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SUSTAINABILITY IN THE SUPPLY CHAIN (DESIGN AND PRODUCTION FOR…
SUSTAINABILITY IN THE SUPPLY CHAIN
CORPORATE SOCIAL RESPONSIBILITY (CSR)
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
SUSTAINABILITY
Systems View
• Looking at a product's life from design to disposal,including all the resources requires
• The product or service itself is a small part of much larger social, economic and environmental systems
• Understanding systems allows more informed judgements regarding sustainability
Commons
Many inputs to a production system held by the public
Common resources often misallocated
Possible solution 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 3Ps:
People
Planet
Profit
Carbon Footprint and greenhouse gas emissions
1) Farming
2) Manufacture
3) Packaging
4) Shipping
5) Disposal
Walmart's Objectives
Improving livelihoods through the creation of productive, healthy and safe workplaces
Building strong communities through access to affordable, high-quality services
Preventing exposure to substances that are considered harmful or toxic
Promoting health and wellness
i. Social and environmental sustainability do not exist without economic sustainability
ii. Staying in business requires making a profit
iii. Alternate measures of success include risk profile, intellectual property, employee morale and company valuation
iv. Social accounting can supplement financial accounting to support economic sustainability
Decisions affect people
Globalization and outsourcing complicate the task
Supplier selection and performance criteria are important
Materials must be safe and environmentally responsible
DESIGN AND PRODUCTION FOR SUSTAINABILITY
Life cycle assessment
valuates the environmental impact of a product, from raw material and energy inputs all the way to the disposal of the product at its end-of-life
The goal is to make decisions that help reduce the environmental impact of a product throughout its entire life
Reduce
Reuse
Recycle
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
• Alternative materials
Design for Disassemly
Revenue Retrieval = Total Resale Revenue + Total Recycling Revenue — Total Processing Cost — Total Disposal Cost
Production Process
1) Reduce the amount of resources in the production process
• Energy
• Water
• Environmental contamination
2)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
Life Cycle Ownership Costs
Total Life Cycle = Cost of Vehicle + Life Cycle Cost of Fuel + Life Cycle Operating Cost
End-of-life phase
What happens at the end-of-life stage?
Closed-loop supply chains or reverse logistics
Automaker’s design incorporates disassembly, recycling, and reuse
REGULATIONS AND INDUSTRY STANDARDS
International Environmental Policies and Standards
• Organizations and governments guiding businesses
-U.N. Framework Convention on Climate Change (UNFCCC)
-International Organization for Standardization (ISO)
-Elimination of greenhouse gas (GHG
European Union Emissions Trading System
• To combat climate change
• Reduce industrial GHG emissions
• “Cap-and-trade” principle
ISO 14000
Environmental Management Standard
• Environmental management
• Auditing
• Performance evaluation
• Labeling
• Life cycle assessment
Advantages
• Positive public image, reduced liability
• Good systematic approach to pollution prevention
• Compliance with regulatory requirements, opportunities for competitive advantage
• Reduction in the need for multiple audits
1) Implemented by more than 200,000 organizations in 155 countries
2) Environmental and economic benefits
• Reduced materials/resource usage
• Reduced energy consumption
• Lower distribution costs
• Improved image
• Improved process efficiency
• Reduced waste and disposal costs
• SO 14001 addresses environmental management systems
• Guidance to minimize harmful effects on the environment
Product design
• Food and Drug Administration
• Consumer Products Safety Commission
• 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