Transcript
DNV GL © 2013 SAFER, SMARTER, GREENER DNV GL © 2013
IS YOUR SUPPLY CHAIN FIT FOR THE FUTURE ?
29 October 2014 1
October 2014
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Methodology and Survey Sample
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The questionnaire was administered using the CAWI (Computer Assisted Web Interviewing) methodology
The survey was conducted in July 2014, on a sample of 2,061 professionals who work at companies in the primary, secondary and tertiary sectors across different industries in Europe, The Americas and Asia.
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Europe 39,2% Asia
45,7%
Oceania 0.9%
North America 6,9%
Center South America
6,1%
Africa 0.7%
Methodology and survey sample
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24% of the firms involved employ less than 50 people, 32% from 50 to 249 and 41% 250 or more
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Companies involved are in the primary sector (3%), secondary sector (61%) and tertiary sector (31%)
The sample (2,061 respondents) includes 68 companies defined as “leaders” based on a self-assessment of maturity in managing supply chains
The sample is qualitative and not statistically representative
Methodology and survey sample
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Supply chain sustainability is attracting increasing attention, especially after tragic incidents such as “Rana Plaza”, in April 2013, in Bangladesh
With globalization, a secure and defendable supply chain has become just as important as the quality of the products
Businesses are making concrete efforts to take sustainability issues into account
Introduction
Identifying and managing potential risks is key for the companies (because supply chain sustainability is becoming increasingly important both to customers and to the business)
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Analysis of current scenario
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When choosing a supplier or making buying decisions,
96% of companies consider sustainability aspects
Sustainable supply chain management
TOTAL N= 2.061 N=
Q.2 To what extent does your company consider the sustainability aspects listed before, when making buying decisions?
31,5%
64,0%
4,5%
To a great extent
To some extent
Not at all
Leaders 68
83,8
16,2
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Relevant aspects for a supply chain:
Relevant aspects for a sustainable supply chain
Low environmental impact (56%)
Health and safety of workers (51%)
Economic aspects (43%)
Ethics (29%)
55,6%
50,6%
42,8%
28,6%
25,6%
23,3%
17,1%
12,2%
10,5%
10,3%
9,0%
5,9%
3,9%
Low environmental impact
Health & safety at work
Strong financial management
Ethics
Fairtrade
Certainty of employment forworkers
Safe use
Human rights
Labour rights
Cause related marketing
Equal opportunities
Community investment
Philanthropy
TOTAL N= 2.061
Q.1 In your opinion, what are the relevant aspects for a supply chain in order to be considered sustainable?
LEADERS: top positions don’t change much Health & safety at work (53%), Economic sustainability (49%) and Environmental impact (49%). Ethics comes immediately next (38%)
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16,3%
22,4%
39,7%
17,9%
3,7%
1 Beginner
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3
4
5 Leader
Maturity in supply chain sustainability
42% of companies have a formal supply chain strategy contemplating sustainability aspects
On a scale that measures maturity,only 22% rated their companies as advanced
LEADERS are a minority 4%
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Up to 49 50 to 249
250 and more
456 595 760
25,0 34,1 56,7
Leaders
68
80,9
TOT
1.876
41,6
Q.3 Are sustainability aspects formally included in your company's supply?
Q.4 Where would you position your company on a 5 point maturity scale for supply chain sustainability, where 1 is beginner and 5 is Leader? TOTAL
N= 1.867
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Main reasons for sustainable management
80% of firms experienced pressure to demonstrate the sustainability of their supply chains
Main drivers for more sustainable supply chains:
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Q.5 To what extent does your company feel under pressure to show it has a more sustainable supply chain?
15,8%
64,4%
19,8%
To a great extent
To some extent
Not at all
TOTAL N= 1.867
Customers (80%)
Compliance with regulations (33%)
Corporate policies (30%)
79,5%
32,5%
30,2%
28,6%
26,9%
22,6%
14,8%
7,8%
6,5%
3,6%
1,9%
2,1%
Customers
Regulators and other authorities
Corporate leaders/policy
Suppliers
Competitors
Final consumers
Employees
Investors
Local community
Non-governmental organisations…
Unions
None of the above
Q.6 Which are the main drivers influencing your market/business in order to manage a more sustainable supply chain?
Leaders
68
80,9
44,1
44,1
35,3
41,2
35,3
26,5
13,2
14,7
7,4
5,9
2,9
TOTAL N= 1.867
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Key initiatives undertaken
Sustainability Audit of suppliers is the most common action. (41% have undertaken one in the last three years)
Communication initiatives are central (34% required suppliers to provide information about sustainability of products and 25% implemented and communicated the policy)
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45,8%
41,2%
36,0%
34,2%
30,6%
25,2%
11,6%
9,2%
4,6%
13,0%
23,1%
Implemented and communicated a sustainable supply chain policy+Information
from suppliers about sustainability
Directly undertaken an audit +External audit against your own audit protocol+ External
audit using a recognized audit methodology
Directly undertaken an audit of some suppliers
Required suppliers to provide information about sustainability
Undertaken dialogue with suppliers to share understanding of sustainability challenges
Implemented and communicated a sustainable supply chain policy
Commissioned an external audit of suppliers against your own audit protocol
Provided training for suppliers on sustainability management
Required an external audit of suppliers using a recognized audit methodology
Other actions
No actions undertaken
TOTAL N= 1.867
Q.7 In the last three years, which of the following sustainability actions regarding your supply chain has your company taken?
if To a great extent OR To some extent in Q2 Leaders
68
83,8
57,4
51,5
60,3
52,9
58,8
20,6
19,1
5,9
22,1
4,4
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Key initiatives undertaken
Initiatives are still limited and far from widespread: 30% of firms take sustainability actions across their entire supply chain. Two-thirds of companies limit their initiatives to the tier one suppliers only
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Q.8 How far do the above mentioned actions, implemented by your company, extend across your supply chain?
if at least one action in Q7
42,9%
29,1%
22,6%
5,4%
A few tier 1 suppliers only
Across the majority of tier 1 suppliers only
Across the majority of tier 1 suppliers and someinteractions at all levels of trading partners
Complete penetration of all tiers of the supply chain
TOTAL N= 1.425
23,7%
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Key initiatives undertaken
To improve sustainability, companies focus on:
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health and safety of workers (56%)
use of hazardous substances (44%)
assessments to understand sustainability risks along the supply chain (44%)
Q.9 Which of the following aspects has your company addressed in its own supply chain in order to improve sustainability?
56,4%
44,4%
43,9%
42,0%
39,7%
36,9%
36,6%
34,3%
27,1%
22,3%
17,8%
13,8%
13,4%
12,2%
10,8%
8,5%
8,3%
2,7%
2,1%
TOTAL N= 1.425 if at least one action in Q7
Health and safety of workers
Use of hazardous substances
Assessment to understand the sustainability risks in your supply chain
Energy use
Waste generation
Avoidance of corrupt business practice
Implementation of a code of conduct Increase awareness of good environmental
or health and safety practice through education programs
Water use
A fair price is paid throughout the supply chain
Undertaken a life cycle assessment to quantify product related impacts
Consumption of non-renewable or scarce resources
Conflict minerals
Climate change impacts
Investments in local communities
Donation to charities related to sustainability impacts
Creation of jobs in disadvantaged communities or promotion of equal
opportunities
Animal welfare
Trade in endangered species
+ 20
+ 19
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Main benefits
The benefits outweigh the
costs for 40% of the companies
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Customers require
sustainability practices
Companies take actions
in order to keep
operating and
make a profit
53,6%
40,1%
35,9%
34,2%
29,0%
17,0%
10,2%
5,3%
Improved ability tomeet customer needs
Reduced social orenvironmental risks
from supply chain
Improved relationshipwith stakeholders
Gained brandreputation &
awareness
Gained competitiveadvantage
Increased marketshare/sales
Other benefits
No benefits achieved
TOTAL N= 1.425
Q.10 Overall what benefits did your company achieve from the actions implemented?
if at least one action in Q7
leaders
65
72,3
56,9
58,5
58,5
52,3
44,6
16,9
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Main obstacles
Obstacles preventing the companies from making more progress :
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economic shortages
&
LEADERS manage obstacles much better: 43% do not see any barrier
48,7%
37,9%
23,6%
22,2%
21,3%
21,2%
19,9%
19,8%
12,9%
17,3%
TOTAL N= 2.061
Q.12 What prevents your company from making more progress on sustainable sourcing?
Lack of financial resources+ Focus on short term results+ Lack of return on investment
Conflicting requirements of customers+ Lack of consensus
about what to do
Lack of financial resources
Conflicting requirements of customers
Lack of consensus about what to do
Focus on short term results
Resistance of the supply chain
Lack of return on investment
Other
No barriers perceived that prevent progress
lack of a clear frame of reference
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Raising awareness
To raise awareness of what the company is doing:
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made claims in marketing activities (25%)
published information about their supply chain (21%)
25,3%
21,3%
19,4%
10,3%
16,6%
27,8%
Made claims in marketingactivities
Published information aboutyour supply chain
Used an externally recognizedsustainability label or certificate
Made sustainability claimsdirectly on the product label
Other actions
No actions undertaken
TOTAL N= 1.425
Q.13 In the last 3 years, have you taken any of the following actions to raise awareness of what your company is doing?
if at least one action in Q7
Small companies: 42,6%
Leader:1,5%
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Future Outlook
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5,5%
10,4%
27,1%
35,9%
21,3%
16,3%
22,4%
39,7%
17,9%
3,7%
Beginner
2
3
4
Leader
Performance expectations
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For the future, companies expecting to hold skilled positions (4 and 5) in the maturity scale for supply chain sustainability are more than double compared to the present
66% of firms expect to improve sustainability of their supply chains within three years’ time
TOMORROW TODAY
Q.1T Where would you like your company to be positioned on a 5 point maturity scale for supply chain sustainability in 3 years’ time, where 1 is Beginner and 5 is Leader?
66,3%
28,0%
2,6%
Improvement
Same
Worsening
TOTAL N= 2.061
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Future drivers
Market drivers will mainly push companies to engage in sustainability initiatives:
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Companies expect sustainable sourcing to become more central to their business
Meeting customer needs (55%; +2%)
possibility to gain competitive advantage (48%; + 19%)
market share (34%; +17%)
enhance brand reputation (41%; +7%)
Q.2T If you would like to improve compared to your position today, what are the reasons for this?
29,0%
17,0%
34,2%
53,6%
40,1%
35,9%
48,2%
34,3%
41,3%
55,1%
41,4%
26,8%
0% 50% 100%
Competitive advantage
Market share/sales
Brand reputation & awareness
Meeting customer needs
Reduction of social or
environmental risks
Relationship with stakeholders
% PAST % FUTURE
TOTAL N=2.061
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Future drivers
Customers will continue to be the most pressing stakeholder group (77%)
followed by
regulators (35%)
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77,4%
35,4%
33,1%
28,5%
27,9%
25,8%
20,1%
9,3%
9,3%
5,4%
2,6%
1,6%
Customers
Regulators and other authorities
Corporate leaders/policy
Suppliers
Competitors
Final consumers
Employees
Investors
Local community
Non-governmental organisations(NGOs)
Unions
None of the above
TOTAL N= 2.061
Q.3T Which will be the main drivers influencing your market/business in order to manage a more sustainable supply chain in three years’ time?
Leaders 68
82,4
38,2
45,6
39,7
41,2
41,2
36,8
17,6
14,7
7,4
5,9
1,5
Employees will be particularly important for Leaders (+17%vs average)
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Future initiatives
Companies will keep working on several initiatives:
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keep relying on audits (51%; +10% vs present)
Require suppliers to provide information (35%)
Implement and communicate a policy (34%; +9% vs present)
50,9%
38,0%
35,5%
34,4%
32,8%
31,1%
15,5%
11,7%
8,1%
9,3%
6,6%
TOTAL N= 2.061
Q.4T Which of the following sustainability actions regarding your supply chain will your company take in three years’ time?
Directly undertaken an audit +External audit against your own audit protocol+ External
audit using a recognized audit methodology Implemented and communicated a sustainable supply chain policy+Information from suppliers
about sustainability
Require suppliers to provide information about sustainability
Implement and communicate a sustainable supply chain policy
Undertake dialogue with suppliers to share understanding of sustainability challenges
Directly undertake an audit of some suppliers
Provide training for suppliers on sustainability management
Commission an external audit of suppliers against your own audit protocol
Require an external audit of suppliers using a recognized audit methodology
Other actions
No actions will be taken
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Future initiatives Aspects to improve sustainability:
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health and safety of workers (49%)
energy use (42%)
waste generation (39%)
use of hazardous substances (36%)
% PAST % FUTURE
43,9%
17,8%
13,8%
34,3%
12,2%
22,3%
27,1%
10,8%
8,3%
2,1%
42,0%
2,7%
39,7%
8,5%
13,4%
36,6%
36,9%
56,4%
44,4%
59,5%
26,6%
20,3%
39,4%
15,3%
24,8%
28,4%
12,1%
9,5%
3,0%
41,9%
2,4%
39,3%
7,6%
10,0%
31,9%
32,1%
49,3%
35,5%
0% 20% 40% 60% 80% 100%
Assessment to understand the sustainability risks in your supply chain
Undertake a life cycle assessment to quantify product related impacts
Consumption of non-renewable or scarce resources
Increase awareness of good environmental or health and safety practice through ed. prog.
Climate change impacts
A fair price is paid throughout the supply chain
Water use
Investments in local communities
Creation of jobs in disadvantaged communities or promotion of equal opport.
Trade in endangered species
Energy use
Animal welfare
Waste generation
Donations to charities related to sustainability impacts
Conflict minerals
Implementation of a code of conduct
Avoidance of corrupt business practice
Health and safety of workers
Use of hazardous substances
Sustainability risk assessment (60%)
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Profiling the leaders
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LEADERS’ FEATURES
1. In buying decisions they consider sustainability aspects to a great extent (83,8%)
2. The relevant aspects for a sustainable supply chain are: health & safety (52,9%), economic sustainability (48,5%) and environmental impact (48,5%). An attention also to ethics (38,2%)
3. They adopt formal supply chain strategies (80,9%)
4. Customers are the main driver to sustainable management (80,9%)
5. Auditing is a key instrument (83,8%) Communication is a priority, especially:
– adoption and communication of ad hoc sustainability policies (58,8%)
– requiring suppliers to provide information about the sustainability (60,3%)
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LEADERS’ FEATURES
6. Risk assessment is carried out to manage their supply chain sustainably (66,2%)
7. Benefits obtained are greater than costs (59,3%). They increased their ability to meet customer demands (72,3%) and improved their market performance
8. They manage obstacles much better than others (no barriers to improvement 42,6%)
9. Communication to the public is essential especially for: – publication of information about their supply chain (47,7%)
– claims in marketing activities (46,2%)
– use of recognized labels or certificates (36,9%)
10. They believe that Supply chain sustainability will become increasingly important in the future
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