and storage of unsold products. Poor forecasting and inventory management are not only a source of unnecessary cost to manufacturing firms, they also mask large, hidden sources of environment impacts. Products that are scrapped because of poor inventory controls are good neither for profits nor environmental quality. Improvements in inventory management can have positive impacts on both profits and environmental quality.

The logistics of distribution are also an important determinant of environmental quality, particularly in terms of the energy used for transportation. When a company controls the distribution of its products, it can make effective gains in environmental quality. Increasingly, distribution is also outsourced often to large distribution service providers. Distribution-related concerns about environmental quality are most evident in mail-order-type businesses. An order may be called into a toll-free number and relayed to a supplier, who then either manufacturers the product or packages it and gets the product to the customer by land, sea, or air through a transportation and distribution service provider, such as the U.S. Postal Service or private companies like United Parcel Service. The changing nature of production and distribution will likely raise difficult questions about such issues as location, transportation, and logistics, which impact both cost and environmental quality concerns.

Service, Maintenance, and Asset Recovery

The service and maintenance of a product (particularly a long-lived product) can result in environmental impacts that are easily overlooked. As product life cycles get shorter, many more durable products, such as printers and personal computers, typically function long after the manufacturer has stopped making them. As a result, supplying replacement parts can be expensive for the manufacturer. However, discarded products may be an excellent source for reusable and refurbishable components (Holusha, 1996). The large volume of products to be serviced, and the high profitability of doing so, can make maintenance and repair services a ready outlet for large volumes of discarded parts.

Both legal and market requirements are forcing many businesses to collect and recover their products, or assets. Whether or not recycling or disposing of packages and products is economical depends heavily on product design. As legal and market dictates change, many businesses are responding by developing recycling systems. For example, to recycle the electrophotographic cartridges used in laser printers and fax machines, Canon developed different approaches to meet the characteristics of its two major markets (Maki, 1994). In Europe, the company uses its network of dealers as collection points. In the United States, where there are diversified sales channels over a vast geographical area, Canon collects its cartridges from customers through a prepaid parcel service. As an added incentive, the company contributes $1 to an environmental group of the customer's choosing for each cartridge returned.

The National Academies of Sciences, Engineering, and Medicine
500 Fifth St. N.W. | Washington, D.C. 20001

Copyright © National Academy of Sciences. All rights reserved.
Terms of Use and Privacy Statement