CSCP, UNEP, WBCSD, WI, InWEnt, UEAP ME Life Cycle Management Navigator: 15_PR_RSCM 1 The Life Cycle...

Life Cycle Management Navigator: 15_PR_RSCM 1 CSCP, UNEP, WBCSD, WI, InWEnt, UEAP ME

The Life Cycle Management NavigatorResponsible Supply Chain Management

Training Session 15


Responsible Supply Chain ManagementWhat is it?

What?

Responsible supply chain management is the integration of

social and environmental aspects into the supply chain.

Information exchange and

cooperation along the

supply chain ...

Information exchange and

cooperation along the

supply chain ...

... are great social, environmental,

and economic opportunities!

... are great social, environmental,

and economic opportunities!


Responsible Supply Chain ManagementWhat is a Supply Chain?

What?

The key elements of the supply chain are

1. Actors

2. Flows of- material- information- money

Source: Adopted from Ganeshan and Harrison & UNEP, 2007, Life Cycle Management

A supply chain comprises procurement, operations, and logistics from raw materials acquistions to customer satisfaction.

A supply chain comprises procurement, operations, and logistics from raw materials acquistions to customer satisfaction.


Responsible Supply Chain ManagementBusiness is a Team Game!

What?

Supplier 1

Supplier 2

Operation

Customer 2

Customer 1

Flow of goods (and money!)

Flow of information

time

Value

Source: Adopted from Alan Powell


Responsible Supply Chain ManagementInteraction with Internal and External Stakeholders

What?

Source: UNEP, 2007, Life Cycle Management - A Business Guide to Sustainability


Responsible Supply Chain ManagementWhat are the key decisions?

What?

For the operating company SCM involves:

• supplier decisions;

• purchasing decisions;

• material management decisions;

• production scheduling decisions;

• inventory decisions;

• transportation decisions;

• customer service.

Source: CESMB

Needed is information and cooperation!Needed is information and cooperation!


Responsible Supply Chain ManagementWhat are the Main Functions involved?

Where?

ProductionProcurement

Material handlingProcess scheduleMaterial handlingProcess schedule

Supplier selection Purchasing criteria

Supplier selection Purchasing criteria

Inventory decisionsTransportation decisions

Inventory decisionsTransportation decisions

Customer service

Customer service

Supplier

CustomerMarketing/Sales


Responsible Supply Chain ManagementBenefits

Why?

... of making demands on suppliers:• Potential to find a good supplier;• Indentify the effect the supplier

has on your environmental performance;• Establish a dialogue e.g. on technology exchange;• Being seen as an “environmental champion“;• Improve the overall business performance.

... of getting environmental demands from customer: • Identify ineffective production and distribution processes;• Fulfill legal demands from extended producer responsibility;• Better customer relationship;• New markets.

Source: CESMB


Responsible Supply Chain ManagementSteps to Go!

How?

Take the simplest step first!

Step 4

Step 3 Step 2 Customer 1

Step 1

Customer 2

Supplier 2

Operation

Supplier 1

Communicate and cooperate!


Responsible Supply Chain ManagementGreen Purchasing

How?

The easiest step to take is responsible purchasing!

The easiest step to take is responsible purchasing!

1. Select a product for pilot project1. Select a product for pilot project

2. Select a key supplier2. Select a key supplier

4. Develop a partnership!4. Develop a partnership!

3. Foster communication with that supplier! 3. Foster communication with that supplier!



How?

A product can be selected on the basis of• Benefit to company

(sales, environment, competitive position)

• Cost to company

• Environmental impact along the life cycle (see LCA)

• Interest by product chain partners

1. Select a product for pilot project1. Select a product for pilot project



How?

The most important suppliers are often called key suppliers.

The designation depends, for example, on:

• Amount of deliveries

• Supplier´s product quality

• Supplier´s special expertise

• Supplier´s delivery reliability

2. Select a key supplier2. Select a key supplier



How?

• Product mass

• Recyclability• Toxicity of material • Amount of packaging• . . .

• Product mass

• Recyclability• Toxicity of material • Amount of packaging• . . .

• Take back of packaging

• Environmental reporting• Use of EMS• . . .

• Take back of packaging

• Environmental reporting• Use of EMS• . . .

Ask for product aspectsAsk for product aspects

Ask for supplier behaviorAsk for supplier behavior

3. Foster communication with that supplier! 3. Foster communication with that supplier!



How?

Establishing good partnerships will improve your overall business performance in the long run.

Establishing good partnerships will improve your overall business performance in the long run.

... and you will win the team game.... and you will win the team game.

• joint trial projects• joint trial projects

4. Develop a partnership!4. Develop a partnership!

• long-term alliances• long-term alliances


Responsible Supply Chain Management Sambazon and the Açai Berry Business

Example

Sustainable Management of the Brazilian Amazon

1. Sustainable harvesting of Açai

berries in the Amazon estuary.

2. Supporting local communities and

businesses through premium prices.

3. Marketing organic Açai products to health and

fitness conscious consumers in California

and US.



Example

• create bio-socio indicators to assess the

impact of the Açaí trade

• develop and implement sustainable Agro-

Forestry Management outreach projects

• establish an Açaí Technical Centre aimed

to develop and disseminate economically

feasible technologies to recycle Açaí by-

products

• Training programmes on agricultural

management benefiting the local

cooperating families

Steps of the Açai Project



Example

Environmental• Avoiding de-forestation through logging and mining• Protecting biodiversity• No use of pesticides or fertiliser

Social• Empowering marginalised rainforest people and culture• Learning and training opportunities through the Sustainable Açaí

Project• Health food for US consumers

Economic• Secure income & employment for ribeirinhos• Increased income per hectare in comparison to cattle farming or

logging• Mechanism for expanding project

Implications of the Açai Project


Responsible Supply Chain ManagementCSR-Project

Case Study

Source: UNEP, 2007, CSR in China‘s ICT Sector

Information and Communication Sector, China

Identification of strategies and activities to • improve social and environmental conditions• meet requirements of customers thus stay in market

• Conduct a cost-benefit analysis to understand and prioritize CSR improvements• Implement management and performance measurement systems• Improve worker-management communication• Take ownership of improvements and implement CSR with own suppliers

Challenges for SMEs as suppliers

Goal

Approach

• Constructed as multi-stakeholder initiative, e.g. with Government, Shenzhen Electronics Industries Association, Global eSustainability Initiative• Key elements: Diagnostic assessment, Workshop, Summary report, Pilote project


Responsible Supply Chain ManagementPurchasing of Green Cleaning Products

Case Study

• Medium-sized manufacturer of generic and “store brand” pharmaceuticals and personal care products.

• Initial problem: Bad indoor air quality. • Saving more than $ 35,000 annually after switching to green

cleaning products (and interviewing suppliers).• Reasons for savings:

- some green cleaning products are less expensive than the traditional ones;

- new bulk purchasing opportunities;- fewer workers’ compensation claims; - rising employee productivity.

Source: www.epa.gov/opptintr/epp/pfs.htm

Perrigo, USA


Responsible Supply Chain ManagementIncreasing pressure on SMEs in supply chains

Case Study

BASF is member of Responsible Care program and expect his business partners to comply with standards such as environmental protection, occupational health and safety, process safety, emergency response, etc..

SMEs represent large percentage of business partners and BASF is committed to work closely with them to attain these standards.

Special focus on 3 groups of partners (mainly SMEs):

1- Logistic partners• Safety and Quality Assessment is conducted to maintain high safety

standards for transportation of products.2- Contractors

• Bonus system for safe working practices. 3- Raw material suppliers

• Rank suppliers on a safety matrix according to supplier and product risk. • On-site visits and evaluations are conducted• Support suppliers in achieving and maintaining EHS requirements

Source: UNEP, Industry and Environment, Volume 26, Oct.-Dec. 2003

BASF, Germany


Responsible Supply Chain ManagementTips for Action!

Tips

• Be proactive - think about new business opportunities working with your suppliers!

• Don´t start too fast - take easier steps first!

• Demonstrate supply chain performance to your customer, engage with second tear suppliers!

CSCP, UNEP, WBCSD, WI, InWEnt, UEAP ME Life Cycle Management Navigator: 15_PR_RSCM 1 The Life Cycle...

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