Environmental Efficiency and Sustainability

Sustainable supply chains became an area of a huge interest of researchers and practitioners. It concerns mainly members of supply chains; manufacturers, their suppliers, distributors, logistics service providers, trade companies, and other organizations. It concerns also investors, stakeholders, customers, consumers and policy makers. Sustainability can be defined as the strategic, transparent integration and achievement of an organization’s social, environmental and

economic goals in the systemic coordination of key inter-organizational business processes for improving the long-term economic performance of the individual company and its supply chain.

Sustainability is a complex concept containing various meanings across different fields, businesses

and industries. Sustainability refers to the integration of environmental, social and economic responsibilities of the business. World Commission on Environment and Development (known also as the Brundtland Commission) defined sustainability as the necessity to meet the needs of the present without comprising the ability of future generations to meet their own needs (World Commission on Environment and Development 1987). Sustainability in production and logistics contexts is ranging from operational to strategic solutions and ideas, such as

  • environmental performance and green production (reduction of quantity of waste and pollution),
  • eco-efficiency,
  • green operations and logistics management,
  • green supply chain management and reverse logistics, in the context of global, regional or local networks and routes of materials flows,
  • eco-design and sustainable new product development.

Environmental performance is generally defined as the impact of a firm on the natural environment. It can be obtained by lower gas emissions or waste effluence, as well as the resignation from hazardous or toxic materials. Taking into consideration the growing green-consciousness, improving environmental performance is often treated as an effective tool which helps companies to gain positive image.

Green Production

Idea of green production of goods or services consists of:

  • reduced material use per unit of output,
  • replaced materials with less polluting or less hazardous substitutes,
  • recycled waste and materials,
  • reduced soil, water, or air pollution,
  • reduced noise,
  • reduced environmental burdens on the final disposal,
  • reduced need for landfills,
  • reuse of valuable components of an end-of-life product,
  • elimination of unnecessary processes,
  • reduction of excessive and burdensome pollution and waste.

Objective of green manufacturing is also to enhance environmental performance during construction and operation of an industrial plant considering sustainability of the production site, water and energy efficiency, resource and material use, environmental management issues, innovation and design process. The main profit should be the reduction in maintenance costs, resulted from lower amount of waste, reduced costs of utilization and lower burden of taxation imposed on the polluters. It may be also the result of energy and water savings. The other objective of green manufacturing is to convert raw materials into usable products in the way which will be most friendly to environment. Theories and studies on the management of sustainability in manufacturing companies, varying from high-level general management strategies to more detailed

methods for addressing specific problems. Generally green manufacturing means a better economic environmental, social and economic performance through reduction of waste. It is also connected with higher efficiency.


Eco-efficiency combines the environmental and economic dimensions of sustainability. Schmidheiny and Zorraquin defined eco-efficiency as: a process of change in which the exploitation of resources, the direction of investments, the orientation of technological development, and corporate change maximize the value added while minimizing resource consumption, waste and pollution. Eco-efficiency is also defined as the reduction of resource intensity consumption and minimization of environmental impacts of production and products or services.

Green operations based on the use of environmental practices help to avoid usage methods which are harmful for environment. Gupta and Sharma defined environmental operations management as the integration of environmental management principles with the decision-making process. Green operations practices can be considered as those practices that contribute to the enhancement of environmental performance in companies’ operations.

Green logistics can give a strategic role in improving the competitiveness and eco-efficient performances of a company. Moreover, environmental performances are still needed in logistics practice. Still there is little discussion covering performance and environmental issues related to the practical applications of eco-efficient initiatives in the logistics industry. Some logistics service providers have created a “green line” of environmentally friendly services. Most companies operating in the logistics industry are willing to invest in order to become eco-efficient, but customers are not willing to pay a premium price for more eco-efficient logistics services. This is a

reason of very little attention which has been given to eco-efficiency in the context of the logistics industry.

Sarkis has proposed the concept of green supply chain through the use of environmental tools such as design of processes, products and structure for environment, total quality environmental management, in-bound, out-bound and reverse logistics. It concerns practices for production planning, supply chain management, production, and finally after-sales operations. Consequently environmental management is evolving from pollution control to pollution prevention and finally to the subsequent implementation of systematic product and process management tools. Instead of having to spend money clearing up its waste, money is saved because the materials that go into the production are used more efficiently and they are required in less amount. If a firm wants to produce a green product, usually it needs more specific raw materials or packaging materials.

If firms’ suppliers also adopt a green perspective then it is possible to lead to strong interdependent relationships within a supply chain, what would be environmentally and economically enhancing. Accordingly to this idea, well developed systems encompass materials sourcing, manufacturing, final disposal and after sales cooperation.

Green supply chain incorporates environmental criteria, concerns purchasing decisions and long-term relationships with suppliers. Such an attitude may bring transfer of environmental technology and consequently waste and cost reduction in the whole structure of supply chain. For the forward and backward flows in the supply chains, different skills are necessary.

Reverse logistics is commonly considered as a part of green supply chain management. It contains planning, implementation and control backward flows of materials mainly after use of finished goods. The interaction between production, use and disposal of products brings also greater complexity and difficulties in taking environmental decisions.

Consequently sustainability concerns also strategic decisions like product and process design. Eco-design or design for environment consider the product’s lifecycle in order to offer more environmentally friendly products and use environmentally sound processes, enhancing reusability, recyclability and remanufacturing possibilities, and reduction of the use of hazardous substances. Eco-design is concerned with strategic issues. It is argued that environmental considerations must be identified at the very early stage of product development. Eco-design must have a clear direction and environmental targets.

Sustainable new product and process development

Typical new product development process relies on creation, market research, product design, detail engineering and environmental influence evaluation. This process may be recognized as suitable when sustainability scope and targets are clear. In such a state each project begins with defining a clear scope and a set of sustainability targets. They provide the boundaries of the project and direction for designers and engineers. Targets provide also guidance and direction to design sustainable products or services. Sustainability issues are then respected in the whole process and the environmental impacts of products are known in detail.

There are many methods and tools for sustainable product design. The well-known method for a sustainable product design is life-cycle assessment (LCA). It is a technique to assess the environmental impacts associated with all stages of a product’s life from raw material extraction through material processing, manufacture, distribution, use, repair and maintenance, to eventual disposal or recycling. The effectiveness of this method is debated in the literature. For instance, it is criticized for limited effectiveness in early product design. This is the result of the use of imprecise, sometimes predictive or wishful input data based on expectations (sometimes on the wishes) about future technologies and their efficiency. This is generally connected with a huge rate of technological and organizational changes observed in industry, transport and logistics.

What is Sustainability
Green Supply Chain Management

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