GSC 3: Sustainability of supply chains

Green supply chain management: What should be at the core of its strategy?

Environmental concern -> Need for a conciliation between economic and sustainable (social + environmental) objectives

Definition of sustainability: What are the actos involved in GSCM?

Individuals, firms, government and other institutions

Defintions of sustainability: What is the timmeframe of the perspective that GSCM should follow?

Long term perspective of equitable sharing of natural resources

Green supply chain management: Is it considered as acceptable to look at the local + immediate effects of supply chains ? Why ?

NO Imperative to look at the ENTIRE CYCLE effects of the production process

What is the most important issue that the development of supply chains has created ?

Supply chains have developed but LARGE SPACES have been left without responsibility -> trend to shift the responsibility to the others especially when a problem occurs -> Series of scandal in supply chain conditions and effects on human rights, social policy and environment

Definition of sustainability: What is the short definition of Sustainability?

"A condition whereby the needs of the present are met without compromising the ability of future generations to meet their needs"

Different strategies: What are the advantages and disadvantages of the Closed-loop strategy?

(+) - "First mover advantage" -> creation of a pool of suppliers with a unique product take-back or reprocessing capabilities (-) - Poor control on the reverse supply chain - Lack of available infrastructures - Suppliers' skepticism on its viability -> difficult to apply

Different strategies: What are the advantages and disadvantages of the Efficency-based strategy?

(+) - Cost reduction advantage (-) - Does not allow for more knowledge, intensive environmental activities such as product design, material substitution or innovation

Different strategies: What are the advantages and disadvantages of the Risk-based strategy?

(+) - ease of implementation - minimization of risks - enhance reputation (-) - no comparative advantage -> lack of uniqueness + no additional innovation or complementary economic benefits

Initiatives to stimulate GSCM: What are the two possible initiatives?

1) COORDINATION WITH SUPPLIERS Improving the coordination with suppliers on environmental efforts to facilitate the development of greener or more environmentally friendly products 2) SPECIAL DEMAND TO SUPPLIERS Demanding improved environmental performance at suppliers' operating facilities -> Require to achieve a certain certification (ISO 14000) or achieve a set of standards of performance

Green supply chain management: What are the 4 main sources of pressure ?

1) Consumers -> more awareness 2) Regulation + Legislation -> become more stringent 3) Ressources -> are more limited 4) Stakeholders + Shareholders -> require more "green" products

3 approaches involved in the GSCM: What are the three aread on which GSCM is interfacing and should extend?

1) Environment -> environmental protection is the main objective of GSCM 2) Strategy -> formulating long-term decisions -> communication with suppliers, code of conduct, compliance 3) Logistics -> it approaches procurement, material handling, distribution, storage, material recovery and distribution

Green supply chain managemen: What are the 3 main differences between SCM and GSCM ?

1) GSCM: focus on the whole production process whereas SCM focus on end-product 2) GSCM focus on various objectives whereas SCM focus mainly on economic objectives 3) GSCM looks for more long-term relationship with suppliers whereas SCM is mainly based on short term relationships -> The more a company focus on its environmental objectives, the more it will need to change its structure and employees competencies, etc.

4 steps to implement GSCM: What are the 4 main steps ?

1) Identify costs -> Made through systematic review of the facility or the process -> Determine if and where significant environmental costs occur -> Then, focus where the probability is the greatest 2) Determine opportunities -> Determine the possible reduction of environmental costs a change in te identified functional areas + processes may bring -> Different criterias: - Potential cost of improvement - Types of environmental burdens - Barriers of change 3) Calculate benefits -> Made through a cost-benefit analysis with the help of quantitative analysis and simulation (+complemented by qualitative studies) 4) Decide, implement, monitor -> On the basis of the results of the evaluation -> After implementation: periodic review allows the management to assess the progress and pursue additional opportunities to achieve a continuous improvement process

Different strategies: What are 3 concrete examples of the Closed-loop strategy ?

1) Kodak -> return + re-manufacturing of its disposable cameras 2) Hewlett Packard -> retrieval of used printer cartridge 3) BMW -> End of life vehicle requirements for suppliers

Advantages of supply chain greening initiatives: What are the 4 advantages at the individual firm level ?

1) Lower costs 2) Greener products 3) Better integration with suppliers 4) Stronger reputation

Drawbacks of supply chain greening initiatives: What are the 3 possible drawbacks of greening initiatives ?

1) Reduction of flexibility by the use of fewer suppliers 2) Differences in organisational culture 3) Suppliers + intermediaries feel less pressured to integrate green production compared to brands which are closer to consumers

Different strategies: What are the 4 possible strategies in GSCM ?

1) Risk-based strategy 2) Efficiency-based strategy 3) Innovation-based strategy 4) Closed-loop based strategy

Advantages of supply chain greening initiatives: What are the 3 advantages at the national level ?

1) Stimulates markets for greener products 2) Creates incentives to SMEs to adopt better environmental practices 3) Opens new market opportunities for companies

Drawbacks of supply chain greening initiatives: What are 3 elements that might help to overcome those problems?

1) Transparency + constant information 2) Training 3) Capacity building -> Important to find a balance between the required investments, reduced costs in the short term and long run benefits especially considering shareholders expectations

Green supply chain management: What is the definition of "greening" a supply chain ?

= Process of incorporating environmental criteria and concern in organizational purchasing practices and long term relationships with suppliers

Different strategies: What is the Innovation-based strategy?

AIM: Greater level of innovation + intergration of environmental performance in the supply chain -> Strategy which looks at how the products are made (raw material, design) -> Build of new supply chain because concrete modifications are made -> Based on more specialised process + technology and on more complex performance standards for suppliers (ex: use of chemicals) THIS STRATEGY REQUIRES: environmental resources, specialised personnel, higher level of knowledge exchange

Different strategies: What is the Efficiency-based strategy?

AIM: 1) Going beyond only regulatory compliance 2) Based on specific manufacturing practices that provide secondary performance benefits while fitting with pre-existing organizational targets -> "Eco-efficiency" or "lean and green strategy" -> Identify and address environmental waste at every stage -> Extra requirements given to suppliers to meetoperations-based efficiency targets

Different strategies: What is the Risk-based strategy?

AIM: minimise the risk through the inclusion of basic clauses in purchasing contracts with suppliers to meet all relevant regulatory requirements -> Use of existing established standards: ISO 14001 -> Based on minimal inter-organisation commitment

Different strategies: What is the Closed-loop strategy?

AIM: reverse logistics or "product take-back" strategy -> Re-manufacturing (high value) or recycling (low value) of used products -> Integrates environmental perforamce in the entire supply chain -> Integrates issues of economic (economies of scale), operational (reverse logistics, collaborative approach) and environmental (obsolete products + waste are recycled)performance