OM FOUNDATIONS IN SUSTAINABLE
DEVELOPMENT
MINOR OPERATIONS MANAGEMENT FOR SUSTAINABLE DEVELOPMENT
2024-2025
,Table of contents
Table of contents......................................................................................................................... 2
Lecture 2 - Circular economy..................................................................................................... 3
Article 1 - The Circular Business Model Pick a strategy that fits your resources and
capabilities............................................................................................................................... 6
Tutorial 1 - Environmental Regulations..................................................................................... 7
Article 2 - Servicizing in Supply Chains and Envirionmental Implications..............................11
Lecture 3 - Business Perspectives on Sustainability: Guest lecture................................... 12
Tutorial 2 - Supply Chain Design..............................................................................................13
Article 3 - What is the Right Supply Chain for Your Product?................................................ 20
Article 4 - How Supply Chain Transparency Boosts Business Value.....................................21
Lecture 4 - Purchasing & Waste Management........................................................................ 22
Lecture 5 - Understanding the Nanostore Landscape........................................................... 25
Article 5 - Introduction to Nanostores.................................................................................... 29
Article 6 - Understanding the Nanostore Ecosystem............................................................. 29
Lecture 6 - Digital Ordering...................................................................................................... 30
Article 7 - Sales Agent, Call Center, or Mobile App? The Impact of Multichannel Ordering on
Nanostore Ordering Behavior................................................................................................ 32
Tutorial 5 - Access to Medicines.............................................................................................. 33
Lecture 7 - Trade Credit.............................................................................................................35
Article 8 - Supply Chain Finance........................................................................................... 37
Article 9 - Order-Based Trade Credits and Operational Performance in the Nanostore Retail
Channel................................................................................................................................. 38
Lecture 8 - Distribution Logistics.............................................................................................39
Article 10 - Supplying to Mom and Pop: Traditional Retail Channel Selection in Megacities 42
2
,Lecture 2 - Circular economy
Tragedy of the commons → about common pool resources: It describes how individual
rational behavior can lead to collective problems when a shared resource is overused and
eventually exhausted.
● Easily appropriable (low barriers to access)
● Rival (what you take, I can’t)
○ For example: fish, climate, roasts, roads and highways, server resources
Research shows that people don’t understand this:
● Extractors and policymakers often have poor knowledge of the ecological relationships
governing regeneration.
○ Imperfect and late information
○ Even if fisheries were fully privatized, extractors would still overreact
○ Delays in building up extraction capacity, irreversible investment, leading to
political interests in continued extraction
● By the time a community discovers that hey are harvesting unsustainably, it is often too
late.
Take-aways:
● Sustainability means: do not take more than the earth can regenerate
● Assets become liabilities: no nature, no business
● Resource dynamics: regeneration is not constant
● Misperceptions of feedback: decision makers have poor information and understanding
of natural resource dynamics
What can be done: Circular economy and sustainable governance
Linear supply chains:
Raw material mining -> primary material production -> component manufacturing -> final
product assembly -> product demand & use -> End-of-life product disposal
➔ What is wrong with this?
◆ We take too much
◆ We make too much waste
◆ Circular economy is trying to close the loop of waste with the beginning of the
chain.
Circular economy: Our planet and our economy cannot survive if we continue with the ‘take,
make, use, and throw away’ approach. We need to retain precious resources and fully exploit all
the economic value within them. The circular economy is about a profound transformation of the
way our entire economy works.
3
,How can we close the loop of linear supply chains:
In a circular economy you need to worry about three things:
- Access (product take-back management): Do i have access to used
products/materials/components?
- Process (re-processing operations management): Can I recover value at a reasonable
price
- Value (reprocessed products market development): What if no one wants to buy it, it is
useless
→ Only an integrated approach has business value
Circularity strategies:
● RPO (ccess problem): Retain product ownership
● DFR (Process problem): Design for repair, refurbishment, recycling
● PLE (Value problem): Product life extension
Example of Value-Access-Process Framework:
Easy process Hard process
Easy access Sweatshirt Phone
Hard access Recycle food container Windmill
High end baby stroller
Recycle food container: Low value, DFR
Sweatshirt: High value, PLE, DFR
Windmill: High value, PLE
Phone: High value, DFR
High end baby stroller: High value, PLE, RPO
4
, ➔ it is hard for the company to get the stroller back, because there is a well-established
secondhand market or people give the stroller to their families. → it won’t be profitable to
buy back the stroller
Process analysis high end baby stroller:
Bottleneck: slowest activity it is slowing the system down -> activity with the lowest capacity
Throughput: system output at 100% bottleneck utilization
Take-aways:
● Process analysis: A chain is only as strong as its weakest link (=bottleneck)
○ 1 hr lost on the bottleneck is 1 hr lost on the entire system
○ 1 hr lost elsewhere likely does not effect your throughput
● Circular Economy:
○ The correct strategy depends on product, process, consumers
○ Obstacles: High technological advancements, uncertain environmental benefits,
scale diseconomies, consumer behavior, some reuse is already happening
through secondhand markets…
○ Many of the CE claims remain untested at a large scale
5
, Article 1 - The Circular Business Model Pick a strategy that fits your
resources and capabilities
"The Circular Business Model: Pick a Strategy That Fits Your Resources and Capabilities"
focuses on guiding businesses in adopting circular economy practices by selecting strategies
aligned with their unique strengths and constraints. The chapter outlines how circular business
models (CBMs) can help companies minimize waste, extend product lifecycles, and create
sustainable value.
Key Takeaways:
● Understanding Circular Business Models:
○ CBMs aim to replace the traditional linear "take-make-dispose" approach with
systems that emphasize reuse, recycling, and resource efficiency.
● Strategic Approaches:
○ Companies can adopt various circular strategies, such as product-as-a-service,
repair and refurbishment, recycling and material recovery, or closed-loop supply
chains. Each strategy suits different industries and operational scales.
● Alignment with Resources:
○ Businesses must evaluate their existing capabilities, such as technological
expertise, supply chain infrastructure, and customer relationships, to choose an
appropriate CBM.
● Implementation Challenges:
○ Shifting to a CBM often requires investment in new technologies, collaboration
across the supply chain, and overcoming resistance to change.
● Case Studies and Examples:
○ Real-world examples illustrate how businesses have successfully tailored their
strategies to their resources, such as manufacturers focusing on remanufacturing
or retailers adopting take-back schemes.
● Scalability and Profitability:
○ The chapter emphasizes balancing environmental goals with financial viability,
urging companies to pilot small-scale initiatives before scaling up.
The chapter concludes that adopting a circular business model is not one-size-fits-all.
Businesses must carefully assess their unique context to create sustainable practices that
deliver both environmental and economic benefits.
6
DEVELOPMENT
MINOR OPERATIONS MANAGEMENT FOR SUSTAINABLE DEVELOPMENT
2024-2025
,Table of contents
Table of contents......................................................................................................................... 2
Lecture 2 - Circular economy..................................................................................................... 3
Article 1 - The Circular Business Model Pick a strategy that fits your resources and
capabilities............................................................................................................................... 6
Tutorial 1 - Environmental Regulations..................................................................................... 7
Article 2 - Servicizing in Supply Chains and Envirionmental Implications..............................11
Lecture 3 - Business Perspectives on Sustainability: Guest lecture................................... 12
Tutorial 2 - Supply Chain Design..............................................................................................13
Article 3 - What is the Right Supply Chain for Your Product?................................................ 20
Article 4 - How Supply Chain Transparency Boosts Business Value.....................................21
Lecture 4 - Purchasing & Waste Management........................................................................ 22
Lecture 5 - Understanding the Nanostore Landscape........................................................... 25
Article 5 - Introduction to Nanostores.................................................................................... 29
Article 6 - Understanding the Nanostore Ecosystem............................................................. 29
Lecture 6 - Digital Ordering...................................................................................................... 30
Article 7 - Sales Agent, Call Center, or Mobile App? The Impact of Multichannel Ordering on
Nanostore Ordering Behavior................................................................................................ 32
Tutorial 5 - Access to Medicines.............................................................................................. 33
Lecture 7 - Trade Credit.............................................................................................................35
Article 8 - Supply Chain Finance........................................................................................... 37
Article 9 - Order-Based Trade Credits and Operational Performance in the Nanostore Retail
Channel................................................................................................................................. 38
Lecture 8 - Distribution Logistics.............................................................................................39
Article 10 - Supplying to Mom and Pop: Traditional Retail Channel Selection in Megacities 42
2
,Lecture 2 - Circular economy
Tragedy of the commons → about common pool resources: It describes how individual
rational behavior can lead to collective problems when a shared resource is overused and
eventually exhausted.
● Easily appropriable (low barriers to access)
● Rival (what you take, I can’t)
○ For example: fish, climate, roasts, roads and highways, server resources
Research shows that people don’t understand this:
● Extractors and policymakers often have poor knowledge of the ecological relationships
governing regeneration.
○ Imperfect and late information
○ Even if fisheries were fully privatized, extractors would still overreact
○ Delays in building up extraction capacity, irreversible investment, leading to
political interests in continued extraction
● By the time a community discovers that hey are harvesting unsustainably, it is often too
late.
Take-aways:
● Sustainability means: do not take more than the earth can regenerate
● Assets become liabilities: no nature, no business
● Resource dynamics: regeneration is not constant
● Misperceptions of feedback: decision makers have poor information and understanding
of natural resource dynamics
What can be done: Circular economy and sustainable governance
Linear supply chains:
Raw material mining -> primary material production -> component manufacturing -> final
product assembly -> product demand & use -> End-of-life product disposal
➔ What is wrong with this?
◆ We take too much
◆ We make too much waste
◆ Circular economy is trying to close the loop of waste with the beginning of the
chain.
Circular economy: Our planet and our economy cannot survive if we continue with the ‘take,
make, use, and throw away’ approach. We need to retain precious resources and fully exploit all
the economic value within them. The circular economy is about a profound transformation of the
way our entire economy works.
3
,How can we close the loop of linear supply chains:
In a circular economy you need to worry about three things:
- Access (product take-back management): Do i have access to used
products/materials/components?
- Process (re-processing operations management): Can I recover value at a reasonable
price
- Value (reprocessed products market development): What if no one wants to buy it, it is
useless
→ Only an integrated approach has business value
Circularity strategies:
● RPO (ccess problem): Retain product ownership
● DFR (Process problem): Design for repair, refurbishment, recycling
● PLE (Value problem): Product life extension
Example of Value-Access-Process Framework:
Easy process Hard process
Easy access Sweatshirt Phone
Hard access Recycle food container Windmill
High end baby stroller
Recycle food container: Low value, DFR
Sweatshirt: High value, PLE, DFR
Windmill: High value, PLE
Phone: High value, DFR
High end baby stroller: High value, PLE, RPO
4
, ➔ it is hard for the company to get the stroller back, because there is a well-established
secondhand market or people give the stroller to their families. → it won’t be profitable to
buy back the stroller
Process analysis high end baby stroller:
Bottleneck: slowest activity it is slowing the system down -> activity with the lowest capacity
Throughput: system output at 100% bottleneck utilization
Take-aways:
● Process analysis: A chain is only as strong as its weakest link (=bottleneck)
○ 1 hr lost on the bottleneck is 1 hr lost on the entire system
○ 1 hr lost elsewhere likely does not effect your throughput
● Circular Economy:
○ The correct strategy depends on product, process, consumers
○ Obstacles: High technological advancements, uncertain environmental benefits,
scale diseconomies, consumer behavior, some reuse is already happening
through secondhand markets…
○ Many of the CE claims remain untested at a large scale
5
, Article 1 - The Circular Business Model Pick a strategy that fits your
resources and capabilities
"The Circular Business Model: Pick a Strategy That Fits Your Resources and Capabilities"
focuses on guiding businesses in adopting circular economy practices by selecting strategies
aligned with their unique strengths and constraints. The chapter outlines how circular business
models (CBMs) can help companies minimize waste, extend product lifecycles, and create
sustainable value.
Key Takeaways:
● Understanding Circular Business Models:
○ CBMs aim to replace the traditional linear "take-make-dispose" approach with
systems that emphasize reuse, recycling, and resource efficiency.
● Strategic Approaches:
○ Companies can adopt various circular strategies, such as product-as-a-service,
repair and refurbishment, recycling and material recovery, or closed-loop supply
chains. Each strategy suits different industries and operational scales.
● Alignment with Resources:
○ Businesses must evaluate their existing capabilities, such as technological
expertise, supply chain infrastructure, and customer relationships, to choose an
appropriate CBM.
● Implementation Challenges:
○ Shifting to a CBM often requires investment in new technologies, collaboration
across the supply chain, and overcoming resistance to change.
● Case Studies and Examples:
○ Real-world examples illustrate how businesses have successfully tailored their
strategies to their resources, such as manufacturers focusing on remanufacturing
or retailers adopting take-back schemes.
● Scalability and Profitability:
○ The chapter emphasizes balancing environmental goals with financial viability,
urging companies to pilot small-scale initiatives before scaling up.
The chapter concludes that adopting a circular business model is not one-size-fits-all.
Businesses must carefully assess their unique context to create sustainable practices that
deliver both environmental and economic benefits.
6
