Using CCWG Data to Create Sustainable Supply Chains · Using CCWG Data to Create Sustainable Supply Chains Sarah Flagg Global Head of Sustainable Logistics Damco International B.V.

Using CCWG Data to Create Sustainable Supply Chains

Sarah FlaggGlobal Head of Sustainable LogisticsDamco International B.V.TransPacific Maritime Conference 2013Long Beach Convention CenterMarch 4, 2013

Agenda

February 28, 20131

Sustainable Logistics

Case Study Marks & Spencer Sustainable Supply Chain

SUSTAINABLE LOGISTICS

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Top 10 Global Logistics Provider

10,800+ Employees in Over 90 Countries

Manage over 2.5 Million TEUs and 110,000 Tonnes of Air Freight Annually

Part of A.P Moller –Maersk Group

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Each year until 2030, at least 150 million people will be entering the middle class.

This will bring almost 60% of the world’s Population into a middle income bracket.

Over the same period energy demand is projected to increase by 40%, and water demand is expected to outstrip supply by 40%.

World Economic Forum Sustainable Consumption Initiative

Sustainability will Change Business Operations

● Drive to manage supply chain impacts will change retailer-supplier relationships

● Business models will change to incorporate closed loop processes and create value chains

● Gain entrance in to new geographies

● Enter new markets by developing products that cater to sustainably conscious consumers

● Reduce dependency on scarce resources and volatile energy prices

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Sustainability is no longer about cost and risk reduction –it is an opportunity for business growth

Carbon in the Supply Chain

Grams of CO2 emitted by transporting 1 ton of goods 1 kmGrams of CO2 emitted by transporting 1 ton of goods 1 km

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Air(NTM average, Boeing

747-400)

Truck(NTM global average)

Rail Electric(NTM global average)

Ocean(CCWG global average, dry) 7

18

21

47

560

Rail Diesel(NTM global average)

Origin Services Destination Services

Supply Chain Sustainability = Efficiency

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Network Optimisation

Equipment Utilisation

Carrier Selection

Packaging Transport Mode

MARKS & SPENCER SUSTAINABLE SUPPLY CHAIN

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Marks & Spencer Plan A

● Ultimate goal to become the world's most sustainable major retailer

● Establishes 180 ethical and environmental commitments to achieve by 2015

● A robust and transparent governance structure is in place to ensure delivery against targets

● Plan A carbon reductions must be aligned with logistics and supply chain strategy

● M&S is the first major retailer to go carbon neutral and 31% of its products have a Plan A attribute

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Marks & Spencer - Damco Partnership

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• Damco conducted workshops to help M&S employees understand the environmental implications of supply chain decisions in procurement, sourcing, and supply chain design

Build Internal Knowledge and Awareness

• Provides visibility of carbon impacts from the entire M&S supply chain

• Allows M&S to mitigate future supply chain risks and distortion by enabling carbon-aware procurement and network design decisions

• Documented a 38% reduction in CO2 per cubic meter shipped since 2007

Global SupplyChain CarbonDashboard

• Damco continues to work with M&S to identify and manage drivers with a higher impact on the supply chain to reduce CO2 emissions and eliminate waste

• Example: Damco presented a route-to-market analysis, identifying a 50%+ reduction in CO2

through mode switch and cargo consolidation at origin

Strategy Development

Marks & Spencer Supplier Network

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Destination

Origin

Origin & Destination

International Hubs

UK Exports WHS

Damco Global SupplyChain CarbonDashboardMarks & Spencer

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Total CO2 Emissions FY 2007-2011

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-

100,000

200,000

300,000

400,000

500,000

600,000

-

20

40

60

80

100

120

140

Q1/Q22007

Q3/Q42007

Q1/Q22008

Q3/Q42008

Q1/Q22009

Q3/Q42009

Q1/Q22010

Q3/Q42010

Q1/Q22011

volu

me

(m3

)

Emis

sio

n (

CO

2 K

g/

m3

)

Volume (m3) C02 Kg/m3

Carbon Intensity

Shipments

Emissions

37,4%* Kg CO2/m3

55,9 %

3 %

Reduced air freight volumes

Increased origin consolidation

New routes to market

Overseas network development

*Average CO2 across GM supply chain from 2007-2011

Impact of Efficiency Improvements

CFS UsageCFS Usage Airfreight VolumesAirfreight Volumes

International Hubs ImplementationInternational Hubs Implementation

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0%

10%

20%

30%

40%

50%

0

20

40

60

80

100

120

2007 2008 2009 2010 2011

%

Use

of

CFS

Kg

C0

2/

m3

Emissions (CO2 Kg)/m3 % CFS

-

20,000

40,000

60,000

80,000

100,000

2007 2008 2009 2010 2011

Total Emissions (CO2 t) "Expected emissions"

Air Volumes (m3)

Emis

sio

ns

- 20 40 60 80 100 120 140

-

40,000

80,000

120,000

160,000

200,000

2007 2008 2009 2010 2011

Kg

CO

2 /

m3

Vol

um

e (m

3)

Hemel Hampstead (Volume) Hemel Hampstead (Exp. Vol.) Hubs (Volume)

Int. Hubs (Exp. Vol.) Emissions C02 Kg/m3

Results and Next Steps● Challenges

● Multiple stakeholders

● Issues with data quality and level of detail

● Industry Recognition

● SCM Logistics Excellence 2012 Sustainable Supply Chain Award

● ‘Highly commended’ at the 2012 European Supply Chain Excellence Awards, category Contribution to Environmental Improvement: Climate Change

● Next Steps

● Utilize the Global SupplyChain CarbonDashboard to integrate CO2 goals in to decision making

● Continue M&S – Damco Partnership

● Engage with external partners (i.e. UK Low Carbon Shipping Initiative)

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“At M&S, our ambition is to be the world’s most sustainable retailer by 2015.

Projects and partnerships such as the Global SupplyChain CarbonDashboard

project with Damco are a crucial part of this, and we are delighted with the many

benefits it has delivered so far.”

Adam Elman, M&S Head of Delivery Plan A and Sustainable Business

February 28, 201316

If you’re talking to a business or operations person, and you talk about productivity improvement, their eyes brighten up.

They get excited. [If] you talk to them about making that same facility more sustainable, they might not get it.

But what they are realizing more and more is that the two are really the same thing.”

Linda Fisher, Chief Commercial OfficerDuPont

THANK YOU

Sarah FlaggGlobal Head of Sustainable LogisticsDamco International [email protected]+31 (0)70-3023807