Climate Group Webinar Jeremy Hammant V3.0

Sustainable Supply Chain Management in a recession

Jeremy Hammant, LCP Consulting

© LCP Consulting Ltd, The Stables, Ashlyns Hall, Chesham Road, Berkhamsted, HP4 2ST UKTel: +44 (0)1442 872298 Fax: +44 (0)1442 873896

2 April 2009 Sustainable Supply Chain Management in a Recession -LCP Consulting 2009

Agenda

• What is sustainability?

• What has driven our current supply chains?

• Developing sustainable supply chains in a recession


Carbon and climate warming are big news …..

• In 1 hour 25 articles were published on Google News

• In 1 day 199 articles were published

• In 1 week 1734 …….

• Obama Touts U.S. Participation in Global Talks on Climate Change (US)• Cricket goes green (ECB – UK)• High tax to attack binge flying culture (Kuwait)• London will be hotter than Northern Portugal by 2071 (India)• Work with us on Carbon Savings – Retailers tell UK Government (UK)

• “Climate change” – 51million hits

• “Global warming” – 32 million hits


Water shortages

But there are more (and bigger?) environmental issues to worry about than carbon …..

Deforestation


Source: WWF Living Planet Report 2002

UK:5.35 hectares

Bangladesh:0.53 hectares

Global Average:2.28 hectares

……and let’s not forget the social issues …..


fair

environmental

economicsocial

healthy efficient

sustainable

The sustainability agenda is much wider than the environment ………

“Development which meets the needs of the present without compromising the ability of future

generations to meet their own needs”

UN World Commission onEnvironment and Development 1987


Agenda


• What has driven our current supply chains?• Developing sustainable supply chains in a recession


CEOs have traditionally focused on 5 key business levers……

Growth

+Margin

+ $:£:€

Velocity

+Return

=Cash

Adapted from ‘What the CEO Wants You to Know’ by Ram Charan

Show me the growth!

Find more margin!

Increase responsive-

ness!

Maximise returns!

Release assets!

Release cash!!


environmental

economicsocial

With a focus on business efficiency

healthy

fair

efficient

sustainable

…. and for many their only thoughts about sustainability were concerned with the firm’s economic well being…….


Consequently the goal of supply chain management was balancing operating costs and customer satisfaction…..

Customersatisfaction

Operatingcosts

How can we improve on both arms of the scales?Where are the easy wins?


Source: WTO 2006 Statistics

The easy wins used to be in low cost sourcing….

World Trade and GDP

0

1000

2000

3000

4000

5000

6000

7000

8000

1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 20150

1000

2000

3000

4000

5000

6000

7000

8000

World Trade Manufactures

World GDP

Forecast

1950=1001950=100

Before the credit crunch growth in world trade was outstripping growth in world GDP


… and in 2006 the value of East-West flows were nearly double West-East ……

Western Europe to Asia ~$200 billionAsia to Western Europe ~ $320 billion

Western Europe to North America ~$300 billionNorth America to Western Europe ~ $180 billion

North America to Asia ~$220 billionAsia to North America ~ $430 billion

Probably not sustainable!


Agenda


• What has driven our current supply chains?

• Developing sustainable supply chains in a recession


CRISIS --------------------------Danger & Hidden

Opportunity

Situation now - crisis or opportunity?

We prefer opportunity!


LCP’s Supply Chain Maxims to ride the downturn …… and prosper in the upturn…….

5. REDUCE UNPROFITABLE COMPLEXITY –

CUSTOMERS AND PRODUCTS

1. BUILD IN CUSTOMER

SERVICE EXCELLENCE

2. DESIGN, PLAN & EXECUTE FOR

AGILITY

3. SYNCHRONISE / INTEGRATE TO

ELIMINATE WASTE

4. COLLABORATE TO LEVERAGE

PERFORMANCE

…….will also deliver more sustainable supply chains


Our experience of what organisations are actually doing…...getting started!

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Transport of bottled product to warehouse

Transport of grapes to winery

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What you need to do…..

• Define your sustainable priorities

• economic/social/environmental

• Identify supply chain risks and opportunities

• understand your end-to-end supply chain

• Link the sustainability agenda to the business agenda using the 5 maxims

• collaboration/waste reduction/asset sharing……

• Prioritise actions

• “apply business principles to the environment, not environmental principles to business”

• Get started – there are plenty of first mover advantages


LCP ConsultingThe Stables, Ashlyns Hall

Chesham Road, BerkhamstedHP4 2ST, United Kingdom

[email protected]

Tel: +44 (0)1442 872298Mobile: +44 (0) 77 9699 0639

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