Supply Chain

Now that we've established one of the largest players in the shift towards a sustainable lifestyle, industry, we must determine where the problem areas are and how to fix them.

The Supply Chain

The supply chain is the system by which goods are changed from natural resources to products bought by consumers. The supply chain is the mechanism by which a cell phone, for example, is created and sold:

1. Mining of the copper, lead, and nickel
2. Creation of plastic through the processing of crude oil and natural gas
3. Manufacturing of the circuit board, LCDs, and batteries
4. Final assembly and packaging
5. Transportation to manufacturing plants and retail stores
6. Sale to consumer

Companies strive to make their supply chains as efficient as possible. There have been many studies and models made exacting this process.

After a consumer has purchased the product, there are few options for the future use of the product.

1. Product is used for a while and discarded.
2. Product is taken to a land fill or burned in an incinerator
3. Product is recycled into lower grade materials which can be reused in some products, but not returned to its original state. For example, the natural metals in the phone such as nickel, zinc, and gold are mixed with lower grade materials during the recycling process and will never again be the same quality of metals as were originally.

Recycling is currently the best option we have, but even that does not often occur.

"Between 1999 and 2003, 2.5 million phones were collected to be recycled or reused, accounting for less than 1 percent of the millions of phones retired or discarded." (1)

Imagine the amount of money businesses stand to make from finding a way to retrieve those items from consumers and use them to create the same products. The customers pay for the assembly, convenience of sale, and use of the product, then give it back to be disassembled in to the same materials. This is one of the main ideas that compose a sustainable business strategy.

Service and Flow

In a service and flow system, consumers pay for the use of a product, then return it to the distributor. This helps businesses by allowing them to reuse outputs to create more inputs and make more money. This also helps to sustain the world's natural resources and ensure that they are available for use, because the idea is that they can always be turned back into what they once were. This poses a particular challenge for industrial designers and engineers. How do you design and create so that the entire product can be taken apart and restored to its natural elements?

Another question that must be asked is: How do we ensure that consumers will return the product to the manufacturer or distributor? Consumers must be given some sort of incentive, and the transaction must be easy to complete. Perhaps all products that are able to be disassembled into their original parts are given a particular form of identification. Free mail carriers for these items could be found at post offices and local stores, and customers could easily send them back for a discount on their next purchase or a rebate. Even by giving consumers this "discount" companies stand to gain a great amount from their effective reuse of materials. (2)

There are many possibilities for how this could work. The role of the postal service could change entirely. The postal service could be commissioned by companies to retrieve products from consumers and bring them back to manufacturers. This challenges the postal service to be present in a paperless society. Perhaps small identification chips could be installed in products that can be disassembled. These chips could then contain the purchasing information of the consumer, and when they are returned for disassembly, the buyer could be automatically credited a portion of their original cost. Security issues would have to be overcome.

Simple forms of the service and flow system already exist. There are shoes you can buy made of sustainable materials designed with disassembly in mind that come in a pre-addressed box for the user to send back to the manufacturer. Businesses are catching on to the value of this system of operation. The challenge becomes making the system work.

This brings us to another principle of sustainable business practices - simplification and micro-sites.

Simplification and Micro-sites

A book called Natural Capitalism illustrates the idea of a business model in which multiple businesses work together in a single location to produce a single product. The book uses the example of the production of glass windshields which employs a typical Economics-of-scale thought pattern in which things are created in bulk and distributed to smaller vendors. It looks like this:

1. A giant float-glass furnace produces giant sheets of glass.
2. That glass is cut into pieces a bit larger than a car windshield.
3. Glass is cooled, packed, crated and shipped 500 miles to the fabricator.
4. 47 days later it is unpacked and cut to shape, wasting 25% of the glass in the process
5. Reheated and curved to different shapes
6. Cooled, repacked, crated and shipped 430 miles to the encapsulator.
7. 41 days later it's unpacked, fitted with seals, repacked, crated and shipped 560 miles to the car factory.
8. 12 days later, it's unpacked and installed in the car.

Do you notice how many times the same things are being done in this situation? Cooled, packed, crated, shipped, unpacked, heated, cooled, repacked, etc. etc. Could there be a way to do all of these things at once?

What if, instead of outsourcing and shipping all of these products thousands of miles to different locations, they could all be done within the same area where the product was being made? What if that car company had someone to cut the glass and shape it in house?

Businesses could offer their services within the production area of a specific product. Fabricators could "lease" out their services and equipment and hold a semi-permanent residence within the production area of the product manufacturer.

Of course the immediate reaction to this is that this is the less efficient way to work. Having micro-sites doing the same thing in different locations can't possibly be more efficient, can it? But business models and natural systems have proved over and over that outsourcing services is never as effective as completing an entire system. You don't see a large tree producing hundreds of leaves, shedding them to plants who cut them up and send them off to a different plant for photosynthesis. Each plant is its own complete system.

Aside from the fact that our current system of constant transfer creates wasted energy in the form of fossil fuels and scrap waste, a complete system solves business problems as well. An efficient system in which one process is completed from start to finish will reduce the time it takes for a product to be produced. Thus, the business creating the product can have more accurate information about product demand, and can create less wasted product.

Of course there are many issues that need to be worked out, and new working systems must be created. The challenge falls on each of us to push our thought boundaries and to find innovative solutions to these issues.


1. United States Environmental Protection Agency. August 2004 www.epa.gov/osw
2. Paul Hawken, Amory Lovins and Hunter Lovins, Natural Capitalism. pg 140
3. Paul Hawken, Amory Lovins and Hunter Lovins, Natural Capitalism. pg 128