Towards a Responsible Supply Chain: Develop and Monitor Environmentally Responsible Programs

In this section (1-D-2) of the CPSM exam the supply chain leader is being asked to develop or establish environmentally responsible programs and monitor them in keeping with 9 subtopics that we will briefly discuss in this post. The important thing is to understand that an environmentally responsible supply chain is not merely about going along with environmental responsibility just because your CEO or customers are asking for more environmental responsibility but there is a whole bunch of influences that make it necessary for the leader supply manager to do the right thing environmentally, provided she/he knows "what is right?" Here are the 9 topics that provide some guideposts:

1. Environmental laws include in the US, laws that protect from air pollution like the Clean Air Act, from water pollution like the Clean Water Act and an understanding of the Solid Waste policy. In the US these laws are enforced by both the Environmental Protection agency (EPA) and the Department of Justice at the Federal level. In addition, every state has its own laws that managers must follow and ensure that employees and suppliers also follow. An important law relates to Government Response in case of sudden environmental problems like the BP oil spill is the Comprehensive Response,Compensation and Liability Act  or CERCLA.Managerial actions include responsibilities for air,water and solid pollution at the source, during transit ( say there is a liquid spill during transit) and at destination.
2. Environmental risk transfer processes like transfer of responsibility to a supplier through a contract or through insurance is tricky for the supply manager.Liability in case of hazardous discharge remains with the focal company who will have to organize cleanup under CERCLA if you recall the BP oil spill.
3. ISO and Best practice now requires an Environmental Management System (EMS) to be in place.
4. Audit of best practices can be internal which is an ISO requirement.
   Once the criteria against which the supply chain is being measured for environmental compliance is decided, then the supply chain audit is done to identify weaknesses and address them.Organizations can take reporting to extreme levels like Puma has done in the video. At the very least self disclosure to EPA is helpful to keep compliance in track.

5.Specific organizational values and policies like the organization's mission and goals for environmental responsibility within the ISO context guides the supply chain manager's efforts. Thus, the Puma supply managers will probably have to follow some wide ranging environmental goals as can be seen in the video.

6.ISM Principles of Social Responsibility and Audit are a professional resource when supply managers are asked for their professional inputs into framing their company policy.

7. Buy-Recycled Programs include a formal attempt in the organization's Environmental Management System (EMS) to buy recycled products. This is in addition to efforts to re-use items.

8. Minimization of Waste saves money for the organization and also saves the environment. The three R's of Reduce,Reuse and Recycle is useful for individuals and organizations where supply managers work. See some nice tips  of the 3 R's at the Missouri Department of Natural Resources.

9.End of Lifecycle action for all things purchased is the responsibility of the supply manager. For example when scrapping old equipment through a scrap dealer , the supply manager is responsible for environmentally responsible disposal of the scrap.

To summarize this topic is about environmental pollution (air,water and solid) and knowledge,action and audit of everything the organization buys. The supply manager tries to keep track through the entire lifecycle -from cradle to grave i.e. components that go into an equipment bought to how the scrap equipment was disposed.