Design and Management

Core action areas in supply and broader value chain management include product design and development, the design of the chain network, planning supply and demand forecasting, planning and managing inventories, pricing and margin sharing, as well as marketing and customer services. All of these hold often untapped possibilities for introducing environmental innovations that make perfect business sense.

Take design of the network as example. In the planning of distribution, transport and logistics, consideration can be given to greater use of carbon light transport modes, batch sizing that enables efficiency economies of scale, and sustainable solutions when exploring options such as home delivery or customer pick-up in the local neighbourhood.

Value chain management can be a key contributor in the development and implementation of recognised environmental and social responsibility principles. Efforts to "green" the supply chain have shown a growing body of experience over the last ten years. This can take the form of:

  • Screening suppliers for environmental performance (for example making environmental rating part of the total rating of the supplier);

  • Require an Environmental Management System (for example auto industry manufacturers are requiring ISO 14001 implementation and registration from suppliers, which affects thousands of suppliers world-wide);

  • Setting purchasing standards (for example to bar the purchase of products containing toxic substances);

  • Working collaboratively with suppliers on green design initiatives (including working with suppliers to reduce packaging and use containers that can be shipped back for re-use); and

  • Providing training and information to build suppliers' environmental performance management capacity.