What is Sustainable Operations Management (SOM)?

Introduction

Operations Management functions with administering and efficiently utilizing man, machine and money to deliver quality output. It primarily focuses on business profits. On the other hand, Sustainable Operations Management (SOM) applies the principle of sustainability to all strategic decisions of business operations. It advocates economic, social and environmental objectives too along with revenue generation.

SOM requires an organization to contribute towards the economic and social growth along with promoting environmental sustainability. An exhaustive study on sustainable operations management is carried out here discussing the concept, factors, ways to implement and the importance of sustainability in operations.

Sustainable Operations Management (SOM)

Sustainable Operations Management can be defined as the set of skills and concepts that help a company to carry out its business processes competitively without hindering or disturbing the social, economic or environmental factors.

The SOM approach aims at delivering the requirement of current generation without compromising the needs of the future. It ensures a balance between business revenue, environmental obligation and social well-being.

All functional process units of a business must be aligned with the principles of sustainability. Production units should be arranged in a way to promote reduction of energy use, gas emissions, liquid and solid wastes and ensure effective resource utilization. Integration of production optimization techniques, use of green energy and limited number of processes should be encouraged. Distribution and logistics, including packaging and transport mode should incorporate SOM techniques.

Major Factors of Sustainable Operations Management

SOM refers to the concept of doing business where the social, economic and environmental factors are associated with the operations of the company. It ensures processes to meet the current requirement as well as plan for the future. Key factors under SOM are as follows −

Social Factors

• Responsibility of a business towards the society and social justice makes the first dimension, social factor. The social impact of an organization both internal and external should be monitored and ensured that the entire operation processes are socially responsible and ethical.

• Internal social factors are related to the employees of an organization. Working conditions, workforce diversity, equal opportunities to minorities and women, lack of discrimination of any kind, affordable health care provisions, safety, training and development, and other employee benefits constitute internal social factors under SOM.

• Impact of business on the local residents and social service sector constitute the external social factors of SOM.

• Companies practicing SOM are expected to engage only with those suppliers who share similar values od sustainability. SOM has to make efforts to make sure that the policies, business processes, advertising content, logo or any other business activity does not seem disrespectful or hurt the sentiments of other companies, suppliers or clients of the global market.

Economic Factors

Economic factors associated with SOM include activities that leave an economic impact as a result of the business functions.

• Following a more disciplined work approach promoting recycling, minimal wastage and utilising green and renewable materials substantially reduce costs ensuring sustainable resource supply.

• Careful resource management and channelling primary wastage to second line of production or sales help to optimize fiancé backing and save natural resources. All these add up to internal economic factors under SOM that secures business stability and success.

• Job creation, impact on local wages, real estate, tax flow, investment in underdeveloped areas, public works and social service systems are some of the external economic factors of SOM.

Sustainable business is believed to build strong and stable economy that help more businesses to thrive and flourish, thereby enriching the overall economy.

Environmental Factors

Companies today are legally bound to adhere to Corporate Social Responsibility (CSR) principles.

• Combining environmental dimension too to CSR is the duty of Sustainable Operations Management. Environmental implications create a sustainable future for generations to come.

• SOM activities are obliged to preserve environmental quality by adopting green business concept. Green industry businesses strive for minimal to zero wastage, prevent carbon emissions, and find ways to recycling habits and other eco-friendly initiatives.

• SOM works against all business practices that cause harm to the environment including improper use of natural resources, emitting toxic waste and pollution. Adopting guidelines such as International Organization for Standardization (ISO) 14000 is an example to stick to environmental practices and lower damages.

How to Implement SOM?

There are certain points to consider before integrating sustainable solutions to operations management. They are −

• The Company need to understand the basic principles of balancing people, planet and purpose with business profits. This fundamental understanding will help adopting SOM with ease.

• The objectives of business need to be prioritised and well aligned to SOM after thoroughly analysing the existing requirements and demands.

• The company could rethink on their mission statement to confirm the long term perspective of its business

• It is always advisable to set fund allocation sanctioned towards SOM initiatives from management.

• Taking inputs from all parties involved including employees, stakeholders, suppliers, partners and customers will help SOM implementation. Seeking feedback will enable them to think and recognise the potential merits of the company being more socially committed.

• Take expert advice if required to device strategic decisions to focus on sustainability goals.

Finally, the activities implemented under sustainable practices need to be monitored and measured to track the changes and outcomes. This can ensure that the business gives ample attention to social economic and environmental factors.

Importance of SOM

Sustainable Operations Management Practices contributes significantly to the internal and external territory of an organization. The importance of SOM primarily is reducing operating costs, improved employee and customer satisfaction and socio environmental enrichment.

The benefits of adopting SOM practices are −

• Integrating SOM creates a wider scope enabling more deliverables for business. This can prompt them to revisit their business objectives and efficiency.

• It can help cost reduction by implementing energy-efficient measures in business processes.

• Profitability is the aim of every business entity. Sustainable practices in operations help efficiently manage resources without wastage and reduce costs, thereby increasing profit.

• Adopting sustainable practices help business to improve its image and goodwill. Society and public governance view the company with reputation as it caters to environmental protection and social commitment.

• SOM provides greater employee satisfaction as they tend to be happier with clean and healthier workspace and feel engaged leading to a productive workforce.

• Employees of companies following SOM approach enjoy high morale and record lesser employee turnover.

• SOM integrated businesses exercise more social responsibility. Customers who are interested in social commitments are more attracted to companies following SOM practices.

Conclusion

Sustainable operations management benefit companies to remain agile and flexible by maintaining proper balance between people, environment and revenue. Operations management can help a company to integrate sustainable practices successfully covering all functional units responsible for design, production, marketing and sales. This helps business to rethink and align its vision and goals further satisfying the socio economic and environmental aspects. This could be seen as an excellent opportunity to organise socially responsible initiatives and enjoy goodwill from the society.

This impact will help them take better strategic decisions and create a strong brand value in the minds of customers. Adopting and integrating sustainable approach to operations management help business to save funds and boost profitability along with being more socially responsible.