TEstBook

COURSE MODULE
Green Supply Chain Management
Course code:BLC308/03
Course Writer: Dr. Quah Hock Soon School of Business and Administration (SBA)


COURSE MODULE
UNIT 1
Green Supply
Chain Management
Course code:BLC308/03


Project Advisor
Professor Dr Zoraini Wati Abas
Course Coordinator
Ms. Kan Wen Huey
Course Writer
Dr Quah Hock Soon
Language Editor Developed by
Online Digital Learning Lab (ODL Lab)
Conceptualizer & Lead Learning Designer
Fauziyah Md Aris (Ms. Qash)
Visualizers & Learning Designers
Norliza Mhd Rodzi & Nurain Mohd Hassan
Cover Design & Content Layout
Norliza Mhd Rodzi
Page Layout & Formatting
Michelle/Elaine/Magic
Published by
Instructional Design for Engaging Experiences (IDeX)
2019 Wawasan Open University
All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without prior written permission from Wawasan Open University.
Wawasan Open University - DU013 (P)
Wholly owned by Wawasan Open University Sdn. Bhd. (700364-W)
54 Jalan Sultan Ahmad Shah, 10050 Penang, Malaysia
Tel: (604) 2180333 Fax: 04 226 9323 Email: [email protected] Website: www.wou.edu.my


01
02
03
04 05
Part 1 | About the Course
Part 2 | Course Overview
Course Synopsis
Course Contents
Course Learning Outcomes Study Schedule Assessment Methods
Part 3 | Study Guide
TABLE OF CONTENTS
Unit 1: Unit 2: Unit 3: Unit 4: Unit 5:
Part
Green Supply Chain Management
Designing Green Value Chain
Procurement and Green Production
Logistics and Circular Economy
Green Supply Chain Performance, Globalization and Technology
4 | References
Part 5 | Feedback Form
BLC308/03 Green Supply Chain Management 3


Part 1
ABOUT THE COURSE
COURSE DETAILS
(Course Details & Allocation of Student Learning Time)
School
Course Type
Credit Hours
Learning Hours : 120 hours
: School of Business Administration (SBA) : Core Course
: 3 hours
Course Title : Green Supply Chain Management Course Code : BLC308/03
Course Coordinator Email
Contact No
Core Reading Materials :
: Ms. Kan Wen Huey
: [email protected] : 04-2180 386
ALLOCATION OF STUDENT LEARNING TIME
No
Activities
No. of Hours
60
10 10
30
8 2
1 Study Learning Materials, Learning Activities and Self- Tests
2 Attending 5 Tutorial Classes (2 Hours per class)
3 Participation in Online Forum Discussions
4 Completing the Course Assignments (CA1 & CA2)
5 Exam Revision
6 Examination
BLC308/03 Green Supply Chain Management
4
Total
120


Part 2 COURSE OVERVIEW
(Course Synopsis, Course Content, Course Learning Outcomes, Study Schedule & Assessment Methods)
Course Synopsis
Green Supply Chain Management evolved from traditional supply chain. Green supply chain address sustainable environmental priorities and concerns with multiple supply chain processes. Learners will learn that green supply chain includes operational processes extending from product design, supplier selection, purchasing material, product manufacturing and assembling, distribution and end-of-life management. As part of the eco-design of the green supply chain, core companies collaborate with suppliers and customers. Various operational functions of procurement, operations, logistics and technology are important enablers to the success of green supply chain. Contemporary issues related to globalization, technology and circular economy affecting green supply chain will be discussed. Case discussions and online video sessions are included to enhance learning experiences. By end of this course, learner will gain understanding that green supply chain management can be adopted in companies to mitigate the environmental degradations, increase economic and operational performance of companies.
COURSE LEARNING OUTCOMES (CLOS) By the end of this course, you will be able to:
1. Explain the concept and applications of green supply chain management contributions to an organisation’s competitive advantage.
2. Explain effective green supply chain measurement to address environmental
3. Describe the use of technology and identify business opportunities in green supply chain management.
BLC308/03 Green Supply Chain Management 5


Course Content
Course topics include :
1. Environmental Concerns and Motivation towards Green Supply Chain
2. Introduction of Green Supply Chain Management
3. Designing Green Value Chain
4. Procurement and Supplier Collaboration
5. Green Supply Chain Production
6. Logistics and Circular Economy
7. Measure Performance in Green Supply Chain and Technology
BLC308/03 Green Supply Chain Management 6


STUDY SCHEDULE
(Weekly topic and study activity for each unit)
Unit Week Topic Focus
Learning Activities/ Self-Assessment
BLC308/03 Green Supply Chain Management
7


ASSESSMENT METHODS
COURSE ASSESSMENT 1 (CA1)
Quiz, Group Work, Presentation, Proposal, Essay, Annotated Bibliography, etc.
25%
TOTAL 100%
COURSE ASSESSMENT 2 (CA2)
The student will be assessed through the following methods:
Quiz, Group Work, Presentation, Proposal, Essay, Annotated Bibliography, etc.
25%
Note: The grade for a course is assigned based on the overall score, which combines both the contiuous assessment and the final examination compoents (please refer to the Student Handbook for details).
BLC308/03 Green Supply Chain Management 8
FINAL EXAM 50%


UNIT 1
PART 3
LIST OF CONTENTS
U1 : GREEN SUPPLY CHAIN MANAGEMENT
1.1 Environment and Supply Chain Management Evolution 1.2 Definition Green Supply Chain
1.3 Green Supply Chain Management Framework
U2: DESIGNING GREEN VALUE CHAIN
2
U3: PROCUREMENT AND GREEN PRODUCTION
2.1 Components for eco-design value chain 2.2 Techniques used in eco-design
2.3 Suppliers Collaboration in eco-design
3
U4: LOGISTICS AND CIRCULAR ECONOMY
3.1 Components of Green Procurements
3.2 Strategies in Green Procurement
3.3 Green Supplier Development Model, Barriers and Enablers
4
5
4.1 Components and Drivers of Green Logistics 4.2 Components and Drivers of Reverse Logistics 4.3 Circular Economy in Green Supply Chain
U5: GREEN SUPPLY CHAIN PERFORMANCE, GLOBALIZATION AND TECHNOLOGY
5.2 Effective Supply Chain Performance for Green Supply Chain 5.2 Globalization relationship with Green Supply Chain
5.3 Technology Enablers for Green Supply Chain
BLC308/03 Green Supply Chain Management 9


U1
1.1
1.2
1.3
1.4
1.5
Environment and Supply Chain Management Evolution
Learning Activity 1.1 Self-Check 1.1
UNIT STRUCTURE
Definition Green Supply Chain
Learning Activity 1.2 Self-Check 1.2
Green Supply Chain Management Framework
Learning Activity 1.3 Self-Check 1.3
Summary
References
BLC308/03 Green Supply Chain Management 10
GREEN SUPPLY CHAIN MANAGEMENT


INTRODUCTION
This unit focuses on:
U1 Green Supply Chain Management
Source: xxxx
1. Environment Concerns and Evolution of Supply Chain Management
2. Definition Green Supply Chain Management
3. Green Supply Chain Management Framework
What are the industry and commercial changes that increase environment concerns over the last decade? How does it shape the traditional supply chain management to “green” theme? What does green supply chain management mean? Is there a framework to evalu- ate green supply chain?
In this unit, we will cover three areas, namely environmental awareness and concerns that drive the traditional supply chain management, the definition of green supply chain and evaluate the green supply chain management framework.
BLC308/03 Green Supply Chain Management 11


U
UNIT LEARNING OUTCOMES
NIT LEARNING OUTCOMES (CLOS)
By the end of this course, you will be able to:
1. Explain the current environmental concerns and supply chain management evolution
2. Explain the definition of Green Supply Chain
3. Relate and apply the green supply chain framework
1.1 Environment and Supply Chain Management Evolution
Green supply chain management (GSCM) includes policies, practices and tools in the context of sustainable environment. Commerce and industry has transformed tremendously over the last few decades leading to environment degradations. Global issues such as global warming and climate change accelerate the development of green supply chain management. Environmental concerns accelerate the supply chain management shift to “green” at a faster pace.
The external environment that drives a shift on the supply chain to be environmental friendly.
1. Global Concerns
• Global warming and climate change
• Higher rate of CO2 emission from industries
2. Regional Concerns • Deforestation,
• Pollution
• Biodiversity
3. Local Problems
• Waste disposal
• Rampant use pesticides
BLC308/03 Green Supply Chain Management 12


The drivers of external environment also face equivalent challenges due to regulatory approaches, access to clean environmental technologies, funding, regulatory policies or incentives and economic environmental fluctuations.
Watch this short video. It shows the concerns on the environmental and the need to evolve role of the supply chain. Global Warming and the Role of Supply Chain.
Source: https://bit.ly/2uJsJPo
For a better understanding of this topic, please read e-book Green Supply Chain Man-
agement: A Concise Introduction, pg 3 –6
BLC308/03 Green Supply Chain Management 13
Title Duration Instruction
: Global Warming and the Role of Supply Chain : 16.53 minutes
: Please watch the following video on
100 solutions to reverse global warming


Figure 1.1: ??? Source: ???
Besides external environmental drivers, companies have realized the need to shape their supply chain to a “green” theme. Corporate environmental management system, the need to be efficient, voluntary as well as management leadership motivates the supply chain to go green.
1. Environmental Management System
• Environmental Management System (EMS) approaches the manner companies operate
company-wide or industry systems or processes to certification system such as
IS014001.
• Regulatory compliance to IS014001 drives companies to change, adapt, shapes the
entire supply chain process into EMS
BLC308/03 Green Supply Chain Management 14


Source: https://youtu.be/2iRDr9oC_4E
Source: https://youtu.be/spjwQX-acnA
BLC308/03 Green Supply Chain Management 15
Title Duration Instruction
: Environmental Management System (EMS) : 19.08 minutes
: Please watch the following video on
Environmental Management System
Title Duration Instruction
: ISO 14001 EMS certification requirements presentation : 16.53 minutes
: Please watch the following video on ISO14001
certification


2. Efficiencies
•
•
Companies shared their aspirations to transform towards green supply chain, thus implementing holistic green supply chain framework, technologies and optimizing supply chain performance.
The efficiencies gain within the core companies and the complex chain of suppliers yield positive desired sustainable business outcomes – cost and profit and creating positive corporate image.
3. Voluntary and Management Leadership
• Companies compete within their industry. When one of their competitors or key
suppliers or customers turn to green supply chain, it generates a sense of peer pressure. This intensity of the supply chain pressure motivates companies’ management to assume leadership to go green.
• Some management decides to improve their image by sponsoring or assuming green corporate social responsibility.
• Management may also plan to enhance their corporate leadership by either voluntary (or compliant) to report their environmental efforts (environmental reporting or accounting). There are many variations of the environmental reporting. Commons practices include eco-balance sheets, relating green supply chain performance and carbon foot printing for goods produced or service delivered.
For a better understanding of this topic, please read e-book Green Supply Chain Management, pg 26-35
The drivers of internal and external has shaped the supply chain management. According to SCOR model, supply chain management encompassed activities of plan, source, make and delivery. Essentially this remains.
BLC308/03 Green Supply Chain Management 16


Source: https://youtu.be/yeVPZmdhfgE
What has changed then?
The focal point of the traditional supply chain changes towards the green theme involves the
following:
1. A linear supply chain evolved towards circular or closed loop.
2. Reverse logistics become more important in green supply chain.
3. Emphasis recycle, remanufacture, reclaim, reuse, reduction activities that reduce the
environmental burden. These initiatives keep the supply chain effective, balance the
need to produce new products.
4. Redesign the value chain throughout activities of procurement, production activities and
distribution downstream supply stages to be green.
BLC308/03 Green Supply Chain Management 17
Title Duration Instruction
: Introduction to Supply Chain Model | AIMS Lecture : 16.53 minutes
: Please watch the following video on SCOR
introduction


How does a supply chain manager evaluate the green supply chain end to end life cycle? Is there a technique?
Source: https://youtu.be/gNNhGviMk4k
Life cycle analysis is a systemic approach to evaluate the environmental business drivers and the corresponding supply chain processes. The life cycle framework equip supply chain practi- tioners a method to evaluate the transition of the traditional supply chain in the following context:
• Analysis of the inception of design of product or service until end of life disposal, disassembly and beyond
• Compute, analyse the impact of product, use and reuse of utilities of goods and service over the life cycle
• Make the complex evaluation of green supply chain related processes (extraction, manu facture, delivery, use, recycle and maintenance) into simple comprehendible approach.
BLC308/03 Green Supply Chain Management 18
Title Duration Instruction
: WHAT IS GREEN SUPPLY CHAIN
: 1.54 minutes
: Please watch the following video on the basic
concept of green supply chain


Source: https://youtu.be/iD-m6qBij8Q
While companies have shown interest to adopt green supply chain, there are equivalent internal challenges as well. Supply chain managers often lacked know-how or experts, lack of clarity to interpret environment benefits and costs correctly. There is a tendency that lean towards short term profit, facing financial restraint to transition to green technologies. Labour force issues are not uncommon as well. There are some of the common barriers to an effective green supply chain management.
For a better understanding of this topic, please read e-book Green Supply Chain Man- agement: A Concise Introduction, pg 7 –9
BLC308/03 Green Supply Chain Management 19
Title Duration Instruction
: Life Cycle Assessment: GORE-TEX Footwear
: 16.53 minutes
: Please watch the following video on Life cycle
analysis being applied on green footwear supply chain


Learning Activity 1.1
1. Please read Unit 1.1 case and discuss the global impact and green supply chain.
2. Classroom activity: Please watch the video on global warming and green supply chain. Class instructors will relate the implication of green supply chain. https://www.youtube.com/watch?v=gNNhGviMk4k
Source: https://www.youtube.com/watch?v=gNNhGviMk4k
Title: What is Green Supply Chain Duration: 1.54 minutes
BLC308/03 Green Supply Chain Management 20


Learning Activity 1.1
Activity 1.1
1. Based on the life cycle analysis short video below: https://www.youtube.com/watch?v=6RNnzfUHwY8 . Work in your group to identify a particular product and discuss how you will segment the supply chain through life cycle analysis
Source: https://www.youtube.com/watch?v=gNNhGviMk4k
2. Environmental concerns drive a rethink on the supply chain. Based on the readings and observations, discuss how the environment “forces” management to rethink the supply chain.
Title: Life Cycle Assessment: GORE-TEX Footwear Duration: 5.19 minutes
Phase
Activity
Top Three Environment concerns
1. 2. 3.
Implications to the supply chain
1. 2. 3.
How should managers companies
1. 2. 3.
BLC308/03 Green Supply Chain Management 21


1.2 Definition of Green Supply Chain Management
With all the hype of green supply chain, what will be the appropriate definition of green supply chain management? In what way, does the academic definition affects industry applications?
SCOR Model of Supply Chain Management
Supply Chain Council’s SCOR model has been widely used as the cross industry and standard diagnostic tool for supply chain management. Comprising fundamental process of Plan, Source, Make, Deliver, the SCOR model is a repetitive framework used to establish standards. It is also commonly used to describe all the business activities associated with the phases of satisfying a customer
Source: https://youtu.be/VrX2Qf0OT2M
BLC308/03 Green Supply Chain Management 22
Title
Duration Instruction
: Introduction to Supply Chain Planning - SCOR Model
: 16.53 minutes
: Please watch the following video on SCOR model


Figure 1.2: ??? Source: ???
As mentioned in section 1.1, the changes both external concerns on environment and internal drives over last decade has lead academics to revisit the definition of greening the supply chain. There is a need to integrate supply chain elements with corporate environmental management.
As academic discussion, some examples of academic definitions cited over last decade are shown here:
“Green supply refers to the way in which innovations in supply chain management and industrial purchasing may be considered in the context of the environment.”
(Green et al., 1996, p. 188)
“Environmental supply chain management consists of the purchasing function’s involvement in activities that include reduction, recycling, reuse and the substitution of materials. “ (Narasimhan and Carter, 1998, p. 6)
The practice of monitoring and improving environmental performance in the supply chain. (Godfrey, 1998, p. 244)
The three selected academic literature definitions illustrated elements of green supply chain related to innovation, purchasing, environment, substitution of materials, environmental performance and the process of control and monitor.
BLC308/03 Green Supply Chain Management 23


It provides a context to refine our understanding of green supply chain management. Logically, the broad definition of SCOR model stays. For now, it is apparent that there is no unifying body to account for green supply chain.
Viewed from a general context, Green Supply Chain Management (GSCM) can be defined as integrating environmental thinking, sustainability into supply-chain management. It includes product design, material sourcing and selection, manufacturing processes, delivery of the final product as well as end-of-life management of the product after its useful life. Green supply chain management can be recognized through corporate social responsibility, green manufacturing, waste reduction, recycling and remanufacturing sustainable/environmental friendly green supply chain.
Source: https://youtu.be/gNNhGviMk4k
BLC308/03 Green Supply Chain Management 24
Title Duration Instruction
: What is Green Supply Chain
: 1.54 minutes
: Please watch the following video on introducing
Green Supply Chain


The definition offers opportunity to evaluate Green Supply Chain Management affecting the following aspects:
1. Designing Eco Friendly Supply chain
• The conscious process to design product (service) based on energy saving concept,
reducing waste and designing product (service) with the intention to reduce usage,
recycle and recovery of materials.
• The design process arches widely over the supply chain from engineering, suppliers,
core companies, regulatory bodies and customers.
2. Green Procurement
•
• •
Involve new initiatives such as e-procurement, incentives for long term contract that emphasise environmental dimensions
Integrate environmental performances into supplier assessment, evaluation.
mprove the functions to enhance green purchasing on components/raw materials, lesser hazardous materials, and recyclable/reusable/remanufactured components/raw materials
3. Internal Environmental Management
• The objective of the internal environmental management targets to establish effective
environmental management system, reduce consumption and take steps to reduce pollution or reduce carbon footprint
4. Customer Cooperation
• Acknowledge the significance of customer contribution to the green value chain
• Solicit customer cooperation for designing eco-friendly supply chain, clean production
and green packaging
5. Cost Reduction
• • •
When the supply chain is green, there is less waste. Less waste translates to cost reduction.
Eliminate waste stream over the value chain reduces tangible cost such as waste
disposable or intangible costs on the quality life of employees
Green supply chain management also contributes to indirect cost savings to the society. An efficient green value chain lessen the impact of indirect cost to society (tax, fines and penalties)
BLC308/03 Green Supply Chain Management 24


6.
Revenue Generation
• Green supply chain management contributes positively to the corporate image. Customers and society which favor the company positively in turn generate more revenue
• Green supply chain practices evaluate alternatives of materials recycle.
• Instead of disposing of non–value-adding wastes in landfills, closedloop
manufacturing of a green value chain explore to sell these materials as by-products, which is an alternative revenue.
Supply chain resilient
• Steps to ensure the supply chain stays sustainable across time. It’s closely link to business continuity
• It encourages a circular economy. Circular economy encourages resources to be managed in sustainable way so that waste recycle back into supply chain as resources.
7.
8.
Corporate Image and Reputation
Companies that practise green supply chain, generally enjoyed better perception from customers, society and regulatory bodies
Employees also felt proud being associated working in a green supply chain. Good image and reputation also attracts more highly qualified workers and improves morale, contributing to long-term earnings and o rganizational performance
• •
For a better understanding of this topic, please read e-book Green Supply Chain Management: A Concise Introduction, pg 10 –16
BLC308/03 Green Supply Chain Management 25


Learning Activity 1.2
1. Read the following academic journals. Critically analyse the components of green supply chain management. What will be your definition of green supply chain?
2. Describe a suitable model framework to assess the components green supply chain.
Activity 1.2
Choose one public listed company in Malaysia. Access the annual report. List down their key green initiatives that affect the supply chain.
1.2 Green Supply Chain Management Framework
1. Green supply chain management (GSCM) includes policies, practices and tools that
companies apply in the context of the sustainable environment.
2. GSCM can be considered as an interdisciplinary topic. It involves different multiple objectives of business, social, economic, technological and environmental sustainability issues.
3. To assist the advancement of the multidisciplinary research field of GSCM, a framework is provided in this sub topic to understand and appreciate the relationships of various research topics.
BLC308/03 Green Supply Chain Management 26


4. The operational transformation model (input-process-output) shall be used to describe the conceptual framework of green supply chain management.
Figure 1.3: ??? Source: ???
Just like any operations modelling, green supply chain framework can be evaluated from input contents that drives value chain processes that produce value added output.
This video introduces how the input-process-control system or model works:
Source: https://youtu.be/DBRNE3A5Wvw
BLC308/03 Green Supply Chain Management 27
Title Duration Instruction
: Input-Process-Output (IPO) Model
: 2.45 minutes
: Please watch the following video on how the
input-process-control system or model works


Inputs (drivers and enablers) motivates the traditional supply chain to adopt green value chain processes. The inputs will include the following Internal and External drivers or enablers. Internal drivers are motivated by management to pursue an objective to transition towards green supply chain initiatives and within control of the management. External drivers or enablers are external factors that either voluntarily or compliant requirements that drive the supply chain to adopt green processes.
Internal Drivers/Enablers
• Environmental Management Systems
• Leadership towards Environmental concerns
• Reporting Environmental
• Environmental Accounting
• Continuous improvement and Efficiencies
External Drivers/Enablers
• International trade
• Regulations
• Consumers
• Stakeholders
• Supply Chain pressure
For a better understanding of this topic, please read e-book Green Supply Chain Management: A Concise Introduction, pg 26 –37
Process
Within the Input-Process-Output model or system, inputs are precedents to process. Input acts as substance for green supply chain processes.
Management is responsible to allocate resources and to provide support for the entire green value chain processes
Life cycle assessment act as a tool or technique to evaluate environmental processes and the corresponding impacts for the stages of a product's life. This range from raw material extraction through materials processing, manufacture, distribution, use, repair and maintenance, and disposal or recycling.
BLC308/03 Green Supply Chain Management 28


Green Value Chain process is the crucial discussion for the entire green supply chain management processes. In the following chapters, we will discuss following functions of the supply chain management.
• Green procurement
• Green production
• Green logistics
• Green reverse logistics
Output
Output refers to the value added outcome from the input-process model or system. Green supply chain output should be similar to a traditional supply chain management output but with strong emphasis on green initiatives outcome. It should reflects how efficient the supply chain system reduces consumption, preserve the environment and meeting stakeholder or regulatory requirements. Output should also balance the economic and environment benefits.
The conceptual green supply chain management provides an integrated study throughout the rest of the chapters. The framework is a system that encompass the important areas of the supply chain management that shape the processes, policies, practices and tools for any companies that are motivated to sustain the environment, thus a green supply chain.
BLC308/03 Green Supply Chain Management 29


Learning Activity 1.1
Watch this video as to how Unilever drives sustainability of a green value chain
https://www.youtube.com/watch?v=cpYhgqPRivw
Source: https://www.youtube.com/watch?v=gNNhGviMk4k
Activity 1.3
Please read entire Unit 1 and answers the following short quizzes
1. Classroom activity: Choose a particular company and relates the green supply chain initiatives.
2. Consider a scenario you are the company director that produces package food for local consumption. Design a framework to describe the green supply chain as part of classroom activity.
Title: Sustainability at Unilever - The Value Chain Duration: 2.25 minutes
BLC308/03 Green Supply Chain Management 30


1.4 SUMMARY
In the first section of this unit, we have covered the environmental concerns that generally motivate the supply chain to adopt a green supply chain management.
In the second section, academically, we have defined the components of green supply chain management by evaluating the critical components that make up the value chain.
In the final section, we covered a green supply chain management framework. The generalization of the input-process-output has been proposed as an approach to analyse the multiple discipline of the supply chain processes.
1.5 REFERENCES
Achillas, C., Aidonis, D., Bochitis, D. & Folinas, D. (2019), Green Supply Chain Management, 1st Edition, Routledge Publishing.
Sarkis, J. & Dou, Y (2018), Green Supply Chain Management: A Concise Introduction, 1st Edition, Routledge Publishing.
BLC308/03 Green Supply Chain Management 31


http://www.wou.edu.my/


COURSE MODULE
UNIT 2
Green Supply
Chain Management
Course code:BLC308/03


Project Advisor
Professor Dr Zoraini Wati Abas
Course Coordinator
Ms. Kan Wen Huey
Course Writer
Dr Quah Hock Soon
Language Editor Developed by
Online Digital Learning Lab (ODL Lab)
Conceptualizer & Lead Learning Designer
Fauziyah Md Aris (Ms. Qash)
Visualizers & Learning Designers
Norliza Mhd Rodzi & Nurain Mohd Hassan
Cover Design & Content Layout
Norliza Mhd Rodzi
Page Layout & Formatting
Michelle/Elaine/Magic
Published by
Instructional Design for Engaging Experiences (IDeX)
2019 Wawasan Open University
All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without prior written permission from Wawasan Open University.
Wawasan Open University - DU013 (P)
Wholly owned by Wawasan Open University Sdn. Bhd. (700364-W)
54 Jalan Sultan Ahmad Shah, 10050 Penang, Malaysia
Tel: (604) 2180333 Fax: 04 226 9323 Email: [email protected] Website: www.wou.edu.my


U2
2.1
2.2
2.3
2.4
2.5
Components for Eco-Design Value Chain
Learning Activity 2.1 Self-Check 2.1
UNIT STRUCTURE
Tools and Techniques Used to Design the Eco-Design Value Chain
Learning Activity 2.2 Self-Check 2.2
Suppliers Collaboration in The Eco-Design
Learning Activity 2.3 Self-Check 2.3
Summary
References
BLC308/03 Green Supply Chain Management 3
DESIGNING GREEN VALUE CHAIN


INTRODUCTION
U2 Designing Green Value Chain
Source: xxxx
This unit focuses on:
1. Components for eco-design value chain
2. Tools and Techniques used to design the eco-design value chain
3. Suppliers Collaboration in eco-design
What are the recipe to design an environmentally friendly supply chain? How does a supply chain manager design such environmental supply chain?
Are there tools and techniques available to use? How does supply chain managers engage suppliers throughout the eco-design journey?
BLC308/03 Green Supply Chain Management 4


Green supply chain integrates ecofriendly concept into supply chain management to improve environment sustainability. There are multiple green practices which includes, green purchasing, green distribution and warehousing, green transportation with usage of biofuels, green manufacturing processes and the products’ end-of-life management. The value chain model is a good approach to design green supply chain. Hence, you will notice the word “value chain” being used in this chapter to describe the functional supply chain activities.
Eco-design is a significant strategy to achieve sustainable future, reducing environmental burdens when benefits of products and processes are determined at these early stages. Increasingly, global companies have adopted eco-design as an approach to maintain market competitive advantage. As more legislative regulations and market pressures relate to environment preservation, companies should seriously consider eco-design as an integrated part of their product development processes.
Supplier involvement in eco-design has also become an increasingly popular method for improving eco-design performance and product economic performance. This chapter describes the importance of value creation within the context of green supply chain. In addition, tools and techniques will be introduced to help students understand the methodology to design the green value chain. This chapter outlines some important lessons on how to adopt eco-design and how to manage supplier integration and involvement.
UNIT LEARNING OUTCOMES
U
NIT LEARNING OUTCOMES (CLOS)
By the end of this course, you will be able to:
1. Explain the components for eco-design green value chain
2. Understand and Apply the Tools and Techniques used in eco-design of value chain
3. Relate the importance of suppliers Collaboration in green value chain design.
BLC308/03 Green Supply Chain Management 5


2.1 COMPONENTS FOR ECO-DESIGN VALUE CHAIN
Green value chain design refers to the environmental design of a product and/or process. It focuses on reducing and preventing the negative environmental effects of a product before it is produced, distributed, and used.
By managing and improving environmental, social and economic performance throughout supply chain, companies conserve resources, optimize processes, uncover product innovations, save costs, increase productivity and promote corporate values. Research showed the supply chain that balance growth, profit and sustainability has increased.
However, many companies may or may not have comprehensive understanding of the sustainability impacts of their supply chain. Within the context of SCOR model and value chain, operational components need to be redesigned to enable an eco-friendly green value chain.
Eco-design is the systematic application of environmental life cycle considerations at the product development and design stage. Closely related to eco-design is the incorporation of environmental considerations into purchasing decisions and supplier management practices. Clearly, decisions made at the eco-design stage will have significant impact on suppliers.
This unit covers the basic design and characteristics for environmental friendly value chain or known as eco-design. Tools and techniques are discussed in this unit. We will also describe the importance of early supplier engagement throughout the eco-design cycle.
Why is it important to focus the eco-design in the value chain? Let’s consider the following points:
• Basic design for manufacturing principle states 70-80% of cost to produce a product are determined and fixed at the design state of product or process life cycle.
o Intercepting early in the eco-design ensures higher rate of success of green supply
chain
o Most of environmental influence and impact is determined early in the design stage
BLC308/03 Green Supply Chain Management 6


• There are many global environmental standards. It’s costly to ignore current or newly established standards and requirement in the value chain
o Various government regulations; example Waste Electrical and Electronic Equipment
(WEEE), European Union on Eco-Design Directives, RoHS (Restriction on Hazardous
Substance Directive)
o International standards on ISO 14000 series
o Compliance to the government and industry standards is not an option. Thus
eco-design in the supply chain has become important and it too costly to ignore
• Consumer demands
o Has led to acceptance of eco-design strategy in the industry
o Companies or producers and their chain of suppliers adapt and change their
supply chain to be “green” or lose their competitiveness
•
The eco-design extend widely over the supply chain
o Involvement is greater than just the engineering staff that design the product or
process.
o Multiple stakeholders in the value chain development reaches out to various
internal functions (marketing, operations, supply chain departments) and external (suppliers and customers)
• Greater awareness to expand the green product life cycle development to improve market share, ultimately profit.
o Leverage supplier involvement such as outsourcing critical materials and processes
o Frees up internal resources for companies to focus on strategic capabilities
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Watch this video on value chain and the implication of designing it right. Case example from Unilever
Title : Sustainability at Unilever - The Value Chain Duration : 2.25 minutes
Source: https://youtu.be/cpYhgqPRivw
Defining Eco-Design
Simply said, eco-design involves activities that design product (or process) to contain elements of environment.
• Focus to reduce and prevent negative environmental effects
• Embed environmental features before products are produced, distributed or consumed.
• Decoupled the product life cycle from inception to reuse and recycle. The associated cost
benefit should be clearly understood to enable the eco-design
• Eco-design is synonymous to the concept of concurrent engineering where multiple
stakeholders – suppliers, customers and various functional players in the value chain are engaged in simultaneous or concurrent work-sessions to design. Process is not sequential. Rework which is deemed as waste which causes time to market to be longer and incur higher cost is avoided or reduced.
• Eco-design reflects design for manufacturability approach. This approach proactively design products to optimize manufacturing processes (fabrication, assembly, test, procurement, shipping, delivery, service and repair), value analysis on cost, feature, compliance, regulations to best serve customers’ expectations.
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• Eco-design is also associated with life cycle analysis (LCA). LCA database provides justification and information to product design and supply chain managers to evaluate best fit on product’s environmental preferable attributes, recyclability, maintainability, refurbish capability, reduction and reusability.
Eco-design in general involve the following:
Evaluate Environment
Research & Market Intelligence
Generate ideas
Design Eco- Strategies
Design Product and Methodology
Figure 2.1. Eco-design steps
Source: Adapted from Sarkis, J. & Dou, Y (2018)
Click on each steps for more details
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Eco-design if properly planned and designed will deliver positive attributes that address environmental concerns. The environmental friendly product features designed from the supply chain are endless. Some of the commonly observable product features of good eco-design:
o Contents (bill of materials) are reduced.
o Contents can be recycle
o Use alternative joining technologies such as darts or screws instead of adhesives o Identify plastics clearly by resin type or other characteristics
o Biodegradable plastics
o Minimize variety of materials used
o Avoid painting and putting labels on recyclable parts
o Use modular design where modules can be replaced for upgrade or repair
o Use ceramic instead of plastics
o Lease products and reuse
o Energy savings products
o Less hazardous materials or components
The implementation of the eco-design with the corresponding environmental features requires comprehensive activities. The major planning and implementation stages in general involve the following.
Develop vision and strategy
• Management needs to establish a vision on the “what their green supply chain intends to be in future”.
• The vision will be important to establish their current mission and to develop the company strategy.
• The strategic direction will set a proactive stage to incorporate green supply chain strategies into divisions, business units and be readily operationalized.
Organisation structures
• Management will establish appropriate organisational structures to address environmental issues into the supply chain.
• Appropriate design of the organisation structure is important to establish goal, communicating processes, share knowledge, methodologies for eco-design
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Develop metrics and goals
• Metrics and goals that are developed must support the objectives of eco-design.
• Proactively, these goals are used to track the company progress towards green supply chain
management.
• Goals and these metrics must be tied to responsible departments so that it can be
measured against performance, reward benefits and used for continuous improvements.
Engage Suppliers
• The concept of eco-design is to engage supplier early, sharing expertise, leverage their expertise in designing and solving problems.
• As a result, eco-design approach needs to incorporate supplier activities, define the level of coordination as supplier information on products, materials, and processes’ that affects the environmental.
Training and Tool
• Effective eco-design should have sufficient and appropriate training, analysis methodologies, data, information, tools and design aids.
• It increases the level of awareness of decision makers within the organisation about environmental and supply chain.
• It also facilitates decision making.
For a better understanding of this topic, please read e-book Green Supply Chain Management: A Concise Introduction, pg 21-25
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Learning Activity 2.1
1. Search through ANY relevant articles and internet searches related to green supply chain management. Build a case to justify the importance of creating value that have elements of green supply chain.
2. Review through the green practices in Samsung. Evaluate further what contributes to Samsung’s engagement in the product supply chain to be “green”.
https://www.samsung.com/my/aboutsamsung/sustainability/environment/sustainabl e-supply-chain/
Self-Check 2.1
1. Green supply chain is not just about producing tangible consumer product. It extends to extraction of raw materials.
Watch this video related to “Green Supply chain Sugar industry”.
https://www.youtube.com/watch?v=Fr_yraQo2go
List down what is your understanding on eco-design in the sugar plantation.
Source: https://www.youtube.com/watch?v=Fr_yraQo2go
Title: Green Supply chain Sugar industry Duration: 3.57 minutes
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2.2 TOOLS AND TECHNIQUES USED TO DESIGN THE ECO-DESIGN VALUE CHAIN
What is next after knowing the components and importance of eco-design to improve the supply chain to be “green”?
Are there tools and techniques to help product development to design environmental friendly products? Are these tools simple and effective?
How does the supply chain manager integrate these tools and techniques to enable green supply value chain?
A basic design-for-manufacturing principle states that 70 to 80 percent of costs to produce a product are determined and fixed at the design stage of a product or process life cycle. Using the similar concept, there are equivalent tools and techniques used to design green value chain. These tools and techniques should be simple, available for use, objective, valid, robust and can be further improved.
There are many tools and techniques available in any industry. For the purpose of concise discussion, we will refer to the eco-design tool classification suggested by Bovea and Perez-Belis (2005). These five groups are collection of tools and techniques based on
1. Design Matrix
2. Quality Function Deployment
3. Value Analysis
4. Failure Mode Effect Analysis
5. Kano Model and TRIZ
1. Design Matrix
This technique and tool is designed in such a way where different requirements that emphasise environmental requirements throughout the product life cycle. There are two methods to evaluate these requirements objectively and visually projected as matrix.
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Requirement Matrix
• Requirements are collected based on two or more dimensions
• It includes life cycle stages which comprised of raw materials, assembly, manufacture,
recovery, treatment, disposal)
• System – related to product, process, product performance and delivery system
• Business – cost, profit and company vision
• Stakeholders – legal, environmental requirements and others
• These requirements are tabulated and overlay to study the interactions amongst life cycle
requirements
• The objective is to satisfy the needs of environment concerns into the eco-design to
minimize the use of natural resources, energy efficient, reduce safety, environmental risks and offers opportunities for reuse and recycle.
Example of a Design Matrix
Table 2.1. Example of a Design Matrix. Source: Adapted Software in Practice
(http://www.chambers.com.au/glossary/traceability_matrix.php) Design for Environment
• A matrix that captures customers, stakeholders’ requirements on environmental issues, health, safety (EHS) over the different stages of the product life cycle.
• This tool should be kept simple. The suggested way of matrix should contain (let’s say) 5 stages of product life cycle on the vertical axis and the different EHS concerns on the horizontal axis.
• This matrix can be evaluated objectively to prioritize and identify areas of improvements, benchmarking and being balanced over other product attributes
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2. Quality Function Deployment
Quality Function Deployment (QFD) is commonly used to define customer requirements and to match the company capability to design and produce. The objective is to only produce what customer really needs through developing the appropriate technical specifications. Likewise, the concept from this tool and technique can be adapted for eco-design where consideration on environment are considered as important features and requirements.
The fundamental QFD is to develop a House of Quality through these steps
1. Define the customer requirements. Emphasize on environmental features
2. Define what the company’s supply chain and process capability to support a green
supply chain.
3. Evaluate matrix between capabilities and requirements. Weightage scoring helps to
objectively relate the importance.
4. Perform competitive evaluation between the company and other competitors
5. Evaluate potential trade-off between the capabilities or features
6. Develop the technical specifications so as to meet the eco-design and the green value
chain
Figure 2.2. House of quality
Source: Adapted House of Quality (Chase and Jacob,
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There are many variations of QFD for eco-design. It’s important to relate the use of QFD, life cycle analysis (LCA) so as to design the right options and solutions. For example, the Readiness Assessment for Implementing DFE (RAILS) model suggests the following steps (Hemel and Keldman, 1996).
3.
Click on each steps for more details
Value Analysis
Collect requirements
Design the Strategies
House of Environmental Quality
Prioritize Design and Improvements
Generally, value analysis is a tool and technique for product development, marketing, finance, operations and various stakeholders. It is used to objectively evaluate the value of a product by decouple their parts and the associated costs. It is a cost reduction tool.
• This concept can be used to eco-design.
• Sometimes, product cost increases due to technical limitations or expensive raw materials that makes the product environmental friendly.
• The objective is to design (redesign) a product that is environmental friendly to a cost that customers willing to pay.
3.1 Design for Environment
• The approach is to use mathematical modelling.
• Techniques such as break even analysis, sensitivity analysis and risk modelling by evaluating
components and design options are commonly used.
• The output should be cost effective yet eco-friendly.
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