Carbon Emissions Reduction
Supply Chain Mapping and
New Product Introduction
Scale
Supply chain sustainability
Impact
Carbon emissions reduction, supplier risk reduction
Background
Supply chains are responsible for a significant portion of company carbon footprints. While the specific number varies based on industry, partners and global operating areas, the total contribution ranges between 60-90%. At the same time, disruptions to global supply chains due to severe weather events is on the rise. This combination of factors translates to a new level of importance on understanding and actively managing supply chains to mitigate adverse impacts on the business.
This project was conducted with a partner that had demonstrated excellence in supply chain management, inventory and production scheduling. A high level life cycle assessment had been conducted for one of their key product lines. The focus was to build a synergistic understanding of the relationships between the structure of the supply chain and areas of greatest environmental impact. Due to the size of the company, this project focused on one major manufacturing division.
Project Overview
Problem Statement
Approach
Result
How can we map our supply chain in a way that provides insight on the relationship to sustainability and highlights opportunities for improved performance?
Based on the findings of an environmental footprint, the greatest impact area for this company was metals. For this reason, it was decided that the project would focus on mapping the metals supply chain for a major division of the company.
The project team included representatives from supply chain, procurement, engineering, and suppliers themselves. The information collection process was significant, spanning electronic data review, interviews, questionnaires and supplier engagement sessions.
On its face, the static information obtained during research provided valuable perspective on the companies, volumes, locations and interrelationships between suppliers. Much of this type of information is difficult for most companies to define even one or two layers above their direct suppliers. In this case, the team took the analysis a step further and considered cross-functional impacts across the stakeholder teams involved.
The findings of the analysis provided intriguing perspective on the relationship between their most environmentally-impactful raw material and supply chain risk.
Elements of the supply chain structure, the prevalence of single sourced parts and location of suppliers in areas of significant weather risk together shed light on the potential synergistic benefits of proactive supply chain management for sustainability and risk mitigation.
As part of final recommendations, the project also provided specific recommendations to reduce environmental impact through the new product introduction process.