Developing Sustainable
Supply Chains
Mary Margaret Rogers
Anderson School of Management
University of New Mexico
Sustainability in Supply Chain
Management
Definitions:
Supply chain management encompasses all activities
associated with the flow and transformation of goods from
the raw materials stage through the end user, as well as the
associated information flows. (CSCPM)
Sustainable supply chain management requires that
sustainability criteria be met while maintaining
competitiveness through meeting customer needs. (Seuring
and Müller, 2008)
Why Should Supply Chains Try to Be
Sustainable?
• Supply chains are boundary spanning
– Coordination across normal boundaries means
that many aspects of sustainability may be
affected
– From initial processing of RM to consumption by
final customer
Why Should Supply Chains Try to Be
Sustainable?
• Outsourcing
• Watchdog groups
• Government requirements
Why Should Supply Chains Try to Be
Sustainable?
• Reduce cost and wastes
• Manage risks
• Create distinguishing (sellable) reputation
• Reinforce shareholder value
Issues affecting sustainability
• Product design
• Source reduction
• Product returns
• Recycling
• Length of product life
cycle
• Material substitution
• Extension of product
life cycle
• Refurbishing
• End of life disposal
• Packaging
• Waste disposal
• Repair
• Remanufacturing
Puma’s Clever Little Bag
Sustainability in Supply Chain
Management
• Use of the triple bottom line
– Social
• Manage risks to organizational reputation
• Create competitive advantage
– Environmental
• Regulatory issues
• Risk of harm from usage, disposal, packaging, shipping
– Economic
• Sustainability can be cost efficient
• Sustainability can enhance shareholder value
Good?
The Triple Bottom Line
Social
Performance
Environmental
Performance
Sustainability
Best
Better
Better
Economic
Performance
Adapted from: Carter, CR, and DS Rogers. 2008. A
framework of sustainable supply chain management:
Moving toward new theory. International Journal of Physical
Distribution & Logistics Management 38 (5):360-387.
Triple Bottom Line
Supporting Factors
Transparency and Risk
Management
•Anticipate harm from
activities
•Stakeholder Engagement
•Supplier Operations
Organizational Culture
•Deeply Ingrained
•Organizational Citizenship
Strategy
•Sustainability as part of
an integrated strategy
•Values and Ethics
Sustainable Supply Chains at Walmart
November 1, 2006 Walmart introduced its
Sustainable Packaging Scorecard
Goal: Reduce packaging in supply chain by 5% by 2013
Predicted Results (Walmart U.S. only):
• 667,000 metric tons of CO2 not emitted
• 213,000 trucks off the road annually
• 66.7 million gallons of diesel fuel saved
Sustainable Supply Chains at Walmart
The 7 R’s of Sustainable Packaging
• Remove
• Reduce
• Reuse
• Renew
• Recycle
• Revenue
• Read
Sustainable Supply Chains at Walmart
“When Wal-Mart tells a supplier that it wants a
change in packaging, that supplier will change
all its packaging…Wal-Mart has the potential to
have a tremendous impact on America’s
environmental footprint.”
David Willett, spokesman for The Sierra Club
Sustainable Supply Chains at Walmart
July 16, 2009: Walmart announced it would
develop a Sustainability Index.
Step 1: Supplier Assessment
Step 2: Life cycle Analysis Database
Step 3: Tool for Consumer
Sustainable Supply Chains at Walmart
February 25, 2010: Walmart announced plans to
eliminate 20 million metric tons of
greenhouse gas emissions from the global
supply chain by the end of 2015.
Goal: Reduce energy use and cost for suppliers,
Walmart, and customers.
Sustainable Supply Chains at Walmart
Reverse Supply Chains
A reverse supply chain is a means of
enhancing sustainability by retrieving
products from customers.
• Safe end-of-life disposal
• Refurbishing
• Reuse for spare parts
• Value in recycling
What’s different about reverse
supply chains?
Forward Supply Chain
Reverse Supply Chain
• Planning:
• Planning:
– Forecasts
• Location:
– One to many transportation
• Costs:
– Well-defined
– Focus on product ordering
costs
• Visibility
– High priority
– Reactive
• Location:
– Many to one transportation
• Costs:
– Not easily defined
– Additional costs not easily
justified
• Visibility
– Low priority
Benefits of Reverse Supply Chains
• Economic
– Maintain product value—reuse
– Continuous improvement
• Ethical
– Customer safety
– Customer satisfaction
• Environmental
– Protect and safeguard sustainability
• Legal
– Global rules and regulations (WEEE Act)
Reverse Supply Chain Challenges
• Operational
– Information and process flow
– Roles
– Product
• Financial
– Costs
• Technological
– Information technology systems