Sustainability

Sustainability Defined Sustainability commonly refers to the characteristic of a process or state which can be maintained at a certain level indefinitely. Sustainability addresses how processes and operations can last longer and have less impact on ecological systems. Non-value adding activities consume resources and therefore, over the long run are not economically sustainable. If an activity does not add value, it should be reduced or eliminated if possible.

Emergence of Sustainability 1.Regulatory compliance requirements 2.Health and safety 3.Rising ratio of material to labor costs 4.Cost savings or cost avoidance 5.Ethical, legal and societal concerns 6.Opportunity to improve corporate image, community and customer relations 7.Anticipate and pre-empt customer demands

Sustainability Initiatives 3 Broad Categories of Initiatives: 1.Product and process life cycle considerations 2.Environmental stewardship 3.Facilities design, construction, environmental control and maintenance

Product and Process Life Cycle Considerations This category of initiatives looks for ways to achieve sustainability objectives over the entire life cycle of a product or service. It is common for this category to include look externally, beyond the boundaries of a single transformation process to the entire value chain. Sustainability activities in this category span design, development, manufacture, as well as reverse logistical flow of items in a closed- loop value chain. The firms implementing initiatives within this category are often more mature in terms of their sustainability programs. Activities in this category emphasize the triple-bottom line, which promotes product design that enhances ecology and society while generating economic value. Examples: reuse, reclamation, refurbish, remanufacturing, recycling, dematerialization, etc.

Environmental Stewardship This category of initiatives looks for ways to achieve sustainability objectives given societal concerns of: global warming, resource depletion, energy and water shortages, solid waste disposal and other environmental concerns. It is common for activities this category to be confined to a single facility (i.e., they are seldom extended to the value chain). Initiatives in this category include industry specific voluntary programs: the Environmental Protection Agency’s 33/50 program, International Organization for Standardization (ISO) environmental management systems standards program. Example: reliance upon renewable energy sources (e.g., biomass, solar power, wind power, etc)

Facilities Design, Construction, Environmental Control and Maintenance This category of initiatives also looks for ways to achieve sustainability objectives given societal concerns of: global warming, resource depletion, energy and water shortages, solid waste disposal and other environmental concerns. It is common for activities this category to be confined to a single facility (i.e., they are seldom extended to the value chain). Initiatives in this category examine material use (e.g., using recycled and recyclable materials), reducing natural resource consumption thereby achieving long-term reductions in operational costs (e.g., capturing greywater), employing automatic environmental monitoring, sensing and control systems (e.g., light dimming), reduced maintenance (e.g., living roofs).

Development of Sustainability Slow adoption rates (low price of resources and disposal costs) Step-wise manner: 1.Process-based capabilities are instilled internally in a single set of transformation activities 2.Integrate and coordinate capabilities across several activities or systems within the firm 3.Embedding these capabilities within the routines and knowledge of the firm making them multifunctional, organizational-based capabilities 4.Network-based capabilities reaching outside the limits of the transformation process encompassing the value chain network

Sustainability History Six Historical Eras: 1.“Resistant adaptation” years ≈ , least expensive means to minimally comply with environmental legislation 2.“Embracing environmental issues without innovating” years ≈ “Reactive” organizations ≈ , “end-of-pipe” solutions for treating waste, but with little effort to prevent waste production 4.“Receptive” stage: the early 1990’s, environmental considerations can be a source of competitive advantage, organizational “policy entrepreneurs” focused company efforts on being more socially responsible 5.“Constructive” stage: mid 1990’s, due to continuing environmental pressures organizations began to adopt a “resource-productivity framework to maximize benefits attained from environmental initiatives,” companies began to look at product and process design to achieve sustainability objectives 6.Value chain partnerships: 2000 and beyond, world-class companies acting in a proactive manner, creating a new vision for the whole system that includes all organizational personnel as well as value chain suppliers and customers

Future of Sustainability Sustainability initiatives must increasingly reflect shared value chain objectives Corporations must not only strive to find opportunities that simultaneously lessen environmental impacts, achieve cost savings, and enhance corporate image, but also drive additional revenues