Env.principles For Supply Chain

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Environmental principles applicable to supply chains design and operation Giannis T. Tsoulfas, Costas P. Pappis * University of Piraeus, Department of Industrial Management, 80 Karaoli and Dimitriou street, 18534 Piraeus, Hellas, Greece Received 8 November 2004; accepted 9 May 2005

Abstract In this paper we deal with the problem of identifying environmental principles for the design and operation of supply chains. The operations that are included in supply chains are briefly described along with the approaches that are applied in order to improve their environmental performance. A background of environmental principles for achieving eco-efficiency and building of environmentally friendly organizational systems is presented and emphasis is put on the application of such principles ‘‘from cradle to grave’’. Then, environmental principles applicable to particular objects of logistics networks planning are identified and commented upon. In addition, selective case studies from the literature, which show the applicability of the formulated principles and their relevance to practice, are discussed. The paper concludes with some remarks regarding the benefits for companies and societies, in general, that occur as a result of the application of the formulated principles. Ó 2005 Elsevier Ltd. All rights reserved. Keywords: Environmental management; Supply chains; Sustainable development

1. Introduction Earth as a resource system has a limited capacity for supporting a growing human population with an intensive exchange of materials and energy with its environment [28]. Communities, governments, businesses, international agencies, and non-government organizations are increasingly concerned with establishing a means to monitor performance and to assess progress towards sustainable development. The latter is defined as meeting the needs of the current generation without compromising the ability of future generations to meet their own needs [52]. However, it is inevitable for humans to consume resources to fulfill their own needs and it is impossible for them not to extract the * Corresponding author. Tel.: C30 210 4142150; fax: C30 210 4142328. E-mail addresses: [email protected] (G.T. Tsoulfas), pappis@ unipi.gr (C.P. Pappis). 0959-6526/$ - see front matter Ó 2005 Elsevier Ltd. All rights reserved. doi:10.1016/j.jclepro.2005.05.021

resources at the present time. Thus, an alternative towards sustainable development is to consume the resources which have less potential for depletion and not to utilize easily depleted resources. Closed-loop supply chains and recovery of used products, in particular, have received much attention lately due to the above mentioned factors. While traditional logistics are perceived as managing the supply of goods and/or services from the producer to the (end) customer [6] as well as internal logistics, and input and output to the company, reverse logistics is the process of planning, implementing and controlling the efficient and effective inbound flow and storage of secondary goods and related information opposite to the traditional supply chain (SC) direction for the purpose of recovering value or proper disposal [16]. Just as economic globalization creates opportunities and poses challenges to our ability to formulate macroeconomic policies, so does environmental globalization. The opportunity for business profit is an additional

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motive for the companies. Relevant legislations in developed countries derive from the social demand for environmental protection and the perspective that the manufacturers should be made responsible for their products ‘‘from cradle to grave’’ has dominated. However, it can be claimed that the efforts made so far are rather limited, while nobody would argue against the need for a global approach to the situation. Developed countries or leader firms, mainly, have established environmental policies for product recovery. The issue of how effective these policies are is debatable. The scope of this paper is to identify systematically environmental principles for the design and operation of SC. There are though cases where the applied principles, which derive from the demand for sustainability, may lead to the improvement of the economic issue as well.

2. The management of materials’ flows from an environmental perspective Every product generated, transported, used and discarded within the SC causes a certain impact on the environment. This impact is a function of the material and energy consumed and of the wastes released in the product’s whole life cycle, which in turn depend upon the type of the product and the technology used [9]. Thus, it is important to examine all the procedures related to materials’ flows, in order to opine regarding the environmental performance of SC. The first stage in the SC, including the selection of materials and methods for processing, may be regarded as product design. Product design and process technology typically determine the types of pollutants emitted, solid and hazardous wastes generated, resources harvested and energy consumed [39,45,47]. During the next

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stage, the forward supply chain, the materials are firstly processed till the manufacture of the product. The manufactured items are usually packaged and then transported to distributors. Finally, the products end in final users e customers. There are cases though, mainly concerning job shop, where the products are directly transported from the producer to the end-user, without the intermediation of a distributor. The reverse supply chain starts when the product is no longer operable or when the end-user decides that he will not use it anymore. Given that products are not disposed uncontrollably, they are collected and transported to appropriate facilities, where a selection occurs: some of them are reprocessed and the rest are properly disposed. The reprocessed items are finally redistributed and reused. In some cases the separation occurs away from the reprocessing facilities. A graphical representation of the materials flow is provided in Fig. 1. Until lately, the main environmental emphasis has been on the manufacturing phase and to some degree on the disposal phase. This emphasis has given very good results, but at the same time the number of products per household, energy consumption and waste have increased more and have caused a larger environmental impact. In the last few years the environmental focus has shifted from the manufacturing processes to the products. Therefore, the only alternative is to shift the focus to products and minimize the environmental impact in the whole life cycle [1]. Indeed, the appropriate identification of all life-cycle stages of a product is necessary for the establishment or optimization of environmental policies. Any activity in the SC may have an undesired impact on the environmental chain. And vice versa, any disturbances in the ecological balance may affect production activities and social

communication with suppliers

selection of materials and processes

proper disposal

extraction of virgin materials

storage

recycling

distribution

parts production

inspection

assembly

disassembly

storage

refurbish

distribution

repair

suppliers

company

direct reuse

retailers/customers

retailers

customers

Fig. 1. The materials flow.

use

end-of-life products

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welfare in the long term. In this sense, the SC is connected in both ends with the environmental chain to establish a perpetual cyclical operation. The analysis of the cost-effectiveness of schemes for the recovery of products is difficult, however, it is useless to do so without looking at the whole process chain, combining the logistics aspects with the recovery ones [35]. A set of approaches is applied in order to improve the environmental performance of SC. Cleaner production is the continuous application of an integrated preventive environmental strategy applied to processes, products, practices and services to increase eco-efficiency and reduce risks for humans and the environment. Cleaner technologies extract and use natural resources more efficiently, generate products with fewer harmful components, minimize pollutant releases to air, water and soil during manufacturing and product use, and design durable goods that can be reused or recycled [36]. Rather than, for example, capturing polluting substances after they have been produced (as with the end-of-process technologies), the goal is not to produce the harmful substance at all, or to produce less of it, or a less harmful one [13]. Life cycle assessment (LCA) is a method in which the energy and material consumption and different types of emissions related to a specific product are being measured, analyzed and summoned over the products entire life cycle from an environmental point of view. Two LCA approaches are most common: one is based on detailed process model descriptions and corresponding emissions and wastes, and the other is based on economic input/output accounts that are used to construct models that describe inter-sector flows in economic terms. The limitations posed by these two major approaches have led to efforts to develop hybrid LCA models that would overcome the barriers that are set by these limitations in order to provide answers to all decision-making groups that are involved. Hagelaar et al. [23] provide an excellent analysis regarding LCA in the context of SC. According to their analysis, there are three types of LCA:  Compliance-oriented LCA, which concerns complying to rules and regulations with the help of end-ofpipe techniques.  Process-oriented LCA, which focuses on controlling the environmental burden caused by the production process by means of production integrated measures that achieve both compliance with governmental rules and regulations and a better return.  Market-oriented LCA, which focuses on the reduction of the environmental burden caused by the design of the product in order to achieve competitive advantage. Then the company has to decide what kind of LCA fits their requirements.

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3. Environmental principles applicable to logistics networks planning In the past there have been some observable efforts from organizations and socially minded groups aiming at formulating principles towards eco-efficiency (e.g. the Cleaner Production Programme and the Valdez Principles). In addition, there have been some business initiatives with regard to their environmental responsibilities (e.g. the World Business Council for Sustainable Development). Furthermore, Environmental Management Systems (EMS) such as ISO 14000 and EMAS provide organizations with a structured approach to plan and implement environment protection measures and to regularly evaluate their performance and improvement. An EMS is not prescriptive, that is, it does not specify how environmental targets should be met. Rather, it requires organizations to take an active role in examining their practices, and then determining how their impacts should best be managed. This approach encourages creative and relevant solutions from the organization itself [42]. Environmental sustainability is a value embraced by the most competitive and successful companies. A firm needs to find the right processes to internalise environmental issues in a way consistent with its long-term interests. The appropriate processes are different for every firm, and there are no ready answers as to which processes are appropriate under what circumstances. Therefore, a good framework can help managers find the appropriate processes by providing a way of structuring their thoughts [7]. Moreover, assessing environmental impacts for cleaner products may assist companies in their quest for continuous improvement by identifying ways of maximizing profits through reducing waste and liabilities, raising productivity and demonstrating the company’s sense of responsibility towards its customers and the environment. The challenge facing industrial firms is to work out ways allowing them to successfully incorporate environmental considerations into their overall strategy. To this purpose, in addition to applying cleaner technologies, firms try to develop innovative management practices enabling them to meet environmental constraints and support sustainability [9]. The cooperation of companies could also lead to a more effective approach. As mentioned earlier in this section, an EMS is rather descriptive. In this paper, a prescriptive approach is presented. The principles proposed below have been formulated based on the literature, where they may be found either as explicit statements (prescriptions or guidelines) or in treatments of subjects relating logistics to environment, which implicitly suggest such principles. Some of these principles may also be inferred from company practice.

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It is important to point out that the proposed principles are not applicable to all cases. This would occur if, for example, the product design would be launched with no constraints at all. In real cases though, usually not all the parties that contribute in SC meet the necessary conditions for eco-optimization. In such cases total redesign should be applied if feasible. Besides, manufacturers should not only be held responsible for the processes that take place in their facilities, but also for the selection of suppliers and partners. The proposed principles are definitely relevant with the ones that were formulated by the initiatives that were mentioned in the beginning of this section. However, they are more specific, they cover the majority of functions that are met in product systems and they are directly connected with the target of closing the loop of flows. The environmental principles applicable to SC design can be classified into 6 groups corresponding to respective company functions that relate directly to the materials’ flows that were described in Chapter 2 (see Fig. 1): 1. 2. 3. 4. 5.

Product design Packaging Collection and transportation Recycling and disposal Greening the internal and external business environment 6. Other management issues Apart from formulating the environmental principles, mention is also made to selective case studies from the literature, showing the applicability of them and their relevance to practice. 3.1. Product design The design process is one of the major tasks for any firm, responsible for two major types of design activities: new product design and development, and process design and development. Both product and process designs are closely interrelated and greatly influence each other while simultaneously impacting the environment. Both aspects must be considered to ensure that the firm has developed and implemented effective and efficient designs and processes. R&D directed at process change and product improvement can lead to highervalue products and reduced environmental impacts. Designers, mostly concerned with product performance, must take into account also the effect of design details on energy/material requirements for manufacturing, use and secondary use (repairability, remanufacturability and recyclability). Redesigned products will only be effective if they are able to provide at least the services of the products they replace. By extending the useful life of equipment items, additional raw materials are not needed to produce new items. In some cases, landfill

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disposal will not be required or that fate is delayed for a few years. A carefully constructed set of economic instruments may provide the incentives needed to lead to design changes that help move towards sustainability. The following principles may apply in product design. 3.1.1. Design and develop recoverable products, which are technically durable, repeatedly usable, harmlessly recoverable after use and environmentally compatible in disposal [21] Materials with a high recycling rate and which have the least impact on the environment, both in use and origin, should be preferred. Where possible, environmentally safer substitutes should be used and the abuse of products should be actively prevented. Digital uses the 6R approach (Recycle, Reclaim, Refurbish, Remanufacture, Resell and Reuse) on their used products [11]. Xerox offers a 3-year total satisfaction guarantee on equipment containing reprocessed parts to demonstrate its confidence in the products, the same as that given on new equipment [32]. In addition, Xerox designers choose a minimal number of materials from the Xerox material environmental index to simplify the eventual segregation of materials and to avoid hazardous materials. The index specifies the relative nature of various materials’ impact on the environment and helps designers choose non-toxic materials that resist equipment to assert that products should wear during normal use and lend themselves well to reuse and recycling. IBM also develops design specifications for its new products to improve product’s end-of-life material recovery [19]. Billatos and Nevrekar [4] underline the Mercedes Benz design efforts, which include the selection of environmentally compatible and recyclable materials for components, the reduction of the variety and the volume of plastics used and the avoidance of using composite materials as much as possible. Hundal [25] reports that another automotive company, BMW, has been trying to introduce more recyclable components in the original design so that it can produce cars out of 100% recycled parts. Finally, Rosenbach and Lindsay [44] have reported many cases of the application of this principle in various companies. 3.1.2. Produce using minimum energy and materials The wasting of materials and energy either due to inappropriate design, or due to excessive number of defects should be avoided. Intel has worked in increasing the number of transistors in a single chip, which will result in fewer chips to build and fewer chips to dispose [22]. 3.1.3. Secondary raw materials should be given priority in usage Primary raw materials should be used only in cases where there would be no stock of secondary ones.

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Furthermore, in many cases this policy is also moneysaving. Such a case is reported by Tsoulfas et al. [49] and by Daniel et al. [10], where lead is recovered and recycled from lead-acid batteries and then it is used for the production of new ones. In addition, Recopol Furniture report that they make furniture which incorporates up to 75% recycled resins and plastics that come from used appliances such as computers, vacuum cleaners, telephones, televisions, washing machines and refrigerators, which would otherwise go to the landfill (http://www.wharington.com.au). 3.1.4. Use eco-friendly energy production, reduce water usage and keep control of pollution sources Using less energy is obviously good for the environment. It is also self-evidently good for business because it cuts companies’ costs, and eventually avoids potential environmental liabilities. It is, therefore, a prerequisite to the long-term sustainability of business. To replace non-renewable and polluting technologies, it is crucial to support the use of renewable energy resources, as well as to reduce energy consumption. The identification of where great amounts of energy are used could subsequently lead to redesign of the product or its use in order to make significant energy reductions. Major improvements in energy efficiency can often be achieved at little or no cost, even with net savings, through the use of targeted programs. Installed water-saving techniques and the use of closed re-circulating systems can lead to reduction of water use. In addition, the elimination of the stochastic factors, which affect pollution, may lead to greener production. 3.1.5. Use standardized parts Such a policy ensures that these parts could be reused not only by the original producer, but also by a larger group of producers. For example, automotive companies use standardized screws, speedometers, etc. In most cases this policy is also money-saving. Pappis et al. [38] report the case of containers that are standardized and can be used by different companies. Standardization is of major importance in Xerox and focus is paid standardizing components as much as possible between product families, thus simplifying and optimizing the opportunities for reuse [32]. 3.1.6. Provide for easy disassembly of the product This would lead to cost, time and energy savings. The opposite case would make the disaggregation of the product unpractical and costly. It has been reported that Chrysler, Ford and GM researchers are trying to improve disassemblability features whilst improving the assembly ones [22]. BMW has been using a colourcoding scheme for differing plastic materials for the past 30 years, which allows the development of efficient dismantling and disassembly techniques [25].

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3.1.7. Reduce by-products and get the best out of them During manufacture by-products are also produced. Some of them can and should be reduced and/or reused. The rest must be eliminated and disposed properly. 3.2. Packaging Packaging design is important for attaining a company’s environmental objectives. Though it serves certain needs related mainly to the distribution of the product (e.g. safe transportation), it is not part of the actual service offered by the product. In any case, it affects environment in many aspects. This is the reason why regulations concerning packaging constitute an essential part of governmental policies for environmental protection. The following principles may apply concerning packaging. 3.2.1. Limit packaging to the necessary size The opposite case not only is contrary to environment protection, but it also affects transportation negatively. Furthermore, environmentally safe packaging can be used as a marketing argument. 3.2.2. Design packaging for refilling or recycling and use standardized packaging when applicable There are examples of standardized bottles, crates, boxes, pallets and containers, which may be used by different companies. In re-organizing the packaging policy, Xerox changed its packaging and established packaging-reuse centers in the UK, the Netherlands, and the US. In addition, it reduced the amount of internal packaging to minimize waste [32]. 3.3. Collection and transportation Despite the obvious environmental gain from used products’ recovery, collection and transportation of recovered products have an environmental cost. Minimizing such a cost is important in order to increase the total environmental gain from recovery. Principles applicable in this phase of the reverse supply chain are the following. 3.3.1. Formulate a policy for the recovery of used products Such a policy favors the maximum utilization of used products. Companies may decide either to undertake the recovery of used products on their own, or to establish cooperation via local or more extended networks for the collection and recycling of similar products. United efforts may be more effective and provide higher recycling rates. Also, recovered products often suit more than one manufacturer. Leasing is a policy that has received much attention lately regarding its environmental dimension. Indeed, companies that lease their

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products instead of selling them have better chances in the management of their used products. Such cases are reported in detail in Fishbein et al. [14].

negatively affecting its overall balance. The following principles may be applied regarding recycling and disposal.

3.3.2. Consider using existing forward supply chain facilities and transportation system as much as possible for the reverse supply chain Transportation and the consequent environmental effects can be significantly limited if the recovery of used products can occur at the same time or in combination with the distribution of new products. The theoretical minimal average transportation distances can be determined using a tool for allocation and route planning. An application of this principle is reported by Vergitsi [50], where the case of used beverage bottles of Hellenic bottling company (3E) is examined. The tracks that carry the beverages do not return empty to the warehouses of 3E, since they carry the empty bottles from the consumer spots, in order to be reprocessed. Krikke et al. [31] conclude that in the case of Printed Wiring Assemblies of Honeywell the forward supply chain is used in order to facilitate the returns of spent products.

3.4.1. Close the supply loop by recycling effectively and efficiently The biological designs of nature provide a role model for sustainability. The goal is to work continuously towards closed-loop production systems and zero-waste factories, wherein every output is returned to natural systems as a nutrient or becomes an input for manufacturing another product [12]. Designing for recyclability is essential but recycling becomes unproductive when the energy, materials and pollution used in collecting and processing used products exceed those used to produce the goods in the first place. Closing the loop by extending responsibility throughout the life cycle chain ensures total product and service stewardship. Mercedes Benz started taking scrap cars back in 1991 and has been performing the material recovery process as part of their environmentally friendly production program [4].

3.3.3. Classify used products as early in the recovery chain as possible This eases the planning of storage of used products and redundant processes are avoided. Daniel et al. [10] mention that used lead-acid batteries are classified in the electricians’ shops, where they are bought by customers.

3.4.2. Reduce the volume and amount of materials going to landfill [5] and consider alternative uses of used products or wastes Using appropriate techniques one can compact the scrap. In addition, smaller landfills can be used. Alternative uses of used products extend their life cycle. For example, used tires can be used as a protective in seaports, speedways, etc.

3.3.4. Treat hazardous materials safely It is necessary to ensure that the generation of hazardous wastes is reduced and also that adequate disposal facilities are available, for the environmentally sound management of hazardous wastes. In Ohio Manufacturer’s Association Case Studies in Team Excellence [37] the initiative of a Chrysler team from the Jeep plant in Toledo is reported, which was formed to respond to state legislation prohibiting the disposal of certain biodegradable and recyclable materials in landfills. The establishment of collection points and of a network of recyclers for such materials together with setting up returnable packaging systems with suppliers led to significant savings in an annual basis. 3.4. Recycling and disposal After its useful life, a used product may be either disposed or recycled (generally recovered). As in the phase of collection and transportation, recycling and disposal may significantly contribute to the total environmental gain and the attainment of the environmental goals of a company. Ideally, companies should borrow from natural cycles to design their systems as part of a larger natural cycle, where materials are borrowed from and returned to nature, without

3.4.3. Support the development of markets for recovered components and materials The environment can be the basis of the creation of new markets or of the reorganization of existing ones for certain (material) flows resulting from the production process. With such a reorganization, materials that would otherwise end as wastes would turn into useful by-products [13]. 3.4.4. Locate recycling facilities close to customer markets [2] Such a policy would ease the direct delivery of used products from end-users. Furthermore, companies can also offer waste disposal services. 3.5. Greening the internal and external business environment Greening the business environment refers to management practices, which aim to improve the internal (company’s personnel) as well as external (suppliers, customers) environment. Supply relationships may provide a key way for business to influence the sustainability of their products and services through improvements

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to the manufacturing system, since it includes duties such as vendor selection, material selection, outsourcing, negotiation, buying, delivery scheduling, inventory and materials management and, to some extent, involvement in design [46]. The personnel of a company are responsible to incarnate the company’s policies. Thus, they should be aware of the environmental impacts of their attitude. Finally, ‘‘greening’’ the customers includes policies to raise their level of environmental awareness and make them partners to the environmental tasks of the company. The following principles may be applied regarding greening the business internal and external environment. 3.5.1. Impose higher (and greener) standards on suppliers [7] and have a close cooperation with them Adopting specific procurement/purchasing policies requiring suppliers to apply sustainable development practices may help companies avoid buying-in waste and subsequent pollution problems. The links between material use, production process and environmental impacts in manufacturing facilities suggest that the important role of suppliers in acquiring and assimilating external information, extending the capacity of a firm to implement radical innovation, may also hold in the area of environmental innovation. Geffen and Rothenberg [18] examined three case studies in the automotive industry, focusing on the paint process, in order to examine the role of partnerships between OEMs and their suppliers in improving the environmental performance of manufacturing operations. The results suggest that closer supplieremanufacturer relations, where the relevant product expertise resides in the supplier, can contribute to improved environmental performance through the implementation of innovative materials and related processes. As suppliers learn more about the manufacturing operation, they are better able to understand the kinds of products that best serve the customer’s needs. Within the protection and trust of a partnership with the manufacturer, they are more willing to share their innovative ideas. Rao [40,41] reported some facts regarding the situation in South East Asia. In particular, he analyzed the way with which companies are ‘‘greening’’ their suppliers. For instance, Ford Motor Company has demanded that all of its suppliers with manufacturing facilities, comprising about 5000 companies worldwide, must obtain a thirdparty certification of EMS for at least one of their plants by the end of 2001, and for all plants by 2003. To help the suppliers establish their own environmental management system Ford offers awareness seminars and training for its suppliers, for them to be like any world class organization and attain their goal of environmental excellence. Nestle Philippines conducts seminars and provides technical assistance to its suppliers and contractors to help them implement an ‘‘EMS that is

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consistent with Nestle’s environmental management system (NEMS)’’. Indeed, in order for a company to be able to ensure that only environmentally friendly raw materials are used in the production processes, it is essential for it to closely monitor the production processes of all of its suppliers as well as their mode of delivery and transportation. 3.5.2. Indicate the return, reuse and recovery possibilities [21], make available the necessary information of your products concerning recycling and provide adequate safety instructions [7] The end-users should be aware of what they could do after the product has completed its life cycle. Thus, customers can make educated decisions about what products to buy and how they should treat them after the end of their life cycle. Since it is difficult to predetermine where the products would end in, it should be easy for everyone to identify the product. An easy solution could be the use of labels with serial numbers or bar codes and the storing of the relevant information in a database [35]. In order to ensure that equipment and components do not end up in landfill sites, Xerox marks them with recycling symbols and reprocessing codes that explain the recycling and reuse potential and strategy for specific parts. Every drawing of a new part must contain the instructions for the end-of-life process. It also began using bar-coded labels to improve material tracking [32]. In 1999 over 20 car manufacturers formed a consortium called IDIS2. The aim of IDIS2 is to make recycling of end-of-life vehicles more efficient by providing product related information to the dismantler. The consortium developed an ‘‘International Dismantling Information System’’ (IDIS) which provides product related information to dismantlers [26]. This system provides information such as the location of hazardous materials, dismantling times and tools and the identification of recyclable materials. Pappis et al. [38] refer to the case of BCL, where appropriate coding schemes are used by the company in order to be able to track their containers any time, but also to provide information regarding the dimensions and the materials of their containers. 3.5.3. Motivate customers and keep records of where they deliver used products or packages Motivation is important in order to maximize return volumes. On the other hand, keeping records of where used products and packages end in may lead to a better planning of collection and transportation networks. Vergitsi [50] reported that the consumers of 3E beverages get a fee when they return empty bottles to their collection points. 3.5.4. Introduce the eco-objectives to the personnel Key to recovery success is the involvement of employees at every level in order for them to promote

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the concept of eco-efficiency. Employee involvement utilizes suggestion systems, self-directed work teams, quality circles, process improvement teams, and various other techniques to empower workers to make process changes. The adoption of employee involvement practices and their impressive outcomes is frequently showcased in company-, industry-, and governmentsponsored competitions [24]. Corbett and Cutler [8] noted that, in their case studies, respondents identified training on a broad front within the organization as key to the companies’ ability to make headway with all business activities including environmental improvement. Kitazawa and Sarkis [29] performed a research in Acushnet Rubber Company, Compaq’s resource recovery facility and Hyde Manufacturing and noted, among others, that, in order to promote employee involvement, all three organizations provide their employees with systematic training courses that are designed to enhance environmental awareness, and the knowledge and skills necessary to solve complex problems. The case of AT&T [20] outlines the role of employee involvement, since an AT&T team that had been cited as one of the area’s worst polluters completely eliminated the primary source of toxic emissions with operational changes that improved both the unit cost and operational efficiency of their facility [37]. 3.6. Other management issues Other management issues involve strategic policies that apply to the whole SC and affect or determine the companies’ environmental targets. In addition, they refer to the incorporation of marketing strategies and information technology, which not only may add value to a product, but they enhance the environmental endeavors of a company. Principles relevant to these issues are the following. 3.6.1. Establish flexible manufacturing and management policies [30] Companies that manipulate materials and energy should be organized in such a way that they could correspond rapidly to changes in management and processes, since sustainable development requires a long-term perspective for planning and policy development. Changing demands for goods and services will also push design changes. The study of alternative design schemes is necessary in order to achieve ecooptimization. (‘‘Do the same but do it better or try to do something different.’’) [15]. 3.6.2. Use effective accounting systems and management tools The use of accounting systems that account for the full life cycle costing of a product or service, and the environmental impacts it creates, can be expected to

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provide additional information that will influence the design process. Many companies have discovered that there are economic advantages to changing designs towards being more sustainable, whether because they are easier to market or cheaper to produce. Success stories in companies realized with the significant support provided by EMS are commonly presented in research papers. The most applicable benefits are better organization and documentation of their environmental activities, increased legal certainty, improved image, greater employee motivation, reductions in resource use, enhanced plant safety, and optimization of process flows [3,17,33,34,43,51]. Moreover, similarities with Quality Management Systems are identified, since the two systems share many common aspects that appeared to accelerate the transfer of organizational learning [8]. However, there are often expressed some doubts regarding whether or not firms have incorporated basic environmental considerations into their strategic plans, despite the fact that firms may have adopted a range of tools for environmental management. Instead, firms may have added environmental management tools without truly transforming their operations because they may have been motivated by attempts to improve public image [48]. 3.6.3. Extend service and enhance product function at the usage phase to improve eco-efficiency Companies are manufacturing ‘‘smarter’’ products with new and enhanced functionality e and selling services to enhance the products’ functional value. The world is moving from a supply-driven economy to a demand-driven economy. Companies are rethinking how they can satisfy demand and are developing customized responses to client needs. Consumers are increasingly gaining access to product services by leasing goods, particularly durable goods, rather than buying them outright [12]. In addition, extended service and functionality increase the value of a product with positive consequences for the company. Intel has developed a chip level technology to put PCs in a ‘‘sleep’’ mode in which the power consumption is reduced [22]. Toyota has developed a half-electric powered car called Prius that has significantly low emissions (http://www.toyota. com). 3.6.4. Establish product update policies Several companies, e.g. those dealing with computers and other electronics, can adopt such a policy. As a result, recovery practices are enhanced, while an up-todate recycling schedule may be formulated. In 1997, Xerox launched its new range of digital ‘‘Document Centers’’, products designed so that upgrading is permitted and also various add-on products and technology advances with different configurations providing a variety of functions are supported [32].

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4. Conclusions Companies are in a continuous worldwide interaction with society. Consequently, the legislations and the streams should be taken under consideration. Manufacturers share responsibility for products from cradle to grave along with suppliers, consumers and others in the life cycle chain. Manufacturers, suppliers, users and disposers of products all have a role to play in minimizing the negative environmental effects of products and terminal emissions. Sharing responsibility for environmental effects will yield a more efficient use of resources, cleaner products and technologies, improved relations between companies and communities and responsible consumer choices. Industrial practices, individual habits, and the laws produced by governing bodies all need to bring consumption of non-renewable resources and production of harmful pollutants into line with what such bodies and ecosystems consider healthy. Until lately, industry only paid for the initial production of a product, while consumers and the taxpaying public had to pick up the tab for the harmful side effects of the pollution generated by that production. Industries are more and more held accountable for the clean-up costs of their pollution and for the long-term damage to the health of humans and the ecosystem. Increasing acceptance of responsibility by producers for their products after sale may ensure that post-sale management of these products will increasingly come into the design equation. If the producer has no responsibility for reuse, recycling or disposal, there is little incentive to design products that are durable, easily disassembled for recycling, or biodegradable. Businesses have many bottom-line incentives to adopt sustainable development. Many firms take the view that, rather than maximizing profits within a fixed set of environmental constraints, it is better to modify these constraints in order to gain a competitive advantage. Environment is introduced as a new criterion for differentiating among products extending to the development of environmental standards or labels [13]. For starters, a sustainable approach can lead to internal cost savings from using energy more efficiently, producing less waste and recycling materials. Second, sustainability can open new markets, as consumers are attracted to companies that have invested in green technologies. Third, opportunities abound to assist other companies and communities e both at home and in emerging markets e to use energy, water and by-products more efficiently and to find beneficial uses for wastes [27].

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