APICS Operations Management Body of Knowledge Framework, Third Edition

2.3 Sustainability

In operations and supply chain management, sustainability is the idea that business can help ensure that markets, commerce, technology, and finance advance in ways that benefit economies, societies, ecosystems, and stakeholders in general—or, at a minimum, do no harm—and contribute to a more maintainable and inclusive globaleconomy.

2.3.1 Triple bottom line (TBL)

The TBL refers to people, planet, and profit. In TBL reporting, environmental, social, and economical aspects all are equally considered.

.1 Life cycle assessment

Life cycle assessment is a technique to assess the environmental aspects and potential impacts associated with a product, process, or service by compiling an inventory of relevant energy and material inputs and environmental releases evaluating the potential environmental impacts associated with identified inputs and releases interpreting the results to make a more informed decision.

.2 Corporate social responsibility

Corporate social responsibility means using fair and beneficial business practices regarding labor and the community or region where a firm conducts its business. It is about providing a safe work environment, giving back to a community by contributing to health care and education, and avoiding the exploitation of labor and resources of an area.

.3 Economic prosperity

Economic prosperity refers to supporting those that provide financial capital in the form of earnings and related benefits, and boosting the economy of the society.

2.3.2 Sustainable supply chain

Sustainable supply chains seek clean methods of production, minimization of the environmental footprint of products and services, and combining environmentally friendly decisions with effective supply chain practices. Clean production focuses on

  • waste minimization and avoidance
  • reusing waste products when possible
  • reclaiming products at the end of useful life
  • preventing or reducing pollution at the source
  • substituting for toxic and hazardous materials
  • reducing waste and potential pollutants in product or service as well as transportation to market.

  • .1 Drivers of sustainable supply chains 

    Brand image. Creating competitive advantage for the firm, including attracting customers, employees, and partners who also value sustainability.

    Innovation. Introducing new products that are environmentally friendly and providing a new source of revenue.

    Cost cutting. Recycling products or making changes to processes that reduce costs and are more efficient.

    Environmental awareness. Addressing problems such as global warming, toxic substance use, and use of non-replenishable resources.

    Regulations. Complying with environmental regulations and standards such as the Clean Air Act, the Occupational and Safety Health Act, and the Pollution Prevention Act in the United States; the Restriction of Hazardous Substances Directive in Europe; China’s Air Pollution Control Law; and ISO 14000.

    .2 Closed-loop manufacturing

    Closed-loop manufacturing is a system in which a product is created using renewable energy, with no pollutant output and no waste—the materials used in production are recycled and reused, not discarded. Products are built for durability and reuse, and producers are responsible for the entire product lifecycle, including the post-consumer phase. The concept is rooted in circular concepts of product design and production.

    2.3.3 Sustainable new product development

    Design for the environment, or eco-design, integrates environmental considerations into product and process design. Developers use tools and practices that encourage environmental responsibility while reducing costs, promoting competitiveness, and enhancing innovation, but also maintaining price, performance, and quality standards.

    Eco-design encourages designing products with more renewable supplies and less materials (for example, dematerialization), sharing resources (for example, car clubs and rental services), integrating product functions (for example, a combination scanner, printer, copier, and fax machine), and optimizing functions (for example, reducing packaging through better design).

    2.3.4 Green six sigma

    Green six sigma is taking standard lean and six sigma philosophies and applying them to the improvement of environmental sustainability.

    2.3.5 Sustainable procurement

    This refers to procuring goods and services with less impact on the environment than other products or services meeting similar performance requirements. Key elements include buying energy-efficient or recycled products incorporating packaging that is reusable, recyclable, or compostable and eliminating packaging where possible working to eliminate toxins and pollutants from cleaning solvents encompassing green ideals when building and maintaining facilities.

    2.3.6 Total cost of ownership

    From a sustainability standpoint, total cost of ownership is consideration of the entire cost of the product as part of sourcing, from purchase to final disposal. This includes

    Acquisition costs—Costs related to raw materials, purchase planning, quality, taxes, purchase price, and financing

    Ownership costs—Costs related to energy use, maintenance and repair, financing, and supply chain/supply network

    Post-ownership costs—Costs related to disposal, environment, warranty, product liability, and customer service/customer dissatisfaction.

    2.3.7 Carbon footprint analysis

    A carbon footprint analysis is performed to measure the amount of carbon dioxide and other greenhouse gases released during the making, shipping, storage, and use by consumers of goods and services. Often, it is found that use by consumers is a greater factor than production in determining how much of these gases are released.

    2.3.8 Reverse logistics

    Reverse logistics is planning, implementing, and controlling the flow of materials, finished goods, and related information from the consumer to the producer for the purposes of recapturing value or proper disposal.

    2.3.9 The sustainable roadmap

    This refers to establishing a vision, or roadmap, of sustainable principles for a business. The process includes steps such as

  • placing sustainability and social responsibility at the core of professional practices
  • educating stakeholders on sustainability concepts, including all employees and partners throughout the supply     chain
  • developing and improving practices, processes, products, services, and standards that lead to a sustainable         supply chain
  • incorporating the waste principles of reduce, reuse, and recycle to all resources
  • measuring performance and setting targets for improvements.
  • 2.3.10 United Nations Global Compact

    The UN Global Compact is a set of strategies for businesses to help them align goals and policies with universal principles surrounding human rights, labor, environment, and anticorruption. The 10 principles of the UN Global Compact are reproduced below.

  • Human rights

  • 1. Businesses should support and respect the protection of internationally proclaimed human rights; and make sure that they are not complicit in human rights abuses.
  • Labour

  • 1. Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining;

    2. the elimination of all forms of forced and compulsory labour;

    3. the effective abolition of child labour; and the elimination of discrimination in respect of employment and occupation.

  • Environment

  • 1. Businesses should support a precautionary approach to environmental challenges;

    2. undertake initiatives to promote greater environmental responsibility; and encourage the development and         diffusion of environmentally friendly technologies.

    Anti-corruption

    1. Businesses should work against corruption in all its forms, including extortion and bribery.