Chapter 5-SCM

What is a key consideration for managers when practicing CSR?

Environmental, societal, and financial impacts

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What concept suggests finding policies that enhance competitiveness while advancing economic and social conditions?

Creating shared value

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Which companies find shared value in low-emission vehicles?

Tesla, Toyota, and Nissan

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What are the benefits of Dow Chemical's Nexera canola and sunflower seeds?

Higher yield, longer shelf life, lower saturated fat, no trans fats

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Which operations functions provide opportunities for finding shared value and meeting CSR goals?

Supply chain management, product design, production, packaging, and logistics

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Corporate Social Responsibility (CSR)

Policies that consider environmental, societal, and financial impacts in decision making.

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Why is it important for firms to consider the implications of a product from design to disposal?

Because stakeholders can have strong views about firms that fail to respect the environment or engage in unethical conduct.

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What is the concept of creating shared value?

Finding policies and practices that enhance the organization’s competitiveness while advancing the economic and social conditions in the communities in which it operates.

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How do companies like Tesla, Toyota, and Nissan find shared value?

By producing low-emission vehicles that enhance their competitiveness in a global market while meeting society’s interest in low-emission vehicles.

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What are the benefits of Nexera canola and sunflower seeds developed by Dow Chemical?

They yield twice as much cooking oil as soybeans, have a longer shelf life, lower operating costs, and contain no trans fats.

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What does the term 'sustainability' refer to?

Meeting the needs of the present without compromising the ability of future generations to meet their needs

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Which of the following is NOT a part of true sustainability?

Only focusing on environmental resources

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What are the three concepts helpful for managers when considering sustainability decisions?

Systems view, the commons, and the triple bottom line

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What does taking a systems view in sustainability involve?

Looking at a product’s life from design to disposal, including all the resources required

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How can recognizing raw materials and human resources as subsystems benefit managers?

It provides a helpful perspective for understanding production processes

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What is an example of how changes in one system can affect others?

Dumping chemicals down the drain has implications on systems beyond the firm

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What does the term sustainability refer to?

Meeting the needs of the present without compromising the ability of future generations to meet their needs.

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What are common associations people make when they first hear about sustainability?

Green products, recycling, global warming, and saving rainforests.

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Triple Bottom Line

A sustainability framework that examines a company's social, environmental, and economic impact.

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What is a systems view in the context of sustainability?

Looking at a product’s life from design to disposal, including all the resources required, and understanding the interactions between different systems.

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How can understanding systems interactions help managers make better sustainability decisions?

By recognizing how changes in one system affect others, leading to more informed judgments.

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Systems View

An approach that considers the entire lifecycle of a product and the interactions between different systems involved in its production and disposal.

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What are the three concepts that may help managers consider sustainability decisions?

A systems view, the commons, and the triple bottom line.

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The Commons

Resources shared by a community that are accessible to all members, such as air, water, and public spaces.

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What term is used to describe resources like sunshine, air, and airspace that have unidentified or ambiguous ownership?

Commons

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What is a common issue with resources held in the commons?

Misallocation

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Which of the following is an example of a resource in the commons?

Polluted air

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What is one method mentioned for managing resources in the commons?

Moving some of the common to private property

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What is an example of allocating rights to manage commons resources?

Establishing fishing boundaries

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What is an example of allocating yield to manage commons resources?

Limiting the quantity of fish harvested

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What is a common issue with resources held in the common?

They are often misallocated.

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Give an example of a resource held in the common that is often misallocated.

Depletion of fish in international waters or polluted air and waterways.

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What is one method society is using to address the misallocation of resources in the common?

Moving some of the common to private property, such as selling radio frequency spectrum.

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What is an example of allocating rights to manage resources in the common?

Establishing fishing boundaries.

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What is an example of allocating yield to manage resources in the common?

Allowing only a given quantity of fish to be harvested.

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What are the three components of the triple bottom line?

People, Planet, Profit

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Which company is mentioned as a global leader in sustainability?

Walmart

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What does the term 'carbon footprint' measure?

Total greenhouse gas emissions

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What is the primary greenhouse gas produced by human activities?

Carbon dioxide

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What is the main objective for operations managers regarding the planet?

To conserve scarce resources and reduce environmental impact

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What is an example of an alternative measure for economic sustainability?

Employee morale

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Which company has started a campaign to save water in the creation of jeans?

Levi Strauss & Co.

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What does social accounting include?

Brand equity, management talent, human capital development

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What are the three components of the triple bottom line?

People, planet, and profit

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Why do firms need to consider the impact of their decisions on all stakeholders?

To avoid reduced sales and profits and to meet the larger socioeconomic demands beyond profit maximization

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Economic Sustainability

The ability of a company to remain in business by making investments and generating profits

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What is the main focus of the 'planet' component in the triple bottom line?

Reducing the environmental impact of operations and conserving scarce resources

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What is a common greenhouse gas produced by human activities?

Carbon dioxide

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What actions do companies like Apple, GE, and Walmart take to ensure sustainability in their supply chains?

They conduct supplier audits to uncover harmful or exploitative business practices

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Social Accounting

A method of reporting that includes measures like brand equity, management talent, human capital development, and philanthropy

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What does the 'people' component of the triple bottom line emphasize?

The impact of company decisions on employees, customers, and the community, including fair wages and safe working conditions

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What is the primary goal of life cycle assessment in product design?

To reduce the environmental impact of a product throughout its entire life

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What is the main concept behind the circular economy?

Keeping and using resources for as long as possible and then recovering and regenerating them

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Which phase in product life cycle assessment is considered the most critical?

Product design

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What is one of the goals during the product design phase?

To incorporate a systems view that lowers the environmental impact

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Which company developed a detergent that saves energy by cleaning clothes with cold water?

Procter & Gamble

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How did Boston’s Park Plaza Hotel reduce its environmental impact?

By installing pump dispensers in its bathrooms

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What material is Mercedes using to build some car exteriors to make them more environmentally friendly?

Banana fiber

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What material is Boeing using in its 787 Dreamliner to reduce weight?

Carbon fiber

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What is the goal of life cycle assessment in product design?

To make decisions that help reduce the environmental impact of a product throughout its entire life.

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What is the circular economy?

An alternative to the traditional linear economy, where resources are kept and used for as long as possible, then recovered and regenerated to the maximum possible value at the end of service life.

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How did Procter & Gamble reduce energy costs with Tide Coldwater?

By developing a detergent that cleans clothes with cold water, saving about three-fourths of the energy used in a typical wash.

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What sustainable change did Boston’s Park Plaza Hotel implement?

They eliminated bars of soap and bottles of shampoo by installing pump dispensers, saving the need for 1 million plastic containers a year.

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What material innovation did Boeing use in its 787 Dreamliner to reduce weight?

Carbon fiber, epoxy composites, and titanium graphite laminate.

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Life cycle assessment

Evaluation of the environmental impact of a product from raw material and energy inputs to disposal at the end of its life.

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Systems view in product design

An approach that lowers the environmental impact by reducing waste and energy costs at the supplier, in the logistics system, and for the end user.

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Reusable express envelopes

Envelopes developed by UPS made from 100% recycled fiber, designed to be used twice and then recycled.

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What is one way manufacturers can reduce environmental impact during production?

Using alternative energy sources

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What type of energy does S.C. Johnson's power plant use?

Natural gas and methane

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What is the purpose of PepsiCo's Resource Conservation (ReCon) tool?

To understand and reduce in-plant water and energy usage

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How much water savings did PepsiCo's ReCon tool help identify in its first 2 years?

2.2 billion liters

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What innovative method does Frito-Lay use to conserve water in its production process?

Extracting water from potatoes

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What incentive does Las Vegas offer to residents to reduce water usage?

$40,000 an acre to replace lawns with rocks and native plants

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What is one way manufacturers can reduce environmental impact during production?

By conserving energy and improving energy efficiency through the use of alternative energy and more energy-efficient machinery.

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What type of power plant did S.C. Johnson build to reduce its reliance on coal-fired power?

A power plant that runs on natural gas and methane piped in from a nearby landfill.

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What is the purpose of PepsiCo's Resource Conservation (ReCon) tool?

To understand and reduce in-plant water and energy usage.

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How much water savings did PepsiCo's ReCon tool help identify in its first 2 years?

2.2 billion liters of water savings.

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What innovative method does Frito-Lay use to conserve water during potato processing?

Extracting water from potatoes and reusing it for the factory's daily production.

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ReCon (Resource Conservation)

A diagnostic tool developed by PepsiCo for understanding and reducing in-plant water and energy usage.

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How does Las Vegas incentivize residents to reduce water usage?

By paying residents $40,000 an acre to replace lawns with rocks and native plants.

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What is the primary goal of logistics managers in the supply chain?

Achieving efficient route and delivery networks while reducing operating costs

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Which management analytics tool is used to optimize supply-chain and distribution networks?

Linear programming

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Why does UPS plan its delivery truck routes with the fewest possible left turns?

To reduce fuel usage and carbon emissions

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How do airplanes reduce fuel use and carbon emissions?

By flying at different altitudes and routes to take advantage of favorable wind conditions

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What innovation have food distribution companies implemented to enhance logistic efficiency?

Trucks with three temperature zones

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What change did Whirlpool make to reduce transportation and warranty costs?

Revised its packaging to reduce 'dings and dents' of appliances

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What factors do operations managers evaluate to enhance logistic efficiency?

Cost, payback period, and the firm’s stated environmental objectives

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What is the primary goal of logistics managers in the supply chain?

To achieve efficient route and delivery networks while driving down operating costs.

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What role does management analytics play in logistics?

It helps firms optimize elaborate supply-chain and distribution networks.

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Why does UPS plan its delivery truck routes with the fewest possible left turns?

Because making left turns increases delivery time, fuel usage, and carbon emissions.

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How do airplanes reduce fuel use and carbon emissions?

By flying at different altitudes and routes to take advantage of favorable wind conditions.

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What innovation have food distribution companies made to improve logistics?

They use trucks with three temperature zones (frozen, cool, and nonrefrigerated) instead of three different types of trucks.

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How did Whirlpool reduce transportation and warranty costs?

By radically revising its packaging to reduce 'dings and dents' of appliances during delivery.

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What factors do operations managers evaluate to enhance logistic efficiency?

They evaluate equipment alternatives, taking into account cost, payback period, and the firm’s environmental objectives.

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Management analytics

Tools such as linear programming, queuing, and vehicle routing software used to optimize supply-chain and distribution networks.

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Life cycle ownership costs

The total cost of owning a vehicle or equipment over its entire life, including purchase price, operating costs, and disposal costs.

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What is the main goal of designing products with recycled or recyclable materials?

To contribute to sustainability efforts

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What is a closed-loop supply chain also known as?

Reverse logistics

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What is the purpose of end-of-life systems in product design?

To facilitate recycling or reuse

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What is the name of Caterpillar's remanufacturing initiative?

Cat Reman

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What is a key benefit of Caterpillar's remanufacturing program?

Lower operating costs for the customer

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How much material did Caterpillar remanufacture from recycled iron in a 1-year period?

More than 130 million pounds

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What is the purpose of designing products with recycled or recyclable materials?

To contribute to sustainability efforts by reducing the need for the 'burn or bury' decision and conserving scarce natural resources.

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What is a closed-loop supply chain also known as?

Reverse logistics.

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What is the Cat Reman initiative?

A remanufacturing initiative by Caterpillar that remanufactures parts and components to provide same-as-new performance and reliability at a fraction of the new cost, while reducing environmental impact.

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How does Caterpillar's remanufacturing program benefit customers and the environment?

It lowers operating costs for customers, reduces material waste, and decreases the need for raw materials to make new products.

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How many end-of-life units did Caterpillar take back in a 1-year period?

2.1 million end-of-life units.

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Closed-loop supply chain

A supply chain that includes the return of products for recycling or reuse, also known as reverse logistics.

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Remanufacturing

The process of restoring used components to like-new condition to reduce waste and conserve resources.

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Which U.S. agency provides regulations for manufacturing and assembly activities?

Occupational Safety and Health Administration (OSHA)

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What is the main purpose of the European Union Emissions Trading System (EUETS)?

To reduce industrial greenhouse gas emissions

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Which organization developed ISO 14001 and ISO 50001 standards?

International Organization for Standardization (ISO)

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What is one of the core elements of ISO 14001?

Environmental management

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Which agency investigates environmental crimes in the U.S.?

Environmental Protection Agency (EPA)

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What is the main objective of ISO 50001?

Improving energy use and efficiency

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Which act must public drinking water systems comply with?

Safe Drinking Water Act

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What does the Eco Index display?

An eco-value on a tag

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What principle does the EU Emissions Trading System (EUETS) work on?

Cap-and-trade

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Which U.S. agency regulates the disassembly and disposal of hazardous products?

Environmental Protection Agency (EPA)

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What must a firm have to be viable and competitive?

A strategy for corporate social responsibility and sustainability

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Who plays a critical role in a firm's sustainability objectives?

Operations and supply chain managers

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What must operations and supply chain managers continually seek?

New and innovative ways to design, produce, deliver, and dispose of products

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What is the impact of operations and supply chain managers' actions?

They impact all the stakeholders

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What happens if firms lack the expertise and commitment of operations and supply chain managers?

They are unable to meet their sustainability obligations

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Why must a firm have a strategy for corporate social responsibility and sustainability?

To be viable and competitive.

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Who plays a critical role in a firm's sustainability objectives?

Operations and supply chain managers.

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What must operations and supply chain managers continually seek?

New and innovative ways to design, produce, deliver, and dispose of profitable, customer-satisfying products while adhering to environmental regulations.

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What happens if firms lack the expertise and commitment of operations and supply chain managers?

They are unable to meet their sustainability obligations.

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Corporate social responsibility (CSR)

A strategy for firms to be socially accountable to themselves, their stakeholders, and the public.

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Sustainability

Meeting the needs of the present without compromising the ability of future generations to meet their own needs.

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Carbon footprint

A measure of total greenhouse gas emissions caused directly or indirectly by an organization, a product, an event, or a person.

Circular economy

Keeps and uses resources for as long as possible, recovering and regenerating the maximum possible value at end of life.

Closed-loop supply chains

Supply chains that consider forward and reverse product flows over the entire life cycle.

Corporate social responsibility (CSR)

Managerial decision making that considers environmental, societal, and financial impacts.

Economic sustainability

Appropriately allocating scarce resources to make a profit.

ISO 14001

A series of environmental management standards established by the International Organization for Standardization (ISO).

ISO 50001

Environmental standards for improving energy performance.

Life cycle assessment

Analysis of environmental impacts of products from the design stage through end of life.

Shared value

Developing policies and practices that enhance the competitiveness of an organization while advancing the economic and social conditions in the communities in which it operates.

Sustainability

Meeting the needs of the present without compromising the ability of future generations to meet their needs.