Information Systems and the Environment (2001) / Chapter Skim
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Environmental Information in Supply-Chain Design and Coordination
Environmental Information in Supply-Chain Design and Coordination
Pages 115-138
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From page 115... ...
Quality management evolved into time-based competition, then into process reengineering, and finally into organizational transformation and the core competency movement. In all of this, process management remained a central focus for two reasons: first, because business processes provided a characterization of the business enterprise that enabled discourse at the strategic level; and second, because team-based approaches to continuous improvement found their best organizational match when assigned to well-defined processes.
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From page 116... ...
Our purpose in this paper is to review environmental stewardship activities in respect to the supply chain, with a focus on both design and continuous improvement processes. We consider in particular the issue of how environmental information is gathered and used in these activities.2 Our examples are primarily from the chemical and process industries, based on a series of interviews with leading companies in that industry connected to the Risk Management and Decision Processes Center of The Wharton School at the University of Pennsylvania.
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From page 117... ...
In all of these areas, careful tracking of environmental information (cost, value, and performance) is essential in understanding, managing, and legitimizing investments in product stewardship activities in the supply chain.5 Let us explore these potential benefits in a bit more detail.
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From page 118... ...
Liability and Negligence Another factor driving companies to improve their environmental performance is the risk of being held liable, or found negligent, for accidents or environmental damage. When a company experiences an accident or an incident with significant real or perceived environmental damage, the company may be held liable to pay for remediation.
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From page 119... ...
Both of these tactics were evident in the product stewardship activities of the companies that we interviewed.7 Note that changing distribution channels or supply-chain partners does not guarantee a company less liability, and it has additional disadvantages. Liability may not be reduced if risky customers still purchase the company's products through intermediaries (e.g., distributors or formulators)
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From page 120... ...
In communities, public-interest groups are increasingly pressuring companies to practice environmental prudence and to prove those actions. The availability of easily accessible information on a company' s environmental objectives and measurable performance criteria therefore can be expected to play an increasingly important role in assuring stakeholders that a company or facility is adhering to stated objectively A frequently cited example of the interaction of information and performance is in the area of Toxics Release Inventory (TRI)
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From page 121... ...
Employee Health and Safety Similar to community concerns, employee health and safety (H&S) is a key focus of product stewardship.
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From page 122... ...
Understanding product usage also helps in eliminating waste by encouraging source reduction and reuse (Willums and Goluke, 1992~. These means of increasing a product's user-friendliness depend on close ties with customers, so that product stewardship is not just a means of avoiding liability and ensuring regulatory compliance, but is also a business driver of product and process innovation for all supply-chain participants.
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From page 123... ...
Another cost-effective means of reducing transportation-associated environmental effects is the use of alternative fuels.
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From page 124... ...
This not only reduces sources of risk and liability by reducing pollution, wastes, and hazards, it also promotes reduced costs and better products. This expanded view of product stewardship and supply-chain management is gradually transplanting the traditional view focused on internal environmental excellence and caveat emptor.
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From page 125... ...
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From page 126... ...
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From page 127... ...
In this analysis, environmental information plays a key role in a number of dimensions including source reduction, transportation optimization, emission analysis, and reverse logistics. Source Reduction Utilizing environmental information to reduce the use of inputs can be accomplished as a part of material balances incorporated in life-cycle analysis.~4 Collecting information about risks from similar products and processes is important in comprehending the environmental impact of a new process.
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From page 128... ...
In addition to the recognized benefits of vehicle routing and replenishment improvements that such information can enable (Fisher et al., 1983) , container sensors can provide telemonitoring of contents, pressure, and temperature, which is increasingly important for both improved order fulfillment as well as product stewardship assurance.
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From page 129... ...
IT is clearly a foundation for all of this activity. Reverse Logistics A final use for IT in the design stage is in the reverse logistics aspects of the supply chain to design the entire product life cycle from cradle to grave.
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From page 130... ...
MANAGERIAL SYSTEMS USED TO DRIVE ENVIRONMENTAL EXCELLENCE Integrating the supply chain to ensure environmental excellence requires integration with key business processes, measurement of results, and commitment from top management. A number of managerial concepts exist that promote these steps toward environmental prudence; collectively, they are called environmental management systems (EMSs)
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From page 131... ...
EMS s may not set specific requirements for environmental compliance, but they do call for a commitment to compliance with environmental laws, prevention of pollution, and continual improvement of environmental performance. EMS s can include specific compliance statements and procedures, and these can be audited as part of the ISO 14000 EMS certification process.
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From page 132... ...
Note that although the ISO 14000 standards require a commitment to continual improvement, at least in the company' s environmental management systems, they do not require a verification of continual improvement in environmental performance. Current plans call for the EU to reconcile EMAS and ISO 14000 by accepting ISO guidelines with an explanatory document specifying the additional EMAS requirements.
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From page 133... ...
The potential benefits from ISO 14000 stem in part from the commonality of practice that standards are intended to promote, together with improvements in both cost and performance. For our purposes here, we note only that ISO 14000 is being increasingly viewed as a potential standardized vehicle for structuring and auditing EMSs, both across business units in a given corporation as well as across the extended supply chain.
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From page 134... ...
Finally, is environmental information and supporting IT an add-on or is it fundamental to the new product or process development and design process? Investment Drivers A second question of interest concerns the drivers of investments in product stewardship and environmental excellence in the extended supply chain.
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From page 135... ...
How can such metrics be made more visible to those who affect the outcomes? How should these be coordinated with environmental strategy for the business units and with various key business processes implementing this strategy (e.g., product and supply-chain design, product stewardship, regulatory compliance, customer support, community and investor relations)
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From page 136... ...
Many initiatives currently under way stem from customer demands and are the direct result of product stewardship activities. As business units develop a philosophy of improving environmental impacts throughout the supply chain, they become proactive in promoting changes that reduce environmental impacts for supply-chain partners.
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From page 137... ...
. Fin the interviews surrounding this study, however, most companies indicated that they were still being driven by a liability and compliance mindset in product stewardship.
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From page 138... ...
1991. Product stewardship: exploring the "how-to." December 11, pp.
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