Chapter 10 Supply chain management. This belongs to a full series of Supply chain management Slide.

1. ‹#› Het begint met een idee
CHAPTER 10 – SUSTAINABILITY AND THE SUPPLY CHAIN
Dung H. Nguyen
Faculty of International Economic Relations
University of Economics and Law

2. Vrije Universiteit Amsterdam
 The role of sustainability in a supply chain
 Key pillars of sustainability
 Sustainability and supply chain drivers
 Closed-loop supply chains
CONTENTS
CONTENTS
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THE ROLE OF SUSTAINABILITY IN A SUPPLY CHAIN
THE ROLE OF SUSTAINABILITY IN A SUPPLY CHAIN
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 Sustainability: economic status, natural environment, fair trade,
good employment, appropriate relationships with stakeholders
 Why to focus on supply chain sustainability?
 Reducing risk and improving the financial performance of the
supply chain
 Community pressures and government mandates
 Attracting customers that value sustainability

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KEY PILLARS OF SUSTAINABILITY
KEY PILLARS OF SUSTAINABILITY
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 Economic pillar
 Long-term firm corporate sustainability
 Social pillar
 Workforce
 Customers
 Society
 Environmental pillar
 Environmental impacts
 Natural resource reduction activities

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EXAMPLES
EXAMPLES
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Screen captures:
1. dole.com
2. starbucks.com
3. coca-colacompany.com
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SUSTAINABILITY AND SUPPLY CHAIN DRIVERS
SUSTAINABILITY AND SUPPLY CHAIN DRIVERS
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Competitive Strategy
Supply Chain Strategy
Efficiency Responsiveness
Facilities
Supply chain structure
Cross-Functional Drivers
Logistical Drivers
Inventory Transportation
Information Sourcing Pricing
Source: Chopra and Meindl (2016)

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FACILITIES
FACILITIES
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 Consume energy and water & emit waste, greenhouse gases
 Ten principles of eco-design for green production:
 Material intensity
 Energy intensity
 Controlling harmful resources
 Using recycled or recyclable materials
 Selecting reliable and robust processes
 Environmental functionalities
 Sustainable alternatives
 Increased environmental awareness
 Fine-tune performance of the production process
 Life cycle design

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NIKE’S SUSTAINABLE DC
NIKE’S SUSTAINABLE DC
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• 100% renewable electricity (wind, solar power)
• many windows and automated LED lighting
• 99 % of cargo comes by water (canal), removing 14,000 trucks per year
Source: arcadis

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INVENTORY
INVENTORY
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• Inventory in landfill: harmful additives, loss of materials
 Packaging for the environment:
 Using minimum packaging volume and weight
 Packaging design for reuse, recovery, recycling
 Minimizing the presence of noxious and hazardous substances in
packaging material
 Biodegradable packaging design

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TRANSPORTATION
TRANSPORTATION
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Source: Achillas et al. (2019)

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TRANSPORTATION
TRANSPORTATION
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Source: Achillas et al. (2019)

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TRANSPORTATION
TRANSPORTATION
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 Fuel consumption
 CO2 emission, waste
 Product design & packaging to reduce transportation cost &
emissions
 Alternative fuels: biofuel, electric power
 Full truck loads

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GREEN PRACTICES IN TRANSPORTATION/DISTRIBUTION
GREEN PRACTICES IN TRANSPORTATION/DISTRIBUTION
 Preference and use of non-polluting means of transport
 Use of an energy efficient transportation and distribution fleet
 Design of efficient distribution networks
 Better route design
 Recycling of old vehicles
 Increase of utilization degree of trucks
 Designing green-sustainable distribution networks
 Adoption/implementation of telematics systems and technologies
 Use of appropriate packaging
 Adoption of eco-driving habits
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SOURCING – GREEN PROCUREMENT
SOURCING – GREEN PROCUREMENT
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 Environmentally friendly (raw) materials
 Social and economic aspects of procurement
 Only purchase products that are really needed
Source: difs

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INFORMATION
INFORMATION
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 Standards for measurement and reporting
 Common set of standards to improve sustainability

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PRICING
PRICING
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 Differential pricing to improve utilization of assets by
changing customer’s willingness to pay
Source: indiamart

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CLOSED-LOOP SUPPLY CHAINS
CLOSED-LOOP SUPPLY CHAINS
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Closed-loop supply chain management is “the design,
control, and operation of a system to maximize value
creation over the entire lifecycle of a product with dynamic
recovery of value from different types and volumes of
returns over time.”

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REVERSE FLOWS IN A SUPPLY CHAIN
REVERSE FLOWS IN A SUPPLY CHAIN
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Source: de Koster et al. (2002)

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CLOSED LOOP SUPPLY CHAIN IN CONSUMER GOODS
CLOSED LOOP SUPPLY CHAIN IN CONSUMER GOODS
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Source: Blumberg (2005)

20. ‹#› Het begint met een idee
CHAPTER 10 – SUSTAINABILITY AND THE SUPPLY CHAIN
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