CHAPTER 2

Frameworks and Tools

As noted in the preceding chapter, the desire to be sustainable combined with management support (especially top management support), while important, is not enough. We need frameworks and tools. These important elements provide support to those charged with developing and deploying sustainable systems. Frameworks provide structure; they show the relationship between the various components and how these components can be arranged to generate more sustainable practices. Tools, on the other hand, provide the vehicle whereby specific tasks or goals can be achieved. They simplify problem solving, provide structure, and help guide and direct decision making. An important component of tools are the measures and metrics—tools that communicate the importance of sustainability and that help motivate people and organizations to achieve higher levels of sustainability performance. When used together, they result in new insight, cost savings, impact reduction, and differentiation as a result of leveraging sustainability for operations and supply chains. Examples include:

• The DuPont mission is “sustainable growth”—creating shareholder and societal value while reducing the company’s footprint throughout the value chain. DuPont businesses leverage the role of life cycle assessment (LCA) in setting the goals, in developing innovative solutions for sustainable product and process design, in monitoring progress toward goals, and in stakeholder engagements.
• Timberland conducted an LCA for a leather boot and calculated emissions at all stages of the value chain, including sub-suppliers like the cattle industry that provided the leather. Surprisingly, leather use was responsible for most of the emissions, at around 80 percent of the boot’s greenhouse gas (GHG) burden. Timberland now knows that reducing the amount of leather per boot will shrink its climate-change impact far more than reducing energy use at assembly plants or distribution centers.
• Data from companies such as Trucost enable organizations to identify, measure, and manage the environmental risk associated with their operations, supply chains, and investment portfolios. Quantifying environmental risks and a price for these risks is key to their approach. Entities like this one utilize public and proprietary data in providing a systematic approach to measuring and managing supply chain impacts leveraging data to quantify the environmental costs of suppliers, including carbon, water, waste, and air pollution.

Companies like DuPont, Timberland, and Trucost taken a deeper dive into understanding their products, processes, and supply chains. If you think no one has been watching, then you are wrong. Assessment enablers such as the Carbon Disclosure Project (CDP) and Trucost (acquired by the S&P Dow Jones Indices) are tracking and valuing these efforts while revealing how much waste and costs typically go unseen within supply chains. In this chapter, we continue the evolution of design trends, and help to operationalize integration. We will review important frameworks and tools such as the Framework for Strategic Sustainable Development (FSSD), Industrial Ecology, LCA, and C2C, before reviewing opportunities to design with less energy and materials with the integration of planning, and project assessment for products, packaging, and supply chains. We end the chapter with a look at the role of transportation providers.

Objectives

1. Build on the first chapter’s design and transformational opportunities.
2. Review current frameworks and tools of sustainability.
3. Leverage a systems perspective, understand how to determine success, and find strategic integration opportunities within firms and supply chains.

To understand the importance of tools, consider the following story. Even though it deals with Quality Management, the lessons that it offers for those interesting in sustainability is profound:

Bill Conway, the former chairman of Nashua Corporation and an early champion of Total Quality Management (TQM) statistical methods, was host to a high-level delegation from Ford. The delegation wanted to probe the reasons for Nashua’s quality success. Conway started the meeting with a challenge—”Suppose I ask two of you successful vice-presidents at Ford to enter a contest. The winner will win a trip around the world for his whole family. I know that both of you are totally motivated and dedicated by virtue of your exalted position at Ford. The contest is to see who can drive a nail into this wall. One you will get a hammer, the other nothing but management encouragement! How do you think will win?” The answer was obvious. Motivation is important, management encouragement is important, but employees at all levels must have tools. They must be the right tools.

What Bill Conway recognized was the critical importance of tools and frameworks. They provide the vehicle by which intent becomes realized, by which thought becomes concrete. While management support and organizational commitment are important, tools and framework are critical. They offer the foundation on which successful deployment and management are ultimately built. Therefore, before presenting the various tools and frameworks, it is first important to understand why these are so important to the attainment of effective sustainability.

Frameworks and Tools an Overview

Frameworks and tools are critical to the successful deployment of sustainability. They are critical because of the different roles that they play. Frameworks are broad based; they provide the users with a road map that links the various tools, programs and components together and to the goal—improved sustainability. Frameworks also provide causality—they show how the actions lead to the goal. In contrast, tools are instruments for helping personnel solve very specific issues or problems. They can be used to organize the data (with the goal of identifying patterns) or to flag areas to examine in detail. They can also be used to develop and deploy solutions.

When dealing with framework and tools, there are two points to remember:

First, for frameworks and tools to be actually used effectively, they must be understood and accepted by those using them. As Gene Woolsey, an operations researcher once noted, “A person would rather live with a problem they can see than use a solution that they cannot understand.” Second, if the frameworks or tools are replacing existing procedures, then the existing approaches must first be discredited. There is a tendency to assume that people are adaptive thinkers. That is, if you teach them a new procedure, they will add it to the set that they currently have. Furthermore, we assume that they will use the tools if we first show them that the tools work and second we provide the users with a strong rationale for using them. The fact of the matter is that this view is wrong. People are substitutive rather than additive thinkers. They will use the current approaches and only those tools that fit with these current approaches UNTIL the current approaches are discredited—shown to be wrong or ineffective. Until this happens, the users will respond by offering the following:

• Lip service: Telling you that they do what you want them to do, even though they are not.
• Selective listening: Listening and applying only those tools and frameworks that fit with the existing approaches.
• Covering up through measures and metrics: Most personnel in a firm know that management will not go to the floor or to their areas and see what they are doing. They also know that measures are imperfect indicators of behaviors. Consequently, there is a potential for personnel to “game” the measures to hide what they are doing.

Available Frameworks and Tools to Help Cross the Chasm

Albert Einstein once said “the world that we have created today as a result of our thinking thus far has problems that cannot be solved by thinking the way we thought when we created them.” The new way of thinking about the opportunities that comes from environmental and social issues starts with Design for Sustainability (DfS) and design thinking and extents throughout the supply chain, and becomes part of an integrated approach to the innovation process. To help in this process, we draw from several frameworks and tools to help the product development process. Some of the leading approaches that allow managers to see the world through a more sustainable lens include the FSSD (formerly known as The Natural Step), C2C design, industrial ecology, natural capital, biomimicry, and LCA.

Framework for Strategic Sustainable Development

The Natural Step (TNS: www.naturalstep.org) is an organization founded in Sweden in the late 1980s by the scientist Karl-Henrik Robèrt. Following publication of the Brundtland Report in 1987, Robèrt developed TNS framework,¹ proposing four system conditions for the sustainability of human activities on earth. Robèrt’s system conditions are derived from the laws of thermodynamics, promote systems thinking, and set the foundation for how we can approach decision-making.

The first and second laws of thermodynamics set limiting conditions for life on earth: The first law says that energy is conserved; nothing disappears, but its form simply changes. The implications of the second law are that matter and energy tend to disperse over time. This is referred to as “entropy.” Merging the two laws and applying them to life on earth, the following becomes apparent:

1. All the matter that will ever exist on earth is here now (first law).
2. Disorder increases in all closed systems and the Earth is a closed system with respect to matter (second law). However, it is an open system with respect to energy since it receives energy from the sun.
3. Sunlight is responsible for almost all increases in net material quality on the planet through photosynthesis and solar heating effects. Chloroplasts in plant cells take energy from sunlight for plant growth. Plants, in turn, provide energy for other forms of life, such as animals. Evaporation of water from the oceans by solar heating produces most of the Earth’s fresh water. This flow of energy from the sun creates structure and order from the disorder. So what does this have to do with business practices?

Taking into account the laws of thermodynamics, in 1989, Robèrt drafted a paper describing the system conditions for sustainability. After soliciting outside opinions and achieving scientific consensus, his efforts became TNS’s system conditions of sustainability and what is now called the FSSD² and organization enabling this framework within cities and organizations, TNS Consultancy.

The Framework’s definition of sustainability includes system conditions that lead to a sustainable society.

In this sustainable society, nature should not be subject to systematically increasing:

1.Concentrations of substances extracted from the Earth’s crust.

2.Concentrations of substances produced as a byproduct of society.

3.Degradation by physical means.

And in that society, people are not subject to systematic social obstacles³ to the following:

4.Health.

5.Influence.

6.Competence.

7.Impartiality.

8.Meaning making.

Positioned instead as the principles of sustainability, to become a sustainable society, economy, industry, supply chain, business, or individuals, we must:

1. Eliminate our contribution to the progressive buildup of substances extracted from the earth’s crust (e.g., heavy metals and fossil fuels).
2. Eliminate our contribution to the progressive buildup of chemicals and compounds produced by society (e.g., dioxins, Polychlorinated Biphenyl’s (PCBs), dichlorodiphenyltrichloroethane (DDT), and other toxic substances).
3. Eliminate our contribution to the progressive physical degradation and destruction of natural processes (e.g., overharvesting forests, paving over critical wildlife habitat, and contributions to climate change).
4. Eliminate exposing people to social conditions that systematically undermine people’s capacity to avoid injury and illness (e.g., unsafe working conditions, a nonlivable wage).
5. Eliminate exposing people to social conditions that systematically hinder them from participating in shaping the social systems they are part of (e.g., suppression of free speech, or neglecting opinions).
6. Eliminate exposing people to social conditions that systematically hinder them from learning and developing competencies individually and together (e.g., obstacles to education, or personal development).
7. Eliminate exposing people to social conditions that systematically imply partial treatment (e.g., discrimination, or unfair selection to job positions).
8. Eliminate exposing people to social conditions that systematically hinder them from creating individual meaning and co-creating common meaning (e.g., suppression of cultural expression, or obstacles to co-creation of purposeful conditions).

A review of your organization’s practices and infractions of these sustainability principles is part of a baseline understanding where leaders and organizations should focus resources and efforts to bring about change. A five-level framework applied to planning and assessment can help any organization better determine why and how to approach change management initiatives. The five levels are the system, success, strategic, actions, and the use of tools.

At the Systems level, you need to understand the system in which you operate and the natural laws that define the biosphere and societies relationship with the biosphere. Success is based on the sustainability principles and outlines the minimum requirements necessary for success. The sustainability principles become the minimum and foundation for your operating manual. Strategic guidelines should guide decision-making processes. Using an ABCD planning process, backcasting from your vision of the future provides guidelines for socially sustainable processes of relating transparency, cooperation, openness, inclusiveness, and involvement.⁴ Actions come from prioritized steps put into action while following strategic guidelines for success in the systems. Finally, applying the appropriate Tools incudes management techniques and monitoring processes to guide implementation of strategic planning.

In order to illustrate the issue of sustainability, the FSSD uses the image of a funnel to demonstrate how decreasing resource availability and increasing consumer demand on those resources will eventually intersect, leading to a breakdown of the system (Figure 2.1). If, however, a company moves toward designing and operationalizing regenerative products, processes and systems, resources and demand can continue forward on a sustainable path.

Figure 2.1 The FSSD funnel and ABCD application⁵

Source: Used with permission from TNS.

How can any firm or project team apply the FSSD? A simplified approach (much like Deming’s Plan, Do, Check, Act) instead positions Awareness, Baseline, Create a Vision, and Down to Action to form the acronym ABCD, which describes the four steps of the framework to demonstrate its simplicity and its power.

• Awareness: Work to create awareness of the idea of sustainability among stakeholders. Begin internally among managers, cross-functional teams and within function champions, include line workers, purchasing, and drivers of trucks. When ready, (meaning when you can demonstrate capabilities and alignment with your value proposition) create awareness externally by releasing information first to your key customer(s) and suppliers and then release this information publicly.
• Baseline: Take a close look at all aspects of operations, from stage-gate product design process, to management decision making and key performance indicators. Audit/benchmark current operations to understand the “as is” state and help determine the “to be” state and performance metrics. Include metrics such as GHG emissions, other forms of waste and social performance, transportation system design, supply chain practices, and employee and driver awareness.
• Create a Vision: Take what the baseline produced to see where you want to be in the future. Find opportunities for innovation. Set high goals. Define how you will measure success. From these goals, backcast to current operations and decision-making utilizing systems thinking to see how decisions today will or will not move you closer to the future vision.
• Down to Action: Prioritize and set goals. Assess projects and initiatives by asking if they take your firm toward or away from its vision. Make the business case for return on investment (ROI); is this a good sustainable value added (SVA)? Create a contingency plan to anticipate risk management factors such as regulatory and cost-structure changes.

By following this framework, whole communities such as Whistler British Columbia, Madison Wisconsin, and Santa Monica California have strategically integrated sustainability into their planning. Multinational corporations such as Nike and IKEA (to name a few) have applied it to operations. The application of strategic sustainable development lends itself well to integrating supply chains, and applied systems thinking to improve business model alignment of critical customers, capabilities, and value propositions. The result, a collective vision of the future, the use of tools including LCA, GHG Protocol, Environmental Management Systems, environmental and social metrics, and even integrated closed-loop systems to turn the vision into a reality. Next, we review other applicable frameworks and tools that help to integrate sustainability into strategic, tactical, and operational practices.

What follows is a brief case study to highlight how the FSSD can be applied to a firm, the integration opportunities for sustainability and extensions to sustainable supply chain management (SSCM).

Applying the FSSD to Aura Light’s Supply Chain

Compiled by Velika Talyarkhan⁶

Aura Light, a sustainable lighting company, and Blekinge Institute of Technology (BTH) had a long-term consulting partnership which led to Aura Lighting changing its strategic direction. In 2009, Martin Malmos, Aura Light CEO, announced plans to make some major changes within the organization, based on BTH’s introduction to the FSSD and the support of a specialist sustainability consultancy, TNS, has been a key part of Aura Light’s new direction in developing a SSCM model with its suppliers. Aura Light’s application of the FSSD’s five-level framework for SSCM is outlined below⁷:

System level

The first step was to define the focus and boundaries of the work. To this end, the focal company would be Aura and its supply chain as a subsystem of the global society and biosphere. The boundary for SSCM is Aura Light, its supply chain, and consultants.

Success level

With the objective of understanding what success would look like, this level of application resulted in management and the organization wanting to do the following. Define a vision for each subsystem, and adhering to the eight sustainability principles of socioecological sustainability. One outcome was the following statement; “Aura Light’s vision is to become the global leading partner for sustainable lighting solutions to professional customers.”⁸

• In this step, Aura Light identified the elements of its vision which would be driven by the SSCM function.
• SSCM success was defined as successfully and systematically eliminating all contributions to the supply chain which violate the eight principles. Potential SSCM goals included:
• Sustainable raw material sourcing.
• Optimized logistics and sustainable transport.
• A positive impact on local communities.
• No scarce materials or substances that risk increasing in concentration in nature.
• No health and safety risks.
• Share and develop competence in sustainability.
• Develop partnerships with customers, suppliers, communities, nongovernmental organizations, universities and governments.

Strategic guidelines level

Aligning with strategic plans for the organization was critical to success. Here they planned steps to achieve the defined success, defined the business case for sustainability, and balance the direction and speed of change with the ROI. SSCM strategic priorities include:

• Building trust and trustworthiness.
• Building deep collaboration.
• Effectively communicating the business case for sustainability.
• Committing to information exchange and transparency.
• Employing innovative thinking.
• Building competence for SSCM.
• Understanding and respecting local contexts.

Aura Light under TNS’s guidance conducted a sustainable life cycle assessment (SLCA) for the company’s two main products (fluorescent tube lights and long-life tube lights). As part of the SLCA, Aura Light mapped its suppliers and identified strategic players in the network through each life cycle process. The process included understanding the interrelatedness of all the supply chain actors, their geographic spread, and risks such as traceability of materials, competition and demand. In the future, other products that Aura manages, such as LED lights, will also require the SLCA to identify and manage risks and opportunities. At present, the baseline SCLA identified a lack of information on the following supply chain activities:

• Raw material extraction and processing.
• Production processes at suppliers.
• Transportation impacts (transport phase was not included in the assessment).

Following the supplier mapping, Aura Light plans to assess the gaps between its current state and desired sustainability vision. The development of a Strategic Supplier Sustainability Assessment tool can be used to identify existing hotspots in the supply chain such as:

• Do Aura Light’s products contain scarce metals or persistent chemicals (contravening Sustainability Principles 1 and 2)?
• Are materials and energy used from sustainably managed ecosystems?
• Is any exposure to health hazards eliminated?
• Is a positive impact created on communities?

Actions level

At this level, they wanted to prioritize activities and develop an action plan for the achievement of the vision. External SSCM actions included joint workshops with suppliers and customers, along with training. Internal opportunities included co-creating supplier-specific product/service specifications, organizational objectives, targets and action plans.

Tools level

At this level they selected appropriate tools for enabling each level above, such as brainstorming, design-sprints, a business model canvas tool, diagnostic tools such as gap analysis, modeling and simulations, and quantitative LCA with supporting databases. A key tool for SSCM was the development of a Supplier Sustainability Assessment tool.

An example of a supplier sustainability assessment questionnaire is reproduced in Table 2.1, to illustrate the information required to assess supplier waste management practices and targets for social sustainable management of suppliers. ISO Quality Health Safety and Environment (QHSE) requirements could also provide a structure for developing a Supplier Sustainability Assessment tool.

Table 2.1 Prototype for Supplier Sustainability Assessment⁸

Aspect	Waste management
Desired	Waste is avoided, recycled, and/or reduced
Suggested question	Are the flows of waste monitored? Is it transparent where the flows of waste end-up? Are any waste management routines at hand? Are the production processes designed for recycling wherever it is applicable?
Aspect	Targets/action plans for social sustainable management of suppliers
Desired	Clear and co-developed targets and action plans for transparency and for sustainable supplier practices
Suggested question	Examples of questions for self-assessment of the focal company´s overall strategic approach: Has the focal company taken actions for transparency and for the co-development of targets and action plans to systematically deal with all social sustainability issues detected through a current status audit and the supplier strategic sustainability assessment?

Progress so far

Aura Light’s sustainability goals have been mapped based on the new vision, and progress made accordingly, which is reported in an annual report. The goals below specifically relate to SSCM (Table 2.2).

Table 2.2 2015 Sustainability Goals for Aura Light’s Supply Chain⁹

Success Factors	Focus goals (through 2015)	Results and operations 2015
Responsible business operations	Our emissions of carbon dioxide will decrease in relation to our sales	From now on we also climate compensate for inbound freights
	More than 95% of the waste from production will be recycled	Results 2015: 88%. Continued improvement in sorting efforts and materials used in production, which are now recycled.
	40% of chemicals containing substances from the prioritized substances for risk reduction (PRIO) list will be phased out	Results 2015: 42% has been phased out.
	The sustainability efforts of our main suppliers are evaluated and monitored through efficient processes	Work with supplier audits is now an implemented process. Proposed measures from Aura Light dealt within a satisfactory way.

Aura Light’s application of the FSSD allows some insight into the integration of sustainability into supply chain management with known frameworks. This company’s work is not complete as the use of the FSSD and ABCD planning process is an iterative approach that should be revisited often while also looking for other tools to help enable the transition to a more sustainable society and circular economy.

Eco-Effectiveness and Cradle to Cradle

Eco-effectiveness presents an alternative design and production concept to the strategies of zero emission and eco-efficiency.¹⁰ Where eco-efficiency and zero emission seek to reduce the unintended negative consequences of processes of production and consumption, eco-effectiveness is a positive agenda for the conception and production of goods and services that incorporate economic, environmental, AND social benefit, enabling triple top line growth.

Eco-effectiveness moves beyond zero emission approaches by focusing on the development of products and industrial systems that maintain or enhance the quality and productivity of materials through subsequent life cycles. The concept of eco-effectiveness also addresses the major shortcomings of eco-efficiency approaches: their inability to address the necessity for fundamental redesign of material flows, their inherent antagonism toward long-term economic growth and innovation, and their insufficiency in addressing toxicity issues.

Cradle to cradle,¹¹ also called C2C, or sometimes interchangeable with “regenerative,” is a biomimetic approach to the design of systems. Briefly discussed in Volume 1, Chapters 3 and 4, C2C models human industry on nature’s processes in which materials are viewed as nutrients circulating in healthy, safe metabolisms. It suggests that industry must protect and enrich ecosystems and nature’s biological metabolism while also maintaining safe, productive technical metabolism for the high-quality use and circulation of organic and synthetic materials. This design concept is a holistic economic, industrial, and social framework that seeks to create systems that are not just efficient but not detrimental to the people or the environment, and waste free. The model in its broadest sense is not limited to industrial design and manufacturing; it can be applied to many different aspects of human civilization such as urban environments, buildings, economics, and social systems.

A central component of the eco-effectiveness concept, C2C design provides a practical design framework for creating products and industrial systems in a positive relationship with ecological health and abundance, and long-term economic growth. Against this background, the transition to eco-effective industrial systems is a five-step process beginning with an elimination of undesirable substances. The steps involve the following:

1. Make sure a product is free of toxic substances.
2. Substitute personally preferred materials that are less hazardous.
3. Assessment of materials and classification as to their ability for biological metabolism—a passive positive list.
4. Optimization of the passive positive list identifying materials as either technical or biological nutrients—creating an active positive list of materials.
5. Reinvention of the relationship of the product and the customer—the product of service concept fits well with this.

Eco-effectiveness ultimately calls for a reinvention of products by reconsidering how they may optimally fulfill the need or needs for which they are actually intended while simultaneously being supportive of ecological AND social systems. This process necessitates the creation of a system of materials management to coordinate material flows among processes and whole organizations in the product system. The concept of industrial ecology illustrates how such a system might take shape.

Industrial Ecology

Industrial ecology is an interdisciplinary field involving the relationships between industrial systems and their natural environment. Industrial systems may be conceived on a micro level as firms or industries or on a macro level as industrial societies. The industrial metabolism, that is, the flows of energy and materials through socioeconomic structures, is seen as the major driver of environmental burdens and threats to sustainability. Technology in its function of transforming energy and materials into goods and services, and inevitably also into wastes and emissions, is seen as a key to more sustainable solutions.

The term, industrial ecology, was popularized by Robert Frosch and Nicholas Gallopoulos.¹² Following the development of the framework, the field developed during the 1990s and has spawned academic programs, scholarly journals, and an international society. Industrial ecology draws on principles from thermodynamics, systems theory, and ecology. LCA, material flow accounting (MFA), and environmental input-output analysis are primary tools used in the field. Building on the notion of symbiosis in nature, highly interconnected industrial networks using wastes as process inputs (industrial symbioses) should more closely mimic the parsimony of closed-loop natural systems.

A famous example of industrial ecology in practice is an industrial district in the town of Kalundborg, Denmark. This small municipality has a well-developed network of dense firm interactions. The primary partners in Kalundborg, including an oil refinery, a power station, a gypsum board facility, and a pharmaceutical company, share ground water, surface water, wastewater, steam, and fuel, and they also exchange a variety of byproducts that become feedstocks in other processes. Successful outcomes of this industrial system includes 5 M liters of bioethanol produced annually, 19,500 tons of CO₂ are saved from using excess waste from the adjacent organizations, and 13,000 tons of lignin pellets have replaced coal at a power plant producing electricity and district heat for 5,000 area dwellings in Kalundborg city.¹³

Within this system, there are three primary opportunities for resource exchange: (a) Byproduct reuse—the exchange of firm-specific materials between two or more parties for use as substitutes for commercial products or raw materials. The materials exchange component has also been referred to as a byproduct exchange, byproduct synergy, or waste exchange, and may also be referred to as an industrial recycling network. (b) Utility/infrastructure sharing—the pooled use and management of commonly used resources such as energy, water, and waste water. (c) Joint provision of services—meeting common needs across firms for ancillary activities such as fire suppression, transportation, and food provision. High levels of environmental and economic efficiency have been achieved, leading to many other less tangible benefits involving personnel, equipment, and information sharing.

While in the early phase of this field, the focus was on technologies and firms and their interconnectedness, industrial ecology increasingly broadened its systemic perspective toward including production and consumption, trade and transportation, infrastructure, and lifestyles. Using industrial ecology to create a vision, the industrial transformation of entire economies, cities, industries, and supply chains can come into view.

Integrating Sustainability and Design: Life Cycle Assessment

The overlay of sustainability within supply chain analysis applies the emerging measurement tools and quantitative models that characterize various relationships and economic trade-offs in the supply chain. Supply chain analysis has made significant strides in both theoretical and practical applications of waste reduction. The application of a sustainability lens to analysis results in an unprecedented mixture of predictive models, and the ability to quantify environmental costs of operations, products, and whole supply chains.

LCA (see Figure 2.2) is a technique to assess the environmental aspects and potential impacts associated with a product, process, or service, by:

• Compiling an inventory of relevant energy and material inputs and environmental releases.
• Evaluating the potential environmental impacts associated with identified inputs and releases.
• Interpreting the results to help you make a more informed decision.

Figure 2.2 Overview of life cycle assessment¹⁴

Source: Used with permission from GaBi.

LCA is not a new tool, and has evolved over the last forty years. In the 1970s, companies in both the United States and Europe performed comparative life cycle inventory analyses. Inventory analysis is an objective, data-based process of quantifying energy and raw material requirements, air emissions, waterborne effluents, solid waste, and other environmental releases incurred throughout the life cycle of a product, process, or activity. Much of the data was derived from publicly available sources such as government documents or technical papers, as specific industrial data were not available. The process of quantifying the resource use and environmental releases of products became known as a resource and environmental profile analysis (REPA), as practiced in the United States. In Europe, it was called an Ecobalance. The 1970s also saw the development of an economic input-output life cycle assessment (EIO-LCA) method theorized and developed by economist Wassily Leontief. The primary focus of this early period was the development of a protocol or standard research methodology for conducting these studies.

Through the early 1980s, life cycle inventory analysis continued and the methodology improved through studies focused on energy requirements. As interest in all areas affecting resources and the environment grew, researchers further refined and expanded the methodology beyond the life cycle inventory, to impact. Impact assessment refers to the phase of an LCA dealing with the evaluation of environmental impacts (e.g., global warming and toxicity) of products and services over their whole life cycle.

During the 1990s, false claims of environmental product attributes along with pressure from environmental organizations to standardize LCA methodology, led to the development of the LCA standards in the ISO 14000 series. Researchers at the Green Design Institute of Carnegie Mellon University operationalized Leontief’s EIO-LCA method in the mid-1990s, with the help of sufficient computing power. This model is still available online taking the EIO-LCA method and transforming it into a tool available to quickly evaluate a commodity or service, as well as its supply chain.

After the turn of the century, the United Nations Environment Program (UNEP) joined forces with the Society of Environmental Toxicology and Chemistry (SETAC) to launch the life cycle initiative, an international partnership. The programs of the Initiative aim at putting life cycle thinking into practice and at improving the supporting tools through better data and indicators. The life cycle inventory (LCI) program improves global access to transparent, high-quality life cycle data by hosting and facilitating expert groups whose work results in web-based information systems. The life cycle impact assessment (LCIA) program increases the quality and global reach of life cycle indicators by promoting the exchange of views among experts whose work results in a set of widely accepted recommendations.¹⁵ There are currently several proprietary software solutions to help make LCA a reality. The two most used in the United States and Europe are Simapro and GaBi, respectively.

Drill Down into Available Materials and Process Information

LCA quantifies the environmental impacts at each step of a product’s life cycle. As a tool, LCA can be used to sustainably design products and even supply chains so that they have the least negative environmental impact.¹⁶ Life cycle management (LCM) is the application of life cycle thinking to modern business practice, with the aim to manage the total life cycle of an organization’s product and services toward more sustainable consumption and production.¹⁷ It is an integrated framework of concepts and techniques to address environmental, economic, technological, AND social aspects of products, services, and organizations.

LCM is supported by environmental management systems and the ISO 14001 standards for these systems and research showing positive impacts on design, waste reduction, and recycling.¹⁸ Additional resources are available online through the EPA, the National Services Center for Environmental Publications, and the Risk Management Sustainable Technologies websites. The benefits from these systems include proactive environmental management, resource and cost efficiency, enhanced reputation, and improved communication.¹⁹ LCA-specific standards include ISO 14040 to 14044 as they describe the primary principles and framework for LCA including four primary steps:

1. Definition of the goal and scope of the assessment including system boundaries.
2. The life cycle inventory analysis phase.
3. The life cycle impact assessment phase.
4. The life cycle interpretation phase, reporting and critical review of the assessment, limitations, and relationships between the four primary assessment phases.

Clarification of some terminology is needed to better understand LCA boundaries. Below are the main options to define the system boundaries used (shown in Figure 2.3):

Cradle to Grave: includes the material and energy production supply chain and all processes from the raw material extraction through the production, transportation, and use phases up to the product’s end-of-life treatment.

Cradle to Gate: includes all processes from raw material extraction through the production phase (gate of the factory); used to determine the environmental impact of the production of a product.

Gate to Grave: includes the processes from the use and end-of-life phases (everything postproduction); used to determine the environmental impacts of a product once it leaves the factory.

Gate to Gate: includes the processes from the production phase only; used to determine the environmental impacts of a single production step or process.

Cradle to Cradle: includes the material and energy production supply chain and all processes from the raw material extraction through the production, transportation, and use phases before the product goes back into transportation closing the supply chain loop becoming a material used again in production, transportation, and use.

Figure 2.3 System boundaries

Source: Used with pemission from Gabi.

Clearly understanding the goal, scope, and system bounds allows LCA to be used as a tool to measure and track a product’s resource use and impacts from cradle to grave, from raw material extraction to end-of-life processes. This tool is essential for managing sustainability risks, reducing waste and discovering opportunities to create environmentally and socially driven value. An established approach to a macro level of analysis involves systems thinking. This holistic approach to analysis focuses on the way that a system’s constituent parts interrelate and how systems work over time and within the context of larger systems.²⁰ Conducting an LCA is one way to understand interconnected supply chain systems of products and services. The outcomes of an LCA lend themselves to supporting the ISO 14025 standard for environmental product labels and declarations.

A cradle-to-grave LCA allows a decision maker to study an entire product system and supply chain hence avoiding the suboptimization that could result if only a single process were the focus of the study. Stonyfield Farms in New Hampshire conducted an LCA on their yogurt product-delivery system to compare options for containers. Knowing the size of the container and the distance to retailer were important factors impacting the environment, they found that if they sold all of their yogurt in 32-ounce (0.95 liters) containers, they could save the equivalent of 11,250 barrels of oil per year. Transportation to the retailer represented about a third of their products’ energy impact.²¹

At 3M, the protocol for new product development includes assessment of environmental, health, and safety issues at suppliers, within 3M, and with the customer. This approach to understanding full-system impacts of its products gives 3M a foundation for building strategies leveraging an eco-advantage. Similar initiatives are taking place at companies such as Alcoa, Bayer, Dow, DuPont, and PPG where teams of LCA experts are now plugged into cross-functional teams in design and supply chain management. Resource efficiency and LCA become tools for pollution reduction and waste minimization allowing managers to better understand where they can have the most impact on a design, process, and supply chain.

Design Better Products, Packaging, and Supply Chains

Good managers know it’s important to scan their external environment. They now look for the eco and social consequences of their products all along the value chain, upstream and downstream. Supply chain analysis tools and methods to integrate sustainability are most effective when they rest on a foundation of good data, careful planning, and an environment management system. Companies are now managing worldwide databases of sustainability performance metrics. Establishing key metrics such as GHG emissions that track results on energy use, water and air pollution, waste generation, and compliance help decision-makers benchmark performance, optimize supply chains, set goals, and monitor progress.

Closing the Loop

We should stop throwing away billions of dollars of valuable recyclable packaging materials. According to a report highlighting how the United States’ lagging packaging recycling rates result in serious market inefficiencies and unnecessary strain on the economy and environment.²² Packaging comprises over 40 percent of the U.S. solid waste stream, greater than any other category, and most of the materials are recyclable. Findings in the report include an estimate that the value of wasted recyclable consumer packaging materials exceeded $11 B and how extended producer responsibility (EPR) can lead to profits in processing used materials, reductions in carbon emissions and energy used to produce packaging, and thousands of jobs in within closed-loop supply chains for collection and processing. Further information from McKinsey finds manufacturers can create value, cut costs, and reduce exposure to volatile commodity prices by improving their resource productivity—using fewer resources for each unit of output.²³ Leaders are looking for opportunities beyond their own operations. Collaboration with suppliers and customers can keep used products, components, and materials in circulation while creating upwards $380 B (USD) of potential annual net material cost savings within the Europe. New business models that rethink the concept of ownership can shift value within closed-loop systems.

“Americans throw away more materials than any other country,” said Conrad MacKerron, author of the report. “This used to be a sign of economic progress, but in an age of declining natural resources, such waste is now an indicator of inefficient use of valuable raw materials and market failure. It’s simply not good business to throw away billions of dollars of reusable resources.”

Information within the report outlines why companies should design closed-loop systems and take responsibility for postconsumer packaging as part of their ongoing sustainability policies. Packaging represents an overlooked system and industrial ecology opportunities because raw materials, such as the petroleum, minerals, and fiber used to make much consumer packaging, are projected to become increasingly scarce. The authors of the report also find that efficiently designed and administered EPR policies would resolve many of the concerns identified with packaging recycling by turning to the actions found in Figure 2.4.

• Increasing recovery rates for all postconsumer packaging.
• Incentivizing producers to reduce materials use and improve recyclability.
• Creating profitable secondary materials markets.
• Providing stable revenue sources through producer fees to improve curbside recycling systems and build new recycling infrastructure.
• Reducing energy consumption and GHGs.
• Meeting pent-up industry demand for recyclable materials.

Figure 2.4 Percentage of solid waste steam

A group of major consumer goods and grocery companies, including Colgate-Palmolive, General Mills, Kraft Foods, Safeway, Supervalu, Target, Kroger, Procter & Gamble, Unilever, Walmart, Whole Foods, Coca-Cola, and Nestlé Waters, are already working on solutions to help adopt EPR policies. By supporting the design of EPR policies that drive more aggressive and effective collection efforts, companies can then make commitments to use far higher levels of recycled content in product packaging, which, in turn, supports closed-loop systems ensuring a stable supply of postconsumer materials to use as new feedstock.

Why this is relevant to supply chain design and management? Does it only mean there is now more work for everyone? To answer the first question, supply chain professionals should have a seat at the design table and new sustainability projects. Supply chain insight should be involved early and often in the stage-gate new product development (NPD) process and work with the growing ranks of sustainability professionals. With the increased focus on energy reduction initiatives within buildings, energy conservation thinking should be extended to transportation systems, moving more goods with fewer resources and minimizing fuel consumption.

To answer the second question, no, everyone does not have more work, but instead this is an opportunity to quickly move up the learning curve on sustainability and realize we all can reimagine products, processes, and systems. This is not more work, but a different way of approaching the work you already perform. Each one of us can find and eliminate waste, improve the business model, and rethink the way we design with key customers in mind. There are already available, proven approaches to help organize and focus on the integration of sustainability within existing processes. Systems thinking, stage-gate NPD processes, FSSD, Industrial Ecology, and C2C design all enable us to see the world as dynamic and interrelated rather than static and limited to functional siloes.

Companies overlooking the opportunity to manage sustainability and closed-loop systems face risk from investors. In 2002, the CDP Project surveyed and requested carbon information from the Financial Times 500 largest companies with only a 10 percent response rate. By 2005, the response rate increased to 60 percent of the same companies surveyed.²⁴ Now, >80 percent of the Financial Times submit annual carbon footprint reports. With the exponential growth in sustainability reporting and the integration of financial and sustainability reports, there will be an increase in the development of material database that includes information on suppliers and where all components and parts come from a given product. Increased supply chain transparency has already led to open source, online LCA collaboration platforms such as Sourcemap.com where anyone can see exactly where a product comes from, what kind of environmental impacts materials have from extraction, to transportation to the retail location, and delivery to your home.

The benefits are already be seen by some innovative firms such as DuPont. At the turn of the century, forward-thinking leaders pledged to cut carbon emissions 65 percent below their 1990 levels and to accomplish this by 2010. The company reduced its emissions 67 percent while the value of DuPont stock increased 340 percent. By 2007, they had reduced company emission 80 percent below 1990 levels. These same efforts saved the company $3 B between 2005 and 2010. How much money can your organization save from cutting carbon emissions?

Role of Transportation Providers

Transportation service providers should see sustainability as a way to efficiency and productivity and manage transportation and logistics functions for their customers while also being considered early in the product design process. Sustainability allows the transportation and logistics function of any firm to create value by working with customers at a strategic level and by backing decisions with very detailed data from the product design process and application of LCA tools. While the business case for new initiatives often come as band aids and incremental improvement, combining sustainability and design thinking provides opportunities to leapfrog chasms and possibly cross the largest chasm between the Early Majority and Early Adopters.

When it comes to DfS product applications, the possibilities are limitless, but we realize that your time is not. The best approach is to assemble teams to get up to speed on sustainability initiatives within your industry. Then, perform gap analysis and review internal needs. Create a vision and set high sustainability goals, review the possible solution sets available through DfS, and backcast into current decision making. The use of teams and looking at the world through a design thinking lens will allow many to more quickly integrate sustainability into practice and performance metrics, and make timely proposals to improve efficiency and productivity.

Solutions can include a design focus on a spectrum of opportunities that include but are not limited to: shipment scheduling (interplant, inbound, and outbound), mode and mode-mix selection, optimization, carrier network development and management, transportation planning, load tendering, tracking and tracing, claims processing, freight bill payment, returns management, benchmarking, and reporting.

However, new initiatives demand products, processes, and solutions that are more practical, that is, more user-friendly, easily implemented, and less disruptive to existing systems. Sustainability is too often positioned in terms of new metrics. Thus, management needs to understand trade-offs, managing to what’s critical and not doing everything at once. One way to approach this is to look for solutions that are designed to be:

• Proactive, understanding your business model and how you compete relative to others in your industry.
• Effective, allowing you to get more total product movement for less total cost.
• Evenhanded, not choosing one solution over another solely due to sustainability, but instead focus on the best solution for your business model.
• Realistic, effectively operationalized and understandable in existing financial terms.

Original equipment manufacturers (OEMs) and retailers value their relationships with transportation providers and recognize that they can reduce the impact of product movement. Key customers will look for their transportation partners to evaluate and minimize their fuel costs, environmental impacts, and increase social value by:

• Retrofitting existing vehicle fleets with technologies that increase fuel efficiency.
• Implementing process and practice changes to reduce fuel consumption.
• Training drivers in fuel-efficient driving techniques.
• Replacing existing inefficient vehicles with new, high-efficiency vehicles and technologies.
• Redesigning products and packaging to increasing packing rates with opportunities for closed-loop systems and recycling.
• Paying living wages to supply chain members.
• Including supply chain members in their ability to influence decision making, while also being informed as to what options are available and why changes are being made.

Environmental Protection Agency’s (’EPA) SmartWay program (previously described in Volume 1, Chapter 3) provides resources, educational content, and financing for making more fuel-efficient transportation a reality and is a logical resource for modernizing your own fleet, or understanding what fuel-efficient practices you should expect from transportation providers.

Other Tools and Procedures

In addition to these tools and frameworks, it should be noted that the various tools and procedures developed for TQM can also be readily applied to sustainability. These include tools such as:

• Cause and Effect Analysis
• Pareto Charts
• P-D-C-A
• Control Charts
• Histograms
• Benchmarking

The advantage of applying these tools is that that they are widely accepted and there are numerous software packages for them.

Summary

Frameworks and tools are important. They explain; they provide templates for success; they structure thinking. In this chapter, we have identified and explored several different frameworks and tools that are uniquely suited to the challenge of deploying effectively sustainability within the organization and its supply chain. Aura Light is but one example of the integration of sustainability within supply chain management. The application of the FSSD within your own organization and supply chain can change the way you think about, measure, and manage results. We have shown that for the manager willing to undertake this journey there are a wide range tools available—tools that need to be introduced and used.

Applied Learning: Action Items (AIs)—Steps you can take to apply the learning from this chapter

AI: Identify and assess the current sets of tools and frameworks being used in your organization. To what extent are these tools and frameworks consistent with the goals of sustainability?

AI: To what extent is sustainability and sustainability-related issues embedded in the current problems and issues being addressed by your company? Is sustainability an issue that is measured and where the consequences are suitably rewarded (or punished)?

AI: Assess the familiarity of your organization and its personnel with the various and framework identified in this chapter.

AI: If sustainability is new initiative that is different from the current areas being emphasized, have you developed a strategy for discrediting the current approaches?

AI: Can you find opportunities for LCA and industrial ecology within your operations and supply chain??

AI: To what extent are there frameworks in the organization that provide the personnel with a clear road map that links where the organization is currently with where it needs to be in the future?

AI: To what extent do the personnel see a clear and compelling reason for sustainability?

AI: Do the personnel understand the types of problems to which the various tools are most suitable? Least suitable?

AI: To what extent are the following options considered in your organization (product/process redesign, LCA, disassembly, substitution, reduce, recycle, remanufacture, consumer internally, waste segregation, alliances)?

Further Readings

Christensen, J., Park, C., Sun, E., Goralnick, M., Iyengar, J. (2008). A Practical Guide to Green Sourcing. Supply Chain Management Review. 12(8).

Global Environmental Management Institute (GEMI) (1993). Total Quality Environment Management: The Primer. Washington, DC: GEMI.

McDonough, W., & Braungart, M. (2002). Cradle to cradle: Remaking the Way We Make Things. New York: North Point Press.

McDonough, W., Braungart, M., & Clinton, B. (2013). The upcycle: Beyond sustainability—designing for abundance. Macmillan.

Works Cited

Bratt, C., et al. (2013). An Introductory Approach to Strategic Sustainable Supply Chain Management. Submitted for journal publicaiton

França, C., Bronman, G., et al. (2017). An Approach to Business Model Innovation and Design for Strategic Sustainable Development.” Journal of Cleaner Production, 155–166.

¹Nattrass and Altomare (1999), Chapter 2.

²Broman, G. I., & Robert, K. H. (2017). A framework for strategic sustainable development. Journal of Cleaner Production.

³These social sustainability dimensions are from the work of Merlina Missimer, Missimer M, Robért K-h, and Broman G. 2014. “Lessons from the field: A first evaluation of working with the elaborated social dimensions of the Framework for Strategic Sustainable Development”. Presented at Relating Systems Thinking and Design 3, Oslo, 15-17 October 2014. Published as part of Merlina Missimer’s doctoral dissertation series No. 2015:09, Blekinge Institute of Technology, Department of Strategic Sustainable Development, Karlskrona, Sweden 2015.

⁴Sroufe, R. “Operationalizing Sustainability”, Journal of Sustainable Studies, Issue 1.1, 2016.

⁵The Natural Step: http://www.naturalstep.org/

⁶Velika Talyarkhan, Graduate Assistant, Duquesne University MBA+Sustainability program.

⁷Bratt, Cecilia et al. “An introductory approach to strategic sustainable supply chain management.” Submitted for journal publicaiton (2013)

⁸França, César, Bronman et al. “An approach to business model innovation and design for strategic sustainable development.” Journal of Cleaner Production (2017): 155–166

⁸Bratt, Cecilia et al. “An introductory approach to strategic sustainable supply chain management.” doctoral dissertation (2013)

⁹Aura Light’s 2015 Annual and Sustainability Report, http://np.netpublicator.com/netpublication/n97742801

¹⁰Braumguart and McDonough (2007), pp. 1337–1348.

¹¹McDonough and Michael Braungart (2002). Also see, The Upcycle, the authors 2013 book from North Hill Press.

¹²Frosch and Gallopoulos (1989).

¹³European Commission/European Research Area: Co-production of Bio-fuels (2013).

¹⁴PE International (2010).

¹⁵Scientific Applications International Corporation (SAIC), (2006).

¹⁶Ehrenfeld (2008).

¹⁷Jensen and Remmen (2006).

¹⁸Sroufe (2003).

¹⁹Curkovic and Sroufe (2011).

²⁰Meadows (2008).

²¹Branchfeld and Dov et al. (2001).

²²King (2012).

²³McKinsey and Co. (2012).

²⁴Read (2007).