Operations Management: An Integrated Approach, 5th Edition

THE SUSTAINABILITY LINK

Until recently buyers of goods were content as long as well-priced goods arrived on time, in the specified order quantities, and intact. The aggregate plan drove these commitments. How the goods actually got to the buyer was of little concern. Today, however, with the pressure of high fuel costs and consumers and regulators demanding eco-friendly practices, companies are under great pressure to ensure that the delivery of inventories of goods they have ordered abide by best practices. One strategy companies are exploring is to minimize total material movement to and from the facility through delivery consolidation and accepting the carrying of larger inventory quantities. Some companies are even changing order cycles and delivery commitments with customers to improve transportation efficiency.

Sustainable practices may require modifying traditional ordering policies to consolidate orders to reduce transportation emissions and a company's carbon foot-print. It may require modifying traditional order computations to ensure that a moving truck is always full—rather than partially full—and that orders are coordinated so that a truck is never returning empty. This may also require modifying orders to minimize waste of packaging and consolidating orders to satisfy requirements that minimize waste of packaged material. It is these small changes in inventory management that can play a significant difference in ensuring sustainability practices.