green supply chain: from awareness to action - · pdf file4th supply chain monitor...

4th Supply Chain Monitor | White paper | 2010-2011

Green Supply Chain: from awareness to action

4th Supply Chain MonitorBearingPoint

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Summary Editorial… …………………………………………………………………………………………………………………………………………………… 4… Acknowledgments………………………………………………………………………………………………………………………………………… 5… ……… Executive summary…………………………………………………………………………………………………………………………… 6… … Moving…forward…………………………………………………………………………………………………………………………………… 6… … The…new…guidelines… …………………………………………………………………………………………………………………………… 9

… 1.…Green Supply Chain strategy and models… ………………………………………………………………… 12

… … Context…and…concept… ……………………………………………………………………………………………………………………… 12… … Implementing…a…new…strategy……………………………………………………………………………………………………………… 14… … The…green…Supply…Chain…model… ………………………………………………………………………………………………………… 16… … Regulation…framework…… …………………………………………………………………………………………………………………… 20

…… 2.…Green actions per Supply Chain segment… ………………………………………………………………… 26

… … Eco-design………………………………………………………………………………………………………………………………………… 26… … Sustainable…purchasing……………………………………………………………………………………………………………………… 32… … Green…manufacturing………………………………………………………………………………………………………………………… 36… … Green…logistics…………………………………………………………………………………………………………………………………… 40…… … Second…life…logistics…and…operations… ………………………………………………………………………………………………… 44

… 3.…Environmental footprint……………………………………………………………………………………………………… 48

… … Context…and…motivations… ………………………………………………………………………………………………………………… 48… … Scope,…areas…and…activities…covered…by…assessments… …………………………………………………………………………… 50… … Improvement…axes…………………………………………………………………………………………………………………………… 52… … Actions…efficiency… …………………………………………………………………………………………………………………………… 53… … Initial…conclusions:…carbon…accounting…follows…carbon…footprint……………………………………………………………… 53… … Collaboration,…sharing…and…openness…as…new…vectors…of…competitiveness………………………………………………… 54… … Concrete…paths…to…action… ………………………………………………………………………………………………………………… 54

… BearingPointcapabilitiesingreenSupplyChain… ………………………………………………………………………………………… 56… Ourcommitment……………………………………………………………………………………………………………………………………… 62… Study…methodology… ………………………………………………………………………………………………………………………………… 64… BearingPoint……………………………………………………………………………………………………………………………………………… 66… Contacts… ………………………………………………………………………………………………………………………………………………… 67


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4th Supply Chain Monitor

Twoyearsago,BearingPointdelivered its firstgreenSupplyChainsurvey incollaborationwithESCPEuropeandSupplyChainMagazine.ThedocumenthighlightedthatenvironmentalactionsundertakenbyEuropeanfirmsweremostlydrivenbytheneedtocomplywithenvironmentalregulations.

Throughthis2010-2011Monitorweintendtoportraytheevolutionoverthepasttwoyearsintermsofmindset,maturityandactionsefficiency.ThissurveyexploresthegreenSupplyChainpracticesinEurope,inordertoidentifythesignificantimprovementsinthemostrepresentativeindustries.Theresultsclearlyunderlineagrowinginterestofexecutivemanagementsindevelopingproductswithalowenvironmentalimpact.Whatwasseenasaconstraintisnowconsideredasanopportunity.

European companies have definitely embarked on the green Supply Chain train. They see it as a tremendousopportunitytocreatevaluefortheiractivitiesonthelongterm.However,thisevolutionalsoimpliesgettingovertheclassicalcustomer-supplierrelationshipmodel,andthinkingaboutnewinternalandexternalcollaborativeforms.

Some companies make the most of the efforts made for green Supply Chain initiatives to enhance their valueproposition. They rely on various media channels to promote an eco-responsible and innovative image toshareholders, finalandintermediarycustomers,endconsumersandtotheirownstaff.Theincreasingqualityofcorporatesustainable reports,especiallyon theSupplyChain related issues,highlightshowcompanieswant tovaluetheircommitmenttoimplementingtheirgreenactions.

Global companies are increasingly aware of the challenges and trade-offs that face their evermore complex,competitiveandtransparentSupplyChains.SupplyChainclassicalstrategiesfocusoncosts,time-efficientmovementandcoordinationofgoodsandservicesfromupstreamsupplierstodownstreamconsumers.Forsustainableleadersthesestrategiesarenotenoughandtheyexpecttoextendtheirsbyinvolvingsuppliersinemergingeconomies,butalsotheirsuppliers’suppliersandintiersbeyondthat.

Companiesaresteppinguptheirenvironmentalprogrammes,wheregreenactionspopulatevariousstagesoftheSupplyChain.Theobjectivesaretominimiserisks,makelongtermprofitsandbecomplianttotheregulations.

Howmaturearegreenactionsoperatedbycompanies?Howhavecompaniesimplementedbuilt-to-lastgreenprocesses?Howisthisnewimperativebecomingasourceofinnovationratherthanaconstraint?

"Sustainable Development is a key word of our strategy and its application is a priority for our group and for all international companies."(MetroGroupCEOEckhardCordes)

Green…Supply…Chain:…from…awareness…to…action…

Editorial

Yvon DonvalPartner

SupplyChainBearingPoint

Xavier HouotPartner

SustainableDevelopmentBearingPoint

Acknowledgments

Wewouldliketothankallcompaniesthattookpartinoursurvey,especiallythosewhoacceptedtobeinterviewed.

Wewouldalsoliketothankthefollowingfortheiractivecontributiontothiswhitepaper:•PierreArbeille(France)•Jean-BaptisteBacou(France)•EricBohner(Belgium)•Jean-PierreCannizzo(France)•StephenCoy(UnitedKingdom)•CharlesdeMonchy(Netherlands)•YvonDonval(France)•AntoineGaudron(France)•MatthiasGoertzen(Germany)•XavierHouot(France)•PierreJoubert(France)•SergeyKuzovkin(Russia)•SébastienLecas(UnitedKingdom)•MatthiasLoebich(Germany)•PerStaffansson(Sweden)•SergeWeibel(France)•MatthiasWohlfahrt(Germany)

Finally,thankyoutotheMarketingandCommunicationteam:ThierryLalande,StéphanieLesdosetAngéliqueTourneux

Matthias LoebichPartner

SupplyChainBearingPoint


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Executive summary

GREENSUPPLYCHAIN:ANEWDEAL

Moving forward

The 2008 survey underlined that environmentalregulationsadopted inEurope (REACH,WEEE,RoHS,EuropeanUnionEmissionsTradingScheme(EUETS))createdasenseofurgency.Companieshadtroublesdefining priorities and the way to handle necessaryactions. In 2010, an inflexion has clearly become

apparent.TheemergenceofSustainableDevelopmentdepartments and the rising consciousness ofenvironmentalissuesamongexecutivemanagementsenabled a better understanding of regulationmechanismsand their consequences.Environmentalactions presently address new constraints andmotives, which are more mature and integrated tocompanies’decisionprocesses.

Improvement of the company brand image andexecutive sponsorship are the two main reasons forlaunching green actions. Initiated by an individualor a department, they are now supported byexecutive managements. The support of companies’managementcommitteessignificantlyfacilitatesandoftenguaranteesthefundingandimplementationofgreenprojects.

Therisinginterestsandmotivationsareanindicationofahighermaturityofcompanies.Ouranalysisoftheresults shows a correlation between the perceptionof this maturity and the political and culturalemphasis of European countries over environmentalissues.Forinstance,Germancompaniesbelievetheirgreen Supply Chain is 78% matured. This positiveperceptionconfirmsthegovernment'spositionabout


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the reconciliation of economical and environmentalmotives;progressmadethankstotheGermanlawonrenewableenergiesillustratesthisreconciliation.

LookingatthebiggerpictureaboutthenewchallengesofgreenSupplyChain:theconditionsforasuccessfulimplementationarenowgathered!

Green Supply Chain is a strategic priority, immediately or on the short run (positive answers)

Source: BearingPoint, Green Supply Chain Monitor, 2010-2011

100%

80%

60%

40%

20%

0%Scandinavia United

Kingdom&Ireland

GSA* FranceBenelux

*Germany,SwitzerlandandAustria

Companies that intensified their green Supply Chain actions during the past 3 years (positive answers)


100%

80%

60%

40%

20%


Kingdom&Ireland

GSA* FranceBenelux


Motivations to implement green actions

Environmentalregulations

Brandimageimprovement

Innovation(product&processes)

Costsreduction

Executiveboarddecision

Competitors'pressure

Newmarketsacquisition

Others

Opinionleaderspressure

0% 20% 40% 60% 80% 100%


Brandimageimprovement

Executiveboarddecision

Environmentalregulations

Innovation(product&processes)

Costsreduction

Newmarketsacquisition

Competitors'pressure

Opinionleaderspressure

Others

0% 20% 40% 60% 80% 100%

2008

2010

This is confirmed by the facts, as two thirds ofcompanies have intensified their green actions overthe past three years. As many consider that greenSupplyChainisastrategicpriority.

Practically,theconditionsoftheimplementationturntowards mastering the risks of green Supply Chain.Forsomebusinesssectorslikelargeretailplayers,theenvironmentalimpactoftheirsuppliersaccountsfor95%oftheirtotalimpact.Suchgroupsoughttomanagetheirexpositiontospecificrisks.Riskscanbelinkedtothe company brand image (atmospheric dischargesdue to bitumen sand extraction, deforestation forpalmoiltreeplantations,…),complianceissueswithEuropeanlaws(REACH,RoHS,…)orcustomers’healthandpotentialpenalties.

The new guidelines

New directions for green Supply ChainBeyond the various initiatives that the media dailypresentor thatwerementionedby the respondentsof the survey, environmental strategies are takingshape. Companies’ trends linked to green SupplyChainaresettingupanddemonstratetheirmaturity.

Convergence of the economical and environmental interests Inthismatter,theshorttermissometimessacrificed…More than one third of the interviewed companiesdeclarebeingreadytostartupenvironmentalactionsin spite of their low present profitability, providedtheycreatevalueinthemediumterm.

Beyond this trade-off, the main change is theperception of companies about a real convergencebetween economical and environmental challengesfor their Supply Chain. Most of the respondents

declarethatgreenSupplyChainisatrueeconomicallever (70%of thecompanies)anda sourceofeasilymeasurableprofits(56%).For47%ofthecompanies,the return on investment is reached before threeyears.

Environmental commitment planned on the long runTakingactionsisnottheresultofatemporarytrend!Companies that chose to implementagreenSupplyChain invest and commit in the matter on the longrun: for these companies which already measuredtheircarbonfootprint,70%evaluateitatleastyearly.The proven ability of green initiatives to face theconsequences of the recent economical crisis alsoproves the sustainability of environmental actions.66%ofcompaniesdeclarethatthecrisisdidnothaveabrakingeffectonplannedandon-goinginitiatives,andthattheyevenacceleratedmostofthem.

Ecology as a performance indicator for Supply ChainEnvironmental actions in Supply Chain have to beassessed.Todosogreenkeyindicatorsandmetricsareintroduced.KPI’sliketheshareofrecycledpackagingmaterialortheshareoftrucksbetterthanEuro-class4comeintoconsideration.Themeasureofperformanceisessentialtogainthetrustofexecutivecommitteesand to meet regulations requirements. Furthermoregreen KPI’s become selection criteria for companiesandsuppliersthusacriticalsuccessandcompetitionfactor.MorethanhalfofEuropeancompaniesadoptedthisapproach,Scandinaviancompaniesbeingleadersas77%ofthemalreadyusegreencriteria.

Significantdecrease

Significantrise



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Operational trendsEco-design: a must for the development of activities"80% of the environmental impact of a product isdeterminedduring itsdesign" (GermanEnvironmentAgency). We believe this percentage is under-evaluated.Anticipatingtheenvironmentalfootprintofaproductfromtheveryfirststepsofitsdevelopment(eco-design approach) is an essential elementto take into account, considering the actions ofmarkets,competitorsandnationalandsupranationalauthorities.

Attentive to theneweco-responsibledesiresof theirclients, some companies don’t hesitate anymore inselling an eco-designed product at a higher price togainmarketshares.Althoughfewoftheinterviewedcompaniesclaimhavingtakenthepathofeco-design,results are very encouraging for those that did asthe main objectives they had when beginning aregenerallyreached:compliancewithlaws,brandimageimprovement,meetingfinalcustomer’srequirementsorrecyclingoptimisation.

Procurement: the green requirements in sustainable procurement Beyondrequirementsthatprocurementdepartmentshave traditionally been promoting over the years,such as the respect of work conditions and non-discrimination, new issues arise about reinforcingenvironmental requirements towards suppliers.According to the results of our survey, two thirdsof companies adopted or plan to adopt a greenpolicy for their purchases. This approach enablesbettercompliancewithexistingnorms(e.g.REACH),improvementofbrandimageforconsumersandbetterrankingbynon-financialnotationorganisations.

Buyers are preferably choosing suppliers withcertifiedprocesses(ISO14001forinstance),butthereis more in the balance: companies also encouragesupplierswhohavealowrawmaterialconsumption,controlled emissions and pollution levels and rawmaterial tracking. Furthermore they tend to selectproductsmadeoutofa largeproportionof recycledand recyclable materials, and stamped by reliableeco-labels (Energy Star for instance being the mostrecognisedlabelintheenergyconsumptionfield).

Lean manufacturing at the time of green Supply Chain Cost-cutting culture and industrial know-how havebeen associated for several decades. For 5 to 10years, depending on the sectors, broadcasting andimplementation of "lean" techniques and practiceshaveknownafurtherdevelopment.The first intentions in the 80s were cost-cuttingthroughthehuntofallkindsofwasteandthroughtheuse of the minimum resources: the expected resultwas operational efficiency. They remain unchanged,but are now promoted inside the company as anenvironmentalnecessity,andenable togiveamorepracticalviewofthecompanyactions.

Logistics: classical optimisation approaches, source of green quick winsInthepast,classicaloptimisationwasdrivenbycostsandleadtime.Nowadaysathirddimensionappears:theenvironmentalimpact.Especiallytheincreasesofenergycostsin2008andtheEuropeanUnionEmissionsTradingScheme(EUETS)drovetheneedforlogisticsoptimisation.Therearevariouswaystooptimisefromprocesses until technical improvements. The goodnewsiseverycompanycanlaunchlogisticsinitiatives

Companies committed to measuring their carbon footprint


60%

40%

20%


Kingdom&Ireland

GSA* FranceBenelux


40%

30%

20%

10%

0%

Companies that don't measure yet but intend to do it within 3 years


Scandinavia UnitedKingdom&Ireland

GSA* FranceBenelux


to reduceenvironmental impacts.Andquickwins ingreenprojectsdoexist.

Carbon footprint: measurement as a prerequisite for the optimisation Defining a baseline by measuring an initial carbonfootprint is the prerequisite for setting up realisticreduction goals. More and more companies realisethatvirtual,nonhardfactbasedreductiongoalscausemore harm than good. It highlights the actions tocarryoutinordertobettercontroltheenvironmentalimpact and optimise operational costs. 80% of thecompanies that measured their carbon footprintidentified immediately applicable improvementinitiatives that led to concrete improvements, forinstancetodiminishresourcesconsumptionandgetridofwaste.

Beyond action, communicationCommunication is also part of the economicalstakes of a green Supply Chain. Communicate ontheenvironmentalimprovementsmadeforthe"LastMile"isastrongcompetitiveargumentforalogisticscontractor.Thatwaythesupplierscangivevaluetotheir know-how and improve their carbon footprintwithoutdegradingtheirperformances.

Showingthatyourcompanystrategicallycaresabouttheenvironmentthroughthedefinitionofitsproductsuse, or through the choice of its components,suppliers, packaging, distribution network, hasbecomeanasset…andwillmostcertainlybeasurvivalneedtomorrow!■



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Study…methodology

BearingPoint has led the Supply Chain Monitor for the fourth consecutive year. Thanks to these initiatives, thefollowingthemeshavebeenapproached:•2010-2011:GreenSupplyChain,fromawarenesstoaction;•2009:Risksmanagement;•2008:GreenSupplyChain,companies’stakesandmaturity;•2007:SourcinginLowCostcountries.

TherearenumerousobjectivesoftheMonitor:•Makeavailablealong-termreflectionplanforSupplyChain;•ProvidetheresultsofaEuropeanpoll;•Writeawhitepapertorecordthetrends,theactionstobepursuedandtherelatedanalysis;•Sharetheresultsduringaneventgatheringleadersofthefield.

Toreachtheseobjectives,athree-stepapproachwasintroducedforthisedition:1.Conductaquantitativestudyamongabout600Europeandecision-makerswithapositionwithinSupplyChain,

SustainableDevelopmentorIndustrialDivisions(Novamétriestudy);2.Improvetheinvestigationthroughaboutfortyinterviewswithmanagersofbigandinnovativecompanies;3.Bringacomplementaryperspectiveintegratingfeedbacksfromourrecentmissions.

Structure of the questionnaire’s sample

Thesamplebringstogetherthe582companiesthatansweredthequestionnaireonlineorbyphone.

Ditribution per region


29%

31%France,Benelux

Germany,Switzerland,Austria

UnitedKingdom,Ireland

29%

11%

Norway,Sweden,Denmark,Finland

Distribution per country


6%

25%

23%Germany

Austria

Belgium

1%

23% France

Luxembourg6%

6%

10%

UnitedKingdomIrelandScandinavia

Wehavesucceededinmaintainingasamplegroupofanswerersequallydistributedinthedifferenteconomicsectors.Wewerethusabletohavemorerepresentativeresultsoftheglobalsituationandtofocusonsomebusinesssectors.

Distribution per sector

Consumergoods,FMCGTransports

Metallurgy

ConstructionAutomotive

IndustrialgoodsRetail/Specialiseddistribution

Energyandutilities

Chemicals

0% 2% 4% 6% 8%


IT/Electronics

Aeronautics/Defense

Pharmaceuticals

Textile

TelecommunicationsFinancialservices

Publicsector

10% 12% 14% 16% 18%

A good proof of the companie's growing interest in Sustainable Development is that Sustainable Developmentdepartmentsarestructured.Theyarenowthemainanswerers,infrontoftheSupplyChaindepartments.

Distribution per department

SustainableDevelopmentSupplyChain

COO

QualityPurchasing

OtherCEO

0% 5% 10% 15% 20% 25%


30% 35% 40%



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ContactsFranceYvon Donval Partner…+33…6…10…84…38…51…[email protected]

Serge WeibelPartner+33…6…24…67…11…[email protected]

Germany, Switzerland & AustriaMatthias Lœbich Partner…+49…89…54033…6126…matthias.lœ[email protected]

Matthias Gœrtzen Partner…+49…69…13022…1336…matthias.gœ[email protected]

Sweden, Denmark, Norway & Finland Per Staffansson Director+46…733…211…676…[email protected]

NetherlandsCharles de MonchyPartner+31…20…504…9067…[email protected]

United Kingdom & IrelandStephen Coy+44…203…206…9655…[email protected]

Xavier Houot Partner…+33…6…24…39…41…89…[email protected]

Matthias Wohlfahrt+49…30…88004…[email protected]

BelgiumEric BohnerPartner+32…2…712…6969…[email protected]

Russia Sergey KuzovkinPartner+7…495…937…4466…[email protected]

MoroccoYoussef HarouchiSenior…Advisor+212…661…18…53…17…[email protected]

BearingPoint.…Management…&…Technology…Consultants.…

We…deliver…Business…Consulting.…We…are…an…independent…firm…with…European…roots…and…a…global…reach.

In…today’s…world,…we…think…that…Expertise…is…not…enough.…Driven…by…a…strong…entrepreneurial…mindset…and…desire…to…create…long…term…partnerships,…our…3200…Consultants…are…committed…to…creating…greater…client…value,…from…strategy…through…to…implementation,…delivering…tangible…results.…

As…our…clients’…trusted…advisor…for…many…years…(60%…of…Eurostoxx…50’…and…major…public…organisations),…we…define…where…to…go…and…how…to…get…there……

BearingPoint…has…started…a…long-term…approach…to…analyse…practices…and…communication…about…significant…progresses…in…Sustainable…Development…through:•…Annual…Monitors:…Supply…Chain,…Purchasing,…Innovation,…Client…relationship,…etc.;•…The…BearingPoint…Institute,…our…innovation…centre…to…enhance…the…strategic…thinking…of…our…clients;•…Client…stories…from…our…engagement…teams…day-to-day…work.

To get there. Together.

For…more…information:…www.bearingpointconsulting.com

Austria…|…Belgium…|…Denmark…|…Finland…|…France…|…Germany…|…Ireland…|…Italy…|…Morocco…|…Netherlands…|…Norway…|…Portugal…|…Romania…|…Russia…|…Spain…|…Sweden…|…Switzerland…|…United…Kingdom…|…Africa…|…North…America…|…South…America

BearingPoint

BearingPoint has written this document with the utmost care. However, given the significant amount of information contained and handled, the authors cannot guarantee the reliability, completeness and accuracy of the said information. Consequently, the authors cannot take on any responsibility as to the information in this document or its use.Furthermore, any decision made by a reader on the basis of this document or the information it contains and/or any use made of this information and/or this document, is under the reader’s sole responsibility and does not necessarily reflect the views of the authors.© 2011 - BearingPoint France SAS.All reproduction rights reserved. All rights reserved. Names, trademarks and/or any other distinguishing marks of companies or products mentioned in this document are the property of their respective owners. BearingPoint disclaims all responsibility in case of mistake or omission.

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green supply chain: from awareness to action - · pdf file4th supply chain monitor...

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