VSE Green Marketing:
Green Place
Diagnosing the Elements of
Sustainable Supply Cycles
Academic research offers a number of definitions for the delivery of value. The
marketing definition of a channel describes it as a set of organizations involved in the
process of making a product available for consumption (Coughlan, 2001).
Similarly, logistics frames the supply chain as a set of organizations linked directly to
the flow of products and information from a source to the consumer (Monckza, Trent,
Hadfield, 2005).
Diagnosing the Elements of
Sustainable Supply Cycles
By contrast, Porter describes a value chain as the set of primary and support
activities performed by the firm to serve as sources of competitive advantage
(Porter, 1985).
A company achieves a competitive advantage by understanding how its channel
provides value to the consumer.
Supply cycles by Dahlstrom (2010)
Supply cycles is the “set of entities associated with yielding
environmental, social, and economic value from resource
procurement through resource processing, consumption, and
post-consumption.
Dahlstrom definition incorporates the logic of the value chain
described by Porter, and it incorporates the logic of supply
chains and distribution channels in logistics and marketing
strategy.
Benefits of Sustainable Supply Cycles
01 02
Better Working Better Management of
Conditions, Reduced Risk
Turnover, and Improved
Product Quality
03 04
Enhanced Brand Stakeholder Returns
Reputation Increased
Source: United Nations Environment Program (2008)
Sustainable Logistics
Logistics refers to the process of planning, allocating, and
controlling human and financial resources dedicated to
physical distribution, manufacturing support, and purchasing
operations (American Marketing Association, 2010)
Sustainable Logistics
Distribution communications, inventory control, materials handling, order
processing, parts and service support, plant and warehouse site selection,
procurement, packaging, return goods handling, salvage and scrap disposal, traffic
and transportation, warehousing and storage, customer service, and demand
forecasting are activities associated with the logistics function (Dahlstrom, 2010).
Average Company Logistics Cost (2007)
Reverse Logistics
Although logistics has traditionally been associated with the flow of
goods toward consumption, reverse logistics that trace products back
from the point of consumption have increasingly been addressed in
supply chains (Rogers, Ronald, Lembke, 1999)
The interest in reverse logistics has been prompted by concerns about
returned goods, proper disposal of end-of-life products, production
planning and inventory management, and supply chain management
(Rubio, Chamorro, Miranda, 2008)
Reverse Logistics
A perspective on reverse logistics provides the opportunity to examine
the influence of return goods, and it further provides the opportunity to
determine the extent to which promotional campaigns, product life cycle
issues, and retail inventory levels influence supply chain decisions.
When this vital strategy is managed with sustainability as a goal, the firm
has potential to optimize fleet operations, manage energy more
efficiently, employ innovative technologies such as RFID, reduce
packaging costs, and strengthen inter- firm relationships.
Delivering Value in
Retailing
In May 2007, IKEA announced plans for premium
parking for consumers that drive hybrids or
other highly fuel-efficient automobiles to its
Canadian store.
IKEA’s decision to provide premium parking to
hybrid vehicles is part of its environmental
commitment to finding business solutions that
have an overall positive influence on the people
and the communities in which the company
operates.
1. Energy and climate: The energy and climate
concerns refer to the amount of greenhouse gas
emissions associated with the supply chain. At
Five areas of the supply chain -
the retail level of the supply chain, the three
greatest culprits for energy use are lighting,
Retail assessment
heating/cooling, and equipment (Thompson,
2007). 4. Water: The use of water in the supply chain is
2. Land and soil: Suppliers increasingly recognize gaining increasing interest in several parts of the
that retailers require adherence to ISO 14000 land world.
requirements or other environmental 5. Community and people: Community and people
specifications (Benito, Benito, 2005). considerations refer to retailers responsibility for
3. Air: At the retail level, a substantial portion of the fair treatment of employees throughout the
influence on air quality is associated with the supply chain, including their own operations. In
transportation costs involved with getting the supply chain, many retailers have begun to
product to the stores and procuring products engage in fair trade in their interaction with their
within the stores. trading partners.
Fair Trade
Fair trade refers to a family of principles that include guaranteed
minimum floor price for products; safe working conditions and living
wages; direct transactions between producer and retailers, community
development; and environmentally sustainable farming methods
(transfairusa.org, 2010).
Fair trade yields reduced debt, more economic options for producers,
and increasingly sustainable agricultural practices (Cameron, 2008).
Example: People and Community
1. Do you know the location of 100% of the facilities
Walmart Supplier Survey that produce your product(s)?
2. Before beginning a business relationship with a
manufacturing facility, do you evaluate the quality
Energy and Climate of, and capacity for, production?
1. Have you measured your corporate greenhouse 3. Do you have a process for managing social
gas emissions? compliance at the manufacturing level?
2. Have you opted to report your greenhouse gas 4. Do you work with your supply base to resolve
emissions to the Carbon Disclosure Project? issues found during social compliance
3. What is your total annual greenhouse gas evaluations and also document specific
emissions reported in the most recent year corrections and improvements?
measured? 5. Do you invest in community development
4. Have you set publicly available greenhouse gas activities in the markets you source from and/or
reduction targets? If yes, what are those targets? operate within?
Source: Material Handling Management (2009) “Wal-Mart s 15 Questions,” Wal-Mart.
THANK YOU
