Innovations in supply chain management: russian case

· Any form of breakdowns.

· Delays in setup and adjustment processes.

· Idle work of equipment

· Reduced production speed

· Process defects

· Reduced yield.

TPM is often connected with development of special checklists allowing staff to reveal the minor problems early and, if it possible fix it.

There is also a special metric that helps to understand the total percentage of machinery productive work per some defined period - OEE (Overall Equipment Effectiveness). It mainly measures the following three components: availability (unplanned and planned stops), performance (operating less than maximum capacity and speed), no defects (production of damaged pieces that require to be reworked or utilized) (Vorne, 2012). This system allows managers to gather reliable data on production wastes and track further improvements.

SMED (Single Minute Exchange of Dies)

This technique “provides a rapid and efficient way of converting a manufacturing process from running the current product to running the next product” (Yash & Sohani, 2012). The concept implies that the vast majority of changeover steps should be performed without any shutdowns (externally). The “Single Minute” does not mean that changeover time should be under 1 minute, it is about digits less than 10 minutes (i.e. in 1-9 minutes) (Vorne, 2012).

SMED faces with two major elements for improvement - human resources and technical equipment. Development of HR and trainings for employees are believed to be more effective and cost saving for the SMED. Technical solutions often come to the scene when the HR has already been trained (Bentley, 2013) .

According to Yash & Sohani, there are following steps of implementing SMED (Yash & Sohani, 2012):

· Observe the current methodology

· Separate the Internal and External activities

· Streamline the process of changeover

· Continuous Training

SMED is proved to work perfectly at any production or office and performs smoothly along with the other Lean tools. The main advantages of implementing SMED lies in the reducing of the changeover time, increasing efficiency, higher flexibility and capacity along with lower inventory (Johnsson , 2008).

Total Quality Management (TQM)

“Total quality management (TQM) is a systematic quality improvement approach for firm-wide management for the purpose of improving performance in terms of quality, productivity, customer satisfaction, and profitability” (Gharakhani, Rahmati, Farrokhi, & Farahmandian, 2013). As well as TPM, TQM seeks for prevention instead of reparation.

In the heart of TQM, there are four main principles (Lakhe & Mohanty, 1993):

· customer satisfaction

· employee involvement

· managerial leadership

· process improvement and control

Opposite to traditional management system, TQM relies on long-term relations with the small number of suppliers. It allows improving the quality because of supplier dedication. Moreover, according to TQM, profit is the outcome of quality, not vice versa. Summing up, TQM is the philosophy of process orientation instead of result (Gharakhani, Rahmati, Farrokhi, & Farahmandian, 2013).

Poka Yoke

Poka yoke is TQM technique, which deals with total quality control and prevention from any form of mistakes. The three basic assumptions define the need for Poka Yoke (System Reliability Center , 2002):

· People make errors

· Machines and software systems make errors

· Simple mistake-proofing technology can eliminate these two types of errors

Sometimes this technology is called as fool-tolerance method. According to Robinson, “Poka yoke devices fall into two major categories: prevention and detection” (Robinson, 1997). A classic example of prevention Poka Yoke is a typical USB cable - it is extremely hard to insert it in a wrong way. At the same time, a detection device signals the user when some mistake or defect occurs. For example, when you turn on your old PC you hear the “beep” sound: if this beep sound is too long, or periodical, or just not typical it is a good signal that something is wrong with your computer.

Obviously, poka yoke gadgets have to be cheap and simple. Otherwise, there will not be significant cost-reduction.

Mistake-Proofing in Three Simple Steps (System Reliability Center , 2002):

· Identify possible errors that might still occur in spite of preventive actions

· Determine a way to detect that an error or malfunction either is taking place, or is about to take place.

· Identify and select the specific action to be taken when an error is detected.

Poka Yoke is very important and, at a first sight, simple technology that may be implemented in almost all business activities. Nevertheless, it is often not a stand-alone solution - it often comes in a complex with other lean techniques.

ISO (International Organization for Standardization) standards

International Standards make things work. They provide industry with specifications for products, services and systems, to ensure quality, safety and efficiency (The International Organization for Standardization, 2016). As it was mentioned, standardization is a very important component of 5S system. Therefore, companies nowadays try to follow these standards in order to stay competitive and reliable for the supply chain partners. The vast majority of the large corporations demands the standardization certificates from their supply chain partners. Thus, it allows reducing the time for risk and reliability estimation.

The list of the most common standards is following (the most “popular” are bolded) (The International Organization for Standardization, 2016):

· ISO 9000 Quality management

· ISO 14000 Environmental management

· ISO 3166 Country codes

· ISO 26000 Social responsibility

· ISO 50001 Energy management

· ISO 31000 Risk management

· ISO 22000 Food safety management

· ISO 27001 Information security management

· ISO 45001 Occupational health and safety

· ISO 37001 Anti bribery management systems

· ISO 13485 Medical devices

This system provides companies with a kind of an ideal condition, goal to achieve. If these standards are met, company could expect better offers from the partners and higher customer loyalty.

Summing up the review of the Lean techniques, the following common features should be outlined:

· As far, as the main market “pressure” goes from the customer, almost all of the mentioned methods highlight the indisputable customer priority

· The total employee involvement, as a result, appears to be the main pre-condition for a sustainable or “lean” development.

· Everything should be taken into consideration and analysed. It should not exist “unimportant” defects or breakdowns.

· Multi-skilled workers are considered to be a foundation for successful business

· If manager does not see the waste - it does not mean that there are no wastes. Managers in lean companies try to see the problem by their own eyes, if it occurs.

· Company should choose supply partners accurately and for a long-term perspective - as it happens during staff recruitment process.

· Flow of production, development, services should not stop

· Visualization and standardization are golden

Now it is time to talk about the other elements of sustainable development system apart from economic aspect. First of all, let us specify on the social aspect of sustainable development. As it is seen from the statistics mentioned above, nowadays social “side” of sustainability is obviously “less popular” among researchers and practitioners. Nevertheless, in the last decade there is visible trend for “socialization” of the business.

In this review the typology of UNGC, mentioned above will be taken as a basis. So then let us start with the social responsibility of the business.



3. Corporate social responsibility

CSR is defined as “the relationship between global corporations, governments of countries and individual citizens. More locally the definition is concerned with the relationships between a corporation and the local society in which it resides or operates” (Crowther & Güler, 2008). As far as data become more and more public today, people, logically, want to be sure that products, which they consume, are not producing with use of child labour, that producing company and its supply chain partners do not abuse labour rights, that there is no discrimination or racism at production or office. Social responsibility of business nowadays turns into feasible competitive advantage. While the ideas of sustainability and innovative development go around the globe, people start to be more discerning what it comes to product image, contents and way how it was produced. Government also plays significant role here - it forces company to perform the minimum level of CSR activities by introducing legal initiatives and laws. Nevertheless, CSR implies that company should be responsible even if there are no legal obligation (Crowther & Güler, 2008).

Moreover, apart from external pressure, there are also internal drivers. The first internal driver was described by Henry Ford. Ford Motor Co. was desirable employer because of quite high minimum salary - it was higher than the average industry level. Ford believed that if his employees get more salary, they would spend more on products and services offered by others, thus giving them an opportunity, in the long run, to buy the Model-T which Ford employees produce (Nilsson, 2014). Such a cyclic process for a particular moment was extremely productive, as we could see from the history today. The same model could be used when it comes to the non-profit activities of the company. For instance, there are cases when company offers corporate education for the children of the employees. Such program, along with the direct reduction of parents' costs on education, also “supplies” a company with highly loyal potential workers (Panasonic, 2014). The second driver is increasing workers' involvement. Proclaiming this instrument to be one of the most important for a sustainable development of the company, managers often understand that it has its own cost. People becoming more and more involved also want to get the other benefits from the company apart from just salary and fringe benefits. Employees want to see the clear company structure, corruption free managerial relationships, safe and comfortable working conditions, etc. management supply logistic corporate

In this paper, the social aspect of sustainable development will be fully covered by CSR in its broadest meaning. Even there are probably also other activities, connected with the social aspect of company's performance, let us make an assumption, that they are all may be untied underneath the concept of CSR and may also be partly described by the following empirical study.



4. Environmental dimension

Eventually, the last, but not the least aspect of sustainable supply chain management concept will be reviewed. According to United Nations Global Compact, environmental challenges for companies implementing sustainable development are (UN Global Compact and Business for Social Responsibility, 2010):

· Material toxicity and chemicals

· Raw material use

· Recyclability and end of life of products

· Greenhouse gas emissions

· Energy use

· Water use and waste water treatment

· Air pollution

· Biodiversity

The fact is that the whole lifecycle of the product leaves a footprint: starting from the raw materials extraction, logistics, warehousing and production, ending with distribution, usage and recycling. Operating in the highly polluted environment, companies are expected to not only minimize the negative footprint from their activities, but also make an extra contribution to improve the ecological situation globally. Therefore, starting from a responsible approach to the packaging materials usage, reducing energy consumption, ending with such super-eco projects as Apple Campus II, companies try to coordinate their economic performance with the demand from the society and, circumstantial, from the future generations. The main challenge here is quite prosaic - while the vast majority of companies nowadays understand the value of Green Supply Chain Management (e.g. GSCM is viewed as strategically important by 92% Canadian manufacturers), significantly less amount (<65%) really use them (Industry Canada, 2009). Nevertheless, data shows that companies are quite aware that environmental contributions could probably be profitable only in the long run. According to 4^th Supply Chain Monitor by Bearing Point more than 30% of the studied companies are ready to invest into environmental initiatives, even recognizing the low return rate in a short perspective (BearingPoint, 2011).

Most of the green activities performed by the abstract company could be categorized into four main directions:

· Green Procurement

· Green manufacturing

· Green Distribution

· Reverse Logistics

Green Procurement is about four re - duction, cycling, use, educate. Moreover, it is related to the ISO standards when it comes to the supplier selection. Green manufacturing - using highly effective production lines with minimum, zero of even negative pollution (this could be possible, for example, by planting significant number of trees, along with extremely low emissions). Green Distribution is about packaging and logistics. These two activities are closely correlated and “greening” of one of them may, subsequently, cause the “greening” of the other one. Reverse Logistics is about taking the used product from the customer in favour of proper recycling or disposal (Ninlawan, Seksan, Tossapol, & Pilada , 2010).

The major trends in the environmental sustainability are eco-design, reverse logistics, standardization for the suppliers and open data for environmental initiatives(BearingPoint, 2011). Eco-design allows bringing eco-friendly technologies into products, its packaging and even image. Implementing reverse logistics, apart from evident extra-resources collected with minimum costs, also connected with the development of new recycling methods and prolongation of the product lifecycle. Strict standardization (e.g. local company's standards, apart from ISO) provides supply chain participants with the confidence about what, how and where is produced and whether this product meets targeted standards or not. Finally, as far as it is about corporate image, the right communication and data selection should be implemented in order to make your stake- and shareholders aware of what initiatives your company is implementing, what are the main results and achievements and what are the plans for a future development.

Summarizing the social and environmental compounds, it could be noticed that similarly to economic aspect, the main goals here are: focusing on a long-term development, satisfying the customers, eliminating any form of wastes and cooperative approach. On the other hand, there are some differences. Green and social paradigms imply that their “ultimate customer” is not an economic agent, but the whole society and planet. Moreover, customer satisfaction is achieved not by faster production and better prices, but with the responsible care for environment and human resources. Thus, the instruments here are more general and aimed for the broader entities - this creates extra difficulties with the implementation of the eco and social initiatives. In addition, obviously sometimes lean practices do not go along with green practices. For example, JIT and Kanban approaches uses the increased replenishment tact due to necessity to fill the supplies more frequently with higher logistic demand. On the contrary, environmental approach goes for reducing the replenishment time and for lower transport usage. As a result, sometimes one of the side is “suffering” in favour of the other one. Many of the lean initiatives could not be implemented because of ecological and social principles and vice versa.



5. Challenges to sustainable supply chain management

Paradoxically, the pressure wave from the stakeholders may not always come along with all of three sustainable compounds. For example, customers may claim for a new product in a short time. Obviously, as far as the economic compound is the most profitable one, company just has to overcome some environmental and social issues of sustainable development (Pereseina, Jensen, & Hertz, 2014).

Moreover, because of globalization, the supply chains nowadays are also global. That means, if you want to buy some raw material, which is produced only in the third-world country, where “lean” is just a scary English word, and there is no minimum salary of labour unions, you should choose: whether you will buy these materials here and go against your philosophy, or try to find a substitution, or try to invest, develop, train this partner, and then, eventually, receive the “sustainable” supply partner. All of three ways could be implemented with different level of costs and risks. What should the company choose? How this choice corresponds with environment and society? If we decided to develop our 3-rd world partners, would not there be any harm for community and culture?

Finally, for some companies, which have been operating in traditional production framework for a long time, the transfer for sustainable production is seen as extremely hard task. The main difficulty here is claimed to be the shift from the short-term view to the long-term. This requires ruining existing managerial approaches, production and office sites reconstruction, trainings for personnel, auditing activities, etc. Therefore, one can say: “why do I need lean, eco-friendly and well-furnished production, if the costs for its realizations are so high? I would better invest this money into R&D and buy new machinery”.



6. The russian state-of-the-art

Despite of political and economic struggles caused by the strains with the Western partners, by the potential in logistics Russia is ranked the 1^st among European countries (ITAR-TASS News Agency, 2014). Nevertheless, it is just a potential. “Russia is lagging behind. The levels of productivity in OECD countries are twice as a high as they are in Russia, while in the US they are 2.6 times higher" (Boltrukevich & Rabunets, 2015). Huge decrease in the number of western supply chain partners forced Russian companies to focus on development of the domestics supply chains and sustainable productions. Moreover, foreign companies, operating in Russia, have to face the relatevely low level of sustainability among local chain partnerts and provide them with standards and diferent forms of investments. Actualy, in the last decade there are a visible growth of interest for sustainable techniques among companies in Russia. One of the brightest examples of such an activity is the Tikhvin Project - the colloborative project of several consulting firms and the Russian wood industry players. “The Tikhvin Project's goal is to improve social responsibility management and transparency in the wood supply chain from Russia” (Axel Springer, The Random House Group UK, Time Inc., Russkiy Les, Stora Enso, 2005). Although this project is now closed, it was one of the first collaborative research aimed for improving the sustainability of the production and logistics of Russian processing industry. In correspondence to the three sustainable principles, this project had labour issues, legality questions, productivity and environmental problems. The main goal of the project was to demonstrate that sustainable techniques could be implemented by Russian companies as prosperous innovations, leading to the growing customer satisfaction and lower total costs. During the project, collaborative companies implemented a large set of tools and practices in order to improve the overall performance; train personnel; etc. “These tools offer the basis for further integration of sustainability requirements and their verification into the supply chain also in the future” (Axel Springer, The Random House Group UK, Time Inc., Russkiy Les, Stora Enso, 2005). The last mention of this project refers to 2014 when the 14 modern machinery set by one of the British Company. The dusty “endpoints” of the project sadly may be named as the distinguishing feature of many Russian innovative projects.

Talking about existing initiatives, one of the Russian automotive producers - GAZ was a pioneer of sustainable production in the modern Russia economy. Its owner, Deripaska, adopted and distributed among the employees the book “Toyota Production System” in 2002. From that moment, GAZ appears to be one of the most sustainable and innovative Russian automotive production with lean techniques implemented in over 20 of their plants (Graban, 2008). In 2010, RUSAL's managing director, Sergey Filippov, introduced the first book in Russia describing the implementation of lean techniques at the domestic production. Since that moment, sustainable initiatives have become popular in the Russian automotive and metallurgy industry. With the help of the army of consultants, Russian heavy-industry top-managers plunged into “sustainable journey” through the production and supply innovations. Nevertheless, as experts claim, the heavy and processing industry still remain the dominant area of sustainable development, while the service and retail sector still lags far behind (Graban, 2008). According to Boltrukevich, some regions, where the production cluster is highly developed, business and goverment authorities start to impement lean initiatives in the healthcare system. Additionally, famous Innopolis in Tatarstan - “innovative city”, adopts the principles of “lean municipalities” reducing the wastes of time needed to solve some problem or implement initiative by using special community chats in Telegram. Even agricultural companies in Kuban region decided to start their “Lean Journey” recently (Boltrukevich & Rabunets, 2015). According to McKinsey report, from the 2002 the “Russia's retail sector has been growing faster than those of China, India, and Brazil” (McKinsey Global Institute, 2009), could not it be the reason for the sustainable practices to be implemented in retail? Especially nowadays, when the relationships with the local supply chain partners have become so urgent and sometimes inevitable. On the other hand, the prevalence of manufacturing and distribution companies among the sustainable ones is proved to be an international trend, e.g. the figure in Appendix 1. The main barrier for implementing innovations, new managerial and production approaches seems to be the high level of all kind of the uncertainties within the country and common lack of knowledge. To solve this problem, “lean community' is actively promoting their ideas by organizing annual conferences, clubs and professional associations. Sadly, these efforts are not always enough to convince entrepreneurs to start implementing innovations in their supply chains.

Summarizing the theoretical research, the three dimensional sustainable system seems to be a perfect instrument for classification of the innovations and improvements, which are implemented and could be implemented at the modern production and service provision. Although the economic pillar obviously prevails today, the social and environmental aspects are becoming more and more topical today. Moreover, looking at the supply chain from the point of complex approach (environment => economy => society => economy => environment), allows as to look at different instruments from the different angle. Lean paradigm in economic, CSR in social, and Green Supply Chain Managing in environmental dimensions of sustainable development could obviously be correlated, although not always positively. Cases shows that sustainable development sometimes faces serious ethical questions: whether to sacrifice one or two dimensions in favour of the third one or not? Finally, the current situation in Russia has been reviewed based upon the expert opinions and statistical data by consulting agencies. All these base line provides a solid background for the following empirical study, which is based on the case studying, interviewing and conceptualization of the gathered data.



7. Methodology and approach

The empirical concept of this study will rely on the qualitative methods of scientific research. By its purpose, quantitative methods allow researcher to use the freedom of interpretation and classification. Studying innovations, which may be related to the three different dimensions of company's development, it is extremely hard to obtain the unified quantitative database. Moreover, as far as the main purposes of this study are to discover the best practices, understand whether they have already been implemented or not, explore how the direct participants of these changes think about them or whether they know about these innovations at all, qualitative methods provide the researcher with the needed instruments for data collection and further interpretation. When it comes to the description of production or services accomplishment, experience, emotions, attitudes, cases do really matter.

Moreover, the qualitative methods serve as perfect instruments to compare the “should-be” situation with the “real” one, because numbers do not always depict the real picture. Finally, when it comes to case studies and interviews, results of the qualitative researches could not be predetermined at all. You will never know what the respondent will say in the next second. That is why; qualitative researches are often the basis for quantitative ones. First of all, the researcher should draw the ground colour (classification obtained by the literature review), then perform gesture drawing and draw the edges (the qualitative research) and finally make the rigorous detailing (quantitative research).

The main goal of every qualitative research is to create some classification for the problem or research area, then describe this classification and provide the reader with the future recommendations or even managerial model based on the situation being analysed or peoples' opinion being reviewed (International Council for Small Business, 2000).

Case Study

“Case study is a research methodology that focuses on understanding the dynamics present in a management situation” (International Council for Small Business, 2000). When it comes to the innovative managerial instruments and sustainable developments, nothing could describe them better than the real situations, the real problems and the real solutions. In order to model a variety of possible situations, the cases of different companies, from very different industries and countries are taken into account. The main criteria for the selection of the particular cases were the presence of an obvious or latent challenge, rough market conditions, diverse nature of the pressure mentioned in the literature review (internal or external), indicative and illustrative success or fail.

Being more precise, the first case is about the company facing the urgent need for production modernization and renovation. Moreover, it is about the importance of the simultaneous enhancement of the collaboration with the supply partners.

The second case depicts the story of the state-owned corporation facing the unprecedented loss of client trust level and how the ostentatious “public” modernization helps not only to become more sustainable in the long run, but recover the corporate image and return the clients' trust back.

In the third one, there is a story of the company, which has started to implement the instruments of sustainable development, and innovations in supply chains right from the jump. This case is a bright illustration in favour of the advantages of a long-term planning and process orientation being the corporate philosophy.

The fourth case is about dangers of the fractional innovations. Company in its race for minimizing the costs put a stake on the overall outsourcing and, as a result, pays double and suffers from the employees' loyalty breakdown.

The whole industry in the case 5, shows that even producing very “traditional” and old-fashioned product, innovative approach to the supply chain management may be implemented and bring a valuable outcome eventually. In addition, here is the brightest illustration of how the Government could softly guide the industry, instead of directive control - great example of an effective PPP.

The final case describes the regular situation, when company suffering from the significant economic slowdown goes for consultancy help, get the insight and try to implement the solution on a single entity and then spreads these ideas among its own offices and production facilities. Great example of modernization through the DoA.

Obviously, description of the cases could not depict the whole list of practices used while implementing particular strategy. That is why, there is a special table in Appendix 2, which depicts the whole array of data, gathered while preparing the case study activity. It could be used to compare the cases and just for a vivid comparison of the companies and industries.

The results of the case study could be the sufficient basis for providing the Russian industry and researchers with the recommendations related to the implementation of the innovations in supply chain management, but in order to understand the Russian specific, explore the list of techniques which the companies operating in Russia claim to use and understand the level of involvement in these changes among the employees, the semi-formalized interviews with the employees of the companies mentioned in the table 4 are conducted

Therefore, the following research scheme is implementing:

Figure 9. Research scheme

Semi-formalized interviews

According to Kvale, interview is a special kind of a talk, which implies intermutual exchange of opinions between two people, having conversation on the topic of a common interest, but at the same time, it is not the talk of the “equal” partners, because the researcher “controls” the course of interview. (Kvale, 1996). The “strength” of this control may vary in correspondence to the targets interviewer pursues.

When it comes to semi-formalized interview, it is important to understand that it is not a free talk and, at the same time, is not a highly structured survey. Moreover, despite the fact that some questions or topics are formulated in advance, answers always stay unpredictable, free-to-formulate. Thus, formalization here lies in the structure of the interview and guide itself (Veselkova, 1995). What is more, in this study the semi-directive guide is used. This type of the interview implies that guide is constructed as the list of blocks or topics, which should be discussed with the respondent (Semenova, 1998).

In the first block, there are questions about the general respondent's awareness about central terms of the paper: innovations, sustainability, supply chains, sustainable supply chain, Lean management and CSR, Green supply chains.

Questions in the second block are connected with the implementation of innovations and thus, sustainable development techniques in his\her company. There are three sub-blocks here named accordingly to three dimensions of the SCM.

The third block seeks to get the respondent's opinion about the current state-of-the-art of the supply chains in Russia with the focus on implementation of new technologies, managerial techniques, social initiatives and environmental procurement.

In the fourth block, there are general information about respondent.

Overall, 4 complete (50-60 minutes) interviews have been conducted with the employees of four different companies operating in Russia: Nestle (FMCG), RosNeft (Oil & Gas extraction), Ernst & Young (Auditing), Alfa-Bank (Banking). All of the respondents work in their companies more than 1, 5 years. All of them hold different positions in their organizations starting from the supply chain manager and ending with the divisional top-manager. Interviews were conducted in Russian, and then the needed citations were translated in English.

Table 4. List of respondents

	Alfa-Bank	RosNeft	Nestle	Ernst & Young
Position	Regional top-manager	Manager	Supply chain manager	Expert
Years of experience	10	15	2	2.5
Number of promotion within the current company	3	1	0	2

· Findings

In the following chapter, the description of 6 cases mentioned above is given. The structure of the cases complies with the following logic:

1. Initial situation (preconditions for changes)

2. Actions, techniques and practices implemented

3. The final result and consequences

All of the references and data sources are given altogether under each case in order not to overload text.

Case 1. Volvo Group

This case is about how Volvo Group has successfully adopted and integrated the SSCM and Lean manufacturing techniques in times when some of the branches were literally struggling for existence. In 2008, it became obvious that low efficiency of production and huge level of unreasonable wastes detected at the Volvo Construction Equipments factory in Bangalore, India mean for business to operate nearly break-even point. Volvo is a company with solid history, which demonstrates the explicit passion for innovations and quality control. Therefore, it was just a matter of time for Indian manufacturing to start implementing lean and sustainable techniques.

Taking the experience of Swedish plants into consideration, managers of Volvo Group decided to create a special “Lean Team” with almost all employees being involved in this process. Eventually, the concept of Improvement Organizations was developed. These teams were in charge of planning of the sustainable activities (Improvement Support Organization) and their implementation (Improvement Work Organization). According to the factory settings, the initial manufacturing capacity was three machines a day. On the very first stages, only 3-5 machines per month were produced. What were the techniques offered by Improvement Organizations? What tools were used to increase the efficiency and eliminate wastes? Finally, what was the result?

To start with, it was decided to develop new trainee programs for Indian employees to get insight about sustainable techniques and changes in production process, which are to come. This approach, as it was mentioned in the literature review, is extremely sensible because of:

1. Opportunity for employees to understand the processes clearly

2. “Kaizen” generation and exchange of ideas and proposals

3. Growing dedication and sense of importance for the company (if my manager discusses changes with me, it means he cares about my opinion)

4. Teambuilding

After the monitoring of the production, discussions and trainings it was found out that one of the major point to improve is a high rate of non-value added activities. In other words, production was suffered from unnecessary movements of personnel and materials, waiting, over processing and defects. Facing these challenges, Improvement organizations decided to use such technologies as time, motion and warehousing study, along with video capturing of whole production line. During 3 months every line, every machine and every system were inspected. The first solution was to modify the production from traditional cove concept into line production. Next step was standardization and TQM along with implementation of JIT. Lean Team also integrated a modern approach to customer care, demonstration of the products and production and trainings for clients - future machinery operators. Finally, advanced techniques of equipment maintenance were introduced (TPM and SMED). As a result of this project, in the first months of 2009 production was steadily growing from 7 machines per month to 40 at the end of the April. Each employee was trained how to use lean technologies in his daily work and life. Now this factory shows great performance and make a substantial contribution to the prosperity of the Volvo Group and the whole region of Karnataka.

Implementing lean technologies in manufacturing, Volvo Group also thought about other important parts of modern sustainable supply chain - ecology and human rights. According to Volvo Core Values, environmental and ecological issues were always on the frontiers of Volvo's interests. Along with lean transformation of manufacturing and its Lean Team, special Environmental module has been created chaired by experienced manager. Analogous to manufacturing, firstly there was a series of trainings for employees about ecology, healthcare and labour safety programs. It is especially important in India, where workers sometimes do not even know about their rights and benefits, about how they could reduce ecology footprint from their households and why it is important at all. In addition, all employees were divided into groups, which are correlated with their workplaces. For example, if you are working at the painting line, you are responsible for sensible use and recycling of painting materials. Furthermore, as far as Volvo Group is producing cars, trucks, special machinery and equipment, the question of high CO2 emissions arises. Here Volvo tries not only to reduce the direct impact by developing new hybrid engines and modernizing existing ones, but also CO2 footprint caused by production - with the help of approbation of new recycling and recirculation methods (for example, before the modernization water which was used for painting was changed every day vs. every nine months today). In addition, there are targets for energy consumption. Even the energy-saving machinery and equipment for the plant are 15-20% more expensive, Volvo choose the eco-friendly side. The last, but not the least - the certification of the suppliers. Today Volvo Group tries to collaborate only with the suppliers who have ISO 9001 certification in quality of their products, ISO 14001 in environmental standards and OHSAS 18001 in labour safety.

This case is a bright example of how innovations, starvation for changes and teamwork could reshape old-fashioned and barely effective manufacturing into modern prosperous production with thoughtful attitude to its workers, environment and smart use of the essential managerial techniques. (Ranganathan & Harishkumar , 2012), (VOLVO CONSTRUCTION EQUIPMENT, 2016)

Case 2. Bright Dairy and Food Co.

While Volvo's transformation in the previous case was the urgent need because of low performance and efficiency, Chinese local company Bright Dairy and Food was always among the market leaders. The turning point was sadly famous scandal - 2008 Chinese melamine crisis. The twists and turns of this scandal is not a matter of this case, but the essence is laying in the fact that people, including children died because of poor quality control, corruption and weak supply chains. Although, Bright Dairy and Food was just among many other Chinese companies involved in this slipshod production, the fact remains. After detection of such components in the products of Bright Dairy, millions of customers in China and in the foreign markets just started to avoid buying them. Facing with the credibility gap, management of Bright Dairy made a really wise and long-term oriented step - they decided to carry out a demonstrative production, supply chain and quality control renovation and modernization. “We want to share innovative and healthy life with our customers”.

To start with, the conception of zero wastes was offered (zero defects in equipment, zero stock outs, and zero complaints). In order to fulfil these plans, strict TQ control was implemented staring from the raw milk collection, ending with innovative reporting system, which allowed to control the quality of products at every stage of the production just by looking at the screen. Moreover, the regulations for pharmacy production were used to manage the production of dairy products. Along with quality control, overall optimization of the processes was made. In order to optimize distribution and warehousing system, management of eight factories has been united into one centralized control point. Everyday farms are informed about the amount of raw milk that will be needed just for the next day. Nowadays, most of the production lines are automatically controlled with the opportunity of remote management. It is a part of a diversified Poka-Yoke system that prevents products from human errors.

The next big thing to change was the supply chain itself. Dairy production is extremely sensible to the quality of raw milk. Before the milk crisis, Bright Dairy had no clear certification program for milk suppliers. Partners were constantly changing, along with the quality of milk. Nowadays, after some Kaizen researches and analysis of FMCG cases a new certification standard for the suppliers has been developed - 100-point measurement system. Using this guideline, factories are able to check the quality and safety of the raw milk supplied by each farm and to perform regular inspections. Each farm gets score from 0 to 100 which defines volumes of supply to the factories. With the aim of pointing out the tremendous significance of the suppliers control, along with the 100-point system a special independent department was created becoming only in charge of dealing with the farms. Final “quality shot” is the fact that almost 100% of the staff working at each farm are Bright Dairy employees. This is a good deal - Bright Dairy gets high quality raw milk, while farms are granted with the constant demand and benefits from the company.

Along with the strict control of suppliers, Bright Dairy also adopts the industrial standards of product and manufacturing certification (ISO, HCCP, SEIRI, etc.). What is more, similarly to 100-points system for suppliers, there is a 1000-point system (1000SS) for the factories. This system scores every aspect of daily operational process (e.g. hygiene of environment, clean milk pots, staff training, maintenance management, etc.).

On the other hand, how such strict quality control of suppliers and production process affects the environment and ecology of the Chinese regions? How does it correlate with labour rights of employees?

Actually, there is a quite few information about ecological and environmental programs of Bright Dairy. The reason may be in weak traditions of business responsibility among Chinese entrepreneurs and government (Bright Dairy and Food Co. is 100% owned by Chinese state), or in their non-public nature, or just in their absence at all. Nevertheless, demanding high standards from the farms, Bright Dairy, without any doubt influence indirectly on the ecological state of the agricultural areas. According to the Forest 500, in 2015, Bright Dairy and Foods received 1 out 5 score when it comes to the commitment to zero deforestation. “Rankings are based on their public policies and commitments and potential impacts on tropical forests in the context of forest risk commodities (palm oil, soya, beef, leather, timber, pulp and paper)”

Talking about human and labour rights, this is weak point for whole Chinese economy. Low cost of labour, rich supply of skilled workers and constant pressure from the workers for the higher wages is typical for China. Moreover, according to Amnesty International, the problem of discrimination of minority groups (Tibetans, Uighurs, etc.) still exists and it is still very sharp. Finally, the issue of child labour is still topical in China (e.g. recent Foxconn leaks).

Considering everything, it is important to outline again the nature of the changes in the company - rapid loss of the market share due to the scandal. Associatively, it is very similar to situation when some abstract government or party lose its ratings and legitimacy and, in order to save the power, they should do something effective, impressive and innovative. Sometimes it eventually turns out to be a successful project (or production like in this case), but sometimes it is just about showing off with concealment of real problems. (Barbara B. Flynn, 2014), (DeLaurentis, 2009)

Case 3. Amazon

This case is an excellent example of how company could develop over the ages if the techniques of SSCM and Lean Production will be a starting point, a foundation, a philosophy from the very first working day.

It is extremely hard to describe the whole broad variety of lean and sustainable techniques and technologies which are used inside Amazon today and it of course is no an aim of this case study. Instead, the focus will be on the main distinguishing feature of Amazon Company - a real constant struggle for improvement, for new ideas and services. If you look at previous two cases and even at the next four one, you will see that the conception of implementing lean techniques as an immediate respond to the market frustration obviously prevails. Amazon is a very different story. This company was founded with a strong intention to get the market fast, with unquestionable efficiency and profitability. Lean tools and smart supply and warehousing management made Amazon the biggest e-commerce store in the USA. Therefore, what were the key points in Amazon's management policy? Which innovations were invented in Amazon in addition to existing sustainable practices?

The first and probably the most important secret is to be very customer-centric. Strong passion for customers' satisfaction and anticipation of their needs - that is the main drivers for Amazon innovations. Optimization, according to Amazon philosophy should not be ahead customer expectation. For example, lower-cost opportunities for order processing and carrying are used only if they could provide the same almost 100% probability of on-time delivery. Moreover, although, Amazon is a e-commerce company, there are much more staff working in the fulfilment and customer care than there are computer engineers. Obviously, here the full commitment of every employee is needed to run this mechanism smoothly.

At the very beginning, Amazon management had been trying to automate every process possible. The problem was that automation might be suitable for books; of for DVD disks, but when you have millions and millions of different positions with different weight, volume, etc., it is tremendously difficult to exclude the human hands from the process. Therefore, given the conditions of Amazon development from a bookstore to «e-Walmart», management of the company and regular employees had to reinvent many principles of lean production in order to continue to improve high standards of service. All people are considered to be able to perform an abstract task with nearly 93% accuracy. Here automation brings 100% accuracy with 0% defects. Moreover, it brings safety, as far as machines are performing repetitive, low-value actions, which are known to be more injury vulnerable.

Standardization is another pillar of the Amazon success. According to Kaizen principles, Amazon management always keeps in touch with regular employees and follows their actions. The main challenge at the beginning was the discrepancy between what is settled in the standards and what is really happening. Obviously, there were a lot of abnormalities and unpredictable situations, which had not been taken into account in the standards. Two actions were taken:

1. Kaizen teams (group of employees in charge of fixing abnormalities and inefficiency)

2. Senior manages working in customer service at least once a year

Although, one simple «result» of Kaizen thinking could be quite obvious and simple, the combination of these ideas is a real power. Notably, kaizen methods are used not only for internal operations but also for suppliers control - there are system of «three strikes» for the merchants, which violate packing rules (starting from explaining the packing standards, ending with ending of all relationships with violating merchant.)

Kaizen teams also helped to improve stowing processes, staff work time optimization, warehouse machinery usage, etc. Now when problem is located, responsible groups starts to think over solution. Once the solution is implemented, team continues to think over how they could improve this solution. Teams are evaluated not for just one success, but for ongoing improvement - this is the nature of sustainable development. You could ask: «How Amazon does stimulates people to think about efficiency? Why should employees care at all? ». The answer is simple:

1. Everyone knows that by their actions they could make their clients happy

2. Andon cord program which gives customer care specialist literally power to stop the line and block any product at the web site if there are some substantial amount of complaints from the customers.

Although there are incredible results into implementation of lean technologies into processing operations, the software development remains a notional point to improve. Computer engineers, as for today, have only one opportunity to test their decisions in a proper way - by offering people to use some alpha, beta versions of new functions. Amazon management is aware that clients should not be tasters, they should use ideal product as if it is happen beyond the web site. Now Kaizen teams of Amazon are brainstorming new testing and developing techniques, which will eliminate beta testing of the services.

Nevertheless, Amazon is a leader not only in implementation of the lean technologies into their operational processes and supply chain management - Amazon is one of the world leaders in implementing sustainable and eco-friendly programs and initiatives. If you look at the «About us» page of Amazon, you will be really impressed by the quantity of eco-friendly and humanitarian initiatives. Amazon is involved into developing of solar and wind energy, into recycling the energy of data centres (for example, to heat the central office), smart and eco-packaging, into reducing the water pollution). As a result, Harris Poll (rating company) gave Amazon the first place among listing companies for its corporate reputation. This rating takes into account such aspects as social responsibility of the company, products and services, vision and leadership, financial performance, workplace conditions, and environmental initiatives. Employees of Amazon have a lot of opportunities and prospects for developments, along with high respect to the human and labour rights of each worker. Moreover, Amazon support military veterans, by actively hiring them and force the diversity as the key principle of HR policy. To sum up, Amazon is a great and quite rare example of a perfect implementation of sustainable value chain management. They do not stop once they have something effective and profitable, they are in race of constant improvement and this is what Kaizen and other Lean things about. However, there are still some challenges connected with the software and delivery, the thing here that these challenges are set up by Amazon itself, not by environment. (Onetto, 2014) (Amazon, 2016)