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Life Cycle Management in the value chains - UNEP's
activities worldwideSonia Valdivia
Oficial de ProgramaUNEP DTIE
Tom SwarrFive Winds International
Forum “Greening ICT Supply Chain”
Life Cycle Management & the Capability maturity model
Introduction
Overview
Next steps
LCT and the 3 pillars of the sustainability
…without compromising the ability of
future generations to meet their own
needs.”
Sustainable development
“meets the needs of the
present …
Life Cycle Management
UNEP and SETAC (2012)
Why Life Cycle Approaches?
Adapted from Fava (2011)
Life cycle challenges and opportunities
6
80% of current management effort covers only 20% of the available opportunities for value creation
Opportunities for value creation through
environmental and social responsibility
Upstream Opportunities:
Building up better alliances with suppliers
, access tolimited resources,
stability of supply, etc.
high
low
Envi
ronm
enta
l and
so
cial
impa
cts
Product Chain
Disposal Consumption RetailManufacturing/
ProcessingTransportationProduction
Source: Adapted from WWF-UK 2003
Downstream Opportunities:
Customer satisfaction and loyalty, improved
brand image, etc.
20
Xerox saved 400M $ in 2009 by implementing D4E (=LCA)
Some of Wall-Mart suppliers saved up to 71% of their annual energy bill by implementing the Wall-Mart footprint approach
Through implementation of LCA results, detergents producers in US saved over 1.8 Mm3 of water, 43000 t of plastics, 57000 t of cardboard, and several millions of dollars in transportation costs over 3 years
Every 1$ spent on sustainability saves 2$ in operating costs. Bloomberg’s sustainability efforts have resulted in over 25M$ in net savings in 2008.
By implementing Life Cycle Management principles, 3M has saved over 1.2 billion $ over 30 years
Philips uses LCA as an eco-innovation tool to develop their “green” products. From 2007 to 2010 they increased their sales of green products of about 50% (from 20 to 38% of total sales)
Most of the top 500 companies listed in Forbes are using LC based tools
...
Economic benefits of applying LCA based approachesFigures based on real cases
Imola Bedő
No metrics
Binary , Yes – noLegal complianceProcedures in placeProcess, Inputs/outputsEfficiency, preventionWaste minimized
Life cycle perspective,Integrated acrossValue chainNew markets/products
Sustainability,ResilienceFocus on capitalPreservation & long-Term prosperity
Metrics
/ qualified
/ efficient
/ effective
/adaptive
/ chaotic
- Management system approach- Continual improvement- Monitoring plan - Adapted to current level of organizational capability- Multiple P-D-L-A Cycles- Gradual expansion system boundaries for added capability and enhanced business value
Alignment with ISO 9000 and 14000
Scope Business case
Socio- technical system
Enhanced well being- sustainable prosperity
Value chain Stronger balance sheet- long- term competitive advantage
Enterprise Top line growth - Innovative products, new markets
Facility Bottom line gains- efficiency, cost reduction
Unit operation Risk avoidance- Legal compliance
ACTION LEARNING
Management commitment
Qualified: implement basic procedures to protect people and the environment
End-of-pipe measurements:-Waste-Air emissions-Water discharges
Teaching on:-Compliance-Basic procedures (e.g. planning)
Sources of learning:-Inspection reports-Root-causeAnalysis?
-Corrective actions-Working rules-Employee training
Identify key measurementGaps for next cycle?
Legal complianceRisk avoidance
Management commitment
Efficient: upgrade procedures
Facility approach (Input/output):-impacts-energy consumption-water balance-toxic chemicals use
Risk assessment to set priorities:-Risk assessment-Pollution prevention-Waste minimization
Sources of learning:- Management system results-Define KPIs and targets-Assess training & development needs
-Management&monitoring plan-Employee development plan-Report performance topublic
Identify performance gapsthat require redesign/innovation?
Process efficiencyEliminated waste
Management commitment
Effective: Life cycle thinking in progress
Value chain perspective:-hotspots and impacts-scopes 1,2&3 GHG -water footprint
LCA/LCM training:-Ecodesign/design for environment
Annual program review:-Resources use reduction- Extend KPIs to value Chain-Trend analysis- Stakeholder feedback
Reporting involvingStakeholders and the Value chain:Ecolabels, EPDs,Green marketing &Stakeholder Engagement plan
Identify key external barriersFor enhanced well being
New marketsInnovative products
Management commitment
Adaptive: becoming a mean towards SCP
Product system:-socio-economic profile-sustainability index for production systems-market barriers- Stakeholder assessment
Action learning:-System innovation-Public private Partnership to overcome market barriers
Sources of information:-Stakeholder review performance-Baseline sustainabilityassessment
-Sustainability managementSystem-Public reporting (transparency)
Co-create new markets forEnhanced well-being
Focus on capitalPreservation & long-Term prosperity
Adaptive: becoming a mean towards SCP
UNEP/SETAC: Next Steps
Conduct Phase 2 pilot to validate with quantified benefits
Refine self- assessment protocol & assess integration with MNC supply mgmt
Refine training materials and deploy to internal (MNC) and external (local network) trainers
Confirm ability of SME suppliers to plan their own improvement programs & balance local/ global sustainability objectives
http://www.avnir.org/documentation/congres_avnir/LCMacademylast.pdf
20
The entire sequence of activities or parties that provide or receive value in the form of products or services (ISO 26000)
Value chain (ISO 26000)
Benefits of Capability Approach
• Global companies – Extend supply chain programs to a much broader base than practical with
internal staff– Focus company programs on strategic partners, material issues– Leverage previous investments in lean manufacturing
• SME suppliers– Faster learning, more successful projects– Framework to rationalize competing requirements of customers & develop a
more cohesive improvement strategy– Facilitates integration of life cycle issues into existing procedures, routines– Local sustainability
• Communities– Emphasis on localized decision- making ensures action aligned with
significant environmental issues and development priorities– Job creation (better jobs) for organizations to support suppliers locally
Capable suppliers, vibrant communities, and resilient value chains!
