Lecture 7-10: Key Learnings Flashcards
(65 cards)
1
Q
Q1: Differentiate between weak and strong sustainability.
A
Weak Sustainability believes that natural capital (like forests and biodiversity) can be replaced by human capital (like infrastructure or knowledge). As long as total capital (natural + human) does not decrease, the system is considered sustainable, even if the environment is harmed.
Strong Sustainability argues that natural capital is irreplaceable and must be preserved because it’s the foundation for all other forms of capital. Without it, a truly sustainable system is not possible. It prioritises environmental protection and limits resource use to what nature can regenerate or absorb.
Ref.: Lecture 7
2
Q
Define natural capital.
A
Biosphere, biodiversity, natural resources etc.
3
Q
Define human capital.
A
Human ability to create:
- Social: capital for wellbeing.
- Economic: capital like infrastructure.
4
Q
Give an example of weak sustainability.
A
Nauru mined phosphate and prioritised short-term economic gains over the preservation of essential natural capital (resources), under the false assumption that human capital can fully substitute for natural capital.
They failed to preserve natural capital (resources): The phosphate deposits were exhausted by around 1990, and 80% of the island was environmentally devastated.
5
Q
Give an example of strong sustainability.
A
Sustainable forest management maintains forests’ natural functions and biodiversity, showing strong sustainability by preserving natural capital for future generations.
6
Q
Q2: What is the Triple Bottom Line?
A
The TBL framework evaluates performance on three dimensions:
- People (social)
- Planet (environmental/ecological)
- Profit (economic)
It aims to guide businesses toward holistic sustainability, beyond profit maximisation.
Ref.: Lecture 7
7
Q
How can the TBL framework be used in practice?
A
Expecting organisations to balance social, environmental, and economic goals in decision-making.
1. People:
- Ensure fair labour practices in the supply chain.
- Monitor employee satisfaction and diversity.
- Support community initiatives, health, education, and well-being.
2. Planet:
- Measure and reduce carbon footprint, waste, and emissions.
- Use renewable energy and sustainable materials.
- Design products for reuse, recycling, or circularity.
3. Profit:
- Ensure long-term profitability through sustainable innovation.
- Invest in efficiency improvements that save costs and reduce impact.
- Develop green products and services for new market opportunities.
8
Q
Give an example of TBL.
A
Unilever claims to:
People (Social):
- Improve global health and hygiene (e.g., handwashing, nutrition).
- Promote gender equality and fair wages.
- Support smallholder farmers with training and fair trade.
Planet (Environmental):
- Target net-zero emissions by 2039.
- Source raw materials sustainably (e.g., palm oil, tea).
- Reduce plastic use and improve recyclability of packaging.
Profit (Economic):
- Sustainable brands (e.g., Dove, Hellmann’s) grow faster than others.
- Build consumer trust through ethical practices.
- Save costs via energy and material efficiency.
9
Q
What are the main criticisms of the TBL framework?
A
- Measurement challenges: Indicators for social, environmental, and economic aspects are hard to quantify and compare.
- Business logic challenge: Companies often focus on the economic dimension and treat TBL as a compliance tool, not a strategy for true sustainability.
10
Q
How does the SSCM model align with the Triple Bottom Line concept of sustainability?
A
The Sustainable Supply Chain Management (SSCM) model aligns with the Triple Bottom Line by integrating environmental, social, and economic performance into supply chain strategy.
Three circles:
- Environmental Performance:
- Social Performance
- Economic Performance
The intersection of all three circles defines true sustainability:
- Strategy as a core, integrated objective.
- Organisational culture with values and ethics.
- Transparency via open stakeholder communication and responsible operations.
- Risk management through e.g. contingency planning.
This holistic approach ensures that supply chains are resilient, responsible, and future-oriented.
11
Q
What does the Sustainability Challenge diagram illustrate?
A
It shows that true sustainability lies at the intersection of Economy, Ecology, and Society.
Key concepts include:
- Eco-Efficiency (Economy + Ecology)
- Socio-Efficiency (Economy + Society)
- Eco-Justice (Ecology + Society)
Balancing all three dimensions is essential for achieving long-term sustainability.
12
Q
Q3: How does the Jevons Paradox influence the impact of product groups?
A
In short: Increased efficiency in resource use can paradoxically lead to higher overall consumption due to higher demand from lower costs, thus negating environmental benefits.
In economics, the Jevons paradox occurs when technological progress or government policy increases the efficiency with which a resource is used (reducing the amount necessary for any one use), but the falling cost of use increases its demand, negating reductions in resource use.
Ref.: Lecture 9
13
Q
Explain the rebound effect.
A
To do less harm is not good, since the positive effects may be negated by the rising number of customers and products.
14
Q
Q4: How can companies implement sustainability in their supply chains? Please refer to the models we have discussed in class.
A
To implement sustainability, companies must:
- Integrate TBL thinking into strategic goals and supply chain KPIs for holistic sustainability.
- Choose a strategy of SSCM (Seuring & Müller, 2008) based on their maturity and industry: Supplier management to enforce sustainability and avoid risks (audits and certifications), or product management to design and deliver sustainable products (LCA, eco-design etc.)
- Adopt circular strategies of CSCM (Batista et al., 2018), like reverse logistics and the 10Rs (Circularise, 2023), to move beyond linear “take-make-dispose” to integrated closed- and open-loop systems.
- Collaborate across the supply chain, invest in transparency, and use LCA/MFA tools for decision-making - LCA helps firms evaluate product impacts across all life stages, and MFA tracks physical flows (inputs and outputs) in supply chains.
- Draw from circular economy schools of thought to guide systemic transformation, including:
- Cradle to Cradle: Design for endless cycles, such that all materials either return safely to nature (biological cycle) or can be reused in industrial processes (technical cycle) -> Butterfly Diagram as visualisation (e.g. a biodegradable shoe sole that enriches soil when composted).
- Industrial Ecology: Treat supply chains like ecosystems - waste from one process becomes input for another (e.g. Kalundborg Symbiosis, where companies share by-products, water, and energy).
- Performance Economy: Sell product functions (services), not ownership (e.g. Philips Pay-per-Lux model, where light bulbs are offered as a service).
- Blue Economy, Biomimicry, Natural Capitalism: Innovation through nature and resource optimisation (e.g. Using coffee grounds to grow mushrooms, and composting the leftovers as fertiliser).
Ref.: All lectures.
15
Q
Q5: What are the key differences between ‘normal’ and ‘sustainable’ supply chains?
A
Focus:
- Normal: Cost, speed, and efficiency.
- Sustainable: Integrate economic, environmental, and social goals (Triple Bottom Line).
Time:
- Normal: Prioritise short-term profitability.
- Sustainable: Aim for long-term value creation, including societal and ecological well-being.
Suppliers:
- Normal: Limited visibility beyond first-tier suppliers.
- Sustainable: Extend responsibility across multi-tier suppliers.
Approach:
- Normal: Often reactive to regulations or risks.
- Sustainable: Take a proactive and strategic approach to sustainability.
Mindset:
- Normal: Product-centric.
- Sustainable: Include life-cycle thinking and stakeholder engagement.
Ref.: All lectures.
16
Q
Describe the transition of supply chain management over the decades (from internal to sustainable).
A
No strategy:
- Stage 1: Internal focus - Silo effect.
- Stage 2: Focus on internal flow of material - integration and linkage of internal functions.
- Stage 3: First external link with suppliers - Internal JiT strategy.
Active supply chain management strategy:
-
Stage 4: Supply chain management integration of
external suppliers. - Stage 5: Lean supply chain management - Full JiT, TQM etc., broadening the scope of control beyond the 1st tier.
Active (S)SCM and CE strategy:
- **Stage 6: Sustainability in the supply chain, circularity and beyond.
17
Q
Define Just in Time (JIT). What is the ecological impact of JIT? Is it good or bad?
A
To deliver small quantities of material, at right time, delivered to the right location, in the right quantities and the right quality.
- Good: Reduces waste like scrap, raw materials in production, energy/emissions, and saves money.
- Bad: Causes more truck, ship, and plane traffic, increases empty loads, and increases air and noise emissions, which generally pollute more and stress the environment.
18
Q
What is waste? Define the seven types of waste.
A
Firms reduce costs and add value by eliminating waste from the productive system and raising efficiency.
- Waste from overproduction
- Waste of waiting time
- Transportation waste
- Inventory waste
- Processing waste
- Waste of motion
- Waste from product defects
19
Q
Define sustainable supply chain management.
A
The coordinated management of material, information, and capital flows across companies, while integrating the economic, environmental, and social goals of sustainable development.
20
Q
What are the main goals of sustainable supply chain management?
A
- Input/throughput: Minimising resources needed and minimising/mitigating/avoiding harmful practices.
- Output: Products which are produced respecting social and environmental standards in addition to bringing a profit.
21
Q
Explain the general model for sustainable supply chain management.
A
The focal company is in the center, influences by and interacts with multiple external and internal factors:
- Norm strategies: Strategic responses to set the baseline, like avoiding risks from global supply chains (addressing non-compliance issues), and SCM for sustainable products (integrating sustainability into product design, sourcing and logistics).
- Suppliers (multi-tiers): The focal company collaborates with multiple levels of suppliers. The connection is shaped by barriers and supporting factors like regulations, cost or capabilities.
- Pressures and incentives: The focal company responds to influences from governance (regulations and policies), customers (demand for sustainable products), and stakeholders (investors etc.)
22
Q
Define pressure and incentives in terms of SSCM.
A
- Pressure and incentives groups: Customers, governments, NGOs, competitors, other stakeholders etc.
- Possible pressures: Boycott, higher cost of loans, fines, legal requirements and negative media coverage/ negative reputation.
*Possible incentives: Higher prices and profits, customer loyalty, good media coverage/ reputation, favourable business environment (e.g. taxes) and First Mover advantages.
23
Q
What are companies required to do under Corporate Sustainability Due Diligence and conflict minerals regulations?
A
Companies must identify and address actual or potential human rights and environmental risks in their operations and supply chains (due diligence).
Under the U.S. Dodd-Frank Act (Section 1502), they must also disclose whether they source conflict minerals (e.g., tin, tungsten, tantalum, gold) from conflict zones like Congo, with third-party audits required.
However, challenges include lack of affordable traceability mechanisms and unintended consequences like reduced legal exports.
24
Q
Explain the soft entry strategy model.
A
A gradual and collaborative approach to integrating sustainability into supply chains, especially when dealing with multi-tier suppliers.
There are two paths from the focal company to suppliers (multi-tier) and vice versa:
- From focal company to suppliers: Supplier evaluation based on a set of criteria.
- From suppliers to focal company: Supplier self-evaluation, standards and minimum requirements.
25
Explain the model of supply chain management for sustainable products.
The link between the focal company and suppliers (multi-tier) is defined by:
* Increased importance of cooperation
* Communication of criteria to suppliers
* Supplier development e.g. lean
The outcome is sustainable products for customers.
These impact and give requirements along the product life-cycle (LCA) for the focal company and the suppliers.
A key element is collaboration!
26
Differentiate visibility and transparency.
**Visibility:** The ability to track and trace materials, parts, and products throughout the supply chain to enhance operational control, efficiency, and risk management - where are things at any given time?
**Transparency:** The act of exposing unethical or illicit practices by making information openly available to build trust, accountability, and ethical behaviour - how are things done and who is responsible?
27
What is Corporate Citizenship (CC)?
Corporate Citizenship refers to voluntary actions like corporate giving, employee volunteering, and community investment.
28
What does Corporate Social Responsibility (CSR) focus on?
CSR emphasizes legal compliance, impact mitigation, and fair working conditions - aiming to "do no harm."
29
What is Corporate Sustainability (CSR plus++)?
It goes beyond CSR by embedding sustainability into core business activities, redesigning business models, and contributing to sustainable societal development.
30
How are Corporate Citizenship, CSR, and Corporate Sustainability related?
They are layered: Corporate Citizenship is the narrowest (voluntary actions), CSR includes legal and ethical responsibilities, and Corporate Sustainability is the most integrated and transformative level.
31
**Q6: Differentiate between Eco-efficiency and Eco-effectiveness? How are both related to Circular Economy?**
In short:
* Eco-efficiency = Doing less bad by optimising and reducing to improve existing systems.
* Eco-effectiveness = Doing more good (actively) by redesigning to design truly circular (sustainable) systems.
**Eco-efficiency:** Doing more with less (minimising/reducing harm) - doing things right!
* Reduce raw material and energy use
* Use fewer harmful materials
* Improve durability and utilisation
* Maximise renewable energy use
Problem: Increasing the efficiency of resource use will decrease its cost of use (less needed), which then increases demand, ultimately resulting in higher overall resource consumption (Jevons' paradox).
**Eco-effectiveness:** Designing systems where waste becomes input, inspired by the Cradle to Cradle principle, and where products are designed for loops, i.e. Butterfly Diagram (actively doing good) - doing the right things!
**Relation to Circular Economy:**
* **Eco-efficiency:** To optimise resource use and reduce waste/emissions by focusing on minimising input/output inefficiencies in linear systems.
* **Eco-effectiveness:** To design circular systems by creating products that feed back into the system through reuse or recycling.
**Eco-effectiveness is core to Circular Economy thinking.**
Ref.: Lecture 9
32
Define Circular Economy.
A regenerative economic system that replaces the traditional "end-of-life" model by reducing, reusing, recycling, and recovering materials across the supply chain.
Its goal is to maintain value, minimise waste, and promote sustainability, regeneration, and equity for current and future generations.
33
What are some drivers of Circular Economy?
* Necessity: If we do not change, we will drown in waste.
* Policy initiatives
* Regulations: Forcing companies into circularity.
* "Experts say so": The only way to have a business in the future (due to regulations and customer demand) is to tap into Circular Economy.
* Motivation: Circular economy is where the competitors are going.
* The business case: Circular Economy is the way out of the idea of growing while reusing resources.
* (Future) Resilience: Raw materials are not infinite, and eventually they will dry out, as well as reusing materials to illuminate buying materials from regions that one does not support politically (e.g. Russia, China etc.).
34
What are some barriers to Circular Economy?
* Low virgin material prices: Cheap raw materials make it economically unattractive to use recycled or reused alternatives.
* Immature reverse logistics systems: Inefficient or underdeveloped systems for collecting, sorting, and returning products block circular flows.
* Limited funding for Circular business models: Innovative circular solutions often struggle to access capital due to perceived risk or unclear returns.
35
What is the Triple Top Line concept?
The Triple Top Line is a design-driven approach that aims to maximise positive value across environmental, social, and economic dimensions - not by balancing trade-offs, but by enhancing all three simultaneously.
It envisions industrial systems that create beneficial ecological footprints, eliminate waste, and improve well-being through socio- and eco-effectiveness from the start.
36
**Q7: Describe the Schools of Thought for Circular Economy, as we discussed in class.**
Includes:
* **Biomimicry:** Learning from and imitating nature's designs, systems and processes to solve human sustainability challenges - e.g. **Tokyo's transport network** is inspired by an experiment with moulds to create networks between food sources.
* **Industrial Ecology:** Applying principles of natural ecosystems to industrial systems, treating industries as part of a larger ecosystem, where waste from one process becomes input for another - e.g. **Kalundborg Symbiosis**, where industries share steam, water, waste heat, and by-products to reduce waste, save costs, and lower emissions.
* **Performance Economy:** Shifting the business model from selling products to selling services. Instead of customers owning a product, they pay for the performance or function it provides - e.g. **Philips 'Pay-per-Lux'**, where customers pay for light and not fixtures.
* **Regenerative Design:** Going beyond reducing harm or minimising waste by focusing on actively restoring and improving natural ecosystems through how products and systems are designed and used - e.g. **BioPanel's biodegradable material** instead of plastics for coffee cups, which can return to earth after use.
* **Blue Economy:** An economic model that mimics natural ecosystems, transforming waste into valuable resources while supporting environmental regeneration and local economic development - e.g. **growing mushrooms on coffee waste**.
* **Natural Capitalism:** Emphasising that economic success and environmental sustainability must go hand-in-hand by recognising the value of natural capital - e.g. **Interface's carbon negative flooring**, which uses recycled and carbon-sequestering materials.
* **Cradle to Cradle (C2C):** A design philosophy that aims to eliminate the concept of waste by designing products so that all materials can be safely and continuously cycled in either the biological or technical cycle - e.g. *DESSO EcoBase carpet tiles**.
Each offers a unique perspective on design, production, and resource use - essential to the Circular Economy.
Ref.: Lecture 9
37
Define the C2C assessment categories.
* Material Health
* Material Reutilization
* Renewable Energy & Carbon Management
* Water Stewardship
* Social Fairness
Each product is scored from Basic to Platinum, as seen in the product scorecard example for "NOFISOL"
38
What are some critisisms of C2C?
* Certification focuses mainly on the production phase.
* Use-phase and end-of-life options are often not fully covered.
* Materials used can’t be independently certified, limiting transparency.
39
**Q8: What are the ’10 Rs’ and how do they relate to the Circular Economy? How can companies use them to develop circular strategies?**
The 10Rs are organised from the linear economy to the circular economy:
**1. Refuse (R0):** Avoid using a product or material altogether; prevent waste at the source - e.g. avoid packaging or single-use items.
**2. Rethink (R1):** Use products more intensively through shared use or multifunctional designs - e.g. product-as-a-service models like car sharing.
**3. Reduce (R2):** Use fewer resources and materials in production and consumption - e.g. material efficiency.
**4. Reuse (R3):** Use a product again for its original purpose without major repair - e.g. refillable containers.
**5. Repair (R4):** Fix a broken product to extend its useful life - e.g. repairing laptops with a new battery.
**6. Refurbish (R5):** Restore an old product to good working condition with minor updates - e.g. refurbished smartphones.
**7. Remanufacture (R6):** Rebuild a product to like-new condition using reused and new parts - e.g. remanufactured car engines.
**8. Repurpose (R7):** Use a product or its components for a different function - e.g. turning old clothes into new.
**9. Recycle (R8):** Process materials to obtain raw materials for new products - e.g. melting plastic into pellets.
**10. Recover (R9):** Extract energy or materials from waste that cannot be reused or recycled - e.g. incineration with energy recovery.
**Relation to Circular Economy:**
* The 10 Rs represent practical strategies that align with the Circular Economy’s goal of keeping resources in use for as long as possible.
* They encourage businesses to shift away from the linear model of "take–make–dispose" toward systems that retain value, reduce waste, and regenerate natural systems.
**How companies use the 10Rs to develop circular strategies**
* **Design Phase:** Apply Refuse, Rethink, Reduce by minimising material use and designing modular, Repairable, and Recyclable products.
* **Business Model Innovation:** Integrate Rethink through Product-as-a-Service or sharing platforms to increase product use per unit.
* **Operational Strategy:** Develop infrastructure for Reuse, Repair, Refurbish, Remanufacture, and Recycle, including take-back programs and reverse logistics.
Ref.: Lecture 9
40
**Q9: Please use a product of your choice to explain the Butterfly Diagram.**
A Circular Economy aims to:
* Keep products, materials, and components in use at their highest value for as long as possible.
* Decouple economic growth from resource consumption.
The Butterfly Diagram consists of:
* Body: Linear production
* Wings: Cycles
The Butterfly Diagram identifies two cycles in a Circular Economy:
**1. Technical Cycle:** Applies to non-biodegradable materials (e.g., metals, plastics, electronics), and the goal is to retain value by circulating products and parts.
Strategies - **Laptop**:
* **Share:** Increase product use by multiple users through sharing models - e.g. shared pool of laptops at the library.
* **Maintain/Prolong**: Extend a product's life through maintenance/repair - e.g. replacing a laptop battery.
* **Reuse/Redistribute:** Use the product again as-is by the same or a different user - e.g. donating/selling a laptop.
* **Refurbish/Remanufacture:** Restore to working condition or rebuild to like-new condition by using reused or new parts - e.g. factory-refurbished laptops through "buy-back" programs.
* **Recycle:** Recover raw materials from a product after end of life, which is a last resort since materials are retained, but product value is lost - e.g. recovering lithium from the battery or gold from the circuit board of a laptop.
**2. Biological Cycle:** Applies to biodegradable materials (e.g., food, wood, organic waste), and the goal is to return nutrients to the biosphere and rebuild natural capital.
Strategies:
* Farming/Collection: Harvesting renewable biological resources such as plants, fish, and animals from nature.
* Extraction of Biochemical Feedstock: Processing organic materials to extract useful substances like oils, enzymes, or bio-based chemicals.
* Cascades: Sequential use of a material in different applications to maximise its value before disposal.
* Anaerobic Digestion: Biological process that breaks down organic waste in the absence of oxygen.
* Biogas: A renewable fuel generated during anaerobic digestion.
* Regeneration: The process of returning nutrients to the biosphere, helping to rebuild natural capital (e.g., improving soil quality for future farming).
Circular economy seeks to minimise waste and systemic leakage, and focuses on maximising utility and value from resources throughout their lifecycle.
41
Define cascading.
Reusing materials as many times as possible without losing value.
42
**Q10: What differentiates linear from circular supply chains?**
In short:
* Material Flow: One-way vs. Closed-loop / regenerative.
* Waste Generation: High vs. Minimised or eliminated.
* Resource Use: Extractive vs. Restorative and regenerative.
* Value Retention: Lost at end-of-life vs. Maintained or increased.
* Collaboration: Limited vs. High (reverse logistics and partnerships)
**Flow of materials:**
* Linear: Take-Make-Dispose model - one-way flow, no recovery.
* Circular: Closed-loop model - multi-way flow where materials cycle back into the economy through reuse, repair, refurbishment, remanufacturing, and recycling to retain product/material value.
**Resource use and waste:**
* Linear: Relies heavily on virgin resource extraction, and ends in waste generation.
* Circular: Aims to minimize resource input and eliminate waste by regenerating and circulating materials.
**Value retention:**
* Linear: Product value is lost at the end of its life.
* Circular: Product and material value is preserved or even enhanced through strategies like remanufacturing or product-as-a-service models.
**System thinking**
* Linear: Operates in isolated stages, with little coordination beyond immediate suppliers or customers.
* Circular: Requires systemic collaboration across industries, often forming eco-industrial networks and symbiotic relationships.
Ref.: Lecture 9
43
Define closed-loop supply chains.
A system where products are returned and reused within the same supply chain.
Key features:
* Involves dedicated take-back systems.
* Enables reuse, repair, refurbish, remanufacture, and recycle of products by the original producer or partners.
* Material properties remain intact, allowing high-quality reuse.
* Considered the “true” Circular Economy model.
Two ways:
**Forward:** Raw materials -> Manufacturing -> Distribution -> Retailer/customer -> Consumer
**Reverse:** Consumer -> Return evaluation -> Recovery (or disposal) -> Manufacturing or Raw materials
44
How is closed-loop supply chain management implemented?
It focuses on managing both forward and reverse logistics to:
* Speed up return processes (including maintenance and logistics),
* Minimise time to market for returned goods or excess inventory, and
* Maximise the economic value recovered from returned products.
45
Define open-loop supply chains.
A system where materials are reused or recycled across different supply chains.
Key features:
* Often involves third-party recyclers.
* Materials of similar types are mixed and processed, leading to downcycling.
* Less control over the flow, limited traceability.
* Products are partially designed for recovery.
46
Differentiate closed-loop vs. open-loop supply chains.
Closed = Within a supply chain.
Open = Across supply chains.
47
**Q11: What framework can companies use to design circular supply chains?**
**The Circular Supply Chain Management (CSCM) Framework** to design and implement circular supply chains. This framework integrates restorative and regenerative principles from the Circular Economy and supports both closed- and open-loop flows of materials.
Key components:
* Establishing a **closed-loop system** (materials return to the same supply chain) or **open-loop system** (materials flow into other supply chains).
* Defining circular strategies using the **Five types of restorative loops:** Reuse, Repair, Refurbish, Remanufacture, and Recycle.
* Designing products for **Circularity** for disassembly, material separation, and durability, enabling effective loop closure (**Cradle to Cradle principle**).
* **Collaborating across the supply chain** by engaging suppliers, logistics providers, customers, and even competitors in material recovery and loop creation (e.g. reverse logistics).
* Integrating lifecycle thinking by using **Life Cycle Assessment (LCA)** and **Material Flow Analysis (MFA)** to map impacts and material use, enabling better circular decision-making.
48
**Q12: How do the five different categories of 'loops’ relate to supply chain strategies?**
Five loops that influence supply chain design by encouraging strategies that reduce resource input, extend product life, and recover value, aligning with Circular Economy principles.
Five loops:
**1. Closing:** **Reusing** materials through e.g. **recycling** and **remanufacturing** to create a closed-loop system that minimises waste by turning it into raw materials.
* Strategy: Design reverse logistics and recovery systems.
* Goal: To minimise waste.
**2. Slowing:** Extending the life of a product/material through durable design and PLC extensions like **repairing**, maintaining and **refurbishing**.
* Strategy: Design for circularity.
* Goal: To delay product disposal.
**3. Narrowing:** Using fewer resources per product by optimising production processes and improving design to **reduce** raw materials needed.
* Strategy: Optimise production and design for less material.
* Goal: To reduce the total volume of materials entering the supply chain.
**4. Intensifying:** Introducing a more value-intensive use-phase to promote the idea of pooled or shared product use over individual consumption.
* Strategy: Enable shared use or pooled consumption models.
* Goal: To maximise the utility of each product across users/use cycles.
**5. Dematerialising:** Substituting products for services to increase the utility and longevity of products (materials), as seen in the shift from product ownership to product service systems (PSS).
* Strategy: Shift to product-as-a-service models.
* Goal: To reduce materials throughput by substituting services.
Ref.: Lecture 10
49
**Q13: How do the supply chain processes change if we consider circularity?**
In a circular economy context, supply chain processes shift from a traditional linear “take–make–dispose” model to a closed-loop system designed to retain the value of products, components, and materials for as long as possible.
Changes include:
* Strategy: Component price vs. Leasing and service
* Structure: Linear and open vs. Cascaded loops and closed
* Flow: Input-Output vs. Biological and technical cycles
* Focus: Efficiency vs. Collaborative value capture
* Scale: High volume vs. Medium-low volume
* Scope: Global vs. Regional and local
Explained:
**1. Integration of reverse logistics**, i.e. flow forwards (downstream) and backwards (upstream), to enable processes like repairing, remanufacturing and recycling.
**2. Support for restorative loops** that demand new processing steps, logistics and collaboration.
**3. Lifecycle-based product design** for durability, modularity, disassembly and recyclability to align with the supply chain capabilities for loop closure.
**4. Enhanced collaboration across stakeholders** is required, including improved information sharing (e.g. via Digital Product Passports).
**5. New business models and flows** like product-as-a-service.
**6. Waste becomes a resource** to close the loop, which redefines procurement and production planning strategies.
50
What are KPIs in supply chain management? What is the challenge?
Metrics to quantify the efficiency and effectiveness of actions.
From the SCM perspective:
* Quality
* Speed
* Dependability
* Flexibility
* Cost
Most systems still follow these, but what is the trade-off between objectives?
Key challenge: Various different performance indicators in the company - e.g. procurement has an interest in bulk purchasing, but warehousing wants to keep inventory to a minimum and have a steady flow of materials.
51
**Q14: What performance measurements we discussed in class are relevant for sustainable and circular supply chains?**
Circularity metrics include:
* Amount of recovered materials
* Amount of renewable energy used
* Percentage of recyclability of product
* Percentage of virgin materials content
* Percentage of recycled content
Other:
* Environmental impact (e.g., carbon footprint)
* Resource efficiency
* Life Cycle Costing
Problem: Tendency to only improve what can be measured.
Ref.: Lecture 10
52
What are the three levels of performance indicators?
**Macro level indicators: National and international**
* Definition: Focuses on the exchange of materials between the economy and the environment, including international trade and national-level material accumulation.
* Purpose: Measures environmental performance at a country or global scale.
* Example: The amount of greenhouse gas emissions in a country. E.g., EU economy emissions decreased by -4.0% in Q4 2023.
**Meso level indicators: Industries or materials**
* Definition: Tracks material flows within industries, sectors, or regions, allowing for more detailed analysis of resource use and waste.
* Purpose: Supports policy or strategy decisions at the sector or regional level.
* Example: Waste generation per industry or region. E.g., Packaging waste generation trends in Denmark from 2010 to 2019.
**Micro level indicators: Businesses (local)**
* Definition: Offers insights at the business or local level, focusing on specific products, materials, or operations.
* Purpose: Used for operational decision-making and performance tracking by companies.
* Example: Energy consumption of a specific company. E.g., Novo Nordisk’s efforts to reduce energy usage and transition to 100% renewable power for production since 2020.
53
What is Scope 1, 2 and 3 (4)?
Categories defined by the Greenhouse Gas Protocol to classify a company’s carbon emissions across its value chain:
In short:
* Scope 1 = Direct emissions like equipment.
* Scope 2 = Indirect (energy) emissions like purchased electricity.
* Scope 3 = Indirect (value chain) emissions like product use.
* Scope 4 = Avoided emissions like savings from efficient products.
Explained:
* **Scope 1 - Direct Emissions:** Emissions from sources owned or controlled by the company, e.g. emissions from a company's delivery trucks.
* **Scope 2 - Indirect Emissions from Energy:** Emissions from the generation of purchased electricity, steam, heating, or cooling used by the company (occur off-site), e.g. emissions from a power plant supplying electricity to an office.
* **Scope 3 - Other Indirect Emissions:** Emissions that occur outside the company’s direct operations but across its entire value chain (upstream and downstream), e.g. emissions from producing raw materials or product use by customers.
* **Scope 4 (Optional/emerging concept) - Avoided Emissions:** Emissions that reductions have enabled by a product or service outside its lifecycle, compared to a baseline scenario, e.g. an investment in renewable energy compared to no change.
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Why are Scope 4 emissions not officially recognised?
Companies can write these off on other scopes.
It is an open door for greenwashing, but it also possibly shows how companies improve.
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**Q15: How are MFA and LCA related?**
**Material Flow Analysis (MFA):** Quantifies physical material flows.
**Life Cycle Assessment (LCA):** Evaluates the environmental impacts of products.
The two analyses are complementary tools used to support sustainability and circular economy strategies.
1. Both use systems thinking to define boundaries for analysis, and both track inputs, outputs and transformations across the defined system over time.
2. MFA provides the quantitative material data for LCA:
3. Use in CE: MFA helps identify where materials are lost, stockpiled, or reused (useful for designing closed-loop systems), and LCA evaluates how different reuse or recycling scenarios impact the environmental footprint.
Ref.: Lecture 10
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Define Material Flow Analysis (MFA).
A systematic method for quantifying the flows and stocks of materials within a defined system (e.g., a company, industry, region).
Purpose: To visualise where materials come from, how they are used, and where they go - supporting resource efficiency, waste reduction, and circular economy planning.
Example: Tracking how much plastic enters, is used, and exits a packaging factory.
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What are the two approaches of MFA?
**1. Substance-Specific Material Flow Analysis:** Focuses on tracking specific materials or substances, including:
* Iron, copper, zinc etc. (economically important)
* Arsenic, mercury etc. (environmentally hazardous)
Used to assess their use, flow, and environmental impact.
**2. Bulk Material Flow Analysis (Bulk-MFA):** Examines total material inflows and outflows across an entire national or economic system. Focuses on the aggregate movement of materials, not individual substances.
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What does "system thinking" mean in the context of MFA?
It means defining and investigating a specific system (e.g., a factory, industry, region, or country) to track material flows within that boundary.
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What is the principle of "mass balance" in MFA?
Mass balance follows the conservation of mass: mass cannot be created or destroyed, only rearranged.
In MFA, this ensures that all inputs equal outputs plus any accumulation.
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How does the conservation of energy relate to MFA?
It states that energy cannot be created or destroyed, only transformed.
While MFA focuses on materials, this principle supports understanding energy use in material transformations.
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Define the process of conducing a MFA.
1. Define the system: Set boundaries, specify processes and flows, and identify the material analysed.
2. Label system variables
3. Quantify variables
4. Check mass balance
5. Collect data (ideally primary)
6. Visualise the system (optional) using e.g. Sankey Diagram
7. Document the MFA
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Define Life Cycle Assessment (LCA).
A systematic method to evaluate the environmental impacts of a product, process, or service throughout its entire life cycle - from raw material extraction to end-of-life disposal or recycling.
Stages:
* Raw material extraction
* Manufacturing
* Transportation
* Use phase
* End-of-life (e.g., disposal, recycling)
Purpose: To identify "hotspots" for environmental improvement and to support sustainable product design.
Example: Assessing the carbon footprint of a t-shirt from cotton farming to landfill or recycling.
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What are some key objectives of the Ecodesign for Sustainable Products Regulation (ESPR)?
ESPR aims to improve product sustainability by setting rules for durability, reusability, repairability, energy/resource efficiency, recycled content, and limiting waste. It also promotes easier remanufacturing and transparency on product sustainability.
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What is a Digital Product Passport (DPP)?
A DPP is a digital record of a product's lifecycle from source to end-of-life. It includes key product data, managed under agreed rules, and is accessible via a unique electronic identifier linked directly to the product.
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**Q16: How does a LCA support the transition to a Circular Economy?**
In short: LCA identifies hotspots in the life cycle where improvements can maximise resource efficiency and reduce negative impacts, enabling informed CE strategies.
Explained:
**1. Identifies environmental hotspots**, which can help companies prioritise circular strategies most effectively.
**2. Supports eco-design and circular product development** by helping material selection.
**3. Evaluates and compares circular strategies,** like new vs. recycled materials, to enable the choice of solutions that reduce carbin footprint.
Ref.: Lecture 10 (+ 11 and 12)
