198
manufacturing companies like 3M ( 2015 ) as well as of global retailers such as
Walmart ( 2015 ). Their approaches show many similarities, but also some differences in the way they are managed. While the retailers see LCM predominantly
through the prism of supply chain management, the manufacturers are often more
focused on using LCM internally to improve product development and reduce production costs. In such cases internal co-ordination and collaboration between different parts of the organization becomes important. The breadth of this collaboration
will depend on the objectives of the LCM exercise, i.e. whether it is primarily
intended to infl uence product development or more aimed at addressing external
sustainability issues in the supply chain. Like most management exercises, a mainstreaming of LCM in a corporation under the direction of the CEO (Chief Executive
Offi cer) will be more successful than creating a special ‘add-on’ LCM service. The
latter faces too many obstacles of acceptance by the existing mainstream
departments.
For the retailers, it is vital to bring the entire upstream supply chain into LCM
exercise as this is where many of the major environmental and social impacts need
to be addressed. Thus IKEA’s Code of Conduct (IKEA 2012 ) specifi es minimum
requirements on its 1600 suppliers covering social, environmental and labor-related
conditions. While the code of conduct provides a clear statement of objectives, compliance is unlikely to be achieved automatically; much work is needed with supply
chain actors to inform, explain, educate and train key partners along the chain. Some
‘recognition’ instruments can be used to identify reliable suppliers e.g. certifi cation
of ISO 14001. While major companies do work directly with their suppliers to facilitate compliance with company requirements, it is not well documented how far up
the supply chain the infl uence is actually exerted.
TRUCOST has undertaken surveys of how many companies publicly report on
their suppliers’ impacts. TRUCOST found that of the environmental damage caused
by the world’s largest 3,000 companies annually, 49 % comes from within supply
chains (Salo 2015 ).
Some companies, such as Puma, are actively collecting supply chain
environmental performance information for use in their business decisionmaking. Puma, part of the PPR Group, conducted a detailed analysis of the
environmental impacts of its operations and supply chain. Only 6 % of the
impacts come from Puma’s offi ces, warehouses, stores and logistics. The rest
come from its supply chain, more than half from the production of raw materials for manufacture. The fi ndings were used by Puma to review where its raw
materials came from, and what materials to source at all.
Direct suppliers are the most visible. But managing the suppliers of the suppliers
remains a complicated exercise for individual companies. Traditionally corporations simply relied on contracts with its supply chain. An earlier study by Seuring
F. Balkau et al.
manufacturing companies like 3M ( 2015 ) as well as of global retailers such as
Walmart ( 2015 ). Their approaches show many similarities, but also some differences in the way they are managed. While the retailers see LCM predominantly
through the prism of supply chain management, the manufacturers are often more
focused on using LCM internally to improve product development and reduce production costs. In such cases internal co-ordination and collaboration between different parts of the organization becomes important. The breadth of this collaboration
will depend on the objectives of the LCM exercise, i.e. whether it is primarily
intended to infl uence product development or more aimed at addressing external
sustainability issues in the supply chain. Like most management exercises, a mainstreaming of LCM in a corporation under the direction of the CEO (Chief Executive
Offi cer) will be more successful than creating a special ‘add-on’ LCM service. The
latter faces too many obstacles of acceptance by the existing mainstream
departments.
For the retailers, it is vital to bring the entire upstream supply chain into LCM
exercise as this is where many of the major environmental and social impacts need
to be addressed. Thus IKEA’s Code of Conduct (IKEA 2012 ) specifi es minimum
requirements on its 1600 suppliers covering social, environmental and labor-related
conditions. While the code of conduct provides a clear statement of objectives, compliance is unlikely to be achieved automatically; much work is needed with supply
chain actors to inform, explain, educate and train key partners along the chain. Some
‘recognition’ instruments can be used to identify reliable suppliers e.g. certifi cation
of ISO 14001. While major companies do work directly with their suppliers to facilitate compliance with company requirements, it is not well documented how far up
the supply chain the infl uence is actually exerted.
TRUCOST has undertaken surveys of how many companies publicly report on
their suppliers’ impacts. TRUCOST found that of the environmental damage caused
by the world’s largest 3,000 companies annually, 49 % comes from within supply
chains (Salo 2015 ).
Some companies, such as Puma, are actively collecting supply chain
environmental performance information for use in their business decisionmaking. Puma, part of the PPR Group, conducted a detailed analysis of the
environmental impacts of its operations and supply chain. Only 6 % of the
impacts come from Puma’s offi ces, warehouses, stores and logistics. The rest
come from its supply chain, more than half from the production of raw materials for manufacture. The fi ndings were used by Puma to review where its raw
materials came from, and what materials to source at all.
Direct suppliers are the most visible. But managing the suppliers of the suppliers
remains a complicated exercise for individual companies. Traditionally corporations simply relied on contracts with its supply chain. An earlier study by Seuring
F. Balkau et al.