Sustainable Consumption and Production in value chains
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Lessons learnt from on-ground projects, trying to imbed sustainability into value chains are shared - perceptions about Indian consumers are challenged and business case for SCP in value chains is put forth
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Sustainable Consumption and Production in value chains
- 3. Value chain
- 6. Benefits CONTINUED… • BePer risk anFcipaFon and management • Lower disrupFon to supply … • “Informal” or “social” license to operate within communiFes • Reduced costs and enhanced efficiency and producFvity • Improved working condiFons can reduce turnover and improve quality and reliability • Environmental responsibility improves efficiency and profitability • Corporate brand and values, and customer and consumer confidence and loyalty are protected and enhanced • Process and product innovaFon. Empowered suppliers uncover opportuniFes for developing sustainable products and services Examples from leading companies show that good supply chain management can increase shareholder value The United NaFons Global Compact
- 7. Tier 2 Factory Knitting / Dyeing Of Natural Fibres / Dyeing Of Synthetics Factory Knitting / Weaving / Dyeing Of Natural Fibres / Dyeing Of Synthetics / Finishing Factory Weaving / Desizing / Scouring / Bleaching / Dyeing Of Natural Fibres / Dyeing Of Synthetics / Finishing Factory Knitting Factory Knitting Factory Dyeing Of Natural Fibres / Dyeing Of Synthetics / Cutting Factory Screen Printing Factory Weaving / Desizing / Scouring / Bleaching / Dyeing Of Natural Fibres / Dyeing Of Synthetics Factory Knitting / Dyeing Of Natural Fibres / Dyeing Of Synthetics Factory Knitting / Dyeing Of Natural Fibres / Dyeing Of Synthetics Factory Knitting / Desizing / Scouring / Knitting / Dyeing Of Synthetics / Soaping / Washing Factory Knitting / Weaving / Bleaching / Bleach Cleaning Factory Knitting / Scouring / Bleaching / Knitting / Dyeing Of Synthetics / Soaping Factory Knitting / Scouring / Bleaching / Knitting / Dyeing Of Synthetics / Soaping / Cutting Factory Knitting / Bleaching / Bleach Cleaning / Knitting / Dyeing Of Natural Fibres / Knitting / Dyeing Of Synthetics / Cutting Factory Knitting / Bleaching / Bleach Cleaning / Cutting Factory Knitting / Bleaching / Knitting / Dyeing Of Synthetics / Screen Printing / Washing Factory Weaving / Bleaching / Bleach Cleaning / Cutting / Washing Brand Tier 1 Tier 3 Main Supplier Main Supplier Factory Dyeing Factory Dyeing Factory Dyeing Overlapping SupplierUnique Supplier Non-Wet Processing Supplier MADE-BY Supply Chain Mapping Tool
- 9. ACIDLOOP value chain 21 12 6 South North West 39 companies in automoFve supply chains 5 4 4 3 2 2 2 Auto companies with more than one ACIDLOOP company as supplier >100 metal finishing companies in 6 locaFons
- 14. Green Retail value chain Key on-ground findings: • Retailers willing to engage in Greening the supply chain • Retailers willing to promote Go Green Strategy • Retailers implemenFng and benefiang from sustainable pracFces in-store But… • RelaFonships with suppliers are transacFonal – price driven • SomeFmes short term relaFonships • PercepFon that Indian consumer is not willing to pay more for sustainable products
- 16. Indian consumer 30 Communicating green products to consumers in India to promote Sustainable Consumption and Production Figure 9: Barriers to Buying decisions From the above analysis it can be concluded that the most important factor that Awareness is low 43% Green products are expensive 19% Less availability 24% Green products may not be of good quality 2% Not sure whether its really green 12% Barriers to buying decisions: Green Purchasing Network India, 2013-14, CommunicaFng green products to consumers in India to promote Sustainable ConsumpFon and ProducFon
- 18. Results from ACIDLOOP cluster NorthWestSouth 24% 25% 30% Chandigarh-Mohali Gurgaon 13% 14% 45% Faridabad 18% 13% 21% Ahmedabad 35% 25% Vadodara 35% 24% 40% Aurangabad 15% 28% 16% Pune 48% 32% 43% Chennai All locations 27% 23% 33% Total SUCCESSFUL RECP MEASURES A wide variety of RECP improvement measures was suggested to the companies over the course of the direct engagement phase. Many measures were then implemented by the companies in close consultation and cooperation with the local counterpart. On the following three pages, we would li some of the measures that we have implem ACIDLOOP project. Many more good and b be found in the Good and Best Practice Measures in the Metal Finishing Sector. KEY RESULTS OF THE DIRECT COMPANY SUPPORT Showing the impact of the ACIDLOOP approach was very important from the beginning of the project. During the first assessment of companies, the ACIDLOOP consultants therefore collected data on what amount of resources the company was using, and how much energy and water it consumed. This consumption data was correlated with the production output. At the end of the project period – after the RECP measures identified had been implemented by the companies – the consultants again measured the consumption of input materials per output produced (specific consumption). The ACIDLOOP team is very proud to have achieved significant savings in specific consumption of input resources across all regions. As can be seen in the figure below material, energy and water consumption decreased on an average by more than 20% in all regions. Before: Steel wires were used for hanging the metal parts to be plated in the electroplating bath. Problems associated with this approach included: ― Steel wire was consumed during plating. ― Loading of parts to be plated was time consuming. ― The orientation of the parts could not be controlled. Replacement of Wires with Jigs in Plating Baths Location: Faridabad | Process: Electroplating After: The ACIDLOOP team suggested the replacement of all steel wires with reusable jigs. Benefits from this approach included: ― The time required for loading was reduced which increased the productivity. ― The orientation of parts could now be controlled which improved the quality of the plating process. Rs. 1,00,000 for hangers Rs 84,000 from reduced costs for wires and less product losses 14 m 0% -10% 20 18 16 14 12 10 8 6 4 2 0 10% - 20% 20% - 30% 30% - 40% 40% - 50% > 50% No.Companies Distribution of Company Savings Costs of interventions Annual savings Payback time Cost and benefits: Material, water and energy savings of ACIDLOOP companies Material Energy Water 11% 19% 23% 25 SUCCESSFUL RECP MEASURES A wide variety of RECP improvement measures was suggested to the companies over the course of the direct engagement phase. Many measures were then implemented by the companies in close consultation and cooperation with the local counterpart. On the following three pages, we would like to present you some of the measures that we have implemented during the ACIDLOOP project. Many more good and best practices can be found in the Good and Best Practice Module for RECP Measures in the Metal Finishing Sector. C H A P T E R 5 Replacement of Wires with Jigs in Plating Baths Location: Faridabad | Process: Electroplating 0% -10% 20 18 16 14 12 10 8 6 4 2 0 10% - 20% 20% - 30% 30% - 40% 40% - 50% > 50% No.Companies Distribution of Company Savings Material Energy Water WestSouth 18% 13% 21% Ahmedabad 35% 25% Vadodara 35% 24% 40% Aurangabad 15% 28% 16% Pune 48% 32% 43% Chennai All locations 27% 23% 33% Total Material Energy Water
- 21. Resource efficiency in value chain - examples Danone; sustainable packaging • Moved from polystyrene to Ingeo PLA • Joint effort of Danone, WWF Germany and Nature Works Coca Coal; water use reduc;on: • In plant improvements from 2.7 to 2.03 (also 1.7 in cases) l of water per l of beverage • 80% of water use in agricultural supply chains • WWF, Germany and Nature Works; 800 l to 200 l
- 22. Example 1: Yogurt OBJECTIVE • Increase Sustainability, Improve Walmart Scorecard Resource efficiency in value chain – example from Walmart Tom Blanck, CSCP, CPP Principal CHAINalyFcs; 2011 APIC Intl. Conf., PiPsburgh, USA
- 23. e 1: Yogurt ore Product per Pallet lers “Weight Out” vs. “Cube Out” 000 Fewer Pallets d 17 MM ft2+ Corrugated Materials s Corrugate: 50% More Product Case Weight = 50% Less ons Packaging Weight Reduction % Savings Pre-formed cup Form, fill & seal (FFS) 7.3 g 5 g Cups made & stamped offsite Formed at yogurt line Shipped No need Circular shape Cube shaped Single sales unit MulF pack – less handling Resource efficiency in value chain – example from Walmart
- 24. Resource efficiency in value chain – example from Walmart RESULTS Business Sustainability Inbound Primary packaging material savings 31% Material savings 363 t Freight savings 60% Pallets eliminated 3,000 CO2 savings 32 t Outbound OperaFonal cost savings >30% Material savings 1,900 t Freight savings 28% Pallets eliminated > 15,000 Corrugated savings 33% CO2 savings 2,000 t Pallets costs saved $90,000 Energy 6,447 kWh
- 25. Summary Key challenges • Longer term relaFonships • Build trust • Closeness to the key stakeholder • Champion the cause