Managing Sustainable Global Value Chains Assignment Sample

Introduction: Managing Sustainable Global Value Chains

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Managing sustainable global value chains is denoted as the wide range of activities where there is full interaction with the economic factors for launching products into the market. This can be stated that there is the involvement of the pre-stage where the design is concerned before the production as well as the marketing which is the post-stage of the production process. The primary purpose of the essay is the analysis and evaluation of the "Global and Sustainable Value Chain", an analysis of the future scenario of the value chains. Furthermore, there is an analysis of the value chains on the basis of "globalisation" or"de-globalisation" which is deemed to be beneficial for firms. The global firm that has been selected is "Toyota" which follows the "global and sustainability of the diverse value chains".

The topic that has been selected for the essay to be conducted on the topic "Global and Sustainable Value Chain: What is the future for value chains: Globalisation or de-globalisation". This can be stated that the global sustainable value chain is the lifecycle of a product which is comprised of the resources, production, consumption and the process of recycling. There are companies that use this to expand into new terrorities in the world which is the main objective and not only the efficient way to monitor the value chains. Toyota Motor Corporation is a Japanese multinational automobile production company based in Tokyo, Japan that has specific and diverse value chains that are used for the expansion of the company.

Aims

The aim of the topic is the analysis of the "Global and Sustainable value chains, future of the value chain lead to globalization or de-globalization".

Objectives

• To analyze the advantages and disadvantages of "Global and sustainable value chains"
• To evaluate the contribution of Toyota in the global and sustainable chains
• To analyze the Globalization or de-globalization of the value chains in the future

Limitation on the scope of the essay

The study conducted on the global and sustainable value chain has been considered which has a lot of potential but there are limitations. This can be stated that the limitation can be on the different aspects of the global value chain as well as the sustainable value chains. There are restrictions in accessing accurate data and information on the topic within the given period of time. The access can be limited due to financial issues and the available data where the alignment of the different concepts can be considered with the same principles of Toyota, the chosen global firm.

Discussion

Advantages and disadvantages of "Global and sustainable value chains"

The sustainability of the value chain is denoted as the concept which is concentrated on the lifecycle of the product or the sustainability of the procedure. In the global value chain, there are different stages that are concerned with the productivity procedure in different countries. The first step understands the past and the present aspects of the "Global and sustainable value chains" as there are both advantages and disadvantages that have been observed.

Advantages

There are a lot of advantages that can be considered for the global value chains as this has led to the increase in the growth and prosperity of the open markets. There is also the integration of the world economy and trade liberalization which is essential for the promotion of competitive advantage, development and creativity. The supply chains have helped in the growth of the effectiveness of the companies as well as the decreases in expenses. According to the opinion of Sharma et al. (2022), value chains have undergone changes and have detected new methods to improve into transforming the surviving capability of the supply chains that can withstand the impact of the pandemic. There is the consideration of the suppliers and stakeholders that are the main focus that can assess the healthy and beneficial future of the firms. The increasing importance of the "Global value chains" has demonstrated the several benefits received by the different countries and global businesses based on the innovation, production and export of the concerned product that has been considered.

Figure 1: Factors of the “Global value chains”

(Sources: Sharma et al. 2022)

This can be identified that with an increase in the use of value chains that are global and sustainable has also paved the way for "technological progress”. There has also been the consideration of the effective costs, access to the materials, and access to the new markets along with the "trade policy reform" which is stated to be an important characteristic of the world economy (oecd.org, 2023). The increase in the "GVCs" has helped in opening new ways for developing countries with the introduction of new ventures and prospects. This is conducted through the decrease in the import and export costs as there is a requirement of strengthening the interaction with the global market which is one of the important benefits of the "GVCs". This can be stated that "Global integration" where companies implement the "green initiative" in the supply chain for the introduction of sustainability of the supply chains. The "green supply chain" is conducted firstly through accurate design and then through operational activities with the consideration of the local market (week1topicoverview997). This is stated to be advantageous as the "environmental standards" select the suppliers on the basis of the rules and the objectives of the company.

Figure 2: Factors of the “Global value chains”

(Sources: Jones et al. 2020)

The integration of the sustainability of the value chain can be discussed with the help of the "value chain analysis" as this can help with the detection of the operational activities. There is the consideration of the swift decrease in cost, optimization of effort and effectiveness, elimination of wastage along with the growth of the ability to generate profit for the firms. The analysis can help with the in-depth assessment which can provide beneficial value to the end user or the companies that have been implementing the value chains. Based on the viewpoint of Jones et al. (2020), increase in the "re-exporting" has been observed in the "Global value chains" through the domestic supply chains that play a crucial role in the increase in the "exports" of "intermediate goods". The beneficial factor that is considered to be able to control the constraints and limitations with the integration of the "GVCs" which is more advantageous for the developing countries due to the access to foreign trade and investment.

Figure 3: Model of GVC on a sustainable competitive advantage

(Sources: Deqiang et al. 2021)

This has helped with the enhancement of the infrastructure, deepening the "trade facilitating measures" and the enhancement of the business improvement. The global sustainability of the value chains is seen across different countries where there is the outcome of "geographical isolation" which is seen in productivity and consumption (Deqiang et al. 2021). However, there is an increasing strength in the service sector and avoiding getting into any kind of activities that are low in value which can indicate that the global value chains have helped different companies as well as different countries.

Disadvantages

The disadvantages that have been identified are on the basis of the complications that arise due to the different scenarios as there is the involvement of several stakeholders. This can result in disruptions in the activities which cannot be carried out smoothly. As per the view of Deqiang et al. (2021), the expansion of the value chains which is through globalization has resulted in the increase of the pollution emissions observed in the developed countries on the developing countries. There are several countries that are developing economies that are seen on the middle and low end of the "GVCs" as well as the subsequent damage to the environment. The sustainability of the value chain which is mostly on the supply chain that is green supply chain has "financial risk" that has been observed. There are also capacity risks which through the policy measures have promoted the development of the sustainability of the value chains (Wu et al. 2019). This can cause disruption in the vision and strategy of the company as there can be a loss in the segmentation into smaller segments.

The disadvantages that are considered can be reflected in the company that has observed the burden seen in the increasing costs of the materials for maintaining sustainability. This can be stated that the increase in the price of the resources cannot be levied on the product to be sold to the potential consumers which can give rise to inflation (week3topicoverview685). The implementation of the sustainability of the value chains has affected the monitoring of the structure of the company like Toyota as there has been an increase in the expenses of third parties where there has been outsourcing of different jobs to external sources instead of internally conducting the activities (Mélon, 2020). There is an increase in the risks due to the valuation that is observed through the growth in the contribution of the suppliers in the value chains.

Contribution of Toyota in the Global and sustainable value chains

The future of the value chains is where the analysis is conducted on the "multinational corporations" for the detection of new production sites which has high-standard infrastructure. This can help with the establishment of the fundamental of the primary supply chains as the important future of the value chains is through the "digitalization investment" which is the main coordinator for the future participation in "GVCs". This has the support of the workforce where both the skilled and unskilled workers are considered. There has been a growth in the supply chain where the great change was due to the impact of the outbreak of the pandemic seen on the advancement of technology (cepr.org, 2023). There has been a dynamic change seen in the "Global value chains" in the last few years from the effort of different global companies where the most contribution is provided by Toyota.

The future of the value chains can be observed through the build-up of new domestic chains and the distribution of manufacturing and production as that has resulted in intimidating challenges. As per the opinion of De Marchi et al. (2020), there are several opportunities which are seen in the "geographical scope" and "industrial scope", "governance" and upgrading" which are 4 dimensions of the structure of "GVC". The motivation of Toyota is considered to be a member of “Global Platform for Sustainable Natural Rubber" for addressing the issues. There is the "Toyota value chain" that has contributed to sustainability and CSR with the consideration of human rights. The company has contributed to the guidelines for the supply chain sustainability behaviour which incorporates the "purchasing", "receiving", "inspecting", "testing" and "shipping of products".

Figure 4: Toyota Global Vision

(Sources: global.toyota, 2023)

The above figure contains the tree diagram where the contribution of the "value chains" has been reflected from the vision in the "roots to fruits". The promotion of sustainability is conducted through the "Toyota Philosophy" as it is based on the encouragement of fair business practices with the constant procedure for the promotion of sustainability (global.toyota, 2023). The enhancement of the quality is conducted through collaboration with the suppliers and dealers which can provide a high level of satisfaction to the potential consumers. The company has introduced the "New Vehicle Zero CO2 Emissions Challenge" which is one of the most adopted of the reduction of "CO2 emission" that can be implemented in the value chain. The challenge is to reduce the pollution emission by 30% in 2025 and there has been a 24% decrease in 2021 that has been considered for the production of new vehicles manufactured by Toyota.

Figure 5: “New Vehicle Zero CO2 Emissions Challenge”

(Sources: global.toyota, 2023)

Globalization or de-globalization of the value chains in the future

The term globalization refers to the trade and technology that have made the world more connected and interdependent. In simple terms, it can be said that it is a growing interdependent of the world economy in terms of culture, population and many other. Globalization is a process by which countries interconnect with each other through the flow of goods and services and many other capital information among them (Lund et al. 2019). It is also observed to be one of the dominant trends in the last few decades which is driven by the factors like technology advancement. There are also certain factors like reduction in transportation costs and even factors like trade liberalization. The importance of the global value chain has also been observed to have emerged as a key feature in the field of globalization in which different stages of production are spread in multiple countries (Antràs and Chor, 2022). The main reason behind this is to take advantage of specialized capability, access to the market and even the benefit of cost efficiency.

Figure 6: Globalization of the value chains in the future

(Sources: oecd.org, 2023)

The concept of De-globalization refers to the reversal of the Global integration process. It is also termed as anti-globalization which is driven by certain factors which include increasing protectionism, dispute in trade, challenges in geo-political tension and even shifts in local production. De-globalization also aims for prioritizing local and domestic products in order to reduce the dependency on foreign products (Jordaan, 2022). This also aims for the purpose of protecting domestic companies and employment.

This can be denoted in the social understanding of both the concept of globalization and De-globalization exist for different sectors and even for different regions simultaneously. However, there are certain arguments and trends that support globalization for the purpose of the value chain. The first argument is that cost efficiency which global value and helps companies for having cost advantages that are offered by other countries (Vargas-Hernández, 2023). There are certain countries that have lower rates of labor or Technology And can manufacture products that a lower cost. The global value chain also helps the company to focus on its competency for the purpose of improving its productivity and innovations. This also allows a company to leverage is their resources and global expertise. On the other hand, the support of De-globalization is that it has trade barriers where the government can include restrictions in order to protect the local industries and also safeguard local employment (Sánchez Flores and Serna, 2022). There are also certain companies that are focused on producing products that are close to their home markets. The challenges of Geo political factors also create a major issue for the companies to stick with local production.

Therefore, in the end, it is important to identify that the future of the value chain can have a combination of both global and local elements. Moreover, advancements in technology like automation and the inclusion of artificial intelligence are also contributing towards reshaping the value chain. This can be stated that the future of the value chain can create interactions between de-globalization as well as globalization forces (Madhok, 2021). However, the main purpose will depend on the factors economic, Technology, political and even societal factors.

Conclusion

The essay can be concluded that "Global and Future value chains" incorporates several factors that are considered that can indicate the future of the value chains leading to "Globalization or de-globalization". The topic is related to the future of the value chains that can lead to "globalization" or "de-globalization" which can be considered based on the feasibility. The primary aim is the analysis of the future value chains which can be evaluated where global firm Toyota has used and implemented that secures its position in the market leading the future value chains. The objectives are further analyzed and evaluated in the discussion part of the essay which can help with the overall understanding of the topics. This can be stated that the limitation of the study is on the basis of the access to the data or information that can support the topic as well as the financial crisis can restrict the proper analysis.

The advantages of the “Global Value chains” encourage competitive advantage, innovation and creativity that can be seen in the supply chain. This has helped in the growth of the efficiency level of the company as well as the decline in the costs which is one of the benefits of the adaption of the "GVCs". There are several factors that are considered with the relationship of the consumers along with the suppliers and stakeholders that indicate the financial health and future profitability of the organization. This has been deemed to be beneficial for the developing countries as well as the developed countries which are through the "green supply chains". The disadvantage is that there is an increase in costs sometimes that cannot be recovered as the cost cannot be implied on the prices of the products that are sold to the consumers.

The contribution of Toyota to the "Global and sustainable value chains" were the "Toyota Philosophy" and "Toyota Global Vision" which have promoted the motivation of fair business practices as well the different mediums of sustainability. There is a challenge that is introduced by the company that is followed by other companies to increase the sustainability of the value chain. There are guidelines that have been developed for the growth of sustainability in the future of the value chains and the supply chain that comprises the high quality of the suppliers and dealers.

Multinational corporations are observed to be using production sites that have high-quality infrastructure in order to establish their supply chain investment in Digital customers is also one of the major reasons that enable companies for participating in GVC. The future of the value chain is considered to be a more complex and dynamic topic as it can easily influence by a different variety of factors. It is difficult to identify with certainty but there are certain trends and arguments that can be identified for the concept of globalization and De-globalization in the subject of the value chain.

References

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