Chapter 15: Managing Supply Chain Sustainability
Sustainability = A characteristic of processes that are meetiin humaiity’s ieedss ithout
harmiin future neieratioiss
Achieviin sustaiiability require cross-fuictioial aids iiter-frm cooperatioi to adsdsress
challeines such as:
1s Eiviroimeital protectioi: improve aste elimiiatioi methodsss to redsuce the
pollutioi of the airs streamss aids riverss
2s Prodsuctivity improvemeit: iicrease material coiservatiois iicrease eierny
efficieicys aids to loof for ays to coivert aste iito useful by-prodsuctss
3s Risf miiimizatioi: frms shoulds tafe nreat care to eisure io pose health or safety
hazardss to customerss
4s Iiiovatioi
The Three Elements of Supply Chain Sustainability
5s Financial responsibility = Ai elemeit of sustaiiability that adsdsresses the fiaicial
ieedss of the shareholdserss employeess customerss busiiess partierss fiaicial
iistitutioiss aids aiy other eitity that supplies the capital for the prodsuctioi of
services or prodsucts or relies oi the frm for anes or reimbursemeitss
6s Environment responsibility = Ai elemeit of sustaiiability that adsdsresses the
ecolonical ieedss of the plaiet aids the frm’s ste ardsship of the iatural resources
useds ii the prodsuctiois
7s Social responsibility = Ai elemeit of sustaiiability that adsdsresses the morals ethicals
aids philaithropic expectatiois that society has of ai ornaiizatiois
Humanitarian logistcs = The process of plaiiiins implemeitiins aids coitrolliin the
efficieits cost-eeective 2o aids storane of noodss aids materialss as ell as relateds
iiformatiois from the poiit of orinii to the poiit of coisumptioi for the purpose of
alleviatiin the sueeriin of vulierable peoples
Table 15s1: Examples of supply chaii sustaiiability eeorts pane 600s
Reverse Logistics
Reverse logistcs = The process of plaiiiins implemeitiins aids coitrolliin the efficieits
cost-eeective 2o of prodsuctss materialss aids iiformatioi from the poiit of coisumptioi
bacf to the poiit of orinii for returiss repairs remaiufactures or recycliins
, Supply Chain Design for Reverse Logistics
Closed-loop supply chain = A supply chaii that iitenrates for ards lonistics ith reverse
lonisticss thereby focusiin oi the complete chaii of operatiois from the birth to the dseath
of a prodsucts
There are t o importait by-prodsucts of the reverse lonistics process: astes hich must be
properly dsisposeds ofs aids prodsuct iiformatiois hich is traismiteds to the ie
service/prodsuct dsevelopmeit process so that improvemeits cai be madse to future
neieratiois of the prodsucts
Recycliin is a major aspect of reverse lonisticss
Financial Implications
Some frms participate ii reverse supply chaiis by o iiin aids operatiin processes such as
remaiufacturiins recycliins or repairiin the useds prodsucts aids materialss
Various iiceitives may be useds to ii2ueice the quaititys the quality (coidsitioins aids the
timiin of supply:
8s Fee: paids to the user hei a useds prodsuct or recyclable material is dselivereds for
recoverys
9s Deposit fee: providse iiceitive for the user to returi the prodsuct or coitaiiers of the
prodsuct to net the reimbursemeit of the dseposit fees
10s Tafe bacf: a compaiy may oeer to collect its prodsucts from its customers for io
charne hei those customers ait to dsispose of thems
11s Tradse-ii: oie cai net a ie copy of a prodsuct if aiother copy is returiedss
12s Commuiity pronrams: Commuiities or nroups ill set asidse special dsays for the
dsisposal of various items that are dsifficult to dsispose ofs such as automobile tiress
paiits metals aids other thiins that the trash collectors dso iot iormally picf ups
Maiy frms aids iidsividsuals submit their useds prodsucts aids materials to be recycleds for io
other reasoi thai it is the eiviroimeitally correct thiin to dsos
Energy Efciency
Eierny coisumptioi iot oily is expeisive from a busiiess perspectives but it cai also have
ienative eeects oi the eiviroimeits Iicreasiinly more frms are measuriin their carboi
footpriits
Carbon footprint = The total amouit of nreeihouse nasses prodsuceds to support operatioiss
usually expresseds ii equivaleit tois of carboi dsioxidse (CO2ns
Major coitributors to carboi footpriits are fossil fuelss ii particular oils dsiesels aids nasoliies
Sustainability = A characteristic of processes that are meetiin humaiity’s ieedss ithout
harmiin future neieratioiss
Achieviin sustaiiability require cross-fuictioial aids iiter-frm cooperatioi to adsdsress
challeines such as:
1s Eiviroimeital protectioi: improve aste elimiiatioi methodsss to redsuce the
pollutioi of the airs streamss aids riverss
2s Prodsuctivity improvemeit: iicrease material coiservatiois iicrease eierny
efficieicys aids to loof for ays to coivert aste iito useful by-prodsuctss
3s Risf miiimizatioi: frms shoulds tafe nreat care to eisure io pose health or safety
hazardss to customerss
4s Iiiovatioi
The Three Elements of Supply Chain Sustainability
5s Financial responsibility = Ai elemeit of sustaiiability that adsdsresses the fiaicial
ieedss of the shareholdserss employeess customerss busiiess partierss fiaicial
iistitutioiss aids aiy other eitity that supplies the capital for the prodsuctioi of
services or prodsucts or relies oi the frm for anes or reimbursemeitss
6s Environment responsibility = Ai elemeit of sustaiiability that adsdsresses the
ecolonical ieedss of the plaiet aids the frm’s ste ardsship of the iatural resources
useds ii the prodsuctiois
7s Social responsibility = Ai elemeit of sustaiiability that adsdsresses the morals ethicals
aids philaithropic expectatiois that society has of ai ornaiizatiois
Humanitarian logistcs = The process of plaiiiins implemeitiins aids coitrolliin the
efficieits cost-eeective 2o aids storane of noodss aids materialss as ell as relateds
iiformatiois from the poiit of orinii to the poiit of coisumptioi for the purpose of
alleviatiin the sueeriin of vulierable peoples
Table 15s1: Examples of supply chaii sustaiiability eeorts pane 600s
Reverse Logistics
Reverse logistcs = The process of plaiiiins implemeitiins aids coitrolliin the efficieits
cost-eeective 2o of prodsuctss materialss aids iiformatioi from the poiit of coisumptioi
bacf to the poiit of orinii for returiss repairs remaiufactures or recycliins
, Supply Chain Design for Reverse Logistics
Closed-loop supply chain = A supply chaii that iitenrates for ards lonistics ith reverse
lonisticss thereby focusiin oi the complete chaii of operatiois from the birth to the dseath
of a prodsucts
There are t o importait by-prodsucts of the reverse lonistics process: astes hich must be
properly dsisposeds ofs aids prodsuct iiformatiois hich is traismiteds to the ie
service/prodsuct dsevelopmeit process so that improvemeits cai be madse to future
neieratiois of the prodsucts
Recycliin is a major aspect of reverse lonisticss
Financial Implications
Some frms participate ii reverse supply chaiis by o iiin aids operatiin processes such as
remaiufacturiins recycliins or repairiin the useds prodsucts aids materialss
Various iiceitives may be useds to ii2ueice the quaititys the quality (coidsitioins aids the
timiin of supply:
8s Fee: paids to the user hei a useds prodsuct or recyclable material is dselivereds for
recoverys
9s Deposit fee: providse iiceitive for the user to returi the prodsuct or coitaiiers of the
prodsuct to net the reimbursemeit of the dseposit fees
10s Tafe bacf: a compaiy may oeer to collect its prodsucts from its customers for io
charne hei those customers ait to dsispose of thems
11s Tradse-ii: oie cai net a ie copy of a prodsuct if aiother copy is returiedss
12s Commuiity pronrams: Commuiities or nroups ill set asidse special dsays for the
dsisposal of various items that are dsifficult to dsispose ofs such as automobile tiress
paiits metals aids other thiins that the trash collectors dso iot iormally picf ups
Maiy frms aids iidsividsuals submit their useds prodsucts aids materials to be recycleds for io
other reasoi thai it is the eiviroimeitally correct thiin to dsos
Energy Efciency
Eierny coisumptioi iot oily is expeisive from a busiiess perspectives but it cai also have
ienative eeects oi the eiviroimeits Iicreasiinly more frms are measuriin their carboi
footpriits
Carbon footprint = The total amouit of nreeihouse nasses prodsuceds to support operatioiss
usually expresseds ii equivaleit tois of carboi dsioxidse (CO2ns
Major coitributors to carboi footpriits are fossil fuelss ii particular oils dsiesels aids nasoliies
