Demand Management for Sustainable Supply Chain Operations

Supply chain management is about fulfilling demand. Most of the current supply chain literature models demand as an exogenous factor. This also holds true for sustainable supply chain management. However, demand itself is shaped by long- and short-term decisions on, for example, not only assortments and prices but also lead times and service quality. In addition to revenues and costs, demand management also has the potential to impact a firm’s environmental performance in the broadest sense, i.e., emissions, waste, and material and energy consumption. In this chapter, we discuss opportunities for endogenizing demand in sustainable supply chain management. We first discuss the impact of relevant demand characteristics on a firm’s environmental performance. Subsequently, we introduce common demand management levers and then review examples of how they have been applied to manage environmental objectives. We close the chapter by synthesizing our main observations and discussing potential avenues for future research.