Implementation of sustainable development
By Ulrika Palme
Sustainable development can be implemented at all levels and through all kinds of actors. A politician can make decisions and formulate policies that promote sustainable development, or initiate and support international agreements with the same aim. The private citizen may choose a less resource intensive lifestyle, or engage in empowering poor people through becoming a micro-lender over the web. At the business level, products and production can be designed to minimize the negative environmental and social impact. The TOSCA web page contains several examples of how sustainable development can be implemented in business, primarily at the participating companies. See more under Activities.
Here follows a general presentation of the most fundamental concept in corporate work towards sustainable development, life cycle thinking, and some related concepts.
Life cycle thinking
Life cycle thinking means taking the entire life cycle of a product into consideration. Life cycle thinking can be applied also on services, production systems and entire technologies. The life cycle of a product or service spans from cradle to grave and includes resource extraction, manufacturing, transport, use and waste management. In all these stages of the life cycle, resources are consumed, energy used and emissions and waste produced. In life cycle assessment (LCA), all resources consumed and all emissions generated are furthermore quantified. By looking at the entire life cycle it is possible to get a full picture of the environmental impact of a product or service.
Life cycle thinking can also be applied on social aspects. This implies thinking trough the entire life cycle of the product, from cradle to grave, and considering e.g. the working conditions of all personnel that contribute to the product.
Applying life cycle thinking means expanding the focus from what happens within the own organisation to activities up- and downstream, i.e. taking the entire life cycle of a product or service into consideration. The concepts “supply chain” is sometimes used as a synonym to life cycle (see e.g. Seuring and Muller 2008), but there are certain important differences. Life cycle, as in life cycle thinking, always relates to the environmental impact of a product or process and includes the final step in the life cycle, i.e. waste management.
The concept of supply chains was developed in business management and was originally concerned with efficiency gains. Christopher (1992) defines supply chains as a: “Network of organisations that are involved, through upstream and downstream linkages, in the different processes and activities that produce value in the form of products and services in the hands of the ultimate consumer”. A similar definition is given in a review of the field by Mentzer et al (2001). That is, somehow contra intuitively, “supply chain” normally refers to the entire chain of activities along the life cycle of a product, not just those upstream. Unlike the life cycle, however, it does not, per definition, include what happens to a product after it has reached the consumer.
Another frequently used and related concept is “value chain”. The concept was established by Porter in 1985 and originally referred to the following chain of internal activities that contribute to increased value of a product: inbound logistics, operations, outbound logistics, marketing and sales, and service (Coyle et al. 2003). Since its popularisation in 1985, the concept of value chains has been widened and can now sometimes be seen to include also external activities, and can then be used instead of or synonymously with “supply chains”. Here, however, on the Tosca web, “value chain” refers to internal activities and processes only.
Another way of talking of the life cycle of a product is to use the concept “product chain”. It is a linear model of a product’s life cycle that is similar to that used in life cycle thinking, but which also includes the actors involved in each step of the life cycle. To the advantage of “product chain” is also that it cannot be confused with other product life cycles, e.g. the product’s life on the market (i.e. introduction, growth, maturity and decline). In contrast to the product chain, a supply chain is normally branched as there are often several actors involved in each step of the life cycle and these actors may be involved in various products manufactured by the same company (Kogg 2009). In this sense, supply chains link several different product chains.
Life cycle management and sustainable supply chain management
Just as in the case of value chains and supply chains, there is some terminological confusion when it comes to describing management along the entire life cycle of a product. These are new fields of research and practice and the terminology is not yet settled. The LCA literature speaks of life cycle management (LCM) (see e.g. Balkau and Sonnemann 2010), whilst the management literature speaks of sustainable supply chain management SSCM) (see e.g. Gold et al 2010). A possible distinction between the two concepts is that LCM can be seen as having the product or service in focus and SSCM as more focused on the company, but this is not always obvious. Furthermore, SSCM is less strict on including the waste management step, although it is included in a sense as so called “reverse logistics” which refers to the reuse of products and materials. In either case, the idea is for business to contribute to more sustainable production and consumption patterns through managing as many steps as possible in the life cycle, or product chain, of their products and services. The more steps that can be managed the better from a sustainability point of view – as sustainable development needs a holistic perspective.
In the future, competition may not be between individual firms, but between supply chains (Gold et al. 2010). This would be a result partly of environmental and social issues continuously increasing their importance in the eyes of consumers, and partly a result of the general efficiency gains that can be made through managing the entire supply chain.
Industrial ecology (IE) as a concept is very closely related to life cycle management (LCM) and sustainable supply chain management (SSCM). Like SSCM it has the industry in focus, and like LCM it emphasises the final stage of the life cycle. A central feature in the analogy with biology – industrial ecology – is to, like nature, avoid any waste by efficient cycling of energy and material. IE is also ecological in the sense that it is concerned with the larger ecosystems that support industrial activity, and hence with issues such as carrying capacity and ecological resilience. Just like in LCM and SSCM, life cycle thinking and LCA are fundamental in IE. Other important tools used in IE are material and energy flow analysis, and systems modelling. The “flagship” of IE is the industrial park in Kalundborg, Denmark, where a cluster of industrial facilities exchange by-products that would otherwise have been discarded (Ayres and Ayres 2002).
Social aspects in the supply chain
An overview of the most important ways of dealing with social aspects in sustainable sypply chains in terms of choice of indicators and assessment methods and processes is presented in the TOSCA report:
Ayres, R. U. and L. W. Ayres, Eds. (2002). A handbook of industrial ecology. Cheltenham, UK, Edward Elgar.
Balkau, F. and G. Sonnemann (2010). “Managing sustainability performance through the value-chain.” Corporate Governance 10(1): 46-58.
Christopher, M. (1992). Logistics and Supply Chain Management. London, Pitman Publishing.
Coyle, J. J., E. J. Bardi, et al. (2003). The management of business logistics: A supply chain perspective. Mason, Ohio, South-Western – Thomson Learning.
Gold, S., S. Seuring, et al. (2010). “Sustainable supply chain management and inter-organizational resources: a literature review.” Corporate Social Responsibility and Environmental Management 17(4): 230-245.
Kogg, B. (2009). Responsibility in the supply chain. Interorganisational management of environmental and social aspects in the supply chain. Case studies from the textile sector. The International Institute for Industrial Environmental Economics. Lund, Sweden, Lund University.
Mentzer, J. T., W. DeWitt, et al. (2001). “Defining supply chain management.” Journal of Business Logistics 22(2): 1-25.
Seuring, S. and M. Muller (2008). “From a literature review to a conceptual framework for sustainable supply chain management.” Journal of Cleaner Production 16(15): 1699-1710.