Module 1_Sustainable Supply Chain Definition.pdf

Sustainable Supply Chain MARIANNICK BOSSUT GSM PROGRAM 2022‐2023 Module 1: Sustainable Supply Chain (SSCM) Introduction & definition Agenda Classical Supply Chain Management Sustainable supply chain definition – Triple Bottom Line Sustainable Supply Chain principles Why SSCM? 6 are...

Sustainable Supply Chain MARIANNICK BOSSUT GSM PROGRAM 2022‐2023 Module 1: Sustainable Supply Chain (SSCM) Introduction & definition Agenda Classical Supply Chain Management Sustainable supply chain definition – Triple Bottom Line Sustainable Supply Chain principles Why SSCM? 6 areas of concern What do you know about supply chain? Provide a concept/supply chain terminology and explain. Supply Chain definition Supply chain definition “The design, planning, execution, control, and monitoring of supply chain activities with the objective of creating net value, building a competitive infrastructure, leveraging worldwide logistics, synchronizing supply with demand, and measuring performance globally.” APICS definition Design: define strategies and operation network Planning: anticipate the needs Execution: actual operation Control and monitoring : continuous performance management (KPI’s key performance indicators management) Creating value: add value to the product/service – value chain – value proposition translated into operation Competitive infrastructure: efficiency and effectiveness Supply chain – a flow management Material flow Suppliers Manufacturing Warehouses Delivery Retailer Customer Channels Financial ‐ Cash flow Information flow ‐ Demand ACTIONS ? FLOW ? WHAT ? Plan Forward Goods Source Reverse Services Make Storage Deliver Control Supply End to End Network and the Concept of Tiering INBOUND OUTBOUND  ! Achieve cutomer satisfaction at lower cost ! Service Cost Supply Chain Management objectives Supply Chain Management Context VUCA world What are the trends that affect sustainability in Supply Chain?  Trends (affecting sustainability) Globalization Increased length of SC  fuel & emissions, pollution Increased vulnerability and risk Outsourcing Increased collaboration, interconnection, outsourcing of logistics Loss of control, visibility on sustainability efforts (e.g. 3PLs) Technology Critical role of ICT innovations to coordinate and integrate CS:  track & trace (RFID, GPS, IoT),  order processing via EDI,... How supply chain transparency can help  SC control tower: continuous and real‐time global view the planet | Markus Mutz ‐ 2020 https://youtu.be/ygxh6KR4BPk  Trends (affecting sustainability) Time Compression: Lean VS Agile Long LT: inefficiencies/waste, high stock levels, more handling, forecasting errors, lack of responsiveness, etc  Stocks and LT to mask these wastes Solutions: LEAN/JIT : Waste elimination in Supply Chain (such as inventory or wating time)  Use in stable demand environment, high volume, low variability AGILE : postponement, responsivness and flexibility  Use in high variability, volatility, variety HYBRIDE : Decoupling point between Push vs Pull  Impact on sustainability: increase transportation and storage location  Trends (affecting sustainability) E‐Commerce Boom in the last 10 years, enormous pressure on reliability and punctuality, speed  Most polluting mode of transport Growth of express parcel delivery & return  congestion, GHG emissions, pollution, etc Increase in packaging (waste) Complexity of omni‐channel sales management (shops, online, call‐centers,...) 1 way Flow From suppliers to customers and waste (linear economy) Combined impact with global economic growth Agenda Classical Supply Chain Management Sustainable supply chain definition – Triple Bottom Line Sustainable Supply Chain principles Why SSCM? 6 areas of concern Agenda Classical Supply Chain Management Sustainable supply chain definition – Triple Bottom Line Sustainable Supply Chain principles Why SSCM? 6 areas of concern Is Green Supply Chain synonymous with Sustainable Supply Chain?  3 « Sustainable Supply Chain » levers « The Triple Bottom Line » (TBL) Environnement PLANET Social SUSTAINABILITY PEOPLE PROFIT Finance ESG = Environmental, Social, Governance Borrowed from Christian Cognaux 29 Triple bottom line definition The triple bottom line is a business concept that posits firms should commit to measuring their social and environmental impact—in addition to their financial performance—rather than solely focusing on generating profit, or the standard “bottom line.” Harvard Business School  UN Global compact The United Nations has developped 17 Sustainable Development Goals (SDGs) Companies are invited to incorporate those in their operations & strategies and to report results in a global report (GRI – Global Report Initiatives). 18000+ companies are officially commited (Nestlé, Dow, Unilever,...) This brings voluntary engagement of companies to go beyond governmental regulations. https://www.unglobalcompact.org/w hat‐is‐gc/participants/9643‐Unilever Borrowed from Christian Cognaux 34 Sustainable Supply Chain Definition, Best practices, Principles, Continuous improvement process  Sustainable SCM definition Towards Sustainable Supply Chain – Where a company can have an impact? In today’s globalized economy, outsourcing business operations doesn’t mean outsourcing responsibilities or risks—or that a company’s responsibility ends once a product is sold. Sustainability at Unilever ‐ The Value Chain Leading companies understand that they have a role to play https://youtu.be/cpYhgqPRivw throughout the lifecycle of their products and services Sustainable Supply Chain definition “Supply chain sustainability” is the management of environmental, social and economic impacts, and the encouragement of good governance practices, throughout the lifecycles of goods and services.” UN Global Compact definition from Supply Chain Sustainability, a practical guide for continuous Improvement. The objective of supply chain sustainability is to create, protect and grow long‐term environmental, social and economic value for all stakeholders involved in bringing products and services to market. Through supply chain sustainability, companies protect the long‐term viability of their business and secure a social license to operate. Supply chain sustainability management is also key to maintaining the integrity of a brand, ensuring business continuity and managing operational costs. Agenda Classical Supply Chain Management Sustainable supply chain definition – Triple Bottom Line Sustainable Supply Chain principles Why SSCM? 6 areas of concern  Sustainable SCM 10 principles in 4 categories 4 CATEGORIES: Sustainable oHUMAN RIGHTS Supply Chain oLABOUR Principles oENVIRONMENT oANTI‐CORRUPTION  companies should have in place policies and processes appropriate to their size and circumstances, HUMAN RIGHTS including a process of continuous human rights due diligence, to “know and show” that they respect human rights Decent Work in Global Supply Chains — A Baseline Report ‐ United Nations Global Compact ‐ September 2018 business can go beyond addressing harm to Examples: human rights by taking steps to support and UN Global Compact & Reporting Initiative (GRI) promote the realization of human rights Guidance for Social Responsibilities ISO 26000 through core business activities, strategic Social Accountability International SA8000 social investment, philanthropy,  Businesses should respect international labour standards within their supply chains, including 1991 Nike press scanda LABOUR by ensuring that suppliers respect the rights of freedom of association and the right to collective bargaining, abolishing forced and child labour and eliminating discrimination. ACTIONS: Right of freedom of movements Freed from inhuman treatment Right for equal pay for equal work Right to rest and leisure Right to work in safe and healthy conditions Access to social protection  Environmental impacts from supply ENVIRONMENT chains are often severe, particularly where environmental regulations are lax, price pressures are significant and natural resources are (or are perceived to be) abundant IMPACT: Water pollution & scarcity Toxic waste Loss of biodiversity Deforestation Long term damage on eco‐system Hazardous air emission Companies should engage with suppliers to High energy use address environmental impacts, by applying the High GHG emissions precautionary approach, promoting greater environmental responsibility and the usage of clean technologies.  ANTI‐CORRUPTION Procurement Fraud : (involving 3d parties, and/or sometimes with the assistance of one’s own employees): Kickbacks, bribes (bakchich, pot‐de‐vin) Fraudulent billing Various purchasing and sales schemes Corrupt practices involving governments and other public actors Suppliers who corruptly bypass health and safety requirements Companies that engage their supply chains through meaningful anti‐corruption Suppliers who evade legitimate law enforcement programmes can improve product quality, Suppliers who avoid necessary licensing reduce fraud and related costs, enhance their reputations for honest business, Suppliers who pay bribes to customs officials or improve the environment for business and licensing authorities create a more sustainable platform for Suppliers who pay bribes to government officials to future growth. bypass taxes Sustainability Development Continuous Improvement Sustainable Supply Chain Principles Continuous Improvement methodology similar to 6‐approach  Where to start? Resources & best practices at The business case for sustainability (2020) www.unglobalcompact.org https://youtu.be/M6AQaS6xodU  Collaboration ‐ Transparency Product design Sustainable product Sustainable Supply Chain Business case  Sourcing – Collaboration Business Risk Management Sustainable Supply Chain Business case Making the shift 1. How might supply chain leaders develop organizational structures and equip their teams to enable them to successfully transition to circular supply chains? Recommendations: ‐ Rethink and clarify roles & responsibilities needed across supply chain teams (procurement, manufacturing, logistics) ‐ Engage team members and upskilling supply chain professionals on key concept about transition CHEP: global pallet pooling company Solution: From « One Way trip » to managed recovery 2. How might supply chain leaders optimize network designs to enable cost‐effective reverse flows of materials and products at scale, while enabling the maximum retention of their embodied value? Recommendations: ‐ Optimise the geographical distribution network: decentralised, regional hub, ‐ Reimagine network partnerships and product and materials‐ownership Automotive and packaging compagnies to optimise the truck loading and reduce impact on packaging materiel selected 3. How might supply chain leaders engage with support and incentivize suppliers to adopt circular economy practices and standards? Recommendations: ‐ Establish and communicate clear criteria and expectations for suppliers ‐ Reward good performance and innovation ‐ Provide guidance and support for capacity building Product designer for carpets, mattresses.. Solution: scannable Digital Product Passport (DPP) 4. How might supply chain deploy adequate technological solutions or adapt existing ones to support and facilitate circular flows of communication? Recommendations: ‐ Leverage emerging technologies such as blockchain, AI, digital twins or IoT to hep increase visibility across supply chain. CHEP: global pallet pooling company KPI’s: ‐ Efficient control ratio ‐ Cycle time 5. How might supply chain evaluate the performance of circular supply chains and create internal incentives that support the shift to circular supply chains? Recommendations: ‐ Rethink and align with sustainability and finance departments on the performance indicators used to monitor, measure, and drive success in a circular inputs ‐ Make KPI’s incentives and reward good initiatives Fairphone Reparability, modularity… 6. How might supply chain influence business models and product design to ensure the efficient and effective circulation of materials and products in the supply chain? Recommendations: ‐ Review product design to ensure design for circular economy ‐ Connect internal stakeholders with relevant teams in upstream and downstream partners 7. How might supply chain ensure that customers return products into supply chain for circulation after the use phase? Recommendations: ‐ Work with marketing to provide incentives and convenience for customers or end‐users to return products and materials after their usage. 8. How might supply chain mobilise adequate levels of investment, support, and responsibility for the deployment of circular supply chain initiatives? Recommendations: ‐ Align goals among the organization: CFO (Chief Financial Officer), CSO (Chief Sustainability officer), CSCO (Chief Supply Chain Officer) 9. How might supply chain inform legislation that affects the movement and axchange of circular materials and products within and across borders? Recommendations: ‐ Engage with policymakers (directly or indirectly) FAIR MOUSE ASSIGNMENT #1 VALUE CHAIN Value Chain  RETHINK – ECO DESIGN RESSOURCES COMPONENTS CLOSE LOOP RESPONSIBLE SUPPLY CHAIN REVERSE LOGISTICS PRODUCTION TAKE BACK PROCESS UNSOLD REPARABILITY REUSE USAGE DECARBONISED REFURBISH EFFICIENCY/ DISTRIBUTION OPTIMISATION (PAAS) WARANTY ASSIGNMENT #1 When: Monday 01/04 8PM What: The Fair Mouse Objective: being able to understand supply chain environment Modality:  Individually  World document – 1 page maximum on Moodle Instructions:  Complete the Value Chain canvas based on information provided about the Fair Mouse