Environmental Analysis Charlie Jo Environmental

Environmental Analysis Charlie Jo Environmental Analysis Material Flow Balance Whether or not it is explicitly recognized as such, efficiency is one of the primary goals of any business endeavor, as greater efficiency means greater profitability. In recent years efficiency, including the environmental efficiency and impact of an organization, has been seen as of increased importance and has been the focus of many developing theories and tools.

The material Flow balance chart and concept is one such tool; theoretically it demonstrates all of the inputs and outputs of any business operations, and ideally the inputs equal the outputs (thus balancing the two sides of the chart). In reality, it is nearly impossible for a business to account for every single element of input and output that it produces, and this is especially true of manufacturing concerns that have large and diverse amounts of physical inputs and outputs as essential parts of their business model.

A material flow chart is still useful, however, in that it can demonstrate where loss is occurring and thus where inefficiencies might exist. Many companies that deal with abundant raw goods include material flowcharts in their sustainability reports or other investor publications or for other internal reasons.

A typical Australian mining concern, for example, uses a flowchart (one of several) to illustrate their use of certain chemicals in a refining process, demonstrating the quantities of the reactants and the ore needed and the output range of refined minerals and metals as well as waste products that are the result of these processes.

Input to output ratios can thus be easily seen, as can waste levels, and any difference between input and output means a part of the process isn't entirely understood and some form of loss is occurring and remains unaccounted for.

Basic Material Flow Balance for Charlie Jo's Appropriate Accounting Techniques Activity-Based Costing is a method of accounting that assigns a specific cost to all of the operations of a business, including the procurement of energy and resources and the waste and environmental impacts that result from manufacturing processes, and thus determines a total cost of operations that can be more accurately compared to the sales and revenue the business generates to determine profitability.

Referring to the material flow balance chart above, it can all but certainly be stated that the procurement of the raw materials, chemicals and dyes, water and energy needs all cost Charlie Jo's specific amounts, and that these amounts are known and accounted for in the company's budgeting and other accounting efforts. Likewise, it is almost certain that the revenue generated by the sale of the finished clothing products is relatively stable and also accounted for.

It is less likely that the full cost of dealing with the waste water produced in the manufacturing process is known, especially since 20,000l of water is unaccounted for in the processing (most likely escaping as vapor), nor what the cost of dealing with the solid waste or the carbon emissions is. Activity-Based Costing would attempt to assign concrete and reliable dollar amounts to each of these items in order to determine the full cost of the business's operations.

Taking these into account at Charlie Jo's could greatly increase the effectiveness of its accounting and potentially its efficiency of operations. Primary cost centres for Charlie Jo's include material sourcing, utility expenses, and labor costs. Cost drivers include changes in the cost of raw materials, certain geopolitical shifts that impact transportation and labor costs, and changes in environmental regulation and waste management functions. All of these are likely to contribute to growing costs in the short- and long-term future of the company.

Sustainable Supply Chains Sustainability is a word that gets used a lot today without very detailed or specific considerations of what it means. Some of the benefits of sustainable supply chains are pretty obvious and straightforward, but others are more subtle and complex; understanding how sustainable supply chains benefit a business and its operating environment is key to bringing Charlie Jo's into the future of business efficiency and profitability.

Sustainable supply chains tend to provide the most cost-effective means of procuring resources and carrying out necessary processes, when the full environmental and other costs of operation are taken into account. On a longer-term basis and with more involved planning and scrutiny, sustainable supply chains can lead to greater innovation and a utilization of previous waste resources, not only cutting costs but actually generating new revenue streams. Sustainability also tends to create greater levels of insulation from price shocks, minimizing the impact of cost drivers to a business.

Charlie Jo could go about implementing sustainable supply chains with relative ease, though not without certain significant switching costs. One of the first places to look for greater sustainability is in the massive amount of water used in processing and production -- 90,000 litres are required to produce 1000kg of clothing, and 70,000 of those litres end up leaving as waste water.

If the processing system could be modified in a way that allows the bulk of the waste water to be recycled, or treated and used by another downstream facility for another process, much greater sustainability in terms of this natural resource would be achieved.

The sourcing of other raw materials and the chemicals and ides utilized in the manufacturing of Charlie Jo's clothing products could also be carried out on a more sustainable basis, using natural dyes from easily replenished stores and chemicals that are also less processed and thus more easily procured and disposed of. In order to carry out these steps in achieving a more sustainable supply chain, Charlie Jo's will need to develop and implement a procedure for evaluating their suppliers.

One of the first parts of this procedure should be to examine the suppliers' own material flow balance, to see how wasteful the company is and how conscious it is regarding its environmental impact and overall efficiency. Regular improvements in efficiency should also occur with all suppliers just as they should at Charlie Jo's, and checking for these regular improvement will help keep Charlie Jo's more connected to and aware of its suppliers and their levels of sustainability.

Charlie Jo's should also keep track of any regulatory violations its suppliers are charged with to ensure its own full compliance with environmental codes and ethical concerns.

Life cycle analysis is also a useful method for Charlie Jo's to ascertain its own sustainability and that of its suppliers; determining the full environmental impact of each input into the company at each stage in the process of the company's business operations will lead to a far more accurate understanding of the direct and indirect costs associated with such operations as well as the overall sustainability of the company's endeavors.

Elements of the process that have very short life cycles and/or that result in significant or hard to manage waste should be eliminated in favor of alternatives whenever possible. Solar Energy Investment Evaluation Current energy costs (at 20 cents per kWh) are $3,000 per 1000kg of clothes, meaning a cost reduction of 75% (as expected from the installation of the panels) is equal to a savings (or "cash inflow") of $2,250. The panels present an initial cost of $22,000 ($25,000 less the $3,000 rebate from the government). Using the payback method, then,.