L3M6 Tutor Notes 1.0 JAN19

CIPS Level 3 Advanced Certificate in Procurement and Supply
operations
Teaching Notes
Module title: Socially Responsible Warehousing and Distribution [L3M6]
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Learning Outcome 1: Understand the concepts of sustainability and Corporate Social
Responsibility (CSR)
These notes are designed to support teaching staff using the CIPS Teaching Resources PPT slides. Teaching
staff are advised to cross reference against the relevant module content and learner resources (e.g. study
guide). Supplementary resources are available on cips.org in the Student Zone, CIPS Knowledge and Supply
Management online journal (www.cips.org).
SLIDE TUTOR NOTES
1 Not applicable
2 Not applicable
3 Sustainability – meeting our own needs without compromising the ability of future
generations to meet their needs.
Corporate sustainability – a holistic approach that considers environmental, social and
economic factors together when entering into any business relationship.
Refer to diagram on the left

• The social or ‘people’ aspect relates to the universal human rights and basic
resources that should be attainable by all people in order to keep their families
and communities healthy and secure and protected from discrimination.
• The environmental or ‘planet’ aspect aims to eliminate waste, promote the use of
renewable energy and recycled materials, and optimise processes through the
supply chain by using available expertise and new technologies.
• ‘Profit’ or economic sustainability means staying in business. Sustainable
economic growth seeks to satisfy the needs of humans in a way that sustains
natural resources and the environment for future generations.
The economic, environmental and social elements are interdependent and work together
to achieve sustainability.
Refer to diagram on right to highlight the outcomes if only two of the pillars are focused
on.
Activity
Select a well-known organisation and use the internet to research their sustainability
policies. Make of note of at least one policy from each of the three areas of people, profit
and planet.
Lead a class discussion for learners to share the results of their research. You could note
down their findings on flipchart paper to see how much overlap there is between the
policies researched.
4 The UN Sustainable development goals (refer to diagram on slide)

• Offer organisations around the world a roadmap to business growth while
addressing social and environmental goals.
2
SLIDE TUTOR NOTES
• Are based on ‘shared values’ in which an organisation’s strategy encompasses

social and environmental efforts rather than regarding them as add-ons.
• Run through the goals, providing or requesting examples or reasons for each of
them, e.g. for goal 3: children in parts of some countries do not have access to
education and are instead sent to work, often in unhealthy working conditions,
which impacts on their quality of life.
The UN Global Compact

• A multi-year strategy to drive business awareness and action in support of
achieving the sustainable development goals by 2030.
• Thousands of organisations from academia, business, non-governmental
organisations, or ‘NGOs, and associations are signatories to these goals’. What
does this tell you about the importance of the goals?
• Has ten principles that span human rights, labour, the environment and anti-
corruption, for example: Principle 2: organisations should make sure that they are
not complicit in human rights abuses.
Activity
(Dependent on numbers in class) Assign one (or more) goal to each learner, and ask them
to use the Study Guide or the internet to find out:
• What is the overall purpose of the goals?
• What is the purpose of their specific goal?
• Provide at least one fact about why the goal has been included.
• Note down at least one target the goal aims to achieve.
You might wish to challenge moreable learners to source more facts and targets.
(note all of the above can be easily sourced from the un.org/sustainabledevelopment
website, but this isn’t necessarily the first link that will come up on an internet search)
• Ask learners to note down their source, i.e. what website or book they obtained
their information from.
Lead a class discussion to facilitate learners sharing the results of their research with the
rest of the class.
Encourage learners to think critically about the sources they use by asking where they
obtained their information from. If they used the internet, how did they decide which
website to go to? If they didn’t use the UN website, why did they choose another one? Did
they obtain information from just one or multiple sources?
5 Sustainable procurement
• Is based on the principle that socially responsible products and services are not
only good for the environment, but are also essential for long-term profitability,
especially as consumers are increasingly demanding socially responsible products.
• Encourages looking at the whole life cost and the associated risks
3
SLIDE TUTOR NOTES
• Encompasses social and environmental performance criteria while still reaching

economic goals
• Refer to diagram on slide and talk through each component. Encourage learners to
suggest what impact each of the factors might have on other areas, e.g. an
exceptionally low base price could indicate poor working conditions further down
the supply chain, and could result in lower quality. Excessive use of natural
resources could indicate lack of or disregard for CSR, and could damage the
organisation’s reputation. Healthy diversity in the supply chain, e.g. elements from
different countries, or diversity in terms of the ethnic and cultural backgrounds of
the employees can bring benefits to an organisation, however, there could be
cultural barriers, of difficulties that arise due to working in different time zones.
There can be challenges when introducing sustainable procurement practices, such as

• the need to justify the principles and its implementation cost to management
• the lack of training and reliable information regarding social, ethical and
environmental principles and processes.
Activity
Prior to the session, you’ll need to plan a scenario, for example, deciding whether to
purchase traditional or LED lightbulbs for an office.
Prepare a ‘key facts’ worksheet to provide background information on two or more
fictional companies that addresses the factors that the students will be debating on, e.g.
pricing, working conditions, CSR activities (or lack of), diversity, business risk, etc. Try to
make each company have benefits, rather than loading all the positives on one, and all the
negatives on the other to make the discussion more considered.
Divide the class into groups.
Allocate one of the factors indicated on the slide to each learner. (You could allocate
different factors to each group to see how that affects the outcome.)
Present them with the scenario and the ‘key facts’ worksheet you’ve prepared.
Provide them with a starting statement, e.g. ‘I think you should buy traditional lightbulbs
because they’re cheaper’ to start off the discussion.
Ask each learner to present a statement based on the information in the worksheet based
on the point they have been assigned.
Ask the group to record the points for and against each organisation.
Each group to draw their own conclusions based on the evidence sourced, then present
their findings to the rest of the class.
6 Organisations can come under pressure from various groups.

Ask students if they can suggest any examples.
Customers and consumers – Customers in the supply chain can use their purchasing
power to encourage suppliers to act on sustainability.
4
SLIDE TUTOR NOTES
It’s been reported that 66% of global consumers would be willing to pay more for
products from a company that demonstrates corporate social good.
Class discussion
How do consumers use their power to encourage suppliers to act sustainably?
Refer to the slide to discuss ‘the most socially conscious consumer’
Ask learners if/when they consider sustainable factors when purchasing, if they do. Are
there certain types of items they’re more likely to consider this for, e.g. clothes, electronics,
food, etc.
How do they find out information about an organisation? E.g. independent research or
from social media.
Not-for-profit organisations
• E.g. The United Nations, the Red Cross, Oxfam and Save the Children
• have well-defined procurement policies that uphold the goals of sustainable
procurement.
Public sector organisations

• The public sector has a duty to implement sustainable procurement
• The city of Toronto has successfully devised a Social Procurement Framework to
drive their strategic social, economic and workforce development goals.
• Belgium has a legal definition of Fair Trade, which is included in public
procurement mandates.
The International Organization for Standardization (ISO)

• Issued ISO 20400 – the world’s first international standard for sustainable
procurement – in 2017
• Designed to help organisations to reduce their impact on the environment, tackle
human rights issues and manage supplier relations.
Activity – independent or group research activity

Allocate either consumers, not-for-profit or public sector organisations, or ISO 20400 to
each learner/group and ask them to carry out research to find at least three facts to
present back to the class. For example,
• Examples of when consumers have succeeded in making an organisation behave in
a more sustainable way
5
SLIDE TUTOR NOTES
• What ISO 20400 is, how it works, etc.

Lead class discussion to share findings.
7 Corporate governance – the system by which organisations are directed and controlled.
• Directors are appointed by the shareholders and are responsible for upholding the
governance. Directors are expected to generate profits while also promoting
ethics, fairness, transparency, and accountability in all their dealings, both
internally and externally.
• Businesses are also held to high standards by customers. Refer back to previous
slide/previous learning.
• Both shareholders and consumers want to see companies operating with integrity.
CSR – a management initiative in which organisations integrate social and environmental

concerns into their business operations.
The goal of CSR policies is to achieve a balance of economic, environmental and social
objectives whilst meeting stakeholders’ expectations.
Refer to diagram on slide and discuss how each of the factors listed play a part in relation
to delivering CSR.
Encourage learners to consider the complexities of delivering on this, by providing a
scenario, for example, if shareholders are focused on profit margins, directors could feel
under pressure to use cheaper suppliers, even if they don’t demonstrate good social or
environmental practices, etc.
Activity
Ask learners to use the internet to locate the CSR policy of an organisation and make notes
on the key elements that are included in it. They should note down several
examples/statements.
Then, either in small groups, or as a class activity, learners to compare the elements
they’ve identified from their policies, e.g.,
Learner 1 to suggest/write down one element (on flipchart paper), and other learners to
indicate if that is included in their policy, etc.
Then examples to be discussed from each of the policies.
8 Promoting CSR
Organisations that wish to establish a CSR strategy can look for guidance from
organisations that have already been successful in their initiatives.
Refer to list on slide which shows the top ten most responsible companies in 2017, as
judged by the Reputation Institute.
LEGO has a top-down approach to CSR activities, which is a key factor in ensuring that CSR
is taken seriously throughout an organisation.
It has initiatives such as ‘Build the Change’ and ‘Sustainable Materials Center’, and has a
partnership with the World Wide Fund for Nature.
6
SLIDE TUTOR NOTES
CDP – formerly the ‘Carbon Disclosure Project’

• Runs the global disclosure system that enables organisations, cities, states and
regions to measure and manage their environmental impacts.
• Has four dimensions: disclosure, awareness, management and leadership.
• Has identified 120 organisations that are leaders in climate change and in reducing
carbon emissions.
Class discussion
What are some of the ways in which organisations can demonstrate good corporate
citizenship?
(It might help to consider first some of the environmental and social issues, such as water
consumption, waste, use of natural resources, then moving on to discuss what steps an
organisation might take to improve or reduce their impact.)
Activity – independent or group research activity

Ask learners to use the internet to find examples of initiatives developed/delivered by the
top 10 companies listed (not including the top three).
9 Monitoring CSR in the supply chain
• Organisations that have well-established and mature CSR programmes monitor

their suppliers’ activities to ensure that they are compliant with their policies.
• The intention is to create continuous improvements in their suppliers'

performance, which has mutual benefits.
• If human rights and labour laws are not fully respected then there is both
operational and reputational risk.
• Procurement teams should focus on investigating high-risk suppliers first,

especially from industries that are known to face particular challenges, for
example, fuels, energy and power, chemicals, plastics and food.
• The risks are higher in countries where legislation is lacking or poorly

implemented.
Applying CSR principles in the supply chain: (content included on slide – ask learners to
consider how each CSR principles achieve each of the points)
• Reduces reputational risk and possible legal liability.
7
SLIDE TUTOR NOTES
• Promotes the development of more sustainable products and improves quality.
• Contributes to meeting and exceeding customers’ expectations.
• Attracts and retains employees.
• Provides security and peace of mind for investors and stakeholders.
• Can strengthen relationships with suppliers when there is collaboration on CSR

that increases productivity and reduces costs.
Diversity – the acceptance of personal differences and inclusion
By respecting employees' individualities and positioning them as an advantage,

companies can drive both the individual’s and the organisation's sustainable growth.
Major areas of focus are gender, race and ethnicity, culture, ability, sexual orientation,
age and socio-economic status.
Gender pay inequalities are being highlighted in the media, and organisations are
responding by introducing initiatives to encourage more women into management
positions.
Activity
Learners to find news articles that highlight inequalities, and discuss them in small groups.
Prompts:
• What is the inequality? E.g. pay, working hours, access to certain positions,
treatment within role, etc.
• What is the issue? E.g. race, gender, age, etc.
• How was it highlighted?
• Has any action been taken to address the inequality? What outcome was there?
E.g. backdated pay, compensation, etc.
10 Not applicable
8
Learning Outcome 2: Understand the environmental impact of procurement and
supply
SLIDE TUTOR NOTES
11 Not applicable
12 Not applicable
13 Not applicable
14
Start by using the questions on the slide as a prompt for class discussion.
• Organisations need to be responsible for the activities throughout their supply
chains in order to be successful in a globalised, fast-changing world.
• Green procurement – the procurement of products and services that cause
minimal negative environmental impacts at competitive prices.
• Green logistics – the process of minimising damage to the environment due to the
logistics operations of an organisation.
• Green procurement and green logistics can make a marked difference in curbing
pollution from greenhouse gas emissions.
Check learners’ prior knowledge: what activities are included in logistics?
Logistics includes:
• transportation
• inventory management
• warehousing
• order fulfilment
• distribution.
• processes such as reuse, recycling and waste disposal.
Methods to reduce a supply chain’s negative impact on the environment include:

• purchasing from environmentally aware and sustainable suppliers
• standardising product design for easier delivery
• reducing energy consumption and emissions in transport by using less fuel.
Activity – individual or in pairs

Carry out research to find other methods that can be implemented to reduce a supply
chain’s impact on the environment.
9
SLIDE TUTOR NOTES
(You might find it helpful to consider some examples or types of negative impacts of supply
chains in the first instance)
15 External stakeholders
• (Refer to groups listed on slide) e.g. environmental pressure groups, customers, the
media, shareholders and regulators.
• Can use their power to influence organisations to improve their environmental
performance – Ask learners: Can you think of any examples?
Environmental pressure groups, or ‘Green’ activists

• Advocate or work towards protecting the natural environment from destruction,
whether individually or through organisations such as Greenpeace.
• Lobby for new environmental laws, enforce the existing ones or protest against and
publicly oppose harmful projects.
Examples:
• The World Wide Fund for Nature
• The Australian Clean Ocean Foundation
Media
Reports on and raises awareness of:
• Environmental disasters caused by organisations
• Organisations that fall short of the policies they say they adopt, e.g. ethical working
conditions throughout their supply chain, reducing impact on environment, etc.
• Activities of environmental pressure groups
• New legislation
Discuss some examples of the above
Consumers
• Becoming increasingly aware of environmental issues and the long-term impact of
globalisation on society as well as on themselves. (Link back to media and
environmental pressure groups.)
• Keen to establish the source of what they eat and wear, and consider the impact it
has on them and the wider world.
• Support businesses that have clear environmental protection policies in place and
those that declare their goals publicly.
Shareholders
• Want to obtain maximum return on investment, realise that reputation is a key
factor, and want to be associated with organisations that are behaving in a
responsible way
10
SLIDE TUTOR NOTES
Regulators
• Environmental legislation is the collection of laws and regulations on air quality,
water quality, endangered wildlife and other environmental factors.
• Legislation authorises agencies in a country to implement and enforce regulations.
However, there is no international court for the environment.
• The most important agreements on climate change, or global warming, are the
United Nations Framework Convention on Climate Change (1992), the Kyoto
Protocol (1997) and the Paris Agreement (2015).
Activity
• Find examples of environmental pressure groups that are active in your country,
and/or legislation that has recently been introduced.
• What issues were they related to?
• What has been the outcome?
• How was it reported on in the media? Try to find a couple of sources to compare
different political stances.
16 Air quality – the degree to which the air is clean, clear and free from pollutants such as
smoke, dust and smog among other gaseous impurities in the air.
Carbon dioxide from the burning of fossil fuels and industrial processes accounts for 65%
of greenhouse gas emissions
Man-made sources of pollution:

• greenhouse gas emissions from moving vehicles
• toxic gases, such as sulphur dioxide and nitrogen oxide from industries
• coal-powered plants and burning wood.
Refer to pie chart on slide to discuss the breakdown of global greenhouse gas emissions by
sector.
Ask learners if any of the percentages surprise them, e.g. did they expect transport to
produce more emissions than agriculture, etc.
Still referring to slide: Transportation is responsible for 13% of greenhouse emissions.
• 95% of these emissions comes from road transportation
• The other 5% comes from rail, civil aviation, domestic maritime transport and
other methods of transport
Class discussion/research activity: How can procurement influence suppliers and

contractors to reduce emissions?
Calculating carbon footprint

There are several standards that can be used.
Most common is The Greenhouse Gas Protocol (or an industry standard based on this
11
SLIDE TUTOR NOTES
protocol)
Categorises emissions into three areas:
• Scope 1 – direct emissions from purchased goods and services.
• Scope 2 – indirect emissions, for example, the purchase of electricity, steam, heat
and cooling.
• Scope 3 – includes indirect emissions from activities outside an organisation’s own
operations, for example, contracted transport.
Carbon neutral – the offsetting of emissions by funding an equivalent amount of carbon

savings elsewhere in the world.
Activity
What other methods can be used to calculate a carbon footprint?
17 The next two slides explore some of the environmental impacts of storage and
transportation: noise and visual pollution, vibrations, land take and workplace injuries.
Noise pollution – unwanted or excessive sound that can have detrimental effects on
human health and environmental quality.
• Can affect workers and the general public.
• Key industries that produce noise pollution include construction, road and air
transport.
• Mainly controlled by laws and ordinances at local, regional, and national levels
which aim to mitigate the adverse effects.
• Class discussion about the activities listed in the Decibel levels diagram. (note: this
is for humans, not animals, which can have more sensitive/acute hearing)
• Consider the implications of the airplane graphic: how has the noise footprint
changed? (prompt: is it larger or smaller?) What do you think prompted this
change? (prompt: discovering the impact on people, putting regulations in place to
make industry make improvements, etc.) What impact might this have had on the
industry? (e.g. could have increased costs as innovative methods were required to
find solutions, could have reduced costs, has reduced extent of impact on those
living near to airports)
Visual pollution – the extreme loss of aesthetic attraction which can impair a person’s
ability to enjoy their view and can cause stress.
• Examples: advertising billboards, dangling telephone and power lines, landfill sites,
graffiti, badly maintained buildings, derelict vehicles, deforestation.
• Too much visual stimulation can lead to eye strain, distraction and too much noise.
• The World Health Organization found that people who have a bad view out of their
window are 40% more likely to develop depression.
12
SLIDE TUTOR NOTES
18 Vibrations
• Caused by moving trains and other forms of transport
• Physical vibration is transmitted through the ground as structurally borne noise or
as airborne noise.
• Structurally borne noise is propagated in wave form in the ground, and can be
transmitted into buildings through the foundations. It can cause the building to
vibrate, which people can feel.
• Secondary airborne noise – occurs when audible sound waves are generated by
vibrations
• Can have similar effects on people’s health and comfort levels as exposure to
excessive noise.
• Long term, can cause structural problems to a building, which can be expensive to
repair.
Land take – the intentional change of land use from natural or semi-natural form to use
by populations or industry.
• Example: when a new factory is built in the middle of the countryside.
• Can have knock-on effects, e.g. supply chains may build up in the location, which
creates more employment opportunities, which brings more people to the area,
which can then lead to housing and schools being built.
Workplace injuries
• Can result from slips, trips and falls, over-exertion, falling objects, buildings and
machinery.
• Many incidents and accidents that happen at work can be prevented if guidelines
and laws are followed.
• It’s the employer’s responsibility to keep the work environment free from hazards
and provide training and personal protective equipment to employees where
appropriate.
Research activity
• Divide the class into five groups, and assign each group one of the impacts of
storage and transportation discussed: noise, visual, vibrations, land take and
workplace injuries.
• Each group to carry out research to find examples of news articles or court cases
relating to the impact.
• Challenge each person in each group to find one example and note down key facts,
such as the parties involved, the date, the nature of the impact, and the outcome.
• The group should then convene to discuss examples – compare similarities and
differences, and decide which to present to the class.
• Each group to present the key facts of their chosen example to the class.
13
SLIDE TUTOR NOTES
19 UN sustainable development goals and targets

Refer to image on slide, which was introduced in Chapter/LO 1. Check students’ recall by
asking them to explain what it is, who sets the goals, what its purpose is, etc.
Governments
• Work towards the sustainable development goals and targets by setting and
implementing policy frameworks and standards based on them
• These regulations prevent damage to the environment, ensure energy efficiency
and guide behaviours that sustain and protect human life.
• Need to ensure their laws keep pace with economic, demographic and
technological change.
• Need to co-ordinate across all levels of government to ensure that national,
regional, state or provincial and municipal governments pursue the same agendas.
• Local governments, due to their proximity to the people, are in the best position to
educate and respond to the needs of their citizens.
Governments have four distinct roles in addressing the issue of environmental

sustainability:
• Policy development
• Regulation
• Facilitation
• Internal sustainability management
Activity – individual or pairs

Find out what policy frameworks or standards have been set in your country in the last
three years in relation to sustainability.
Compare the results of your research with another pair.
20 Ways to reduce the impact on the environment of activities that produce carbon
emissions:
• reduce water consumption
• reduce the amount of waste produced
• recycle more waste so less ends up in landfill
• improve sustainable procurement
• report transparently on key sustainability issues.
‘Green’ transport
• Replace traditional modes of transportation that depend on fossil fuels with more
eco-friendly methods.
• Examples include: low-emission buses (refer to graphic on slide and discuss the
impact and implications of the technological advances), hybrid cars, electric cars
and motorcycles, eco-friendly trains, and the increased use of bicycles.
• CycleLogistics estimates that 51% of goods transported in cities could be shifted to
bicycles and cargo bikes, which would significantly reduce emissions and
14
SLIDE TUTOR NOTES
congestion.
• Advantages include reduced carbon emissions, a decrease in pollution rates, lower
cost energy, and it would contribute to building a sustainable economy.
‘Green’ buildings
• Buildings that reduce or eliminate the negative impacts it has on the environment,
and can even create positive impacts.
• Benefits can be achieved in the design, construction or operation phase.
• Examples include:
• using energy, water and other resources efficiently
• using renewable energy, such as solar energy
• using non-toxic materials that are ethically and sustainably sourced.
• A zero-carbon building - maximises energy efficiency and recycling.
• Energy efficiency in the construction sector can be achieved with the aid of
government regulation. Tax benefits and special funding are used as incentives.
Activity
Divide the class into pairs. One person from each pair to research green transport, the
other to research green buildings.
Ask them to find out and note down key facts such as government regulations, targets or
incentives, examples, further innovations that are in development.
Pairs to get together and share their research with each other to exchange ideas.
21 Not applicable
Learning Outcome 3: Understand methods for the storage and movement of

inventory
SLIDE TUTOR NOTES
23 Not applicable
24 Not applicable
25 Use diagram to highlight key factors to consider when developing location strategies for
stores and warehouses – examples provided below
Factors an organisation needs to consider when reviewing potential locations for a store
or warehouse:
Impact on the local community

15
SLIDE TUTOR NOTES
• will create jobs

• will lead to an increase in the number of heavy goods vehicles in an area.
Urban planning considerations

• land use zones (greenbelt, brownfield or contaminated)
• planning permission
• the use of the adjacent land
• sensitive receptors such as nearby childcare facilities and hospitals that may be
affected.
Economic and engineering aspects

• road safety impact assessment to assess the impact of changing the road layout
• service and utility connections
• geotechnical considerations, such as the ground material of the proposed site
• the distance from the warehouse to sea, rail and air terminals
• capital and operating costs also need to be considered.
Environmental aspects:
• air quality
• odour, visual and noise pollution generated by the warehouse
• the impact on the geology, hydrogeology, hydrology and ecology.
Activity
Present a scenario to learners appropriate to your country/city/town, e.g. a
manufacturing organisation wishes to build a new warehouse in/near your town.
Learners to refer to maps (either printed or on the internet) and consider what they’ve
learned so far to decide where might be a good site. Ask them to provide three reasons for
their selection.
If learners might struggle with this, you could select five possible sites and ask them to
decide which would be most appropriate.
Lead a class discussion to exchange ideas – what sites did learners suggest? What were
their reasons?
26 A socially responsible strategy for store and warehouse design can create a competitive
advantage by considering the entire life cycle, from construction to decommissioning.
Refer to diagram on slide to discuss the challenges that affect the design of stores and
warehouses.
Social, economic and environmental aspects should inform the design and construction of
a warehouse.
Social objective – designing for human use, e.g.

• considering thermal, acoustic and lighting comfort
16
SLIDE TUTOR NOTES
• reducing risk from natural hazards

• designing for fire and crime protection.
Economic objective – ensuring cost efficiency, e.g.

• using locally sourced and readily available materials
• using cost-saving technology
• using modular or standardised components where possible to reduce construction
and demolition time on site
• selecting materials that require minimum maintenance and maximum protection
from the elements.
Environmental objective – resource conservation, e.g.

• considering durable, non-toxic materials
• designing for energy-efficient construction and deconstruction
• use of water-efficient plumbing fixtures
• developing non-arable land or brownfield sites for construction.
27 Various activities take place in a store or warehouse: You could ask learners for
suggestions before providing the following list.
• receiving deliveries of SKUs (stock keeping units) from suppliers
• unloading deliveries from carriers
• storing products
• receiving orders from customers
• assembling orders
• repackaging and transporting SKUs to their final destination.
When designing the layout of a warehouse, the following factors should be considered
• Warehouse structure:
• The characteristics of each department and the relationships between
departments.
• The number and locations of input (delivery) and output (dispatch) points
• The structure of each department and the relationships between
departments in the warehouse.
• The material flow into and around the warehouse (refer back to previous
discussion about the activities that take place in a warehouse) and how
inventory will be moved through the functional areas.
• What sizes and types of product will be allocated to different areas.
• Sizes and dimensions – Overall size and space required, and how it will be
allocated among departments.
• Layout details – To include aisle configuration in the retrieval area, pallet block-
stacking pattern in the reserve storage area, etc.
• Equipment selection – Types of equipment and level of automation required for
storage, transportation, order picking and sorting.
17
SLIDE TUTOR NOTES
• Operational selection – How the warehouse will operate, e.g., different storage
methods, zone picking, order picking methods.
Refer to diagram on slide that shows one possible layout for a warehouse. There isn’t just
one ideal, it depends on the activities taking place in the warehouse.
Layout – key points:

• There isn’t ‘one way’ to organise a facility.
• The layout should be flexible, so it can be adapted for future needs.
• Slotting or profiling identifies the most efficient placement for each item in a
warehouse.
• Packing and shipping areas should have key placement zones for carrying out each
task to improve safety, efficiency and productivity, and avoid costly mishaps.
• Aisles should run the length of the warehouse from end to end, without
obstructions or dead ends.
• Include measures to avoid accidents, injuries, or damage to the warehouse itself.
Activity
Learners to work in small groups to consider the flow of materials through a warehouse
for an example organisation they’re familiar with.
Learners to create a diagram, referring to, but not copying, the one on the slide that takes
into account the flow of materials.
28 Three types of material handling systems:

• Manual – staff move material.
+ Flexible system
- only feasible when materials can be moved with little assistance.
• Mechanised systems – use equipment such as forklift trucks, cranes and conveyor
systems
+ provide a more efficient handling system
+ can handle items too heavy for staff.
• Automated systems – use technology such as automated guided vehicles (A-G-Vs)
and loading and unloading machines
+ can process high volumes of materials efficiently.
Material handling and efficiency

• Effective material handling equipment can enhance the flow of materials, and
therefore reduce the total manufacturing time through well-designed material
movement.
18
SLIDE TUTOR NOTES
• The chosen method should create and encourage hazard-free and safer work
conditions, improve efficiency and productivity, and boost time utilisation and
equipment usage.
• To decide which is the most efficient method, look at the distance that should be
covered, and the method that will facilitate damage reduction of materials.
• More automated systems are being used to increase speed and create a safer,
more efficient operation.
• Manual material handling operations will likely always be needed though.
Activity
Learners to work in groups of three.
Advise learners that one person in each group will advocate for manual handling, another
for mechanised systems and the last for automated systems.
(You could set a specific scenario to aid learners.)
Give learners 10 minutes to prepare key points for their argument.
Learners to enter debate within their group of three.
Tutor to set ground rules for debate (e.g. one speaker at a time; no shouting over each
other; focus on the subject not the person, etc.) and facilitate debates.
Whole class discussion to draw out learning points.
29 Palletisation and unit loads
• Unit loads – boxes and cartons containing products
• Palletisation – the process of stacking unit loads on pallets to ship or move as a
group
• Pallets are used to increase the processing speed
• When placing orders for products, it’s important to understand the number or
quantity that makes a full pallet load and to order multiples of that amount in
order to maximise processing efficiency.
When designing unit loads, several levels need to be considered: (refer to table on slide
for details and examples)
• Sales units
• Secondary unit loads
• The use of pallets
• Shipping containers
• Carriers
Single-piece unit loads gaining prominence in the supply chain as e-commerce means
customers are ordering individual items
19
SLIDE TUTOR NOTES
30 Class discussion – why is packaging needed? / What could happen if it’s not
used/insufficient?
What are the issues associated with packaging? (consider financial costs, plus
environmental costs)
Packaging
• Keep as small as possible while still protecting the finished item.
• Choose lightweight materials such as paperboard, aluminium, and corrugated
cardboard, in order to keep shipment costs to a minimum.
Automated packing, wrapping and labelling machines:

+ reduce physical effort
+ reduce damage incurred in manufacture, storage and distribution.
- contribute to the increased use of paper, cardboard, plastics and banding materials, and
associated non-biodegradable waste.
Socially responsible packaging strategies aims:

• reduce the impact on the environment
• reduce waste
• follow conservation principles.
Organisations need to use sustainable, recycled and recyclable packaging where possible.
Activity
Select an item that you use every day, e.g. personal grooming or food product.
What packaging was it in when you purchased the item? Record the material, the size,
etc.
What purpose did the packaging serve? (prompt: to preserve, to protect, to keep loose
items together, etc.)
Is the material recycled/recyclable?
Could the packaging be reduced or replaced with greener materials?
Environmental standards for packaging

Organisations should also design for the recovery of waste in addition to the disposal of
packaging from domestic and commercial waste.
Some common approaches to maintaining environmental standards:
• Extended producer responsibility (EPR)
• Sustainable materials management (SMM; or Sound Material-Cycle Society)
• The 3Rs (Reduce, Reuse, Recycle)
• Circular economy
• The polluter pays principle (PPP)
• Life-cycle assessments (LCA)
20
SLIDE TUTOR NOTES
Activity
Learners to research one of the standards mentioned above (EPR, SMM, etc.) Tutor to
allocate standards to learners to ensure even coverage.
Learners to record key points, such as:
• What the standard is about.
• When it was set up.
• If it’s part of a wider set of standards or principles.
• What impact it can have on organisations.
Tutor to lead class discussion to share learning.
31 Automation – the use of automatic equipment to perform activities that were previously
done by people, e.g. storing and picking orders.
Benefits:
• Can reduce picking errors
• Efficiency improvements can make the systems scalable.
• The scalability and quick implementation of schedules mean that the cost-
reduction benefit can be seen in just a few months at a fraction of the initial
investment of traditional fixed-path systems.
• Substituting technology for labour increases efficiency and quality, and reduces
overheads and variability.
• Other benefits include increased transport efficiency, better space utilisation,

higher cube density and improved store operations.
• Enables new business models such as e-commerce and direct business-to-

customer advantages.
• Can enable growth by allowing a distribution centre to service more stores and
increase product offerings.
Diagram: Automation drives value at three levels of the supply chain
Benefits of AS/RS – Automated storage and retrieval systems
• Reducing space and labour utilisation
• Flexibility to operate as a stand-alone structure inside existing buildings or as rack-

supported structures (e.g., for cold/freezer storage)
• Consistent and safe product handling
• Consistency in following storage processes
21
SLIDE TUTOR NOTES
• Maintaining real-time product tracking and identification
• Order picking and consolidation facilitated by automated replenishment
• The ability to create highly controlled storage environments, eliminating the need
for human access
• The ability to keep products fresh and reduce recalls
• Ensuring regulatory compliance
• Supporting consumer protection
Class discussion: are you aware of any organisations that use automation or AS/RS?
What activities do they use automation for?
What impact has it had on their organisation?
What impact has it had on the employees?
32 Not applicable
33 Lorenzo works in the procurement team for an organisation called Clean Beauty that
produces shampoo and other hair care products.
Clean Beauty have just reviewed all of their operations to assess the impact their activities
have on the environment. Based on their findings, they’ve decided the three priorities are:
• Replacing their plastic bottles with recycled and recyclable options
• Reviewing the layout of the warehouse to increase efficiency (tutor to prepare a

warehouse layout that isn’t efficient for learners to refer to)
• Ensuring their packaging complies with environmental standards.
Work in pairs or small groups to discuss the scenario and answer the questions.
1. Research and suggest three alternative materials that Clean Beauty could use instead of
their plastic bottles.
2. Suggest at least two changes you could make to the layout of the warehouse to
improve efficiency.
3. Prepare a short summary of three of the standards that Clean Beauty should comply
with (e.g. max 150 words each)
22
23
Learning Outcome 4: Understand the environmental impact of warehousing and
distribution
SLIDE TUTOR NOTES
34 Not applicable
35 Not applicable
36 Class discussion: Can you think of some of the impacts that global logistics might have?
Prompt learners to consider the resources required for transporting and storing goods, and
the impact on the environment. Contrast that with local suppliers, etc.
The proliferation of global logistics networks has put increasing pressure on resources and
the environment.
Prioritising green logistics can help to minimise the damage caused.
Green warehousing – talk through the elements in the table on the slide
Activity
• Divide learners into three groups. Each group to research one of the columns in the
table, e.g. energy efficiency, green energy sources or sustainable buildings.
• Learners to carry out independent research to find out key facts, for example:
• Energy efficiency: What factors determine what the optimum warehouse
temperature is for a particular organisation? What influences decisions
about the materials handling equipment used?
• Green energy sources: Diagram showing how each energy source is used to
generate energy. What factors influence the source selected? What costs
are involved?
• Sustainable buildings: What standard is used in your country? What does it
cover?
• Encourage learners to find industry examples, e.g. IKEA installing photovoltaic
panels to use more green sources and reduce energy consumption.
• Each group to reconvene and share results of their research with other members of
their group and decide on key facts to record on flip chart paper or on post-it notes.
• Lead class discussion to share key facts with rest of the class.
37 Organisations can come under pressure from consumers, governments and activists.
Consumers/the general public

In general:
• Becoming more aware of environmental issues and activities that contribute to
24
SLIDE TUTOR NOTES
climate change.
• Concerned with the social and environmental impact of globalisation and the
transportation of goods – how it impacts them, society and the environment.
Issues including air quality, marine pollution, solid waste and landfills, toxicity and
the use of pesticides, water quality and deforestation
When planning new warehouses:

• Consider the impact it will have on the public, e.g. increased traffic, changing road
layouts, increased emissions from transport, visual/noise pollution, etc.
• Permission can be denied as a result of public consultation, so it’s important to
consider the impact on them and include public consultation in your plans.
Governments
• Encourage environmentally responsible actions by specifying standards through
legislation, such as the acceptable level of carbon emissions.
• Organisations must follow the government's environmental regulations or face
legal or financial penalties with the potential threat of dismissal from the market
Pressure groups or activists

• Examples include Greenpeace, the World Wide Fund for Nature (WWF), Oxfam and
Amnesty International
• Seek to ensure that businesses operate in an ethical and sustainable way.
• Use publicity campaigns and social media to raise awareness of poor
environmental practices while also lobbying businesses directly.
Activity
• Learners to select a pressure group and find out about one or more campaigns
they’ve run recently. What was the campaign about/hoping to achieve? Was it
prompted by a specific activity? What organisation or industry was it aimed at?
Has anything happened as a result? Learners to note down key points.
• Learners to pair up and spend 3 minutes each informing their partner of the key
points they found out.
International legislation and agreements – refer to table on slide

Environmental sustainability promoted at different levels:
• National level – environmental legislation
• International level – environmental agreements holds countries to shared
standards to ensure that competitive advantage isn’t achieved at the expense of
poor environmental practice. E.g. UN Global Compact.
Note, The World Trade Organization (WTO) facilitates free trade. If any health,
environmental, enforcement or conservation measures were found to be in conflict with
WTO trade rules, the WTO would prioritise the protection of the environment over free
25
SLIDE TUTOR NOTES
trade.
Activity
Learners to conduct individual research into the UN Global Compact, the WTO, the GATT
and the GATS
38 How can an organisation find out what impact their warehousing and distribution is
having on the environment? By calculating their carbon footprint.
Carbon footprint
Measures the total greenhouse gas emissions caused directly and indirectly by people and
organisations.
Considers the output of carbon dioxide, methane, nitrous oxide, hydrofluorocarbons,
perfluorocarbons and sulphur hexafluoride.
Sources that contribute to a warehouse carbon footprint calculation include:
• transport
• energy use from heating, cooling and insulation
• material handling and other equipment
• conveyors
• waste.
To calculate a carbon footprint (refer to content on slide)

• Select your measurement method – be consistent!
• Be clear what parts of your organisation are included – consider how easy/difficult
it might be to collect accurate data.
• Collect your data and identify and explain any gaps, or assumptions you have
made.
• Do the calculation and multiply activity data by the GHG emissions factors – use
the calculator on The Carbon Trust's website (www.carbontrust.com).
• Ask a credible third-party to audit and verify your data before making it public
• Take action to reduce your carbon footprint over time.
Activity
Either present learners with a carbon footprint report of a particular organisation, or ask
them to find one themselves.
In small groups, learners to discuss key points from the document with group members.
Then present a scenario to each group, e.g.
• Multinational retailer of flatpack furniture
• Local bakery that sources all ingredients from local producers
• National supermarket that sources products from around the world, etc.
Each group to brainstorm/create a mindmap to consider all the activities that could
contribute to carbon footprint, and consider the ease/difficulty of obtaining data on each
one.
26
SLIDE TUTOR NOTES
Activity
Individual research activity: learners to find out 5-10 ways that organisations can reduce
their carbon footprint. Write each idea on a post-it note in thick marker.
Learners to put post-its on board and tutor to group similar ideas together.
Tutor to lead class discussion – how can they do each one, how easy it is to implement,
extent of the impact.
Follow-up: Learners to consider how they could reduce their own impact, e.g.
walking/cycling/taking public transport rather than car, etc.
39 Warehouses and stores have various impacts on the environment
Accidents/Risks – Refer to diagram on slide to discuss various risks to employees, the

warehouse building, the environment and the local community associated with
warehouses
• Carry out risk assessments to identify hazards that could potentially cause harm.
• Put measures in place to reduce risk.
Noise pollution
• Unwanted or excessive sound that can have detrimental effects on human health
and environmental quality.
• Specialist companies analyse and assess the potential noise pollution for new
warehousing and distribution projects before planning permission is granted.
Visual intrusion
• The visual impact of warehousing and distribution activities on the local
community and its visitors.
• Extent of the impact depends on the importance of the site, e.g. World Heritage
Site, and where and when the viewer is impacted, for example, at home, at leisure,
or when commuting or working, and the frequency of exposure.
Vibration
• Caused by rapid oscillating movement, e.g. mechanical vibrations.
• Hand-arm vibration (H-A-V) caused by using equipment and processes that
transmit vibrations into the hands and arms of employees.
• Long-term, regular exposure to HAV can lead to vibration white finger and carpal
tunnel syndrome.
• Whole-body vibration (W-B-V) caused by vibrations being transmitted to
employees through their seats or feet by workplace machines and vehicles.
• Regular, long-term exposure to high levels of W-B-V is linked to lower back pain.
Land take
• The ‘taking of land’ from suburban areas to be used for warehousing.
27
SLIDE TUTOR NOTES
• Includes the overall space taken up including external access, parking and
approach roads.
• Impact can be extensive as a new warehouse can attract other parties in the supply
chain to set up operations nearby, in order to reduce their transport costs, etc.
• Can affect the quality of life of the local community by creating physical barriers,
increasing noise levels, generating odours, reducing the urban aesthetic and
destroying the heritage of the area.
Activity
Can you think of any other environmental impacts that a new warehouse might have?
Prompt: ecology of the area. Less habitat for wild animals, impact on the food chain, etc.
40 The EU Energy Performance of Buildings Directive (EPBD)

Came into force across the EU from 2006 as a measure to reduce the amount of carbon
produced by buildings.
Areas to consider when building a new warehouse include: (refer to points on slide)
• energy efficiency and use of renewable sources – including the use, where possible
of natural light and heat
• preventing pollution – reducing waste and increasing recycling
• transport efficiency – minimising the use of fossil fuel-consuming vehicles going to
and from the building
• water efficiency and conservation
• use of low-impact, sustainably-produced, local materials to reduce resource
consumption
• efficient use of land – with a low-maintenance design, retaining natural features
and enhancing biodiversity where possible.
41 Cost of environmental damage caused by logistics – refer to table on slide for examples
• Social costs – the impact on public health
• Ecological costs – the impact on the environment and ecosystems
• Economic costs – the impact on organisations’ profit
Cost of avoiding environmental damage

• Greener methods of warehousing and logistics, such as minimising the miles
products travel and reducing packaging on products can be introduced to reduce
the environmental damage caused.
• Some organisations suggest that avoiding environmental damage leads to
increased costs; others say activities such as using green energy sources has
reduced their costs
Activity
Learners to find an organisation that prioritises reducing its environmental impact and
make notes on what it is doing to achieve this.
28
SLIDE TUTOR NOTES
To ensure learners don’t all use the same organisation, you could specify an industry or
country for each learner to research within. Or learners could ‘claim’ organisations – once
claimed, others can’t use it.
Lead a class discussion for learners to share one initiative (ideally the one that’s had the
most impact) with rest of the class.
42 Warehousing and logistics rely on efficient modes of transportation to satisfy customer

demands.
Freight transportation, particularly road freight such as heavy goods vehicles, has a
significant impact on the environment.
Governments can encourage both private and business vehicle operations to reduce CO2
emissions by offering incentives to adopt greener modes of transport. Methods include
(refer to diagram on slide for additional ones):
• Enhancing the connectivity of rail, waterway or port, road and air systems in
logistics hubs
• Encouraging new-energy vehicles and clean technologies
• Introducing low-emission zones
• Enhancing vehicle emission standards nationally.
• Offering tax breaks for environmentally friendlier vehicles (e.g. electric cars)
• Raising tax on diesel to generate extra revenue and reduce the appeal of buying
diesel-run vehicles.
• Introducing regulations on vehicle emissions to ensure new vehicles adhere to a
minimum standard.
• Local governments can limit freight transport between set hours in specific
locations or on specific routes.
Activity
In small groups, learners to discuss the following:
• What impact would enhancing the connectivity of rail, waterway, road and air
systems have on organisations?
• What impact would raising tax on diesel have? (prompt: consider the wider supply
chain, e.g. passing increased costs on to consumer, rather than reducing use of
diesel)
• What initiative is most likely to reduce vehicle emissions?
43 Not applicable
44 Juliette works in the Procurement Department of a national distribution company, ATT.

ATT are looking to set up a new warehouse in the north of the country.
Juliette has been asked to create a report for the board.
Work in pairs or small groups to discuss the scenario and answer the questions to help
29
SLIDE TUTOR NOTES
Juliette with her report.

1. Select three impacts that the new warehouse could have, and provide suggestions for
how they could each be minimised.
2. What factors would need to be considered when building the new warehouse?
(Prompt: consider energy efficiency, use of green energy and sustainable building
methods)
3. Why is it important for ATT to consult with the public?
30

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CIPS Level 3 Advanced Certificate in Procurement and Supply

Leading global excellence in procurement and supply

SLIDE TUTOR NOTES

Refer to diagram on the left

4 The UN Sustainable development goals (refer to diagram on slide)

• Are based on ‘shared values’ in which an organisation’s strategy encompasses

The UN Global Compact

• Encompasses social and environmental performance criteria while still reaching

There can be challenges when introducing sustainable procurement practices, such as

6 Organisations can come under pressure from various groups.

Public sector organisations

The International Organization for Standardization (ISO)

Activity – independent or group research activity

• What ISO 20400 is, how it works, etc.

CSR – a management initiative in which organisations integrate social and environmental

CDP – formerly the ‘Carbon Disclosure Project’

Activity – independent or group research activity

9 Monitoring CSR in the supply chain

• Organisations that have well-established and mature CSR programmes monitor

• The intention is to create continuous improvements in their suppliers'

• Procurement teams should focus on investigating high-risk suppliers first,

• The risks are higher in countries where legislation is lacking or poorly

• Reduces reputational risk and possible legal liability.

• Promotes the development of more sustainable products and improves quality.

• Contributes to meeting and exceeding customers’ expectations.

• Attracts and retains employees.

• Provides security and peace of mind for investors and stakeholders.

• Can strengthen relationships with suppliers when there is collaboration on CSR

Diversity – the acceptance of personal differences and inclusion

By respecting employees' individualities and positioning them as an advantage,

• What is the issue? E.g. race, gender, age, etc.

• How was it highlighted?

SLIDE TUTOR NOTES

Check learners’ prior knowledge: what activities are included in logistics?

Methods to reduce a supply chain’s negative impact on the environment include:

Activity – individual or in pairs

Environmental pressure groups, or ‘Green’ activists

Man-made sources of pollution:

Class discussion/research activity: How can procurement influence suppliers and

Calculating carbon footprint

Carbon neutral – the offsetting of emissions by funding an equivalent amount of carbon

19 UN sustainable development goals and targets

Governments have four distinct roles in addressing the issue of environmental

Activity – individual or pairs

Learning Outcome 3: Understand methods for the storage and movement of

SLIDE TUTOR NOTES

Impact on the local community

• will create jobs

Urban planning considerations

Economic and engineering aspects

Social objective – designing for human use, e.g.

• reducing risk from natural hazards

Economic objective – ensuring cost efficiency, e.g.

Environmental objective – resource conservation, e.g.

Layout – key points:

28 Three types of material handling systems:

Material handling and efficiency

Automated packing, wrapping and labelling machines: