Sustainable supply chain management Flashcards
What is Sustainability Management?
The application of a wide range of sustainable practices that seek to meet the triple bottom line objectives in business
distinguish between value chain and supply chain?
Value chain: a set of activities that an organisation carries out to create value for its consumers.
A Supply Chain is a network of partners who collectively convert basic commodity (upstream) into a finished product (downstream) that is valued by the end-customer and who manage returns at each stage (involve value added activities)
What is the Stan Shih Smile Curve? (Value chain curve)
Supply chain management goes beyond manufacturing and includes other value added functions.
- a lot of value is added at the first and latter half of any set of business activities. (R&D, Branding, Design, Distribution, Marketing, Sales/service)
Why green the supply chain? (2 main reasons)
- we live in a finite world. (resources as becoming scarce)
- we create impacts on the environment ( we have gone beyond the planet boundary)
What are the driving forces which have created environmental degradation?
- Population: how many of us are consuming resources and creating
-Affluence: goods and services consumed per person
Technology: impact per good are the main drivers and impacts on the environment. - based on the Ehrlich IPAT equation
- I=P x A x T
= can be used to further understand the implications of greening the supply chain
What are the implications of IPAT?
- IPAT shows that the main underlying problems are related to scale. Growth and affluence have exceeded Improvements in technology
- two possible future scenarios:
1. Maximum possible number of people living at subsistence levels
2. Much smaller population living more comfortably
What three levels of decision is involved in the supply chain management? (need to integrate sustainability in all levels of the supply chain)
- Strategic level: high level of decision making, concerned with design and building supply chain for goods and services to be provided (ex; moving supply chain from one country to another)
- Planning level: leveraging the existing supply chain, to meet medium term goals (the business level strategy) involves short term decision making, how to maximise actions to achieve maximum outcomes
- Operations/functional level : concerned with implementing the strategic and planning on a day-to-day basis.
Define sustainability
kind of development that meets the needs of the present without compromising the ability of future generations to meet their own needs. (based on the triple bottom line) planet, profit, people. = integrate this at all levels to attain the sustainable supply chain management.
Define sustainable supply chain management?
and what is the objective?
the management of environmental, social and economic impacts and the encouragement of good governance practices, throughout the lifecycles of goods and services.
Objective: creating, protecting and growing long term TBL values for everyone involved in supply chain
How can sustainability be interpreted? (3 different forms)
- Rational perspective:
Need to protect and invest into resources in whatever production and consumption activity that we are undertaking. (use resources well) - Innovative perspective: use innovation technology to minimise use of resources (middle ground)
- normative perspective: Should be a fair allocation of resources (environmental, economic and social resources)
What does rationality of sustainable supply chain involve? (2 things)
- PLANET: An environmental (resource orientated) point of view: every organisation dependant on resources, which are usually required to fulfil its purpose and goals. and are all dependent on each other (global supply chain) and results in impacts on the physical environment.
- PEOPLE: a social (people orientated) point of view: focus on health and well being of people in the supply chain and impact on society. environmental and social SC can be combined into one. as activities that prevent harm to the environment usually benefits the population of earth.
How do one integrate Supply chain and sustainability? ( 2 views)
Supply chain( traditional view)
- satisfy consumer
- save time and money
Sustainability (contemporary view):
- consideration for the triple bottom line
- a global supply chain perspective
= Aim moves away from saving money and satisfying the consumer to attaining the TBL, and have globalised view of SC.
moving from focal firm to extended network.
What is the Life Cycle Assessment (LCA) tool?
Tool for assessing the whole environmental impacts of a product or service from cradle to grave that a company is using.
- Can be applied in global context where SC activities are dispersed.
What is resource efficiency?
- Limiting the use of the earth’s limited resources in a
- sustainable manner while
- minimising impacts on the environment.
It allows the creation of more with less and to deliver greater value with less input.
(side of consumption and product, two sides to the story in terms of making efficient use of resources)
What are ways in which companies can green the supply chain in the production stage? (3 main things)
- Product design:
- designing objects and services to comply with the TBL.
- the LCA can be used to assist in design of product to minimise environmental impact over useable life and end of life. (over 80% can be influenced during design stage) - Product life extension:
- depletion of resources can be minimised by extending the life of products.
- the challenge is to develop offerings that allow more of the product value to be captured.
- ex: preventive and predictive maintenance, upgrade, direct product reuse, remanufacture. - Recovery process at end-of-life: extending SC to include issues such as remanufacturing, recycling and refurbishing.
