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Supply chain sustainability
Supply chain sustainability

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2.3 The impact of waste on the environment

So what is waste? The common dictionary definition is ‘unwanted or unusable material, substances, or by-products’ (Oxford Living Dictionaries, n.d.).

According to the UK Department for Environment, Food and Rural Affairs (DEFRA), waste refers to ‘any substance or object which the holder discards or intends or is required to discard’ (DEFRA, 2012, p. 24).

Quite often we think of waste as being an issue for the production (operations) department, rather than in the context of supply chain management (SCM).

If you were to consider the ways in which SCM can impact on waste, either positively or negatively, you may come up with some of the following points:

  • ordering too many items could result in the supplier or purchaser needing to dispose of the surplus
  • waste created during transportation either through damage, perishability or obsolescence
  • inaccurate specification of the products could lead to wastage or rework
  • disposal of waste products.

With these in mind, read the following example:

In the early 1990s, at the start of the boom for home computers, a container ship left Japan with a container completely full of 2× speed CD drives for the home computer market.

The transportation time from the factory to the UK distributors was approximately eight weeks. By the time the delivery was made, the computer industry had moved on and the new standard for the CD drives was 8× speed. This meant that the shipment was unsellable, and so it was scrapped.

In this example, the potential outcome may not have been foreseeable, but ultimately the waste was due to the logistics – therefore, it was the ‘fault’ of SCM.

Besides the impact that these issues have on the environment, they often also imply significant costs. Therefore, when discussing supply chain sustainability, it is also important to consider the financial perspective. Let’s do that in the next section.