An economic and environmental framework for analyzing globally sourced auto parts packaging system

Competitive forces are driving US domestic manufacturers to source parts globally, which significantly extends their supply chain and introduces new sustainability concerns. This paper addresses the situation from an operating division manager's perspective. We present an approach to packaging system assessment which considers the division manager's span of control, addresses the design of packaging and the corresponding logistics processes, and incorporates both cost and environmental impacts. A construct familiar to operations managers, the value stream map, is adapted to model material flow of both parts and packages, and an integrated material flow analysis is used as the common basis for cost analysis, a modified life cycle environmental impact analysis, and an energy consumption analysis. The framework is illustrated using a case study of a major US automaker.