This document discusses developing sustainable supply chains. It defines supply chain management and sustainable supply chain management. There are several reasons why supply chains should strive to be sustainable, including to reduce costs and risks, manage reputational issues, and reinforce shareholder value. The document also discusses issues affecting sustainability across various stages of production and distribution. It emphasizes using a triple bottom line approach of evaluating environmental, social, and economic impacts. Examples are provided of sustainable supply chain initiatives undertaken by Walmart. Reverse supply chains and their benefits and challenges are also outlined.

1. Developing Sustainable Supply
Chains
Mary Margaret Rogers
Anderson School of Management
University of New Mexico

2. 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)

3. 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

4. Why Should Supply Chains Try to Be
Sustainable?
• Outsourcing
• Watchdog groups
• Government requirements

5. Why Should Supply Chains Try to Be
Sustainable?
• Reduce cost and wastes
• Manage risks
• Create distinguishing (sellable) reputation
• Reinforce shareholder value

6. Issues affecting sustainability
• Product design
• Product returns
• Length of product life
cycle
• Extension of product life
cycle
• End of life disposal
• Packaging
• Source reduction
• Recycling
• Material substitution
• Waste disposal
• Refurbishing
• Repair
• Remanufacturing

7. Puma’s Clever Little Bag

8. 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

9. 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.
Environmental
Performance
Social
Performance
Economic
Performance
Sustainability
Good?
Better
Best
Better
The Triple Bottom Line

10. Triple Bottom Line
Supporting Factors
Transparency and Risk
Management
• Anticipate harm from
activities
• Stakeholder Engagement
• Supplier Operations
Strategy
• Sustainability as part of an
integrated strategy
Organizational Culture
• Deeply Ingrained
• Organizational Citizenship
• Values and Ethics

11. 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

12. Sustainable Supply Chains at Walmart
The 7 R’s of Sustainable Packaging
• Remove
• Reduce
• Reuse
• Renew
• Recycle
• Revenue
• Read

13. 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

14. 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

15. 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.

16. Sustainable Supply Chains at Walmart

17. 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

18. What’s different about reverse supply
chains?
Forward Supply Chain Reverse Supply Chain
• Planning:
– Forecasts
• Location:
– One to many transportation
• Costs:
– Well-defined
– Focus on product ordering costs
• Visibility
– High priority
• Planning:
– Reactive
• Location:
– Many to one transportation
• Costs:
– Not easily defined
– Additional costs not easily
justified
• Visibility
– Low priority

19. 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)

20. Reverse Supply Chain Challenges
• Operational
– Information and process flow
– Roles
– Product
• Financial
– Costs
• Technological
– Information technology systems

21. The
Circular Economy
in the
Asia Pacific Region
www.circularecconomyasia.org