The power of supply chain initiatives
 

The power of supply chain initiatives

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This presentation illustrates the environmental and economic potential of supply chain initiatives. Next to reducing exposure to climate related risks and improving a company’s energy and GHG ...

This presentation illustrates the environmental and economic potential of supply chain initiatives. Next to reducing exposure to climate related risks and improving a company’s energy and GHG performance, they can result in tangible benefits including cost savings and a better product quality. It was held by Giel Linthorst, Unit Manager Supply Chains at Ecofys, during the Life Cycle Management Conference (LCM) in Gothenburg, Sweden, on 27 August 2013.

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The power of supply chain initiatives The power of supply chain initiatives Presentation Transcript

  • Giel Linthorst27/08/2013 The power of supply chain initiatives Realizing energy savings and GHG emissions reduction in the supply chain of companies
  • © ECOFYS | | Supply chain initiatives: powerful and large potential 1. Supply chain initiatives are a powerful mechanism to reduce the environmental impact in the supply chain of companies 2. Supply chain initiatives have a large environmental and economic potential Giel Linthorst27/08/2013
  • © ECOFYS | | Importance of supply chain initiatives Giel Linthorst27/08/2013 On average, 40% to 60% of a manufacturing company’s carbon footprint is from its supply chain Raw materials Basic materials manufacture Manufacture of intermediate product Manufacture of final product Retail/ business customer
  • © ECOFYS | | Commissioned by Institute for Industrial Productivity, ten supply chain initiatives were examined to explore a range of approaches: 1. Walmart 2. Ford 3. Prorail 4. Suzhou Energy Efficiency Star scheme 5. IKEA 6. SKF 7. British Gypsum 8. General Electric 9. BASF 10. Home Depot and Intertek’s Think Green Initiative Ten supply chain initiatives examined Giel Linthorst27/08/2013
  • © ECOFYS | | Key types of supply chain initiatives Giel Linthorst Mandatory requirements Supporting actions Disclosed to the public Not disclosed to the public 27/08/2013 Reporting and monitoring Audits, capacity building and implementation support, supplier forums External facilitation tools Purchasing approach • The Home Depot • Intertek • Suzhou Energy Efficiency Star scheme Labelling scheme • Walmart • General Electric • Ford • IKEA • SKF • BritishGypsum • BASF • ProRail Performance requirements
  • © ECOFYS | | Powerful example: CO2 Performanceladder Giel Linthorst The CO2-Performanceladder is a procurement mechanism to encourage companies to be aware of and reduce their CO2 emissions. • Large impact > 340 participants in 3,5 yrs • On average 2-3% annual energy efficiency improvements • More purchasing companies are using the mechanism A = Insight B = Reduction C = Transparency D = Participation Levels • The higher on the ladder, the higher the award advantage • Suppliers high on the ladder need to have a CO2 emissions inventory of their most important suppliers (companies and/or products) 27/08/2013 ProRail
  • © ECOFYS | | Benefits of supply chain initiatives > Benefits for initiators – Improved reputation and brand value – Reduced supply chains risk – Product and service innovation – Improved operational efficiency & cost reductions > Benefits for suppliers – Capacity building and implementation support from client – Energy savings & GHG reductions – Productivity improvements – Improved business relationships > Benefits for NGO’s and governments – Achieving energy and climate goals Giel Linthorst27/08/2013
  • © ECOFYS | | Lessons learned linked to design of supply chain initiatives Giel Linthorst > Focus on subset of suppliers > Understand local conditions and point of leverage > Top-management support > Define overall objective > Stepwise approach with increasing ambition, using tools and third party verification 27/08/2013 Hotspot analysis Preconditions Basic: Setting expectations Intermediate: Performance assessment & reporting Advanced: Drive reductions
  • © ECOFYS | | The power of supply chain initiative Giel Linthorst >Supply chain initiatives are very effective and efficient if well designed >Supply chains initiatives can have large impact on energy savings and GHG mitigation 27/08/2013 Hotspot analysis Preconditions Basic: Setting expectations Intermediate: Performance assessment & reporting Advanced: Drive reductions
  • © ECOFYS | |© ECOFYS | | Contact Giel Linthorst Unit Manager Supply Chains T: +31 (0) 30 - 662 3322 E: g.linthorst@ecofys.com 27/08/2013 Giel Linthorst > You may download the report.