: • Chemicals in product formulation • Emissions, transport and water use • Waste and packaging Step 2: Source Reduction As mentioned above, Source reduction is a key strategy in managing waste that is to avoid it in the first place. Throughout the company numerous steps are taken to reduce waste and maximize the opportunities for reuse or recycling of materials. Buyers in particular fulfill an important role by avoiding products with excess packaging or packaging made from non-reusable or non-recyclable materials. Changes in warehousing and distribution methods will greatly reduce the quantity of plastic pallet wrap used. Using the latest technology, the company may replace plastic pallet wrap with reusable large cardboard stock containers, which can identify the hidden financial and environmental costs and benefits associated with stock distribution via the existing and a trial packaging system. At the retail level customers are encouraged not to take carry bags. Step 3: Reuse strategy A great deal of innovative reuse can be support by Retail department. Some examples include: • The reuse of transport packaging by warehouse and suppliers

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• The recharging of computer consumables • Reuse of envelopes and stationery items • Unwanted stationary items and old computer/office equipment donated to Reverse Garbage Truck • Computer hardware is upgraded rather than replaced and shopfittings reused wherever possible. Step 4: Recycle Strategy The Body Shop should take responsibility for its post-consumer waste and encourages customers to return their empty containers for recycling or responsible disposal. Every store should have facilities to collect recyclables. With the research of The Body Shop, we can find one per cent of customers were using refilling in store, therefore the Body Shop may be undertaking a new approach to reducing its use of virgin plastic by introducing post-consumer recyclate (recycled plastic) into its PET (clear plastic) plastic bottles. In addition to recycling its own packaging The Body Shop also encourages customers to recycle their wine bottle corks and greeting cards through the stores. The Body Shop acts as a collection point for aluminum cans, plastics, cardboard, paper, glass, metal and timber etc. Step 5: Responsible Disposal Waste that cannot be reduced, reused or recycled is either land filled or sent to an industrial waste processor. The processor recovers materials with a calorific value and these “fuels” are sold for use in energy intensive processes.

D. Transportation Strategy

Green transport has won £16.6m funding, which is the priority of the seven government's technology strategy program in UK (IEE Review, 2005). To the Body Shop, it is a necessary linkage to implement environmentally friendly and socially responsible transportation in order to go towards green supply chain. The Body Shop purchases the raw ingredients and delivers finished products transported by air or by sea freight in global market. In 1997/98 materials shipped via above modes accounted for over 90 percent of the total quantity of materials transported (Environmental Statement, 1999). The Body Shop operates a fleet of six unleaded petrol cars, which are based at the Retail Support Centre for the purposes of business. As mentioned above, the waste created by transportation can be recycled. Many benefits arise from such recycling efforts. With the exception of tires, which are more difficult to recycle, batteries and used oil are easily recyclable and such recycling efforts should be part of transportation strategy for the Body Shop. The Body Shop will investigate to reduce the impacts on air travel because air travel continued to contribute amounts to total CO2 emissions. The company will take step to assess for meetings with colleagues interstate and overseas by using video conferencing. There are a great of innovative reuse occurred at the Retail Support Centre such as the reuse of transport packaging by

warehouse and suppliers. The reuse of large cardboard stock containers will continue to be alternative of plastic pallet wrap.

IV. CONCLUSION

In conclusion, The Body Shop has an ultimate goal of being socially, economically and ecologically sustainable. The new mission statement covers the entirety of the environmental impacts that The Body Shop either directly causes, or can influence. It focuses on its responsibilities to act to protect the environment throughout its global business. Most importantly, its creative strategies contribute to the overall transformation significantly, which will continue guide the further development of the company.

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