The concept of sustainable production is emerging to counter these impending environmental, economic and social crises. A Life Cycle Engineering (LCE) approach therefore aims to reduce the waste by reusing it and therefore readily assists in promoting sustainable development.

Since Life Cycle Engineering promotes systems thinking and is proactive, it leads to collaboration and integration between various groups such as marketing, engineering, production etc. This helps organizations to get up to date data and possibly run in parallel activities which otherwise would be left to a later date.

Organizations, and the leaders and managers in them, will however need to change their mindsets to make room for LCE. For example, currently packaging development is not considered by many to be an integral part of product development and is considered to be an external activity performed by third party suppliers. It is also generally considered as a production task and is therefore not started until the production phase. 

With LCE however, the packaging development can now become an integral part of product development. LCE will allow companies to make sourcing, reuse and recycling decisions for packaging while they are still in the product development phase. As a result, this provides space in decision making, gives bargaining power with suppliers and assists organizations in making time to market reductions. 

This also means that organizations need to make changes to their current working at all of the following three levels:

·         Strategic:  to define integrated product packaging development policy

·         Tactical: to integrate the packaging into the product development planning process

·         Operational: to integrate the packaging decision making during the product development process

Life Cycle Engineering forms a basis of Green Supply Chain Planning process in contrast to traditional supply chain strategic planning where supply chain strategy aligns to business strategy. With LCE the potential economic, environmental and technical impacts of products, services or processing methods are analyzed for the entire life cycle at conceptualization and design phases.  LCE will therefore allow organizations to:

·         Save cost by reusing/recycling within a stage and therefore  avoid shifting the burden along different phases of the life cycle

·         Reduce potential costs relating to environmental issues

·         Focus on preventing pollution and avoiding producing unnecessary products

·         Instill systems thinking at each stage of the product life cycle and become more responsible ecologically

·         Make holistic decisions

·         Increase attractiveness of the organization both internally to employees and to external parties

·         Be better at collaboration and cooperation along the supply chain and increase their attractiveness as a supply chain partner

When doing this, organizations will then have greener and cleaner sustainable products and will be using methods that are innovative, improved, competitive and growth orientated.

Source : Emmet & Sood – Green Supply Chains : An Action Manifesto. This book was awarded certificate as “The Most innovative Supply Chain book in the last decade (2000-2010)

Life Cycle Management need not be expensive or complex to implement and also LCM helps companies to ensure that their choices are ecologically sound. In addition, it helps to identify opportunities to design better products, make cost reductions, gain a stronger competitive advantage, have superior strategic decision-making, identify new business opportunities and markets, improve relationships with key stakeholders and can even manage any inherent risks in the end-to-end supply chain. We will examine these aspects below

Competitive Advantage

Improved and holistic information is available to all decision makers and therefore by capitalizing on this information, companies can improve revenues, strengthen their market position and increase shareholder returns

Cost Reduction

LCM instills innovative thinking that can lead to reduced energy and raw material consumption, and reduced waste and emissions. Since LCM triggers improved communication and collaboration between partners in the entire supply chain, as supply chain partners get involved early in the product/service life cycle, therefore even better cost efficiencies can be made in the overall supply chain functions for example, in procurement, design, manufacture, distribution, sale, use and disposal.

Having lower quantities and reduced toxicity of emissions and wastes will also mean less risk of fines and penalties for any non compliance with health and environmental regulations and give a better image of the organization.

Superior Strategic Decision Making

Now that the implications of capital investments, operating expenses and future liabilities can be assessed all together and earlier, LCM leads to superior decision making across the whole organization and even the supply chains. More investment options can also become available as a more complete financial assessment is now feasible.

Improved Product/Service Design and Value

LCM can trigger innovative product and service design that help to produce improved products with more value to the consumer. Holistic product designs often do result in eco-friendly products and services that will consume less energy, water or resources and produce less waste during its service.

LCM therefore encourages designers and suppliers to think outside of the box to discover opportunities for improvements and to identify new ways of doing things that will provide both economic and environmental gains.

New Business Opportunities and Markets

These improvements on product and service design can also lead to new ideas for providing the same products or services, but with reduced environmental impacts. Companies can offer the existing products and services to new markets and therefore expand and differentiate on the basis of reduced environmental impacts. The result is new business opportunities and new markets for existing products and services.

In addition, LCM assists in the development of new or improved services, techniques or technology that will decrease or eliminate environmental impacts. Indeed, life cycle information is becoming a requirement to do business in some markets

Improved Workplace Culture

A commitment to LCM helps organizations to attract and retain their quality workforce. It presents them as socially and environmentally responsible progressive entity working for the betterment of the future generations.  Businesses can secure productive employees in an increasingly competitive labor market, and reduce their costs associated with recruitment, training and discontinuity.

Better Risk Management

LCM can help businesses reduce their risk of future liabilities by assisting to minimize the environmental, safety and health problems associated with the production, consumption, maintenance and disposal of products. It also helps in future scenario analysis and assists businesses to adapt in advance, manage the risks and capitalize on the opportunities that it presents.

Goals of LCM

The main goals of LCM that lead to sustainable development are:

·         Minimize toxic waste

·         Minimize raw material used in producing goods and services

·         Promote recycling and reuse

·         Increase process efficiency

·         Minimize energy intake

·         Increase the use of renewable resources

·         Increase the durability or lifetime of the product

·         Reduce obsolescence

We will now look at these goals in detail using the Life Cycle Engineering (LCE) approach; LCE being directly related to the product, whereas Life Cycle Management is focused not just on a particular product, but on the activities of all the partners in the supply chain.

Source : Emmet & Sood – Green Supply Chains : An Action Manifesto. This book was awarded certificate as “The Most innovative Supply Chain book in the last decade (2000-2010)

1.     Regulatory stakeholders, who either set regulations or have the ability to convince governments to set standards

2.    Consumers,  who seek emotional resonance alongside the cost and convenience factors of where and when they buy a particular product

3.    Organizational stakeholders, who are directly related to an organization and can have a direct financial impact on the organization

4.    Community groups , environmental organizations and all those other potential lobbies, who can mobilize public opinion in favor of, or against, an organizations environmental policies

5.    Media, who have the ability to influence society’s perceptions

Based on the roles of each player in the supply chain there are different incentives to migrate towards Green Supply Chains and briefly these are as follows

·         Factors that drive manufacturers towards Green Design and Green Production include:

–     Legislation

–     Corporate customer requirements

–     Competitor standards

–     Voluntary agreements

–     Maximizing product understandings

·         Environmental drivers of suppliers include:

–     Customers requirements

–     Consumers

–     Legislation

–     Consumer organizations and NGO’s

·         Logistics providers are implementing Green practices due to government regulations and customer expectations and agreements

Source : Emmet & Sood – Green Supply Chains : An Action Manifesto. This book was awarded certificate as “The Most innovative Supply Chain book in the last decade (2000-2010)

One of the best definitions of Corporate Social Responsibility is perhaps provided by Archbishop Desmond Tutu’s The Benchmark Foundation. It states:

“Corporate Social Responsibility (CSR) is the decision-making and implementation process that guides all company activities in the protection and promotion of international human rights, labor and environmental standards and compliance with legal requirements within its operations and in its relations to the societies and communities where it operates. CSR involves a commitment to contribute to the economic, environmental and social sustainability of communities through the on-going engagement of stakeholders, the active participation of communities impacted by company activities and the public reporting of company policies and performance in the economic, environmental and social arenas.”

There is a strong connection between Corporate Social Responsibility and Green Supply Chains. One of the most effective tools to achieve green transformations in the corporate world is Green Supply Chain management. It focuses on sustainable design that increases environmental and social awareness across the supply chain. Sustainable design involves reengineering of design processes to meet current and future human needs without compromising the environment. The basic objectives of sustainability are to reduce consumption of non-renewable resources, minimize waste and create healthy, productive environments through:

·         Using less and fewer materials

·         Avoiding toxic substances and choosing renewable or recyclable substances

·         Designing for disassembly

·         Minimizing energy use, moving to the use of renewable energy and extracting energy from waste in some cases

·       Keeping a product or its parts or materials in productive use for their optimal lifespan, so slowing or preventing the linear flow of materials  from extraction and processing to disposal

Despite an area of significant overlap, GSCM is however not a subset of CSR. While CSR focuses on area under the direct control of a particular organization, Green Supply Chain thinking goes beyond that to recognize that in today’s corporate world, the area of influence of an organization persists far beyond its boundaries. Hence GSCM calls on all partners of a particular supply chain to collaborate to create an end-to-end Green Supply Chain to assure a sustainable and prosperous future. 

Source : Emmet & Sood – Green Supply Chains : An Action Manifesto. This book was awarded certificate as “The Most innovative Supply Chain book in the last decade (2000-2010)

Positive impact on financial performance

Despite ample evidence to the contrary, there persists a myth that going green costs additional expense. Some of the factors responsible for persistence of this myth are inertia, the lack of a systematic approach and an unwillingness to engage in sustained and changed thinking that is necessary to create a green supply chain.

However, the most fundamental benefit of Green Supply Chains is a positive long term net impact on the financial performance of the organization. This has been proven by both analysis and empirical evidence.

Sustainability of Resources

Green Supply Chains sponsor the effective utilization of all of the available productive resources of organizations. By incorporating Green Supply Chain Management thinking through their entire business decision making process, organizations may now purchase green input resources that will flow through environmental friendly production process to produce the desired green outputs.

Lowered Costs/Increased Efficiency

At the core of Green Supply Chain Management is the principle of reducing waste by increasing efficiencies. Effective management of resources and suppliers, can reduce production costs, promote recycling and also, the reuse of raw materials. Also, the production of hazardous substances can be reduced, thereby preventing organizations from being fined as a result of violating environmental regulations.

Consequently, the relevant operational costs are reduced whilst; the efficiency of using resources is improved.

Product Differentiation and Competitive Advantage

It helps an organization to position itself and its products as environmentally friendly in the customers’ perception. Besides attracting new profitable customers for organizations, it will give competitive edge over the competitors in the market place. It will also strengthen the brand image and reputation in market place.

Adapting to Regulation and Reducing Risk

Organizations adopting Green Supply Chain practices can reduce the risk of being prosecuted for anti-environmental and unethical practices. A demonstrated effort towards creating an effective Green Supply Chain through the sustained dedication of resources, activity, measurement and management protocol, will be highly regarded in the event that any questions arise.

Improved quality and products

Organizations that produce products which are technologically advanced and environment friendly will find this will enhance the brand image and brand reputation in customers’ mind.

Besides the above six benefits, there are additional advantages that can be generated by GSCM:

·         Effective management of Suppliers

·         Dissemination of technology, advanced techniques, capital and knowledge among the chain partners

·         Transparency of the supply chain

·         Large investments and risks are shared among partners in the chain

·         Better control of product safety and quality

·         Increased sales and revenue

·         Beneficial uses for waste

Source : Emmet & Sood – Green Supply Chains : An Action Manifesto. This book was awarded certificate as “The Most innovative Supply Chain book in the last decade (2000-2010)