Lecture responsible tourism unit 6 responsible tourism supply chains

Unit outlineObjectives By the end of the unit participants will be able to: • Understand the mechanics of supply chains and the importance of building sustainability in the supply chai

UNIT 6 RESPONSIBLE TOURISM SUPPLY CHAINS

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Unit outline

Objectives

By the end of the unit participants will be able to:

• Understand the mechanics of supply chains and the

importance of building sustainability in the supply

chain

• Develop a sustainable supply chain policy and action

plan

• Implement a supply chain sustainability assessment

• Identify strategies to support suppliers to meet

supply chain sustainability goals

• Understand how to monitor the sustainability

performance of the supply chain and support

continuous improvement

Topics

1 Introduction to responsible tourism supply chains

2 Sustainable supply chain policy

development and action planning

3 Raising awareness and supporting suppliers to meet sustainability targets

4 Monitoring and evaluate sustainability performance

TOPIC 1 INTRODUCTION TO

RESPONSIBLE TOURISM SUPPLY CHAINS

UNIT 6 RESPONSIBLE TOURISM SUPPLY CHAINS

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What is a supply chain?

product or service from supplier

to customer

materials, and components

being transformed into a finished

product

core and ancillary tourism goods

and services

general tourism supply chain is

the holiday

Picture sources: vov.vn/Uploaded/VietHoa/2012_11_21/Bieu%20dien%20van%20nghe.jpg

http://sinhcafe.com/photo_north/Maichau/maichau_hoabinh_trekking_adventuretoursdotvn.jpg

http:// www.schoolanduniversity.com/images/page_uploads/Food-and-beverage-Management.jpg http://upload.wikimedia.org/wikipedia/commons/9/97/Premier_Executive_Transport_Services_Boeing_737-700_KvW.jpg http://www.relaxitsdone.co.nz/_media/images/257-luxury-accommodation-in-queenstown-at-45-south-luxurious-master-bedroom.jpg

The key actors in tourism supply chains

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The tourism sector supply chain

Two compelling reasons why we need sustainable

supply chains in tourism

Consumers expect it

Consumers

your core product You are eroding your core product

Some other good reasons to develop a

sustainable supply chain

• Improved profile / brand

• Improved market access

• Increased operational effectiveness

• Increased sustainability

Some common sustainability issues in tourism

supply chains

ECONOMIC PERFORMANCE ISSUES

Employee wages and benefits

Local purchasing

Revenue leakage

Linkages with local suppliers and subcontractors

Corporate responsibility-related payments

ECONOMIC PERFORMANCE ISSUES

Employee wages and benefits

Local purchasing

Revenue leakage

Linkages with local suppliers and subcontractors

Corporate responsibility-related payments

SOCIO-CULTURAL PERFORMANCE ISSUES General

Equal opportunities and non-discrimination Human rights (including combatting sexual exploitation of children)

Workplace

Workplace conditions Labour relations (fair wages, job security, working hours etc) Health and safety

Training and education Children in the workplace

Suppliers and subcontractors

Labour relations and human rights practices Contracting with small and micro-enterprises Respect for rights of ethnic and minorities and of local communities

Community

Traditional rights and freedoms Local consultation and participatory decision-making Contribution to community development

Economic linkages with local communities

SOCIO-CULTURAL PERFORMANCE ISSUES General

Equal opportunities and non-discrimination Human rights (including combatting sexual exploitation of children)

Workplace

Workplace conditions Labour relations (fair wages, job security, working hours etc) Health and safety

Training and education Children in the workplace

Suppliers and subcontractors

Labour relations and human rights practices Contracting with small and micro-enterprises Respect for rights of ethnic and minorities and of local communities

Community

Traditional rights and freedoms Local consultation and participatory decision-making Contribution to community development

Economic linkages with local communities

ENVIRONMENTAL PERFORMANCE ISSUES

Air, water and land pollution

Toxicity of materials and products used

Purchasing guidelines

Built environment (including protection of architectural, historical and

archaeological heritage)

Environmental management system

ENVIRONMENTAL PERFORMANCE ISSUES

Air, water and land pollution

Toxicity of materials and products used

Purchasing guidelines

Built environment (including protection of architectural, historical and

archaeological heritage)

Environmental management system

Source: Tour Operators’ Initiative for Sustainable Development (TOI) 2004, Supply Chain Engagement for Tour Operators: Three Steps Toward Sustainability, TOI, France

93% of your supply chain is invisible –

and why this matters to you!

companies don’t know exactly what’s happening in

them

serious risk and reputation issues, legislation and

litigation issues and lawsuits for false claims relating

to human and environmental issues

eventually affect you

Source: Rowe A 2013, ‘93% of Your Supply Chain Is “Invisible”’, Network for Business Sustainability, Available [online]:

http://nbs.net/knowledge/93-of-your-supply-chain-is-invisible/, Accessed: 09/02/2014

The function of making tourism supply chains

more sustainable

goes beyond the company

and contracts combined

with b2b support to create

positive change

suppliers to achieve positive

financial and sustainability

performance

of responsible tourism

Healthy communities

Natural environment

Economic vitality

SUSTAINABLE TOURISM

Example: Putting responsibility into a

component of a tour operator’s supply chain

Others

Tour operator

• Uses local destination guides

• Employs local staff

• Employs local staff

• Sources sustainable food

• Implements Fair Trade

• Supports local sustainability projects

• Pays fair salaries

• …

Suppliers

• Grow food organically

• Do not sell endangered animals

• Have good working conditions

• …

Example of simple restaurant supply chain

Picture sources: http://www.hoianworldheritage.org.vn/uploads/news/rautraque.gif; http:// www.vinacorp.vn/Content/ckfinder/userfiles/images/bia(1).jpg; http://images.vietpress.vn/Images/Uploaded/Share/2013/09/23/93.jpg; http://www.vinachem.com.vn/TCTYHC/GifAdv/Ninh_binh/san_pham.gif; http://newworldvn.vn/hinh-anh/images/the gioi-moi/ao-ghe-nha-hang-khach-san.jpg; http://www.stevina.vn/uploadfiles/product/C%C3%A2y%20gi%E1%BB%91ng%202.JPG; http://dantri4.vcmedia.vn/2togCcWP25hx4bn5VbuB/Image/2013/11/anh-minh-hoa-cdac7.jpg; http://www.dunghangviet.vn/uploads/content/2012/04/05/thanh-loc-rau-qua-truoc-khi-xuat-khau-

0386.jpg; http://eventsnpromotions.com/wp-content/uploads/2012/12/photodune-1735309-waiter-with-champagne-xs.jpg; http://dantri21.vcmedia.vn/Ic3EyFHpPWFvMJOJFocc/Image/2013/03/Rau-cu-qua-luoc634814061593253822-6bfaf.jpg;

http://www.vanderree-Fruit &

vegetables ingredients

Meat ingredients

Table linen

Beverages

Restaurant

Dairy farm

Market Freight Fruit &

veg farm

Seeds

Fertiliser, pesticides, etc

Freight Butcher Deli or

market

Seeds

Fertiliser, pesticides, etc

Freight Cotton

farm

Linen store

Processing factory

Processing factory

Fertiliser,feed, etc

Retailers, Distributors, Manufacturers, Producers

RESTAURANT / CONSUMER RETAILER DISTRIBUTOR, MANUFACTURER, PRODUCER

Direct suppliers Indirect suppliers

TOPIC 2 SUSTAINABLE SUPPLY CHAIN

POLICY DEVELOPMENT AND ACTION PLANNING

UNIT 6 RESPONSIBLE TOURISM SUPPLY CHAINS

The importance of having a sustainable supply

chain policy in tourism

SUSTAINABLE SUPPLY CHAIN POLICY

Defines company

sustainability position

• Establishes the goals /

targets for supply chain

and supplier sustainability

Prioritises issues

• Identifies the specific areas

of sustainability action that are most important

Ensures correct action

• Combined with procedures policies make sure

sustainability actions are effective and do not erode sustainability goals

Defines training requirements

• They help identify skill and technology gaps and areas

in which capacity building

in sustainability topics can

be implemented

The benefits of having sustainable supply chain

policy in tourism

• Helps defend a company from legal disputes

• Demonstrates company commitment to sustainability

• Promotes support of suppliers to achieve sustainability

objectives

• Create greater stability and consistency in supplier

sustainability actions resulting in the faster achievement of

sustainability objectives

TOPIC 2 TOPIC 3 TOPIC 4

The key steps to developing a sustainable

existing supply chain

Decide where you want to be

Develop a sustainable

supply chain policy,

standards, targets and action plan

Help your suppliers get there

Raise awareness, build capacity and offer rewards to help your

suppliers meet the sustainability goals

Monitor performance and improve

Monitor, evaluate and improve performance of

suppliers in meeting sustainability targets

Conducting a sustainable supply chain

baseline study

What is it?

The process of researching the

current level of sustainability of

suppliers with the goal of

identifying sustainability gaps

and developing sustainability

targets for improved

performance

Benefits

Helps find sustainability gaps Determines the extent and type of current behaviour/practices in sustainability

Determines attitudes towards sustainability

Determines current indicator levels (before intervention)

Assists establish and prioritise sustainability policy areas/ objectives Provides a means to set realistic sustainability targets and measure progress

Benefits

Helps find sustainability gaps Determines the extent and type of current behaviour/practices in sustainability

Determines attitudes towards sustainability

Determines current indicator levels (before intervention)

Assists establish and prioritise sustainability policy areas/ objectives Provides a means to set realistic sustainability targets and measure progress

The key steps in implementing a baseline study

A Build a

management

team

B Develop baseline assessment methodology and approach

C Develop assessment criteria

D Implement baseline study, review and evaluate results

A Building an effective management team

representatives from different

internal departments and suppliers

participants have good knowledge of

key operational areas and

experience or understanding of

sustainable tourism

sponsor” or “leader” for overall

responsibility / ownership in

developing and managing the policy

Source: Tour Operators’ Initiative for Sustainable Development (TOI) 2004, Supply Chain Engagement for Tour Operators: Three Steps Toward Sustainability, TOI, France

•Provide resources and

top-level support for the

program

Company Board

•Use sustainability performance as a factor in selecting suppliers

•Incorporate sustainability clauses into contracts with suppliers

Contracting director &

Managers

•Discuss sustainability issues and the company program as part of regular contacts with suppliers

•Provide feedback and continuous follow-up with suppliers

•Facilitate dissemination of policy and training and awareness materials

•Identify new local suppliers entering the tourism sector

Destination Managers &

Representatives

•Incorporate sustainable action plans into job description and staff appraisals

Human Resources Director &

Department

•Provide legal advice on wording, inclusion and enforcement of sustainability clauses in suppliers’

on prices

Production Department

•Monitor quality and health and safety standard of suppliers

•Incorporate sustainability performance issues into monitoring of suppliers

Quality & Safety Department

•Provide day-to-day management and coordination of the program

•Offer advice on sustainability issues, technical supports, etc…

Sustainability Unit

•Provide assistance in development of training programs for staff and suppliers on sustainability issues

Communications/

Training Unit

Role of key departments in sustainable supply

chain policy development

B Developing a baseline assessment

methodology and approach

required?

affect progress?

Supplier documents & data

Picture source: http://sisnwinc.com/wp-content/uploads/2013/05/documents12001.jpg

C Establishing sustainability criteria

sustainable tourism principles and practices

practices

Examples of economic sustainability assessment criteria for suppliers

Supplier pays above minimum wages

Supplier implements strategies to avoid revenue leakages from local economy

Supplier has policies on the purchase

of local products and services Supplier pays / charges fair prices

to producers

Supplier economic sustainability assessment criteria

Examples of environmental sustainability

assessment criteria for suppliers

Supplier implements strategies to reduce waste

Supplier implements strategies to recycle products

Supplier implements strategies implements strategies to educate visitors and staff on importance of natural environment and

sustainability issues

Supplier environmental sustainability assessment criteria

Examples of social sustainability assessment

criteria for suppliers

Supplier has contracts for all workers

Supplier adheres to health and safety guidelines

Supplier implements ongoing workplace training programme Supplier provides visitor codes of conduct to guests

Supplier social sustainability assessment criteria

Using Green Lotus criteria to create a supplier

sustainability checklist

(1 low -10 high)

A Sustainable

A1.4 Availability of annual plan on implementation of social and cultural activities (both

inside and outside of the tourist accommodation establishment)

10

A2.2 The staff are trained on cultural and social issues (once a year) 6

B Maximise socio-economic benefits for local society

B2.1 Availability of policies on recruiting local people, people from remote regions and less

developed economic regions

0

B3.1 Priority in usage of locally made products or local raw materials without exhausting

natural resources

0

B5.2 Availability of policies to support female employees (maternity, training, consultation

on reproductive health, etc.)

3

C Minimization of adverse impacts on cultural and natural heritage

C2.1 Expression of local culture and traditions in the tourist accommodation

establishment’s architecture, activities and services it provides

4

D Implementing baseline study, reviewing and

evaluating results

1 Implement the baseline study according to

plan and evaluation criteria

2 Analyse results to understand:

3 Prioritise suppliers to work with on achieving greater

sustainability

Developing a responsible supply chain policy

and procedures

selecting new suppliers

existing suppliers to improve sustainability

and reporting on progress made on

improving sustainability in the supply

chain

Effective policies and procedures…

• Set the vision

• Offer flexibility

• Are mutually agreed upon

Example of responsible supply chain policy

statement

A1 Tours recognises that our social, economic and environmental impacts reside as much in our supply chain as in our own activities In our supply chain A1 Tours will ensure that our suppliers are:

• Aware of the specific environmental, social and economic issues, risks and opportunities relevant to their operations and products

• Ensure they operate to internationally recognised standards of practice

• Ensure systems implemented deliver effective performance

management and improvement

A1 Tours

Responsible Supply Chain Policy Statement

Example of responsible supply chain

procedures

In order to develop a sustainable supply chain, A1 Tours will:

1 Take a leadership role in sustainable supply chain management

2 Screen suppliers for their performance in social, economic and environmental issues management

3 Support suppliers to improve sustainability performance

4 Set minimum performance standards

5 Consult with stakeholders

6 Monitor compliance to agreements

7 Terminate business relationships if performance remains below standard or suppliers are unable or unwilling to work towards performance targets

A1 Tours

Responsible Supply Chain Procedures

Other provisions that can support a sustainable

supply chain policy

COMPANY PROCUREMENT POLICY

• Internal policy specific to how company staff

contract suppliers (“services”)

• Can also include purchase of “goods”

• Can include sustainability selection criteria for

procurement of goods and services as a part of

other broader requirements

COMPANY PROCUREMENT POLICY

• Internal policy specific to how company staff

contract suppliers (“services”)

• Can also include purchase of “goods”

• Can include sustainability selection criteria for

procurement of goods and services as a part of

other broader requirements

SUPPLIER (“VENDOR”) CODE OF CONDUCT

• Specific for contracted suppliers

• Should set out social, economic and environmental expectations of suppliers

• Typically voluntary

SUPPLIER (“VENDOR”) CODE OF CONDUCT

• Specific for contracted suppliers

• Should set out social, economic and environmental expectations of suppliers