Sustainable Supply Chain Management in a recession Jeremy Hammant, LCP Consulting © LCP Consulting Ltd, The Stables, Ashlyns Hall, Chesham Road, Berkhamsted, HP4 2ST UK Tel: +44 (0)1442 872298 Fax: +44 (0)1442 873896
Dec 17, 2014
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
3 April 2009 Sustainable Supply Chain Management in a Recession -LCP Consulting 2009
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
4 April 2009 Sustainable Supply Chain Management in a Recession -LCP Consulting 2009
Water shortages
But there are more (and bigger?) environmental issues to worry about than carbon …..
Deforestation
5 April 2009 Sustainable Supply Chain Management in a Recession -LCP Consulting 2009
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 …..
6 April 2009 Sustainable Supply Chain Management in a Recession -LCP Consulting 2009
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
7 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
8 April 2009 Sustainable Supply Chain Management in a Recession -LCP Consulting 2009
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!!
9 April 2009 Sustainable Supply Chain Management in a Recession -LCP Consulting 2009
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…….
10 April 2009 Sustainable Supply Chain Management in a Recession -LCP Consulting 2009
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?
11 April 2009 Sustainable Supply Chain Management in a Recession -LCP Consulting 2009
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
12 April 2009 Sustainable Supply Chain Management in a Recession -LCP Consulting 2009
… 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!
13 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
14 April 2009 Sustainable Supply Chain Management in a Recession -LCP Consulting 2009
CRISIS --------------------------Danger & Hidden
Opportunity
Situation now - crisis or opportunity?
We prefer opportunity!
15 April 2009 Sustainable Supply Chain Management in a Recession -LCP Consulting 2009
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
16 April 2009 Sustainable Supply Chain Management in a Recession -LCP Consulting 2009
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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17 April 2009 Sustainable Supply Chain Management in a Recession -LCP Consulting 2009
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
18 April 2009 Sustainable Supply Chain Management in a Recession -LCP Consulting 2009
LCP ConsultingThe Stables, Ashlyns Hall
Chesham Road, BerkhamstedHP4 2ST, United Kingdom
Tel: +44 (0)1442 872298Mobile: +44 (0) 77 9699 0639
Unlocking environmental supply chain value