Ethical Issues at the Lush Company

Categories: Company

More and more organizations recently have recognized that profit maximization is no more their priority, the growing concern with the environment, has led to a focus on sustainable development. The definition of sustainability, originates from the United Nations Brundtland Commission, was about: meeting the needs of the present without compromising the ability of future generations to meet their own needs. The main aspect of green supply chain is a stronger focus on ecological and sociological aspects. As a result of globalization and technology growth, the level of environmental contamination has risen dramatically in the last 50 years.

The major causes of greenhouse gases, which include carbon dioxide, methane. Industrial activities, like manufacturing, transportation and energy production are blamed for causing environmental deterioration. Take transport for example, many Western companies purchase products from China and India in order to achieve lower cost, but consider the consequence of greater distances, which can bring about serious environmental problem-carbon footprint. The EU has stated that 1.3 billion tonnes of waste are produced annually by its member states and that this figure is rising by 10 percent every year.

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(Alan, Pil and Peter,2010,p.585).

Consequently, EU has enacted strict environmental protection laws regarding recycling, packaging, air pollution, etc. China has relatively lax environmental oversight compared to the developing countries. Various forms of pollution have increased as China have industrilised which has caused widespread environmental and health problems. (Edward, 2013). Many international organisations are blamed for outsourcing to Asian markets and transport finished products or components all over the world in order to cut down on labour and resources costs.

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Conventional business model with long distance delivery,small batch size and energy-intensive production will likely go by the economic and political wayside.

Modern businesses should not narrowly pursuit own interest but also take the welfare of whole society and next generation into consideration. The triple bottom line, was first fully explained by John Elkington in 1997,could be used to measure the company performance in environmental social and economic aspect.More specifically.the effect on people’s livelihoods and financial security,job creation and emission level,etc.Sustainability in the supply chain has been identified as essential to deliver long-term profitability.There are many drivers for organisations to integrate environmental concerns into their supply chain strategy:stricter environment regulations, increased community and consumer awareness of environmental protection and each member in supply chain is requested by others to adopt a more sustainable approach.Smart businesses gain a competitive advantage by integrating environmental concerns into their supply chain.For example, by using energy-saving vehicles and machinery,working costs can be cut down and carbon emission can be reduced. Apart from this,better routing and scheduling in transport has the same impact-it has been recognised as a win-win strategy for organisations.

Additionally, consumers, non-governmental organisations (NGO’s) and other interested groups focus increasingly on the performance of the supply chain as a whole. If a company manages to obtain media coverage, for being a best practice example of a successful, responsible and sustainable company, this can significantly enhance brand value, customer satisfaction and sales figures.(Kummer,2006). Supply chain management is the oversight of materials, information, and finances as they move in a process from supplier to manufacturer to wholesaler to retailer to consumer.It involves purchasing,manufacturing and distrubution.Logistics and transport activities have great impact on the environment.

As for green supply chain is a greener way in purchasing,manufacturing management, distribution and reverse logistics.Each member in supply chain is involved, ideal green supply chain is greener designs and to convert current supply chain to further support companies that run in a green way. Lush retail, is an international cosmetics company established in England in 1994,the biggest former supplier of The Body Shop.

Lush claims they have always had embodied ethics that can be found in the products themselves;Lush not only measure the sustainability of their own business but also extend the evaluation to their suppliers and customers. This essay demonstrates how Lush retail stay competitive with their sustainability strategy in supply chain. Lush have very clear company objectives, which is purchasing fair trade products, reducing waste during manufacturing process and transportation, and also making a reasonable profit margin in order to benefit their internal stakeholders. However, these objectives cannot go along without effective supply chain management, especially for a global business, which has more expansive and complex logistics networks. The Future laboratory in 2008 produced the Three Tiers of Sustainability.More specifically,Tier 1 is getting the basics right, this stage is been commonly used in the most organisations and Lush is no exception.Logistics has become increasing complicated due to business growth,resulting in greater chances of making error during packaging and shipment. The introduction of NCR 870 1080P network cameras enables senior managers to close monitor the logistics process anytime.

The development of the surveillance system has positive impact on logistics. The frequency of packaging and shipping error has been significantly dropped and this lead to better operation efficiency.(Messoa, 2013). This can also bring positive impact on environment, the resources used in production can be cutted down and the lead-time gap can be shorten.Many natural resources is limited and its scarcity of resources getting worse due to over exploitation.Resource conservation is vital because natural resources cannot be easily reproduced by man. On the other hand, It is generally accepted that supply chain in the future is smarter,next generation supply-chain will require a broad knowledge base that includes IT skills,and employment of high-tech instrument, which can replace human resources,lead to less mistakes and further improve visibility.(IBM,2010)

For instance, Another technology Lush employed in supply chain is radio-frequency identification, which transfer data stored on tags on a product or other object, facilitating identification and tracking. RFID tags can bring more advantages that traditional barcodes cannot bring,they can store more data,provide real-time information, and can be scanned from a distance and without a clear line of sight.Lush benefited from RFID technology for years, fresh raw materials can be delivered to industry on time and finished products can be precisely delivered to each retail store. The problem of decay in supply chain has been solved. Learning to think sustainability is the second level of three tiers of sustainability.Companies should take the sustainability into account and make the whole supply chain involved.Lush have realised the importance of green supply chain at early stage,this can be seen from product design,supplier management,rationalisation and distribution optimization.Products sold by Lush were invented to reduce or entirely do away with packaging and preservatives.

Naked,unpackaged product means the product itself is tinier,cosmetics packaging tends to be light but high volume. A lower ratio to weight in a product generally means an efficient utilisation of the main components of distribution and fully utilitisation of the weight-constrained capacity of vehicle.(Alan, Pil and Peter,2010,p.585). Lush shampoo bars are solid in format without packaging, and run up to 80 washes per bar-the equivalent of three 350 milliliter bottles of shampoo. It would take 15 truckloads of bottled shampoo to get the same impact on the sales floor as one truckload of shampoo bars. This can help lush further cut down on the transportation costs and greenhouse effects of transporting all of the packaging. (Wolverton, 2009). Recycling is another strategy that Lush employed, this strategy has been highly commend by The National Recycling Awards.Lush not only use 100% recycled plastic in pots and bottles, but also purchased facility to re-process the empty used pots into new pots and waste into other tools. It is worth mentioning that most cosmetics sold are made inside and raw materials are collected domestically not imported.

This is beneficial to the local community and ensure the freshness of products, and also cut shipping’s carbon emissions and greatly contribute to the environment. Unlike Lush,most organisations in cosmetic industry manufacture in a single factory and distribute the bulk finished products all over the world in order to achieve economies of scale. One of the major challenges facing organisations today is the need to respond to ever increasing levels of volatility in demand.Product and technology life cycle are shortening, competitive pressures force more frequent product changes and consumers demand greater variety than ever before.(Martin,2011).Parts of products sold by Lush have very short expiry date due to without preservative,the urgent need for agile and lean supply chains exist so that can meet customer demand rapidly and keep volume per stock keep unit low.Conventionally,businesses in a supply chain never considered themselves to be part of a marketing network and so have not shared with each other their strategic thinking, therefore,assets piled up in the logistics pipeline.

For agile and lean supply chains to be truly effective a close integration through long-term commitments to great transparency of information(capacity,capability, quality).A strategic goal need be recognised and shared among members in supply chain that is to maximise customer service whilst simultaneously minimising costs and reducing assets lock up in the logistics pipeline.(Martin,2011). Visibility of final demand should be open to the suppliers, this helps suppliers to understand how many fruits, vegetables needed to collect and process,so the problem of food waste can be relived. Most organisations are forecast-driven rather than demand-driven.In order words, because many upstream suppliers have to make forecasts based upon past sales or shipments and convert these forecast into inventory due to without real demand data.(Martin, 2011,P.102). The CEO of Lush, Wolverton,said that “We integrate our inventory management ordering and reporting capabilities into our accounting system so the information flow is as seamless as possible. We also use Web-based payroll systems. We align ourselves so we can report on efficiencies no matter what country the manufacturing business is in.

That transparency will be extremely important as we continue to grow.”(Mark,2009). Cost data is shared upstream and downstream by Lush, the profit of each member is open to others. Besides, Lush help the local community to set up the manufacturing facilities and create job opportunities for local labours. It brings further positive impact on long-term relationship development. Mutual Trust is built among members,so Lush suppliers are more willing to delivery products on time. In-bound lead times is reduced and become predictable. Additionally,many customers are really concerned about the real ingredients used in production, because the supply chain is so complicated.For instance, One of Lush masks is made of vegetable oils, synthetics,cucumber,etc.In many situations company itself does not know the what really their one-tier supplier supplied as their supplier source it from its upstream supplier.

Great transparency is needed, so Lush are able to access to information supplier provided.Lush believe the materials used are safe and non-animal tested. Manufacturing Sustainable manufacturing practices are as significant as sustainable product design, both are key factors in green supply chain management.Many waste in production process can be reduce, the profitable and efficient companies are those who can maximise the use of resources.Lean production has been considered to be a key strategy to attain sustainable manufacturing by reducing waste of money, time and quantity of resources used in production.In order words,is about increasing productivity and efficiency,as well as making great contribution to the society.

For example,reducing transport distance and time leads to reduction in fuel cost and logistics lead time. It will also help reduce environment impacts by reducing carbon emission and cost associated with inventory.Muda is a japanese terms for waste.It refers to business activity, which uses resources but does not directly add customer value. There are seven categories of muda:over production, transportation, motion, waiting, unnecessary processing, inventory and defects.By recognise the seven areas can help company better to carry out waste hunting exercise.Key areas where waste was found at Lush included high inventory,idle machinery and vehicles being made to wait at loading bays.The waste had been identified, Lush created a detailed production plan, including parts procurement. Supplying right products at the right time in the right quantity according to production plan can eliminate waste, inconsistencies and unnecessary requirements. In the Lush production system, Kanban system plays an important role.

The word Kanban refers to a system of cards, which is attached to the container or carried of a lot of used to match what needs to be produced in a work station and what needs to be delivered to the next station.Kanban system is basically a pull system, which means that what needs to be produced in a particular station depends on what the next station needs.The production is therefore modulated by end customer order.(SiliconFarEast, 2003). Marked squares on the floor is another method Lush used to facilitate the execution of pull system. The squares contain fresh food, work-in-progress products required by the next step in the manufacturing. The squares become empty as materials as used.(Alan,Pil and Peter, 2010, p.162). Then Lush carriers will quickly respond to empty square and move materials into square. the impact transportation, Kaizen is an important ingredient of lean manufacturing.Kaizen approach refers to continuous improvement through involving employees in discussion about quality issues and solution.

Every employee-from senior managers to ordinary staff is encouraged to come up with small improvement suggestions on a regular basis,many small improvements can lead to big changes.Lush employees are encouraged to write down their suggestions, and over 90% of those were implemented. As senior managers in many cases cannot find out these problems, like unnecessary inventory, defects, overproduction.A quality circle was established at Lush in 2008, and workers involved has been trained to identify,analyse and solve work-related problems in order to reduce waste in areas such as transportation, excess inventory,scrap,and therefore,to improve production capacity, warehouse utilisation. As stated before,lush re-process the waste into new tool,thereby maximising use of existing resources and minimising landfill and energy usage.

Transportation is a crucial part in moving the supply chain towards a more sustainable approach.As a global business, transport has quite a big impact.More products are moved far greater distances because fresh raw materials used from all over the globe – maritime,air and road transport make up biggest contribution to climate change.Aviation has a much bigger impact than other modes of transport. To minimise the carbon footprint, Lush have reduced the amount of air-freighted raw material to less than five percent in weight of everything they bring into the UK and will keep that as target.Lush also work with their international partners to help them reduce their amount of air freighted goods coming out of factory.

A big policy change at Lust which took some time to develop was putting a ban on domestic flights in Britain,that saved about 122 return journeys a year.(Lushcosmetics, 2010).Lush have company vehicles and staff travel around mostly by train.Lush encourage out staff to cycle, promote the government cycle schemes and car sharing. They have six factories around the world so they can manufacture locally and minimise the transport of finished goods.(The green hub team, 2009). however, one of the first things to suffer when the relationship is based only upon negotiations about price is quality.the supple buying team works tirelessly to ensure the transparency of leverage the capabilities and competencies of suppliers through closer integration of the buys’ and supplier’s logistics process globalisation-complexity-extended supply lead times;production postponement with local added value;complicated node management;multiple freight transport options;extended and unreliable transit times;the need for greater visibility in the supply chain(martin 29) IS FAR from enough At Lush there are lots of ethical issues that we care about as individuals and take action on collectively,making us a campaigning company. the animal testing policy that all Lush suppliers have to abide by means that none of out,or our customers’,money ends up in the hands of companies who are still testing on animals;and our buyers go to extraordinary lengths to find community projects to buy ingredients from,which will benefit the people growing, picking and making all the lovely butters,essential oils,resins and other materials that go to make up the finished products.

References

  1. The United nations Brundtland Commission.(1987) World Commission on Environment and Environment and Development, Our common future.England:Oxford University Press.
  2. Edward, W.(2013) ‘Cost of environmental damage in China rapidly amid industrilisation’, The New York Times,30 March [Online]. Available at: http://www.nytimes.com/2013/03/30/world/asia/cost-of-environmental-degradation-in china-is-growing.html?_r=0.(Accessed:30 March 2013).
  3. Jennifer, D. (2013) ‘China’s environmental problems are grim,admits ministry report’, The Guardian, 7 June [Online]. Available at:http://www.theguardian.com/environment/chinas-choice/2013/jun/07/chinas-environmental problems-grim-ministry-report (Accessed:7 June 2013).
  4. Kummer, N.(2006). ‘Sustainable supply chain management: how to manage triple value chains’. Triple Innova [Online]. Available at: www.triple-innova.com (Accessed:5 May 2009).
  5. Mark, W.(2009) ‘Lush’.Retail Merchandiser [Online]. Available at: http://www.retail merchandiser.com/index.php/reports/retail-reports/58-lush (Accessed:17 November 2009).
  6. Messoa, A.(2013) ‘Handmade cosmetics specialist Lush gives Taiwan branch a facelift in logistics and security’. Asmag [Online]. Available at: http://www.asmag.com/showpost/14339.aspx (Accessed:13 February 2013).
  7. Lush cosmetics – making fresh products (2010) Directed by Lushcosmetics [Video].England:Lush retail Ltd.
  8.  Christopher, M. (1992). Logistics and supply chain management, Essex, England: Pearson Education Limited.
  9. Tariq, K.(2013) Supply chain integration [Lecture to BA Business and Management Marketing Year 2].1 November.
  10. IBM (2010) ‘The smart supply chain of the future’, IBM Global Business Service [Online]. Available at:https://blackboard.brunel.ac.uk/bbcswebdav/pid-338363-dt-content-rid 956261 1/courses/C.MG2138.A.2013-4.YEAR/IBM-SCM%20of%20the%20future.PDF (Accessed:October 2010).
  11. Silicon Far East (2003) Just-in-time manufacturing.Available at: http://www.siliconfareast.com/jit.htm (Accessed:February 2003).
  12. Lush cosmetics – our environmental policy (2010) Directed by Lushcosmetics [Video].England:Lush retail Ltd.
  13. The green hub team(2010) “Transport’, Lush [Online]. Available at:https://www.lush.co.uk/content/view/1071 (Accessed:May 2009).

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Ethical Issues at the Lush Company. (2021, Sep 30). Retrieved from https://studymoose.com/ethical-issues-at-the-lush-company-essay

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