1 / 63

Corporate United: Synergy 2008 Conference April 15-17, 2008

Corporate United: Synergy 2008 Conference April 15-17, 2008. Sustainability. What is it? Is it the flavor of the month? Why are companies doing it? How will it effect my job? How can it improve my business? How can I get started, tomorrow?. What is Sustainability?.

rasha
Download Presentation

Corporate United: Synergy 2008 Conference April 15-17, 2008

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript


  1. Corporate United: Synergy 2008 ConferenceApril 15-17, 2008

  2. Sustainability • What is it? • Is it the flavor of the month? • Why are companies doing it? • How will it effect my job? • How can it improve my business? • How can I get started, tomorrow?

  3. What is Sustainability? • "Humanity has the ability to make development sustainable--to ensure that it meets the needs of the present without compromising the ability of future generations to meet their own needs." World Commission on Environment and Development, Brundtland Commission, "Our Common Future"

  4. Sustainability for Business • “For the business enterprise, sustainable development means adopting business strategies and activities that meet the needs of the enterprise and it’s stakeholders today, while protecting, sustaining and enhancing the human and natural resources that will be needed in the future” – Business Strategies for Sustainable Development: Leadership and Accountability. A.T. Kearney Analysis

  5. “Sustainability” is NOT just a trend Numerous factors indicate that the green is sticking • Impact of climate change; impending carbon market • Tightening environmental regulations • Rising oil energy prices and increasing world demand • New generation of workers focused on social and market leadership

  6. Sustainability is Here to Stay • Biggest benefits to companies • 37% Attract new customers • 34% Improved shareholder value • 31% Increased profitability *The Economist Intelligence Unit 2008 • “85% of respondents would change brands if the company had a negative environmental image” – ’07 Cone Consumer Environmental Survey

  7. New Regulatory Environment • European Union Regulations • RoHS Directive- Restrictions of Hazardous Substances – July 2006 • REACH Directive – Registration, Evaluation and Authorization of Chemicals – June 2007 • EUP Directive – Energy Using Products

  8. A Carbon Market is Likely* Many proposals in Congress: cap & trade vs. carbon tax million metric tons CO2e 10 Source: www.wri.org, Not official EPA position

  9. Recruiting Best and Brightest Young people want to work for a company that has a strong social or environmental mission In a survey of 800 MBAs, 97% of the respondents said they were willing to forgo financial benefits to work for an organization with a better reputation for corporate social responsibility and ethics -- Corporate Social Responsibility Reputation Effects on MBA Job Choice, David. B. Montgomery; Catherine A Ramus, Stanford University, 2003.

  10. Why “Green” your Comany • Customer Demand • Customers looking to reduce the carbon footprint of their supply chain • Customers sending surveys and inquiring in RFPs about suppliers’ sustainability activities • Increase Revenue • Reduce operating costs • Develop new revenue generating initiatives • Differentiate products and services • Regulatory Pressure Increasing • Prepare for a pending carbon market • Prepare for stricter local air pollution regulations • Employee Recruiting and Retention • Increasing competition for talent • Pride in company

  11. Sustainability at Work Interface Posts Global Environmental Progress With 2006 EcoMetricsTM Report Waste Elimination Activities • The cumulative avoided costs from waste elimination activities since 1995 have totaled over $336 million. Total Manufacturing Waste to Landfill Reduced 70% Energy Efficiency and Energy Conservation projects • Total energy use at manufacturing facilities per unit of product down 45% since 1996 Use of Renewable Energy • Up 16% across manufacturing facilities in 2006

  12. Sustainability at Work • WalMart • 5% reduction in packaging by 2013. Expects to save 667,000 metric tons of CO2 and $3.4B in direct cost savings, $11B in cost savings across supply chain • Johnson&Johnson • Energy Efficiency GHG projects achieving internal ROI of 16%

  13. Greening Your Supply Chain: Why?

  14. Environment and Procurement • 43% of companies included green factors in their decision-making process for suppliers. • Over 88% of executives said that the environmental commitment of suppliers would influence their outsourcing selection • 94% of executives from publicly traded companies are planning to add “green” clauses in their renegotiation processes Black Book of Outsourcing: 2007 Green Outsourcer Report

  15. Opportunities for growth • Reactive Proactive Growth Comply with local, national and int’l regulations Reduce energy use, reduce fuel costs, reduce waste, investigate greener alternatives Establish a carbon neutral supply chain, create new products, engage new partners Positioning your company for growth: Restructuring relationships with your customers: Price/transactional relationship Value added collaboration

  16. Value Creation • “In the emerging value-creation model, implementing green initiatives along a company’s supply chain can raise productivity, enhance customer and supplier relations, support innovation, and enable growth.” • – Diamond Management & Technology Consultants

  17. Being Green is Easier than You Think

  18. Green to Gold “The idea of a Green Supply Chain isn’t exclusively about green issues. It’s about generating efficiencies and cost containment. The process continues to evolve, but by acting now with the proper strategy, companies should have the ability to gain a competitive edge” • – Diamond Management & Technology Consultants

  19. Symbiotic Relationship of Lean and Clean • Less scrap, fewer defects, less spoilage = reduced environmental waste • Fewer defects, less overproduction, simpler products, right-sized equipment = reduced use of raw materials • Less storage, inventory space needed = reduced materials, land and energy consumed • Less overproduction, lighting/heating/cooling unneeded space, oversized equipment = less energy use • Less overprocessing, more efficient transport and movement = lower emissions

  20. Traditional “Lean” Eliminates... Defects Overproduction Waiting Non-utilized resources Transportation Inventory Motion Extra processing “Clean” adds... Full use of Raw Material Energy Efficiency Water conservation Eliminating Toxic Material Reduction of: Packaging Wastes Emissions to Air and Water Solid & Hazardous Wastes Regulatory obligations and risks Combining Lean/Clean Manufacturing

  21. Green Suppliers Network: Delivering Cost Savings AND Environmental Improvement

  22. Green Suppliers Network Audience • The Green Suppliers Network is designed to assist small and medium-sized companies with sustainability. Why? • No/little expertise • No/little resources • Multiple demands from customers • Conservative/Risk Averse • New “environment” for industry

  23. What is the Green Suppliers Network? A strong first step on the path to sustainability How: • Expands lean definition of waste to include environmental considerations: the Lean and Clean Advantage • Lean & Clean on-site reviews • Measurable business and environmental impacts • Trains employees to “learn to see” environmental opportunities

  24. Sourcing Strategies: Creating Value through a “Green” Supply Chain • Cost Reductions • Innovations • Risk Mitigation and Supply Chain predictability • Developing supplier capabilities • Multi-Tier Suppliers engagements • Supplier Performance Evaluation

  25. Green Suppliers Network Can Help • Cost Reductions – • Focus on cost savings and environmental performance • Avg. $585K in cost savings per suppliers • Innovations • New ideas to customers • Validated by a 3rd party assesor (GSN team)

  26. Supplier Innovation • Step 1. Steelcase nominated Byrne for Green Suppliers Network Byrne Ownership balked at agreeing to an audit they thought would be performed by the EPA • Step 2. Byrne participated in GSN Review and were trained on the Lean and Clean Advantage Final report dovetailed with Byrne’s Lean initiative, Byrne Ownership began to understand the need to pursue green solutions • Step 3. Byrne learned more about EU initiatives, RoHS and WEEE, and decided to be proactive in US When Steelcase approached Byrne for a “Cradle to Cradle” (C2C) certification project involving McDonough Braungart Design Chemistry (MBDC), Byrne was already “down the path” A “power solution” resulted.

  27. Results of a GSN journey Power solution is PVC-free, RoHS-compliant, and WEEE-compliant.

  28. Green Suppliers Network Can Help • Risk Mitigation and Supply Chain predictability • Suppliers focused on efficiency and continuous improvement • Prepared to respond to regulations (RoHS, WEEE, REACH) • Developing supplier capabilities • Training suppliers to look for opportunities for improvement

  29. Green Suppliers Network Can Help • Multi-Tier Suppliers engagements • GSN positioned to engage multi-tier supply chain along product line • Supplier Performance Evaluation • Aggregate program data to inform you on supplier performance i.e. costs and environment

  30. Cost Savings Identified *Results for 51 completed reviews

  31. Clean Opportunities Identified *Results for 51 completed reviews

  32. Results Snapshot • Avg. $585K identified cost savings • Environment and Lean Additional Benefits • 15 suppliers reported • $3.8 Million in increased sales • $1.2 Million in investment in plant and equipment • 27 jobs retained and 8 jobs created to date

  33. Calculator Results Screenshot

  34. Program Roles • U.S. Environmental Protection Agency • Department of Commerce’s Manufacturing Extension Partnership (MEP) • State Environmental Experts • Large Manufacturers • Suppliers

  35. How the Program Works • Corporate Champions join program • Champions nominate suppliers • Review team conducts assessment • Supplier implements opportunities • Champion and Green Suppliers Network get aggregated data

  36. MetalworksLudington, MI Manufacturer of metal filing cabinets • Reduced water use by 16 million gallons from new parts washing practices • saving $30,000 annually • Reduced chemical use in parts washing by 20% • Saving $20,000 • Saved $50,000 in natural gas costs from redesigning curing oven orifices • Saved $50,000 in natural gas costs to improved controls on air make up

  37. Sermatech ConnecticutManchester, Ct. Developing/applying engineered high performance protective coatings for aerospace • “A $4500 investment in the Green Suppliers Network review has yielded $1000 per month due to waste minimization, and an operating profit increase of $25,000 a month, representing a 45% productivity improvement, for a total of $26,000 per month in savings.” • Reduced re-work by 75% • Reduced hazardous waste by 30% • Reduced VOC emissions by 66%

  38. H & L AdvantageGrandville, Michigan Small Injection Molding Manufacturer to the office furniture industry • Lowered overall operating costs by 20% • Increased inventory turns by 30% • Moved from three day to one day lead-time on parts • 41% reduction in inventory for the targeted product • Additional events have lead to reduced equipment run times, equipment upgrades and increases in production square footage area in the plant (30,000 square feet) “It makes sense for use to look at all our costs, including environmental. It’s helping us to fend off competition from low-cost manufacturers overseas” Beurkens, H&L Advantage

  39. McNeil-PPC, Inc.Lititz, PA Manufactures all Listerine distributed in the US and 85% worldwide. Subsidiary of J&J • Estimated annual waste reduction: 200,000 gallons • Estimated annual water savings: 40,000 gallons • Reduce batch changeover time from 90 to 20 minutes. • Estimated annual savings of $250,000 “We had never looked at product packaging, water use, or energy use as part of our lean discussions. We now know how wasteful our practices really were and understand the connection between lean initiatives and clean benefits” – M.Keller, Director of EHS

  40. Key Program Facts • NO EPA personnel will come to your/suppliers door • Each GSN team is made up of MEP lean and state pollution prevention experts • All information is confidential • EPA will not see facility specific data • Decision to implement recommendations stays with supplier • OEM gets aggregate date about it’s suppliers performance

  41. Other Green Suppliers Network Champions

  42. GSN Specifics • Assessments focus on single process • On-site assessments take 2-3 days • Cost $6,500 Cost of review - $2,000 GSN buy down* $4,500 Total cost to supplier • Usually 3:1 ROI or greater *Suppliers Must Qualify Under SBA Definitions

  43. www.greensuppliers.gov

  44. Buying Transportation? www.epa.gov/smartway

More Related