The value chain is the process or activities where a company leverages the interconnectedness of social, environmental, and economic factors to build or improve sustainability efforts. According to General Services Administration (GSA)1, sustainable materials and processes reduce negative impacts on the environment by reducing waste and energy usage. When properly supported by technology, value chain sustainability can protect the environment while ensuring long-term business success through reduced operating and future upgrade expenses.
To maximize these benefits to the fullest extent possible, value chain sustainability should encourage best governance practices throughout the lifecycle of goods and services. For facility managers, these practices can include adopting a circular economy business model where products are reused or reconfigured to extend their lifecycle.
How Sustainability Practices Benefit the Value Chain
As the lifecycle of products and services increases, environmental impacts can be reduced by limiting the amount of waste that ultimately ends up in landfills. Landfill Gas (LFG) levels are a natural byproduct of decomposition. These gases, which contain 50% methane and 50% carbon dioxide, can be significantly reduced to improve local air quality. As part of a circular economy mindset, adopting product reuse and reconfiguration strategies will also slow the harvesting and consumption of limited natural resources.
Effective sustainability practices reduce businesses’ operating costs. These savings are achieved by reducing energy consumption for manufacturing and transporting goods. In the long term, these savings can translate into lower consumer pricing, which increases brand awareness and customer loyalty.
There is a growing need to integrate sustainable choices into supply chain management to reduce operating costs further. Sustainable strategies can protect and enhance the five primary activities of business:
● Inbound operations
● Daily operations
● Outbound logistics
● Marketing and sales
● Customer service
Because no two businesses are the same, facility managers (FMs) and their teams must examine each company’s needs individually to incorporate sustainable practices that benefit all five activities.
The Role of Technology in Building Sustainability
Many companies utilize digital technologies to foster seamless collaboration between teams, suppliers, and vendors. However, these companies can also use data analytics and AI to leverage customer data to streamline business operations for increased sustainability. The leveraged data can improve brand awareness and loyalty and create a company pathway for developing more sustainable products.
Additionally, facility management teams utilize telemetry and Extended Reality (XR) applications to monitor and maintain the operational health of building infrastructure systems. As a result, a flexible and adaptable cable management system, like the sustainable Gridd® Access Flooring System, is becoming an essential component for new construction and built environment projects. Gridd is designed to meet the requirements of the circular economy business model which reduces environmental impact by extending product lifecycles through innovative reusable design. Gridd is made from 100% US steel for unmatched durability to improve LEED scores and the facility’s circularity. Gridd can be endlessly reconfigured to meet changing data and power cabling demands for companies and FM teams.
Sustainability, a key concept of a circular economy, can be integrated into each value chain stage to create more environmentally, socially, and economically responsible business practices. Here’s how they interrelate with each other:
Sustainable Sourcing
Sustainable materials are typically sourced from renewable resources like wood or those that can be recycled with a low environmental impact (steel, aluminum, copper). Companies and FM teams should exercise due diligence to ensure that manufacturers and suppliers follow ethical labor practices and are actively working to reduce waste and their carbon footprint.
Design and Development
Update product design processes to address sustainability concerns such as longevity, reusability, recyclability, and minimal environmental impact. Incorporate sustainable materials into product development to reduce ecological footprints while promoting innovation.
Production and Manufacturing
Implement energy-efficient practices in manufacturing processes to reduce energy usage and costs. Using renewable energy sources can further reduce manufacturing costs while increasing production levels. Adopting lean manufacturing techniques, proper waste management systems, and recycling programs can minimize waste.
End-of-Life Management
To minimize environmental impact, provide solutions for reusing, reconfiguring, recycling, or properly disposing of products. Implementing take-back programs or designing products that can be continuously reused or recycled aligns with the circular economy business model best practices.
Benefits of Integrating Sustainability into the Value Chain
FM teams and companies adopting sustainability or circular economy principles can reap the following benefits.
Cost Savings: Reducing waste, energy use, and resource consumption can lead to significant cost savings that improve a company’s bottom line
Brand Reputation: Companies known for sustainable practices often enjoy better brand loyalty and marketplace reputation, which can increase sales.
Regulatory Compliance: Proactively adopting sustainable practices can help companies comply with current and future regulations, such as the Build Back Better Act of 2022.
Market Advantage: Meeting the growing consumer demand for sustainable products can provide a competitive edge over companies slow to adopt sustainability principles.
Risk Management: Mitigating supply chain risks involves reducing reliance on non-renewable resources and ensuring ethical business and labor practices.
Setting the Standard for Sustainable Investment and Innovation(Opens in a new browser tab)
By embedding sustainability into the value chain, FM teams and companies can help their clients reap the circular economy benefits. Utilizing products and systems that can be easily upgraded or reconfigured can reduce future construction costs. Products made from sustainable materials like steel provide exceptional strength and durability while minimizing environmental impact and energy usage to generate additional savings. As a result, a circular economy creates more resilient, responsible, and profitable businesses while contributing positively to society and the environment.
Discussion about this post