Thinking Outside the Box: Supply Chain Environmental Management Brings Strategic Thinking Beyond the Factory Walls

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Courtesy of Richard MacLean & Associates, LLC

Environment, health, and safety (EH&S) programs have historically focused on the activities in and
around the factory walls. No longer. Corporations are expanding their attention to include EH&S issues and opportunities derived from improved supplier and customer relationships—encompassing the entire supply chain from cradle to grave. Supply Chain Environmental Management (SCEM) may be a strategy to position your company to reduce supplier costs and provide greater value to your customers. SCEM is a growing issue that is receiving increased attention in a variety of sectors, particularly electronics. It holds strong implications for suppliers at each stage of the manufacturing process, as well as for end users of finished goods and services. This article outlines the evolution of SCEM as well as current trends, and provides some advice on positioning your organization to take strategic advantage of SCEM.


EH&S aspects at any stage of the chain, from raw materials production to finished products and services, can add or
subtract value to a customer. If your company happens to be in the “middle” of the supply chain and your customer or
raw material supplier has a significant EH&S problem, you have a problem too. If you can offer suggestions that add
value anywhere in this chain, everyone wins. This is not rocket science, but all too often EH&S managers can form myopic visions of where their “responsibilities” begin and end.

SCEM is, in effect, a logical extension of existing supply chain management programs combined with ongoing programs to demonstrate product value or resolve customer issues. Unique to SCEM are some of the internal and external forces that have lead to its adoption. For example, European legislation requiring electronics manufacturers to recycle their products at the end of their lives has forced companies to re-examine their products. Some firms have moved aggressively to put in place product take-back schemes. The Xerox Corporation cites the European legislation as one of the forces driving its remanufacturing program.

Environmental considerations are increasingly being pushed forward into R&D and design, because the success of a take-back program is linked directly to the product’s design. There is some irony in the fact that end-of-life regulations should impact supplier relationships at the beginning of the product life cycle, but there are many examples that demonstrate the impact of design and the environmental connections between the different stages of a
product’s life.

Take-back regulations have not been implemented outside of Europe, and policy in the United States at the moment favors voluntary measures to achieve the goals of the European legislation. For example, the U.S. Environmental Protection Agency (EPA) has recently published a booklet providing case studies in voluntary efforts.1 The President’s Council on Sustainable Development suggests that extended product responsibility is an important step toward corporate sustainability, but one that is best achieved through voluntary measures and public-private partnerships.

In addition to government activities, a number of non-government organizations have advocated that companies impose their own standards on their subcontractors. In addition, organizations such as the Silicon Valley Toxics Coalition (SVTC) and the Rainforest Action Network (RAN) are looking beyond their companies’ own environmental policies to consider the impacts of supply chain issues on the environment.

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