The power of supply chain initiatives
10
Giel Linthorst 27/08/2013 The power of supply chain initiatives Realizing energy savings and GHG emissions reduction in the supply chain of companies
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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 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.
Transcript of The power of supply chain initiatives
Giel Linthorst 27/08/2013
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 Linthorst 27/08/2013
© ECOFYS | |
Importance of supply chain initiatives
Giel Linthorst 27/08/2013
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 Linthorst 27/08/2013
© 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 Linthorst 27/08/2013
© 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
27/08/2013 Giel Linthorst
> You may download the report.
