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IBM Confidential Sustainable Growth in Steel


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IBM Confidential Sustainable Growth in Steel

  1. 1. An Indian Perspective IBM India Pvt. Ltd. Sustainable Growth in Steel Please consider the environment before printing this presentation
  2. 2. Sustainability <ul><li>Until the 1980s, business leaders used the word sustainability to mean a company’s ability to increase its earnings steadily </li></ul><ul><li>The term became widely used in its present sense in 1987, after it appeared in a UN report by Norway’s former prime minister Gro Harlem Brundtland, who defined sustainable development as “meeting the needs of the present without compromising the ability of future generations to meet their own needs” </li></ul><ul><li>True sustainability has four equal components: </li></ul><ul><ul><li>Social , to address conditions that affect us all, including poverty, violence, injustice, education, public health, and labour and human rights </li></ul></ul><ul><ul><li>Economic , to help people and businesses meet their economic needs—for people: securing food, water, shelter, and creature comforts; for businesses: turning a profit </li></ul></ul><ul><ul><li>Environmenta l , to protect and restore the Earth—for example, by controlling climate change, preserving natural resources, and preventing waste </li></ul></ul><ul><ul><li>Cultural , to protect and value the diversity through which communities manifest their identity and cultivate traditions across generations </li></ul></ul>
  3. 3. The Development Conundrum…
  4. 4. The Development Conundrum…
  5. 5. Snippets... Survival of companies will depend on being “really” green .. move beyond public relations, CSR, beyond local Statutory requirements Steel Producers Launch Green Campaign Underscoring the steel industry’s effort to reduce its CO 2 emissions, the World Steel Association (worldsteel) has launched its Climate Action recognition programme that recognises steel producers that have met their commitment to participate in its CO 2 emissions data collection programme. Japanese Steel Industry commits to GHG Emission Targets JFE and six other major steel makers announced they will jointly develop technologies for reducing about 30 percent of the current level of GHG emitted by the steel industry by 2015. The industry accounts for about 40 percent of the Japanese domestic industry’s total emissions Industry Emission Norms in the US The U.S. steel industry in general which operate carbon-intensive integrated mills, will be hurt badly under a carbon-emissions cap and trade system, WSJ reports . To pay for emissions, they will be forced to raise prices or, in order to reduce their carbon footprint, produce less steel.
  6. 6. Leadership Focus is increasing… Environmental factors doubled in CEO importance over the past four years Source: IBM CEO Study 2008, n = 1,130 2004 2008 9% 18% External forces impacting the organization: Environmental factors 80% of CEOs view sustainability as impacting brand value 82% of executives expect some form of climate change regulation within 5 years 31% say they want to reduce their environmental impact Expectations around corporate responsibility have changed 80% 82% 31% Negative impact 68% 12% Positive impact 20% No impact Source: IBM 2008 Global CEO Study | McKinsey Global Survey | IT Managers Driving Green Agenda | ‘08; IDC Green IT Survey | Sept ‘07
  7. 7. Thought Processes are Evolving… There is a need to create space for the traditional operating principles and acumen within the sustainability dimension I want to do what is right for the planet Traditional imperatives for green focused on a moral imperative to preserve safety & life Energy Land & Resources Air Water Conservation & clean energy Reducing pollution/ CO2 Clean water Protection I need to do what is smart for my business and the planet The new imperatives are about being responsive to stakeholders and building a better, sustainable business Brand & Growth Regulation Talent Risk Operational effectiveness Cost reduction
  8. 8. The Indian Scenario... <ul><li>Low Per Capita Consumption </li></ul><ul><li>High Recyclability and Reuse </li></ul><ul><li>Selective application of new manufacturing technologies </li></ul><ul><ul><li>Larger Productive Window </li></ul></ul><ul><ul><li>Greater Energy Efficiencies </li></ul></ul><ul><li>Government Thrust in stimulating the economy in the short term </li></ul><ul><ul><li>Push in Infrastructure is expected to be sustained over the next few years </li></ul></ul><ul><ul><li>About $ 500 bn. of Infrastructure Investments being planned in the 11 th 5 Yr. Plan, 26% of this will be allocated to Roads and Rail infrastructure </li></ul></ul><ul><ul><li>Focus on development of the Rural Economy </li></ul></ul><ul><li>Relatively higher GDP growth in India – in comparison to the Rest of the World </li></ul>
  9. 9. Priorities in a “Low Carbon” Economy… <ul><li>Include Carbon Management as a Core Principle of the Business Model </li></ul><ul><ul><li>Essential to identify areas for maximum environmental action </li></ul></ul><ul><ul><li>Regular Organisational Performance Metrics will include Carbon Management Costs and Environmental Impact Assessment </li></ul></ul><ul><ul><li>Driving the organisation towards a sustainable Supply Chain will be a Strategic Objective </li></ul></ul>Source: CBI Report “Climate Change: Everyone’s Business” 2007
  10. 10. A Steel Manufacturing Organisation – Overview Business Development Sales & Service Distribution Production Equipment & Plant Management Business Management Plan Control Execute Human Resources Planning
  11. 11. A Steel Manufacturing Organisation – Overview Some carbon/GHG impact Moderate carbon/GHG impact Major carbon/GHG impact Business Development Sales & Service Distribution Production Equipment & Plant Management Business Management Plan Control Execute Enterprise Business Performance Management Environment/ Energy Management Monitoring Production New Product/ New Demand Strategy New Business Strategy Customer Relationship Mgmt. Strategy Supply & Capacity Planning Facility Investment Planning Facility Maintenance Planning Enterprise Business Planning Environment/ Energy Management Planning Quality Tracking New Product Development R&D Strategy Execution Shipping Transportation Facility Maintenance Execution Environment/ Energy Management Supplier Performance Management Production Planning R&D Strategy Logistics Strategy Transportation Planning MRO Material & Service Purchase Planning New Demand Generation Purchasing Demand Forecasting & Sales Planning Integrated Sales-operation Planning Finished Product Inventory Planning Quality Management Inbound Logistics Planning Inbound Logistics Raw Material Inventory Management Production Order Management Facility Order Processing Facility Acquisition Finance & Accounting Facility Construction Monitoring & Management Market analysis & Pricing Strategy Sales Channel Strategy Evaluate Facility Investment Plan Human Resource Management Business Administration Public Relations Contract Management New Product Development, R&D Performance Management Accounts Receivables & Credit Management Inquiry Processing Offer/order Processing & Billing Claim Management Human Resources Planning Purchase Planning Logistics Monitoring & Performance Management Finished Product Inventory Monitoring & Management Production Monitoring & Performance Management Facility Maintenance History Management MRO Material & Service Purchasing New Product Development Project, R&D Monitoring Sales Force Management Quality Management for Inquiring Order Technical Support
  12. 12. Defining a Strategy
  13. 13. In Conclusion... <ul><li>Capitalise the opportunities presented for growth in the short term </li></ul><ul><li>Sensitise the organisation towards the Sustainability dimension </li></ul><ul><ul><li>Preparedness </li></ul></ul><ul><ul><li>KPIs </li></ul></ul><ul><ul><li>Execution </li></ul></ul><ul><li>Adapt the organisation towards delivering results sustainably </li></ul>
  14. 14. Solutions for Carbon Management People <ul><li>HR diagnostics </li></ul><ul><li>Tele-presence </li></ul><ul><li>Collaboration tools </li></ul><ul><li>Travel Footprinting </li></ul><ul><li>Travel management </li></ul><ul><li>Workforce transformation </li></ul><ul><li>Think CO 2 – Innovation Jam/Ideation </li></ul><ul><li>Employee engagement programs to support carbon strategy </li></ul>Property <ul><li>Property carbon audit </li></ul><ul><li>Sustainable property portfolio analysis & procurement </li></ul><ul><li>Workplace transformation </li></ul><ul><li>Process and organisation optimisation </li></ul>Customer & Product <ul><li>Green communications strategy development </li></ul><ul><li>Strategy development for new markets </li></ul>Strategy <ul><li>CSR Diagnostic </li></ul><ul><li>Carbon Diagnostic </li></ul>Customer and product Supply chain People Property Information IT Strategy
  15. 15. Solutions for Carbon Management Information <ul><li>ISV applications: CarbonView, SAP, Pelion, others </li></ul>Supply Chain <ul><li>Green supply chain strategy </li></ul><ul><li>Energy efficiency studies for manufacturing </li></ul><ul><li>Carbon optimisation for transport & logistics </li></ul><ul><li>Fleet optimisation telematics </li></ul><ul><li>Green procurement strategy & ethical sourcing </li></ul><ul><li>Carbon Trade-off Model </li></ul><ul><li>Green Sigma™ </li></ul>IT <ul><li>IT carbon strategy study </li></ul><ul><li>Data centre energy efficiency assessment </li></ul><ul><li>Application portfolio assessment </li></ul><ul><li>Server/Storage consolidation studies </li></ul><ul><li>Distributed IT energy efficiency assessment; follow on services from all assessments – design, build, run </li></ul><ul><li>IT optimisation, transformation & outsourcing services </li></ul><ul><li>Energy efficient servers and storage </li></ul>Strategy Customer and product Supply chain People Property Information IT
  16. 16. Thank You