Sustainable Supply Chain Management

Defining Sustainability

• Sustainability is how natural systems function, remain diverse, and produce everything needed for ecological balance while acknowledging human civilization's resource use.

Triple Bottom Line

• Sustainability balances ecological preservation with human resource needs for long-term viability.

• Prioritizes reducing carbon emissions, promoting healthier living, and minimizing waste for future generations while maintaining business profitability.

• Organizations integrate sustainability to meet consumer demands and enhance competitiveness.

• The triple bottom line (TBL) measures sustainability through People (social), Profit (economic), and Planet (environmental).

Triple Bottom Line Dimensions:

• Economic (Profit): Ensures financial viability, meets stakeholder needs, and supports long-term growth; mitigates negative impacts of supply chain expansion like resource scarcity.

• Environmental (Planet): Addresses responsible resource use, waste management, and carbon footprint reduction, preserving resources for future generations.

• Social (People): Focuses on employee welfare, safe work environments, and community support, enhancing organizational reputation and stakeholder trust.

PDCA Cycle in Environmental Regulations

• The Plan-Do-Check-Act (PDCA) cycle ensures continuous improvement in processes, products, and services while adhering to environmental regulations.

  • Plan: Identify environmental issues, analyze problems, develop hypotheses, and determine solutions.

  • Do: Implement the solution on a small scale to measure results.

  • Check/Study: Evaluate the results to assess the solution’s effectiveness.

  • Act: Implement the successful solution fully across operations.

ISO Environmental Standards

1. ISO 14001:2004: Specifies requirements for an environmental management system (EMS).

2. ISO 14004:2004: Provides principles and techniques for implementing an EMS.

3. ISO 14040:2006 & ISO 14044:2006: Focus on assessing the environmental impact of products throughout their lifecycle.

4. ISO 14064-1:2006 & ISO 14064-2:2006: Address quantification and reporting of greenhouse gas emissions.

5. ISO 14020:2000, ISO 14021:1999, ISO 14024:1999, ISO 14025:2006: Govern eco-labeling and environmental claims.

Economic Benefits of ISO Tools:

• Reduced raw material/resource use

• Reduced energy consumption

• Improved process efficiency

• Reduced waste generation and disposal costs

• Utilization of recoverable resources

Green Supply Chain Management

• Green Supply Chain Management (GrSCM) integrates environmental care into all supply chain stages.

  • Includes Reduction, Recycling, Remanufacturing, Inventory Management, and Production Planning.

Green Opportunities Throughout the Supply Chain

• Supply chain network design: Reducing energy and carbon emissions.

• Building design: Efficient design of manufacturing and distribution facilities.

• Customer requirements and preferences: Pressure from customers in terms of aspects such as organic production and recycling.

• Packaging: Reusable, recyclable, recycled packaging.

• Reverse logistics: Removing, processing waste, coordination, full loads.

• Transportation management: Vehicles fitting loads, less carbon emissions, use of trailers to increase capacity, search for closer suppliers and markets.

• Collaboration with other organizations: Combining freight, processing of waste.

• Sourcing: Local, green-conscious suppliers, carbon footprint of purchased goods; alternative materials or design; standardization.

• Technology: Equipment to better reduce carbon emissions, better accounting systems, energy-saving equipment.

• Organization valuation (shareholder value): True change towards sustainability embedded in strategies, practices and reporting.

• Organizational: Identifying possibilities, changing procedures, changing attitudes and behavior through conscious efforts

Developing a Sustainable Supply Chain Strategy

• Phase 1: Designing the sustainable supply chain strategy

  • Step 1: Assess supply chain (Who are we?)

  • Step 2: Assess the environment (What is changing?)

  • Step 3: Evaluate (How do we fit?)

  • Step 4: Adjust the supply chain strategy (How should we fit?)

• Phase 2: Integrating the sustainable supply chain strategy

  • Step 5: Operationalization (How do we get there?)

  • Step 6: Implementation