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CHAPTER 4: SUSTAINABILITY IN THE SUPPLY CHAIN (Regulation and Industry…
CHAPTER 4: SUSTAINABILITY IN THE SUPPLY CHAIN
Corporate Social Responsibility(CSR)
Doing what is right can be beneficial to all stakeholders
How products and services affect people and environment
Stakeholders have strong opinions about environmental,social and ethical issues
Sustainability
Systems view
The product of services itself is a small part of much larger social, economic and environmental systems
Looking at a product's life from design to disposal including all the resources required
Understanding systems allows more informed judgements regarding sustainability
Commons
Many inputs to a production system held by the publics
Possible Solution
Moving some of common to private proper
Common resources often mislocated
Triple Bottom Line
Planet
Carbon footprint and greenhouse gas emission
Overaching objective is to conserve scarce resources
Cautious about the earth's environment
People
Supplier selction and performance criteria are important
Decisions affect people
Globalization and outsourcing complicate task
Materials must be safe and environmental responsible
Walmart's objectives
Improving livehoods through the creation of productive,healthy and safe workplaces
Promoting health and wellness
Building strong communities through access to affordable,high quality services
Preventing exposure to substances that considered harmful and toxic
Profit
Social and environmental sustainability do not exist witout economic sustainabiliity
Staying in business requires making profit
Alternate measures of success include risk profile,intellectual property,employee morale and company valuations
Social accounting can supplement financial accounting to support economic sustainability
Design and Production for Sustainability
Product Design
Incorporate systems view to lower environmental impacts
Alternative materials
Design decisions affect
Materials
Quality
Processes
How the product will be processed when discarded
Cost
Related packaging
Logistics
Production Process
Reduce cost and environmental concern
Reduce the amount of resources
Energy
Water
Environmental contamination
End-of-life-phase
Automaker's design incorporates disassembly,recycling and reuse
Closed-loop supply or reserve logistics
Logistics
Reduce costs by achieving efficient route and delivery network
Getting shipment to customers promptly
Keep trucks busy
Buying inexpensive fuel
Management analytics can help
Life cycle ownership costs
Evaluate equipment alternatives
Regulation and Industry Standards
ISO 14000
Environmental management standards
Environmental management
Auditing
Labeling
Life cycle assessment
Performance evaluation
Environmental and economic benefit
Lower distribution
Improved image
Reduced energy consumption
Improved process efficiency
Reduced materials/resources usage
Reduced waste and disposal cost
Implemented by more than 200,000 organizations in 155 countries
Advantages
Compliance with regulatory requirements, opportunities for competitive advantages
Good systematic approach to pollution prevention
Reduction in the need for multiple audits
Positive public image,reduced liability
European Unions Emissions Trading System
Reduce industrial GHG emmissions
"Cap-and-trade" principle
To combat climate change
International Environmental Policies and Standard
U.N. Framework Convention on Climate Change(UNFCCC)
International Organization for Standardization(ISO)
Organizations and government guiding business
Elimination of Greenhouse Gas(GHG)
Industries regulation
Commercial builders
Federal Safe Drinking Water Act
Resource Conservation and Recovery Act
Disassembly and disposal of haxardous products
Department of Transportation
EPA
Manufacturing and assembly
State and local agencies
Environment Protection Agency(EPA)
Occupational Safety and Health Administration(OSHA)
Allocation
Yield
Rights