Post on 03-Jun-2018
8/12/2019 Chopra Scm5 Ch18
1/16
PowerPoint presentation to accompany
Chopra and Meindl Supply Chain Management, 5e
1-1
Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall.Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall.Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall.
1-1
Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall.
1-1
Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall.
18-1
Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall.
18Sustainability and
the Supply Chain
8/12/2019 Chopra Scm5 Ch18
2/16
18-2Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall.
Learning Objectives
1. Understand the importance o sustainability in
a supply chain
2. !iscuss the challenge to sustainability posedby the tragedy o the commons
". !escribe #ey metrics that can be used to
measure sustainability or a supply chain
$. %dentiy opportunities or improved
sustainability in various supply chain drivers
8/12/2019 Chopra Scm5 Ch18
3/16
18-"Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall.
&he 'ole o Sustainability
in a Supply Chain
( &he health and survival o every supply chainand every individual depends on the health o
the surrounding )orld
( *+pand the goal o a supply chain to others thatmay be aected by supply chain decision
( ,actors driving ocus on sustainability1. 'educing ris# and improving the inancial
perormance o the supply chain
2. ttracting customers )ho value sustainability
". a#ing the )orld more sustainable
8/12/2019 Chopra Scm5 Ch18
4/16
18-$Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall.
&he &ragedy o the Commons
( !ilemma arising )hen the common gooddoes not align perectly )ith the good o
individual entities
( /etting any agreement on action is diicultbecause the optimal joint action is not
individually optimal
( 0eed or intervention but considerabledisagreement on the reuired orm o
intervention
8/12/2019 Chopra Scm5 Ch18
5/16
18-Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall.
3hat re Some Solutions
to &his 4&ragedy56
( 0o solution )ithout ta#ing a)ay someo the reedom that participants
( 0eed to choose rom options that areunli#ely to be supported by all o their
o)n ree )ill
8/12/2019 Chopra Scm5 Ch18
6/16
18-7Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall.
3hat re Some Solutions
to &his 4&ragedy56
( utual coercion social arrangements ormechanisms coerce all participants to
behave in a )ay that helps the common
good
Command-and-control approach
ar#et mechanisms
Cap-and-trade
9roportional ta+
8/12/2019 Chopra Scm5 Ch18
7/1618-:Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall.
;ey etrics or Sustainability
1. *nergy consumption
2. 3ater consumption
". /reenhouse gas emissions$. 3aste generation
(.Challenges )ith scope(.bsolute or relative measures o
perormance
8/12/2019 Chopra Scm5 Ch18
8/1618-8Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall.
Sustainability and
Supply Chain !rivers
( Opportunities identiied by matching theour categories )ith supply chain drivers
( ,acilities Signiicant consumers o energy and )aterand emitters o )aste and greenhouse gases
Separate the improvement opportunities into
those that generate positive cash lo)s and
those that do not
8/12/2019 Chopra Scm5 Ch18
9/1618-
8/12/2019 Chopra Scm5 Ch18
10/1618-1ACopyright 2013 Pearson Education, Inc. publishing as Prentice Hall.
Sustainability and
Supply Chain !rivers
( &ransportation Lo)er transportation costs also tends to
reduce emissions and )aste 9roduct design a signiicant role in reducing
transportation cost and emissions
'educing pac#aging and allo)ing greater
density during transportation
8/12/2019 Chopra Scm5 Ch18
11/1618-11Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall.
Sustainability and
Supply Chain !rivers
( Sourcing ajority o energy and )ater use and )aste
and emissions occurs in e+tended supplychain outside the enterprise
*+tended supply chain and )or# )ith their
suppliers to improve perormance
Beriying and trac#ing supplier perormanceon sustainability is a major challenge
8/12/2019 Chopra Scm5 Ch18
12/1618-12Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall.
Sustainability and
Supply Chain !rivers
( %normation /ood inormation is a big challenge
bsence o standards leads to claims oimprovement that are not veriiable
Leads to company-speciic standards and an
e+plosion o certiications and certiying
agencies Use o consistent measures )ithin a supply
chain
8/12/2019 Chopra Scm5 Ch18
13/1618-1"Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall.
Sustainability and
Supply Chain !rivers
( 9ricing Consumption visibility and dierential pricing by
load or time o day may ma#e a signiicant
dierence in the usage o energy
Change customer@s )illingness to pay or a product
that is produced and distributed in a more
sustainable manner but costs more Sustainability cannot be improved simply by
ocusing on reducing costs or the use o incentives
8/12/2019 Chopra Scm5 Ch18
14/1618-1$Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall.
Closed-Loop Supply Chains
( Supply chains cause signiicant harm to theenvironment )hen their output ends up in a
landill
( %mprove sustainability by designing products thatcan be reused and recycled( ust be supported by a supply chain that ensures
recycling
( *conomic interests o all the parties must beunderstood and aligned or the activities to be
perormed
8/12/2019 Chopra Scm5 Ch18
15/1618-1Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall.
Summary o Learning Objectives
1. Understand the importance o sustainability
in a supply chain
2. !iscuss the challenge to sustainability posed
by the tragedy o the commons
". !escribe #ey metrics that can be used to
measure sustainability or a supply chain
$. %dentiy opportunities or improvedsustainability in various supply chain drivers
8/12/2019 Chopra Scm5 Ch18
16/1618 17
ll rights reserved. 0o part o this publication may be reproduced= stored in a retrieval
system= or transmitted= in any orm or by any means= electronic= mechanical= photocopying=recording= or other)ise= )ithout the prior )ritten permission o the publisher.
9rinted in the United States o merica.