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Class #21 Sustainable Operations

The document discusses sustainable operations, emphasizing the importance of sustainability and corporate social responsibility in decision-making. It highlights the impact of new product development, process analysis, and sustainable sourcing on environmental performance, while also addressing challenges like greenwashing and unauthorized subcontracting. The IKEA case study illustrates various sourcing options and their implications for sustainability, ultimately assessing IKEA's performance in this area.

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Tamar Salant
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9 views

Class #21 Sustainable Operations

The document discusses sustainable operations, emphasizing the importance of sustainability and corporate social responsibility in decision-making. It highlights the impact of new product development, process analysis, and sustainable sourcing on environmental performance, while also addressing challenges like greenwashing and unauthorized subcontracting. The IKEA case study illustrates various sourcing options and their implications for sustainability, ultimately assessing IKEA's performance in this area.

Uploaded by

Tamar Salant
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Sustainable Operations

Sustainability: Meeting the needs of the present without compromising the ability of future
generations to meet their needs.
Corporate Social Responsibility:
-Introduces policies that consider social, environmental and financial considerations in
decision-making
-“Doing What’s Right” can be beneficial to key stakeholders
-Creates shared value: Increase competitiveness, Helps the community

Greenwashing: the process of conveying a false impression or providing misleading information


about how a company's products are more environmentally sound. Greenwashing is considered
an unsubstantiated claim to deceive consumers into believing that a company's products are
environmentally friendly.

What Internal Operations Impact Sustainability?: New Product


Development, Process Analysis, Service Mgmt, Quality Mgmt,
Forecasting, Inventory Mgmt, Logistics/Transportation

How do NPD Processes Impact Sustainability?:


-Design for manufacturability (DFM) can reduce scrap and wasted
resources
-Sustainable Design→ Incorporates a systems view in the design of
the product that reduces the environmental impact; Approach
reduces waste & energy at the supplier, in production, & at end
user; Look for alternative materials to reduce impact; Designs that reduce packaging &
transportation (IKEA Flat Packaging)
-Sustainable Packaging Ingredients, Design (Minimal packaging), Reusability

NPD: IKEA→Product design can play a big role; Invention of the flat pack product!;
Tremendous savings on transportation costs, and fuel emissions; Triple Benefit
How does Process Analysis Impact Sustainability?:
-Service Mgmt: Pollution & want reduction of energy &
water→Reduction of single-use items (cup,straw,nail salon

flip flop); high efficiency


lighting, solar; Reduce Waste

Transportation Emissions: EV development, safety concerns (train fire), reduce product


space increase utilization, ocean freight–harm wildlife; Route optimization (reduce
trips→Product design)
Sustainable Transportation: Walmart→ May 2006: installed small, efficient diesel engines
on all trucks that make overnight trips.; Drivers
can turn off their truck engines and use the APUs
to warm or cool the cabin and run
communication systems while on breaks;
Eliminate 100K metric tons of CO2 emissions
per year; Save 10 million gallons of diesel fuel,
$25 million per year

Outside the Firm– End-Of-Life Considerations:


Product designed with less material or recycled
material; Design closed loop systems to reuse product; Example: Caterpillar remanufacturers
parts and components based on customer exchange /return program

*Most risks: Extended Supply chain (least ability to influence actions), further away=harder to
understand=impact on you; Tracking performance challenge, measuring sustainability

Sustainable Sourcing: Integration of social, ethical and environmental performance factors into
the process of selecting suppliers. →Greatest impact occurs in extended supply chain; Impact
has grown with increased global sourcing; Tracking supplier performance on sustainability
is a major challenge

Unauthorized Subcontracting: Risks: Unethical labor practices, Building codes & Safety
Violations, Environmental regulation violations Prevention: Understanding supplier capacity,
Keeping track of workloads, Not demanding unrealistic prices, Treating suppliers like customers
and building long term relationships, Sharing info. btw sustainability & purchasing personnel.

Unauthorized Subcontracting effects: Factory Collapse

IKEA Sustainability Case:


-What is IKEA’s overall approach to sustainability?

-What do you think of the 4 sourcing options?


Option 1: Owning More Forests→Demand growth creates cutting down
Option 2: Driving Higher Procurement Targets and Standards→Recycled/Sustainable FSC-
Certified
Option 3: Using More Particleboard→ Costly particleboard, breaks down (quality
perception)
Option 4: Using More Recycled Wood→Cheaper (sometimes), invest into adapting (change
manufacturing process), region specific,
-What grade would you give IKEA on Sustainability?
B/B-

Since case, INCREASED Wood Consumption

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