Managing for environmental sustainability

Jiangsu Zhuhong Forging Co., Ltd.

Table of Contents
Executive Summary ...................................................................................................................................... 3 Introduction ................................................................................................................................................... 4 History: ..................................................................................................................................................... 4 Ownership ................................................................................................................................................. 4 Major Products .......................................................................................................................................... 4 Market presence ........................................................................................................................................ 4 Jiangsu Zhuhong Forging Co. Ltd. Key Target Market ................................................................................ 5 Product ...................................................................................................................................................... 5 Price .......................................................................................................................................................... 5 Promotions ................................................................................................................................................ 6 Corporate plan............................................................................................................................................... 6 1. 2. 3. Manufacturing strategic plans ........................................................................................................... 6 Marketing strategic plans .................................................................................................................. 6 Human resource strategic plan .......................................................................................................... 7

Environment related strategic plan ........................................................................................................... 7 Environmental Information gathering system............................................................................................... 8 Organizational Response Mechanism ........................................................................................................... 8 Behavioral Audit ........................................................................................................................................... 9 Energy Consumption ................................................................................................................................ 9 Emission Level........................................................................................................................................ 10 Sentiments of Stakeholders ..................................................................................................................... 10 Manufacturing Efficiency ....................................................................................................................... 11 New/ Improved product Developments .................................................................................................. 11 Waste Management ................................................................................................................................. 12 Packaging ................................................................................................................................................ 12 CEO behavior: ........................................................................................................................................ 12 Environment Safety Mechanism ................................................................................................................. 13 Recommendations ....................................................................................................................................... 14 References ................................................................................................................................................... 16

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Executive Summary
The report is about the management of environment sustainability of the company Jiangsu Zhuhong Forging Co. Ltd which was prepared after conducting an interview with owner of this company Mr. Mr. Meiyan Yang. The company produces forged rings made of steel for different manufacturing industries like steel, power and cement. These industries are the chief consumers of forged rings are mainly concentrated in the province of China. The environment safety mechanism as well as environmental sustainability management of the company is very poor as they are more focused towards increasing productivity and efficiency whereas the environment precautions have taken back seat. Thus there were several recommendations made for the Jiangsu Zhuhong Forging Co. Ltd so that they can improve their environment saving mechanism by implementing latest technology and simultaneously increase the productivity of the company. Being in a world where global warming is the major threat, Jiangsu Zhuhong Forging Co. Ltd has to opt for environment sustainability for long term advantages and benefits.

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Introduction
Jiangsu Zhuhong Forging Co., Ltd. is a forging company which is situated in the mainland chinas state of Wuxi City and covers almost 55,000 sq. mts.

History: The Company was formed in the year of 2004 after analyzing the great demand in the
forging products and increasing business motivators in the mainland china by Chinese government to increase the number of companies. China is considered to be the manufacturing hub of the world and thus manufacturing companies thrive in the province of china because of the support of the government.

Ownership: Jiangsu Zhuhong Forging Co., Ltd is a forging company which is categorized
under the umbrella of manufacturing companies is owned by Mr. Meiyan Yang who invested money to erect a forging company with a support of Chinese government. The company was formed with a vision of becoming a forging company having latest technology and become market leader in the particular segment of forged metals.

Major Products: Majorly the products of Jiangsu Zhuhong Forging Co., Ltd are forged metals
which are useful in different manufacturing companies and processing units. Round steel forgings (140~850), quadrate steel forgings (150~500) of a variety kinds of materials and 1MT~5MT forks and draw benches are the major products of the Jiangsu Zhuhong Forging Co., Ltd. These products are made with quality and performance as the most important factor.

Market presence: The products of Jiangsu Zhuhong Forging Co., Ltd are useful in many
manufacturing industries all over the world. The major industries where the product of Jiangsu Zhuhong Forging Co., Ltd are used are power producing companies, cement companies, steel factories, automobile industries and several other small and medium enterprises. These industries make almost 90% of the usage of the products and services of the Jiangsu Zhuhong Forging Co., Ltd. The major strength in the key market is the long lasting performance of the company as well as strong quality adherence by the Jiangsu Zhuhong Forging Co., Ltd which satisfies its customers in smooth business operations. Majorly the customer satisfaction and the product performance in the market is the chief reason for the success of the products of Jiangsu Zhuhong Forging Co., Ltd.

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Jiangsu Zhuhong Forging Co. Ltd. Key Target Market

The key product of this company is the forged metals and rings which are used in other manufacturing industries. These products are used majorly in power, cement as well as steel industries around the world. But the major customer base of Jiangsu Zhuhong Forging Co. Ltd is located in and around China only. Export from this company is almost negligible as the products are consumed by the Chinese manufacturing industries. There are many numbers of industries and companies which are thriving in China because of the motivation of the Chinese government and the policies which are aimed to grow the number of manufacturing industries. Mainly the transportation used by this company is based on roadways as well as railways. For the transportation in Chinese province, trucks, trailers and trains are used by the Jiangsu Zhuhong Forging Co. Ltd. This company also utilizes the sea route in case of import of products to other countries. In case of sea routes, sea vessels of approximate 50,000 DWT are utilized by this company. The major transportation efficiency parameter is the timely delivery to the customer for long term beneficial relationships. Customer buying habits are very similar in every area as the product is mainly categorized for the business to business (B2B) customers. In general the customers are looking for the products like forged rings but there are different companies selling the same product. Mainly the selling of the product is defined by the relationship between the customer and supplier. The relations maintained by Jiangsu Zhuhong Forging Co. Ltd. are very strong with its customers as well as suppliers and thus this relationship helps the company in building strong client base. The target market of the Jiangsu Zhuhong Forging Co. Ltd. is increasing exponentially because of the increase in the number of the manufacturing companies around china as well as all over the world.

Product: The product offered by the company is not different from the competitors in
specifications but the quality standards of this company are far better than the same products of the competitors.

Price: The price of all the products of all the competitors including the Jiangsu Zhuhong
Forging Co. Ltd. is almost same. The only difference in the price happens because of the

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distance of the customer location from the factory of the manufacturing company (Cumming, 2006).

Promotions: The promotional strategy adopted by the Jiangsu Zhuhong Forging Co. Ltd. is
traditional approach. During the interview it was told that mainly the marketing is done through regular trade fairs in different regions of China. The other way of promoting the products to the target segment is through catalogs which can help the company in spreading awareness about the product. These are the traditional approaches which are utilized by almost all the competitors in this industry.

Corporate plan
Jiangsu Zhuhong Forging Co. Ltd. is a company which produces products for the different manufacturing companies around the world and mainly in china in the form of forged rings of different metals. These products are of prime importance for the smooth functioning of the business operations of many powers, steel and cement companies. Jiangsu Zhuhong Forging Co. Ltd. is completely dedicated for the fulfillment of the orders of all its clients. This strategic planning of this company is very dynamic as it helps to achieve the organizational goals and objectives. Some of the strategic plans of this company are as follows: 1. Manufacturing strategic plans: Jiangsu Zhuhong Forging Co. Ltd. is into the manufacturing of forged rings and several other products which are in high demand in china. Thus to fulfill the demand of the customers, Jiangsu Zhuhong Forging Co. Ltd. involves the newest technologies in its company to increase the efficiency as well as productivity of the manufacturing plan. The strategic plans of the Jiangsu Zhuhong Forging Co. Ltd. regarding its manufacturing unit are to capture latest technology for its plant and thus increase the production without increasing the unit amount of raw material. 2. Marketing strategic plans: Jiangsu Zhuhong Forging Co. Ltd. has business to business operations thus the marketing objective is also focused according to the requirements of business and corporate clients. Marketing objective of this company is to become leader in the market of forged rings by providing value to the customers and maintain long term relations with the clients. The marketing objective is fulfilled by the trade fairs and attractive as well as informative catalogs mainly meant for the clients.
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Jiangsu Zhuhong Forging Co. Ltd. also maintains a website which provides relevant information about the products and service offered by the company to the clients. These all fulfills the marketing strategic plans of the company and help in formulating new strategic plans. 3. Human resource strategic plan: Recruitment of new as well as experienced talents is very necessary for the success of the company. Human resource department also performs several other functions such as performance appraisal, recreational activities, training and learning etc. which are useful to increase the productivity of the employees. Human resource department of Jiangsu Zhuhong Forging Co. Ltd. is also very efficient in fulfilling all these activities and thus the strategic plan of retaining the talented employees while recruiting new talents. Thus the talent pool of the company is very strong because of strong human resource team. These were some of the functional strategic plans which help the company in order to provide efficient business operations (Costanza, 2003). These operations are beneficial for the company, employees as well as all the related stakeholders. But there are several other functions which need to be taken care by the company helping the society. The most important is the maintenance of environment by the company.

Environment related strategic plan: Environmental concern are becoming serious issues in
every corner of the world. Companies have to be proactive in order to save the planet and reduce the harm to the ecology because of the blind pollution and consumption of scarce natural resources like water and fuel. Every manufacturing company is held responsible for degrading the ecological levels below the specified or suggested levels. Jiangsu Zhuhong Forging Co. Ltd. is also a manufacturing plant and thus it should be behaving responsibly for the environmental issues. Jiangsu Zhuhong Forging Co. Ltd. also has strategic plans to take care of the environment by increasing the productivity as well as decreasing the consumption of the natural resources. Belief in the environmental sustainability and making the operations as environmental friendly is the prime environmental strategic plan of Jiangsu Zhuhong Forging Co. Ltd..

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Environmental Information gathering system

Every company has several information gathering systems installed in their respective companies to monitor the ecological impact by the output of the processing plants. The monitoring system is very necessary as it helps to prevent the environment from degradation and also reduce the pollution caused by the plant. In Jiangsu Zhuhong Forging Co. Ltd. there are several monitoring units installed at various points in the plant. Chimney is the outlet from where all the fumes and pollution moves out into the environment thus very sensitive monitoring system is installed at chimney of Jiangsu Zhuhong Forging Co. Ltd. The nature of the information which is used for monitoring the environmental degradation and other such issues are very sensitive. Thissensitive information has to be utilized in a proper way for effective and efficient formulation of strategies. The natures of the information which are collected are of quantitative types as numerous statistical tools are worked upon the data to convert it into useful information. All these information are transferred to the top management and the decision maker depending upon the severity of the situation (Daly, 1993). The decision maker in Jiangsu Zhuhong Forging Co. Ltd. is the top management as well as the owner of the company. They have the responsibility of making the company as environment friendly and the processes of the company should be such that they consume very less amount of natural resources and the pollution caused by these units and machineries should also be very less. Thus the decision is to make the process as streamlined so that the productivity is increased without increasing the input to the plant. The plans for maintaining the environment has to be decided on urgent basis as the society as well as many other linked members are on stake. In fact environmental issues have gained a lot of momentum these days because of increasing threat of global warming. Global warming is a serious concern and thus there are strict rules and regulations imposed by the government to compel the companies to maintain ecological standards.

Organizational Response Mechanism

The response mechanism of Jiangsu Zhuhong Forging Co. Ltd. has to be very fast as the environmental issues are very critical issues and thus they have to be taken care in order to successful managingof all the environmental issues. In general in several companies thereare
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many companies which have dedicated team for the environmental issues solutions but Jiangsu Zhuhong Forging Co. Ltd. has no such dedicated team. In Jiangsu Zhuhong Forging Co. Ltd. all the tasks related to environmental maintenance are carried by the top management who are busy in operating their respective functions and simultaneously they have to look on the environmental issues also. Thus the efficiency of the top management decreases and also the effectiveness of the environmental plans also degrades. This is the major drawback of the Jiangsu Zhuhong Forging Co. Ltd. as it has no such team which can continuously monitor the environmental scenarios and the pollution caused because of the operations of the company. When the company faces some serious issues regarding the environment de-regulations, the company has to make fast decisions (Kajikawa, 2008). As the decision making power lies with the top management of the company, hence the decision taken by the top management is very easy to implement as it does not need much approvals. Hence involvement of top management is considered to be very effective in the organizational response mechanism.

Behavioral Audit
The behavioral audit is performed in order to check upon the issue of environment sustainability of Jiangsu Zhuhong Forging Co. Ltd. and the information is gathered by conducting interview with the owner of Jiangsu Zhuhong Forging Co. Ltd. Mr. XYZ. During the interview most of the information was gathered was completely aimed to analyze the present scenario in the company as well as the environmental standards which are being followed by the company. This interview also suggests the commitment of the top management as well as CEO of the company towards the achievement of environment sustainable growth in the company.

Energy Consumption: The major sources of the raw material are the steel which is generally
forged into rings and other shapes beneficial for the customers.These products are highly useful in industries like cement, steel and power industry. These products are made of steel which is delivered by the suppliers of the company Jiangsu Zhuhong Forging Co. Ltd.. Mostly the supplier utilizes the communication in the form of the road routes through the trailers and trucks and also through railway routes. These railways routes are fulfilled by the cargo trains. Supplier locations and factories are at distant location and thus it gets difficult for them to supply. But the major objective of the Jiangsu Zhuhong Forging Co. Ltd. is to provide the most cost effective
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mode of transportation of the huge amount of steel. Some other raw materials which are used in manufacturing of forged metals are fuel, electricity and water (Hahn, Schultz, Folke & Olsson, 2008). The water is taken from the ground water resource. Because of the blind usage of the ground water, the area of that particular region is facing fresh water scarcity.The transportation which is used by the company to cater the product in the market as well as to the clients is through roadways as well as railways. Cargo trucks and trains are used by the company in order to transport the manufactured forged products to the clients. This is one of the most costeffective ways for transportation and thus the company saves lots of money in transportation. There are different levels of emission targets which are specified by the government. According to the reports of the company Jiangsu Zhuhong Forging Co. Ltd. and the interview of the owner, it has been suggested that almost 90% of the time, the emission from the plant and machinery is under the specified level set by the government. Thus the company is self proclaiming itself as environmentally sustainable company. But the question was raised in the interview about the facts when the company was not able to refer to the specified emission levels. Thus the response was given that the company is always dedicated towards providing latest technologies for the production and support. Thus Jiangsu Zhuhong Forging Co. Ltd. claims to control the emission level by implementing latest monitoring and control system in the company and making the environment as trouble free.

Emission Level: The data about the emission level is recorded through the sensors and
electronic meters as well as gauging systems. These systems transfers the data to the central computerized database system where the reports are made and the comparison of the emission level is made with the standard safe emission level. Thus the reports are of the use for the top management who after judging the reports conclude the solutions and take the decision to rectify the problem in the plant. The corrective measures which are decided by the top management are communicated to the stake holders instantly through different communication channels like telephone and emails. These corrective actions have to be communicated regularly to make the stakeholders believe about the reactiveness and concern of the company towards the environmental issues.

Sentiments of Stakeholders: Various stakeholders who are involved in the Jiangsu Zhuhong
Forging Co. Ltd. are investors, suppliers, customers, employees, government and the persons
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living near the factory premises. These are the stakeholders which are always influenced by the decision of the company Jiangsu Zhuhong Forging Co. Ltd.. Out of all the stakeholders, the sentiments of the society people are very sensitive. These people gets the polluted affluent in the form of companys residual and waste. They are dangerously hurt because of the vicinity with the company premises and coming with the direct contact of wastages. Government is also very sensitive with the environment sustainability management of the Jiangsu Zhuhong Forging Co. Ltd. and the approach taken by the company in order to preserve the environment.

Manufacturing Efficiency: The product of this company is forged metal rings which are used
in different industries like power, cement and steel companies. These rings are made of steel which and the steel are supplied from the different vendors. The manufacturing plant of the company is very well updated with the latest technology. The strategic plan of the company is to provide the latest technology for the manufacturing process. But not always the latest technology is implemented by the company as it is an expensive affair. Hence the environmental rules and regulations are blurred because of the cost-benefit analysis by the company (Holling, Gunderson & Peterson, 2002. The major objective of the company is to increase the productivity of the company while increasing the efficiency simultaneously. But to achieve this objective in a cost-effective way, the companies leverage the environmental issues as well as degrade the environment. Jiangsu Zhuhong Forging Co. Ltd. has streamlined business process and thus the efficiency of the company is very high but when the efficiency is compared with the ideal efficiency which should be present, then scope of improvements is seen by the company. The company is performing not only because of the plant and machineries but also with the help of human power and operational strategic plans which are helping for overall success of the company.

New/ Improved product Developments: Research and developments are the activities
which have to be carried out in several companies to remain ahead of the competitors. But in Jiangsu Zhuhong Forging Co. Ltd. the product is mainly process based and thus there is very less scope of research and development. Development can be done in the field of environmental sustainability as it is one of the most crucial issues in the world because of increasing threat of global warning. As observed from the interview, the company is least bothered about being

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creative and innovative in developing new technologies for environment sustainability management.

Waste Management: Waste management of the company is normal when compared to other
manufacturing companies of the Chinese province. Waste is generally floated in the water body near by the factory but it makes the water toxic. The waste water management system of the company is not very effective as it does not completely clear the intoxicated water. The polluted water is harmful for the people living in the vicinity of that water resource. Also the ground water gets polluted because of the waste products. Thus it can be concluded that the waste or residual management is not as effecetive as it should be in a manufacturing company.

Packaging: The packaging of the product is done in cartons or wooden boxes which can be reused for next transportations also. The packaging is very important for the effective and performance loaded output of the company. In general when the weight of the cargo exceeds certain limit, then it is transported in the wooden boxes else they are put into cartons. Quality of the packaging of products is very high in order to transport the product without any breakage. As the product packaging is in the re-usable format hence the waste management is effective in this case. The wooden boxes as well as cartons are re-used till the time they are expired and then they are dropped into processing zone where they are made re-usable again with full strength.

CEO behavior: The CEO is the top most authority in the company who is responsible for all
the decisions and also accountable for the outcomes of their decisions. Top management is expected to walk the talk but the CEO of Jiangsu Zhuhong Forging Co. Ltd. is weak in showing this behavior when it comes to environment. CEO is concerned about the environment till the time revenue of the company is maintained. But if the environment management comes between the ways of business functions then the priority is given to the business functions and not environment issues. Thus the company is investing less money for the research and development of the environment management and techniques which can reduce the degradation of the ecology. CEO is concerned about the emission standards but the company report does not show this fact as there were certain moments when the emission was crosses much above the permitted emission level. CEO of Jiangsu Zhuhong Forging Co. Ltd. has 15 years of experience in the forging industry. He has done engineering in the
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mechanical department and then masters in mechanical engineering. The career record of the CEO is very successful as he has driven growth of many companies through his aggressive strategies.

Environment Safety Mechanism

Environment safety is the prime task for all the companies but Jiangsu Zhuhong Forging Co. Ltd. is a manufacturing company which is takes decision after the event occurs thus they can be categorized as reactive. They have applied sensors and reactors in the plant to check pollution caused by the affluent but the decision is taken only when the abnormality is observed and the pollutant emission is increases above the specified limits. This is harmful for the society as well as the nearby natural resources which come in contact with the polluted emissions. A proactive company is a company which always remains ahead of time as well as competitors in order to increase the productivity and save the environment (Gunderson & Holling, 2002). The reports are also generated regarding the environment and the pollutants which are released in the environment. These reports are generated every half-yearly which is very long duration and no corrective action can be taken because of these reports. The company being a reactive company and the long duration in between consecutives reports lead to the disruption in the technologies which are being used. The older technologies need maintenance as well as care and if it is not given, then the plants and machineries emit pollutants which are harmful for the society (Chapin, Kofinas & Folke, 2009). According to the responses of the Mr. Meiyan Yang, mainly in all the reports which are corresponding to the environmental facts and figures consists of the data of the sensors. This data is generally provided as raw data to the owners and top managements for assessment and the decision is taken. The data has to be converted into useful information if it has to be taken seriously but the company is very less interested in sustainability. Thus the overall organizational culture is having attitude which shows no respect to the environment.

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Recommendations
There are several recommendations which have to be issued in the interest of the Jiangsu Zhuhong Forging Co. Ltd. so as to improve their environmental sustainability management. Many issues which can be improved by implementing the following recommendations are: 1. Jiangsu Zhuhong Forging Co. Ltd. should start investing in the research and development of newer ways to reduce the degradation of the environment. If the environment is hit badly then the repercussions will be faced by these manufacturing companies only. In the future, the Chinese government will impose strict rules and regulations over the issue of environment as pressure of cutting of green house gases is increasing over the China. If this pressure continues from the global countries, then China will start pressuring its manufacturing companies to adopt for greener technologies. Hence Jiangsu Zhuhong Forging Co. Ltd. can earn a global image by becoming fore-runner in implementing the technology useful for reducing the impact of waste and pollution. 2. Jiangsu Zhuhong Forging Co. Ltd. should allocate certain amount of money or percentage of the revenue every year in order to implement the latest less pollution causing machineries in the factories so that the objective of the environmental sustainability management is maintained. Newer technologies, plants and machineries are the vital part of the business functions and thus it also helps in increasing the productivity as well as efficiency of overall business operations (Rockstro, 2009). 3. Organizational culture flows from top to bottom and thus to prevail the culture of ecologically ahead organization, the culture has to be such that it motivates the use of greener initiatives. To make such type of culture in Jiangsu Zhuhong Forging Co. Ltd., the top management including the owner of the company as well as CEO of the company should understand the benefits of environmental sustainability management. They should believe in the long term advantages of the greener initiatives and then only they can effectively communicate all these advantages to the employees and all other stakeholders related to the Jiangsu Zhuhong Forging Co. Ltd. 4. There has to be particular team which is dedicated for the environmental issues. These teams should be constantly monitoring all the environmental activities going on in the company. They should be monitoring the data from different sensors placed in different

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places in the factory so that they have wide array of information regarding the amount of pollutants released in the country. These dedicated teams will be more focused and more accountable in maintaining the environment near the factories. Decision makers will remain to be the top management but the decisions will be suggested by these teams. These are some of the suggestions which have to be implemented by the company in order to make its company an environment sustainable which will help in long term competitive advantage. Most of these recommendations are feasible and also they are cost effective for a forging company like Jiangsu Zhuhong Forging Co. Ltd.

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References
1. Gunderson LH, Holling CS (2002) Panarchy: understanding transformations in human and natural systems. Island, Washington, DC. 2. Hahn T, Schultz L, Folke C, Olsson P (2008) Social networks as sources of resilience in social-ecological systems. In: Norberg J, 3. Cumming GS (2006) Complexity theory for a sustainable future. Columbia University Press, New York, pp 119148 4. Chapin FS III, Kofinas GP, Folke C (2009) Principles of ecosystem stewardship: resilience-based natural resource management in a changing world. Springer, Berlin 5. Costanza R (2003) A vision of the future science: reintegrating the study of human and the rest of nature. Futures 35:651671 6. Daly HE (1993) Sustainable growth: an impossible theorem. In: Daly HE, Townsend KE (eds) Valuing the Earth: economics, ecology, ethics. MIT Press, Cambridge, pp 267273 7. Holling CS, Gunderson LH, Peterson GD (2002) Sustainability and panarchies. In: Gunderson LH, Holling CS (eds) Panarchy: understanding transformations in human and natural systems. Island, Washington, DC, pp 63102 8. Kajikawa Y (2008) Research core and framework of sustainability science. Sustain Sci 3:215239 9. Rockstrom J et al (2009) Planetary boundaries: exploring the safe operating space for humanity. Ecol Soc 14:32 10. Senge PM (1990) The fifth discipline: the art and practice of the learning organization. Doubleday, New York

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