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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
Life Cycle Management Navigator: 15_PR_RSCM 2 CSCP, UNEP, WBCSD, WI, InWEnt, UEAP ME
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!
Life Cycle Management Navigator: 15_PR_RSCM 3 CSCP, UNEP, WBCSD, WI, InWEnt, UEAP ME
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.
Life Cycle Management Navigator: 15_PR_RSCM 4 CSCP, UNEP, WBCSD, WI, InWEnt, UEAP ME
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
Life Cycle Management Navigator: 15_PR_RSCM 5 CSCP, UNEP, WBCSD, WI, InWEnt, UEAP ME
Responsible Supply Chain ManagementInteraction with Internal and External Stakeholders
What?
Source: UNEP, 2007, Life Cycle Management - A Business Guide to Sustainability
Life Cycle Management Navigator: 15_PR_RSCM 6 CSCP, UNEP, WBCSD, WI, InWEnt, UEAP ME
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!
Life Cycle Management Navigator: 15_PR_RSCM 7 CSCP, UNEP, WBCSD, WI, InWEnt, UEAP ME
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
Life Cycle Management Navigator: 15_PR_RSCM 8 CSCP, UNEP, WBCSD, WI, InWEnt, UEAP ME
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
Life Cycle Management Navigator: 15_PR_RSCM 9 CSCP, UNEP, WBCSD, WI, InWEnt, UEAP ME
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!
Life Cycle Management Navigator: 15_PR_RSCM 10 CSCP, UNEP, WBCSD, WI, InWEnt, UEAP ME
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!
Life Cycle Management Navigator: 15_PR_RSCM 11 CSCP, UNEP, WBCSD, WI, InWEnt, UEAP ME
Responsible Supply Chain ManagementGreen Purchasing
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
Life Cycle Management Navigator: 15_PR_RSCM 12 CSCP, UNEP, WBCSD, WI, InWEnt, UEAP ME
Responsible Supply Chain ManagementGreen Purchasing
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
Life Cycle Management Navigator: 15_PR_RSCM 13 CSCP, UNEP, WBCSD, WI, InWEnt, UEAP ME
Responsible Supply Chain ManagementGreen Purchasing
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!
Life Cycle Management Navigator: 15_PR_RSCM 14 CSCP, UNEP, WBCSD, WI, InWEnt, UEAP ME
Responsible Supply Chain ManagementGreen Purchasing
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
Life Cycle Management Navigator: 15_PR_RSCM 15 CSCP, UNEP, WBCSD, WI, InWEnt, UEAP ME
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.
Life Cycle Management Navigator: 15_PR_RSCM 16 CSCP, UNEP, WBCSD, WI, InWEnt, UEAP ME
Responsible Supply Chain Management Sambazon and the Açai Berry Business
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
Life Cycle Management Navigator: 15_PR_RSCM 17 CSCP, UNEP, WBCSD, WI, InWEnt, UEAP ME
Responsible Supply Chain Management Sambazon and the Açai Berry Business
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
Life Cycle Management Navigator: 15_PR_RSCM 18 CSCP, UNEP, WBCSD, WI, InWEnt, UEAP ME
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
Life Cycle Management Navigator: 15_PR_RSCM 19 CSCP, UNEP, WBCSD, WI, InWEnt, UEAP ME
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
Life Cycle Management Navigator: 15_PR_RSCM 20 CSCP, UNEP, WBCSD, WI, InWEnt, UEAP ME
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
Life Cycle Management Navigator: 15_PR_RSCM 21 CSCP, UNEP, WBCSD, WI, InWEnt, UEAP ME
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!
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