The Benefits of Life Cycle Assessment for Sustainable Supply Chain Management
Supply chain and procurement managers aiming for sustainability often face challenges such as limited data visibility and increasing pressure to report reliable environmental metrics to various stakeholders. An Environmental Life Cycle Assessment (LCA) can provide solutions by assessing multiple environmental impacts of a product, service, or organization over its entire life cycle, from "cradle to grave."
To generate useful insights, an LCA requires data collection from suppliers, involving the upstream supply chain. This means there's work to be done not only within your supply chain organization but also with external suppliers. But what tangible benefits does LCA bring to supply chain management?
Benefits of LCA and Data Collection in Supply Chain
The LCA process promotes active supplier engagement, offering valuable insights into your supply chain's dynamics:
Supply Chain Communication Quality – Gain clarity on how effectively communication flows within your supply chain.
Supplier Responsiveness – Observe which suppliers respond promptly to data requests and which are less engaged. This indicates their level of partnership and readiness to support sustainability efforts.
Supplier Environmental Data – Determine which suppliers already track environmental metrics and which do not, offering a clear view of their sustainability maturity.
Supplier Willingness to Improve – Assess which suppliers show commitment to environmental improvement. Not all suppliers will have perfect practices, but some will demonstrate a proactive attitude towards collaboration and improvement.
Even the process of conducting LCAs yields valuable insights into supplier alignment, regardless of the final results. Armed with these insights, you can encourage or pressure suppliers to share data. For those who don't, you may need to assume their impacts align with, or exceed, industry averages available in global databases.
Leveraging LCA Results
Your LCA results reveal which suppliers have the most significant environmental impacts, or “hotspots,” within your supply chain. This does not necessarily mean a high-impact supplier is "bad." For example, in car manufacturing, a supplier producing a ton of stainless steel will naturally have a different environmental footprint than one merely transporting that steel, converting it into parts, or providing small amounts of decorative wood.
If you work with multiple suppliers for similar products, LCA allows for impact comparisons. Even with a single supplier, you can benchmark against average data from resources like the Ecoinvent database. This opens up various supplier engagement possibilities:
Collaborate with suppliers who have the most significant impact to reduce their environmental footprint.
Source more from suppliers with lower impacts when similar products or services are available.
The data can prompt vital questions. Using the car manufacturing example:
Is it feasible to source fossil-free steel?
Would recycled steel reduce environmental impact?
How far is the steel transported, and what are the CO2 emissions per ton/km with your logistics provider?
Can you ensure wood sources are FSC-certified, or is this certification relevant?
These questions and more can emerge through LCA, especially when focusing on the upstream value chain.
Outcomes and Getting Started with LCA
In the end, LCAs provide a clearer view of your upstream supply chain, initiate data-sharing and environmental improvement initiatives, and reduce the risk of hidden environmental impacts.
Looking for a step-by-step guide to get started? Explore our LCA roadmap for practical guidance in sustainable supply chain management. Or, if you're ready to dive in and make real changes, our Leader’s LCA course is tailored for supply chain managers like you—engage suppliers, gather actionable insights, and reduce environmental risks. Check out the syllabus to see how it aligns with your goals!
