sustainable strategies n.
Download
Skip this Video
Loading SlideShow in 5 Seconds..
Sustainable Strategies PowerPoint Presentation
Download Presentation
Sustainable Strategies

Loading in 2 Seconds...

play fullscreen
1 / 47

Sustainable Strategies - PowerPoint PPT Presentation


  • 101 Views
  • Uploaded on

Sustainable Strategies. IGD’s Hot Topic report to help plan your approach towards a sustainable supply chain. To get the most out of this Report. Each slide in this report is accompanied with written commentary This commentary can be viewed in the Slide Notes

loader
I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
capcha
Download Presentation

PowerPoint Slideshow about 'Sustainable Strategies' - darius


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.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript
sustainable strategies

Sustainable Strategies

IGD’s Hot Topic report to help plan your approach towards a sustainable supply chain

to get the most out of this report
To get the most out of this Report
  • Each slide in this report is accompanied with written commentary
  • This commentary can be viewed in the Slide Notes
  • To do this go to the View Menu and select ‘Notes Page’
  • To print the slides with commentary, ensure you are printing the Notes pages
about this report
About this Report
  • Why should you look at sustainability now?
    • What does sustainability include, industry initiatives & the priorities
  • Carbon & Energy Management
    • Performance measures, KPIs, industry initiatives, best practice examples, supply chain implications
  • Packaging & Waste Management
    • The waste hierarchy, closing the packaging loop, KPIs, industry initiatives, examples, supply chain implications
  • Distribution Optimisation
    • KPIs, industry initiatives, best practice examples, improvement initiatives, supply chain implications
  • Sourcing & Supplier Engagement
    • KPIs, industry initiatives, best practice examples, supply chain implications
  • Preparing your plan to meet future needs
igd s research on sustainable strategies
IGD’s Research on Sustainable Strategies
  • Online poll of senior retailer and supplier executives
    • 134 companies in 24 countries including 15 European countries
  • Survey of senior supply chain professionals
    • 66 companies in 10 European countries including the UK
  • Over 20 in-depth interviews with senior retailer and supplier executives and industry experts in Europe and the US
  • Detailed analysis of CSR reports of the top 20 retailers from IGD’s Global Retail Index
  • Analysis of the outputs from ECR UK & ECR Europe workgroups in the areas of sustainable distribution & packaging
why should you look at sustainability now
Why should you look at sustainability now?
  • Concerns over environmental degradation, resource exploitation and general business durability
  • There are a number of supplementary reasons why sustainability has become more important. These are:
  • Ethical/ idealistic considerations
  • Political activism
  • Economic/ ethnic/ religious favouritism
  • Employee relations
  • Commercial/pragmatic considerations
  • Cost reduction
  • Alignment with evolving consumer requirements
  • Potential for increased shareholder value
  • Protecting and developing the brand
  • Safeguarding future business
sustainability is rising up the commercial agenda
Sustainability is rising up the commercial agenda

“There is a real change in terms of sustainability not being solely a corporate function but now filtering through the commercial and marketing functions. This is a new way of doing business”.

“At first our buyers thought sustainability was a fad. However, measuring carbon footprints is built into the bonus system of all our senior managers so they had little choice but to participate”.

“Consumers increasingly expect leading brands to do their share towards environmental and social issues”.

Senior Executives, Multinational Suppliers

Source: IGD International Sustainability Survey, May 2008

sustainability is an opportunity to differentiate
Sustainability is an opportunity to differentiate

What are the influences that have shaped your company’s strategy on sustainability?

Scale: 1 = least important, 10 = most important

Source: IGD International Sustainability Survey, May 2008

what does sustainability include
What does sustainability include?

Source: www.igd.com/sustainability

sustainability a long term journey
Sustainability: a long-term journey

Source: IGD Research, 2008

industry initiatives priorities
Industry initiatives & priorities

NOW

NEXT 2-3 YEARS

  • Energy reduction
  • Waste reduction
  • Packaging reduction
  • Transport optimisation
  • Carbon measurement
  • Water management
  • Sustainable sourcing
  • Ethical sourcing
  • Eco-design of products
  • Energy reduction
  • Packaging reduction
  • Carbon measurement
  • Waste reduction
  • Transport optimisation
  • Sustainable sourcing
  • Water management
  • Ethical sourcing
  • Eco-design of products

Source: IGD International Sustainability Survey, May 2008

carbon energy management are fundamental
Carbon & Energy Management are fundamental
  • Retailers are investing in new technologies across the supply chain and collaborating with manufacturers' to drive change
  • The most advanced retailers in this area have made environmental initiatives central to their corporate strategy
  • The focus of these retailers is to:
    • Limit the environmental impact of their own businesses
    • Engage with suppliers to drive change across the wider supply chain, and
    • Build this into their communication strategy to gain a competitive advantage
carbon energy what is being measured
Carbon & Energy – what is being measured?
  • Leading retailers in the UK & Europe are focusing on limiting their own energy consumption & carbon emissions
  • Typical measures include
    • Energy consumption per case sold/ per sqm
    • Electricity usage in facilities
    • Greenhouse gas emissions from refrigerants’ loss
    • Meeting energy standards for buildings
    • Share of energy from renewable sources
carbon energy industry initiatives
Carbon & Energy – Industry Initiatives

Ease of implementation

High

Low

Low

Level of adoption

High

what are other leading retailers key focus areas
What are other leading retailers’ key focus areas?
  • Making ongoing improvements in energy efficiency
  • Increasing the use of renewable sources of energy
  • Reducing the emissions and energy consumption per case sold year-on-year
  • Setting carbon targets for stores and other operations
  • Reducing the consumption of water and the contamination of waste waters
eco design carbon labelling industry initiatives
Eco-design & carbon labelling – Industry Initiatives

Ease of implementation

High

Low

Low

Level of adoption

High

eco design what are other leading retailers focus areas
Eco-design: what are other leading retailers’ focus areas?
  • Promoting products that are good for the environment
  • Minimising air transport while helping trade with developing economies
  • Increasing the range of energy-efficient product ranges sold
  • Helping customers choose energy efficient products
  • Supporting the development of a methodology to measure embedded carbon within products and piloting carbon labels
best practice carbon energy
Best Practice – Carbon & Energy

Source: IGD Research, Company websites, 2008

supply chain implications
Supply Chain Implications
  • The food supply chain will be expected to lead the way in reducing greenhouse gas emissions
  • Increasingly, savings from energy efficiency & use of alternate sources of energy will gain strategic importance
  • There will be greater focus and need for carbon measurement of the entire supply chain
  • The supply chain will need to move from ‘quick wins’ to reduce energy consumption to looking at more structural changes to their operations
packaging waste what are industry priorities
Packaging & Waste – what are industry priorities?
  • Packaging reduction continues to be a key initiative, with a trend towards
    • Reduction in volume & weight of packaging
    • Increased sourcing of sustainable materials
    • Further use of recycled material
  • Retailers are engaging with suppliers to reduce waste generated at source by:
    • Managing the waste hierarchy
    • Closing the packaging loop
what are other leading retailers focus areas
What are other leading retailers’ focus areas?
  • Increasing the amount of packaging made from sustainable materials and its recycled /recyclability
  • Reducing food waste and recycling, composting or using the waste as input for anaerobic digestion
  • Extending the scope of packaging reduction agreements with suppliers
  • Controlling cost of waste management
  • Setting specific operational standards for measuring waste
packaging waste industry initiatives
Packaging & Waste – Industry Initiatives

Ease of implementation

High

Low

Low

Level of adoption

High

the waste hierarchy
The Waste Hierarchy

Source: IGD Research, 2008

closing the packaging loop

Extraction

Manufacture

Filling

Compost

Recycle

Return / Reuse

Distribution

Retail

Incineration or Landfill

Home

Primary

Secondary

Tertiary

Closing the Packaging Loop

Packaging Cycles

Source: IGD Research, 2008

examples of rrp reducing primary and overall packaging
Examples of RRP: Reducing Primary and Overall Packaging

Source: IGD Research, Company websites, 2008

new shipper case more efficient environmentally friendly usa macaroni cheese
2007

Count: 48 cartons

Pack: 6 across X 8 deep

Pallet Configuration: 8 cases/layer;80 cases/pallet

2008

Count: 35 cartons

Pack: 5 across X 7 deep

Pallet Configuration: 9 cases/layer;90 cases/pallet

  • Benefits
    • Easy open / Less labor
    • Eliminate overhang
  • Printed case
  • Reduced case count
  • Reduces corrugate by 20%
New shipper case: more efficient & environmentally friendly USA / Macaroni & Cheese
slide28
Germany / Central Europe Jacobs Coffee SRP tray facilitates in-store handling with minimal outer packaging waste

Corrugate tray – No hood – No wrap

Source: IGD Research, Company websites, 2008

supply chain implications1
Supply Chain Implications
  • Regulation will focus on the issue of food-waste and portion size; retailers will continue to engage with suppliers to reduce waste
  • Simplification (and the integration) of primary, secondary and tertiary packaging will lead to a shift in warehousing and transport strategies
  • Closed loop packaging will gain traction and will become important in the movement of ‘consumables’
  • With the increasing use of recycled plastic, standardisation of acceptable materials is likely
  • Development of alternative types of packaging, packaging materials and systems will create new opportunities and challenges
distribution what are industry priorities
Distribution – what are industry priorities?
  • Transport & warehousing are visible parts of the food supply chain and key to supporting and delivering against the CSR agenda
  • Major industry initiatives in this area include:
    • Improving space utilisation and fuel usage
    • Optimising road transport, including vehicle design, engine type, fuel type
    • Building and retro-fitting warehouse facilities to improve sustainability
    • Developing alternate non-road transport modes (rail, canals)
what are other leading retailers focusing on
What are other leading retailers focusing on?
  • Increasing the use of bio-diesel in own fleet operations
  • Introducing a ‘green’ travel policy to reduce carbon emission caused by travel
  • Replacing fleet with vehicles that meet Euro 4 & Euro 5 emissions standards
  • Using battery operated vehicles for online shopping deliveries
transport industry initiatives
Transport – Industry Initiatives

Ease of implementation

High

Low

Low

Level of adoption

High

* Areas explored as part of IGD Research

best practice sustainable transport
Best Practice - Sustainable Transport

Source: IGD Research, Company websites, 2008

technical improvements lead the way
Technical improvements lead the way

Logistics system redesign

Vehicle telematics

Modern engine design

Transport collaboration

Out of hours deliveries

Larger vehicles

Source: IGD Research, 2008

warehousing industry initiatives
Warehousing – Industry Initiatives

Ease of implementation

High

Low

Low

Level of adoption

High

* Key initiatives identified by ECR UK workgroup

high adoption of quick wins in warehousing
High adoption of quick-wins in warehousing

Energy efficient lighting

On-site recycling

Low water use appliances

Rain-water collection

On-site energy generation

Green building materials

Geo-thermal heating/cooling

Source: IGD Research, 2008

best practice sustainable warehousing
Best Practice – Sustainable Warehousing

Source: IGD Research, Company websites, 2008

supply chain implications2
Supply Chain Implications
  • Technology and innovation will continue to lead
  • Best practice will move from quick wins to site-builds
    • Geo-thermal heating/ cooling, use of green building materials will soon become more widespread
  • Transport collaboration will gain momentum, for both inbound and outbound deliveries
  • The use of shared warehouse facilities will increase
  • The use of sustainability scorecards will feature as part of the selection criteria of logistics providers
  • Standard 3PL contracts will incentivise providers to reduce road miles.
sourcing supplier engagement
Sourcing & Supplier Engagement
  • Three main trends in this area:
    • Encouraging suppliers and associates on compliance to mitigate risk
    • Engaging with suppliers on improving performance metrics including sustainability led criteria
    • Developing new ranges to meet consumer (ethical shopping) needs
  • As retailers make sustainability a core competence, suppliers will need to assess their end-to-end operations on these criteria
sourcing supplier engagement industry initiatives
Sourcing & Supplier Engagement – Industry Initiatives

Ease of implementation

High

Low

Low

Level of adoption

High

what are other leading retailers focusing on1
What are other leading retailers focusing on?
  • Support local businesses including small and medium-sized enterprises
  • Support suppliers who are ethical and responsible
  • Increasing sourcing from certified organisations and sustainable sources
  • Improving standards of animal welfare
best practice sourcing supplier engagement
Best Practice – Sourcing & Supplier Engagement

Source: IGD Research, Company websites, 2008

supply chain implications3
Supply chain implications
  • Increasing focus on local and regional products will challenge supply chains built to moving bulk groceries through a standard, national supply chain
  • Rising costs of transport could undermine the benefits of centralised production
  • The security and continuity of supply of internationally sourced products could further shift sourcing strategies
  • The use of sustainability criteria-led scorecards in procurement decisions could affect supply chain strategy
how should you plan your approach
How should you plan your approach?
  • Energy, packaging & waste, sourcing and transport are priority areas for retailers
  • The most advanced retailers have clear KPIs and have made sustainability central to their strategy
  • To build a sustainable supply chain internal efficiencies will need to be addressed first before working externally
  • The quick-wins will need to be balanced with the longer-term solutions across the wider supply chain
  • Common solutions and partnerships will be essential, and industry working groups will be key to finding good solutions
for further information
For Further Information
  • Visit www.supplychainanalysis.igd.com to understand the major issues affecting the FMCG supply chain with our Hot Topics
    • Each Hot Topic is an in-depth guide designed to help you understand the background behind the issues, identify their benefits, see news and case studies from leading retailers and manufacturers, and recognise future business opportunities