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Chapter 4: Sustainability in the Supply Chain (Regulations and Industry…
Chapter 4: Sustainability in the Supply Chain
Sustainability
Systems View
looking at a product’s life from design to disposal
The product or service itself is a small part of much larger social, economic and environmental system
Commons
Many inputs to a production system
held by the public
Common resources often misallocated
Possible solutions include
Moving some of the common to private
property
Allocation of rights
Allocation of yield
Triple Bottom Line
Consider the systems necessary to support the 3P's
People
Globalization and outsourcing complicate
the task
Supplier selection and performance
criteria are important
Materials must be safe and
environmentally responsible
Planet
Look for ways to reduce the
environmental impact of operations
Overarching objective is to conserve
scarce resources
Carbon footprint and greenhouse gas
emissions (GHG)
Profit
Alternate measures of success include risk profile, intellectual property, employee morale, and company valuation
Social accounting can supplement financial accounting to support economic sustainability
Social and environmental sustainability do
not exist without economic sustainability
Corporate Social Responsibility
How products and services affect people
and the environment
Stakeholders have strong opinions about
environmental, social, and ethical issues
Doing what’s right can be beneficial to all
stakeholders
Design and Production for Sustainability
Product Design
Design decisions affect materials, quality, cost, processes, related packaging and logistics, and how the product will be processed when discarded
Incorporate systems view to lower environmental impact
Production Process
Reduce the amount of resources in the production process
Energy
Water
Environmental Contamination
Reduce cost and environmental
concerns
Logistics
Reduce costs by achieving efficient route and delivery networks
Getting shipments to customers
promptly
Keeping trucks busy
Buying inexpensive fuel
Management analytics can help
Evaluate equipment alternatives
Life cycle ownership costs
End-of-Life Phase
Closed-loop supply chains or reverse logistics
Automaker’s design incorporates disassembly, recycling, and reuse
Design for Disassembly
Harmonizer
Rocker
Regulations and Industry Standards
Product design
Food and Drug Administration
Consumer Products Safety Comission
National Highway Safety Administration
Manufacturing and assembly activities
Occupational Safety and Health
Administration (OSHA)
Environmental Protection Agency (EPA)
State and local agencies
Disassembly and disposal of
hazardous products
EPA
Department of Transportation
Design for disassembly
Nearly all industries have regulations
Commercial builders
Federal Safe Drinking Water Act
Resource Conservation and Recovery Act
International Environmental Policies and Standards
Organizations and governments
guiding businesses
UNFCCC
ISO
ISO 14000
Environmental management standards
Environmental management
Auditing
Performance evaluation
Labeling
Life Cycle Assesment
Implemented by more than 200,000 organizations in 155 countries
Environmental and economic benefits
Guidance to minimize harmful effects on
the environment
ISO 14001 addresses environmental management systems
GHG
European Union Emissions
Trading System
To combat climate change
Reduce industrial GHG emissions
“Cap-and-trade” principle