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4th India Steel SummitAchievement & Unfinished Agenda
August 2010
Vishal [email protected]
New Paradigm for Green and Sustainability
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The four key pressures on organisationsGlobal Pressures
• Increasing regulatory requirements, many enforced globally
• Carbon credits & trading
Regional / Local Pressures
• EU lead the agenda for CO2 reduction
• EU Regulation for energy using products implementing measures under study
Global Pressures
• Customers environmentally aware
• Greater demand for more environmentally preferable products and services
Regional / Local Pressures
• Corporate policy extending beyond the bounds of law, high efficiency is a basic requirement
• Premiums start at higher costs
• Local talent management
Global Pressures
• Rising energy, raw materials and waste management costs
• Scarcity of resources
• Risk from adverse weather
Regional / Local Pressures
• Exchange rate $ vs. EUR and ‘export’
• Higher ‘eco’ tax
• Source of local supply and security of source
Global Pressures
• Customers increasing demand for environmentally preferable products and services
• Operational efficiencies
Regional / Local Pressures
• Availability for resources
• Local competitors
Organisation
Laws, Regulation,StandardsTo reduce emissions of greenhouse gases such as the EU Emissions Trading Scheme, Climate Change Levy or Building Regulations
StakeholderPressuresFrom investors, market and financial analysts, employees, consumers or NGO’s about the environmental and economic consequences of climate change
CostsRising costs of energy, transport, waste disposal and raw materials; risks for physical assets due to climate change / global warming
NewBusinessDevelopments in markets, knowledge and new technologies, which enable business to cut their carbon emissions while increasing productivity and finding potential new revenue opportunities
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Aware
Practicing
Optimizing
Leading
Experimenting
TIME
Values-based Self Regulation
Incorporates the company's value system and/or code of conduct to guide business behavior
Growth Platform
Access to new markets, new partnerships or product/service innovations that generate revenue
Legal and Compliance
Adherence to law in the countries of production, operation and distribution
Efficiency
Measurable cost savings through efficient or win-win scenarios
Strategic Philanthropy
Alignment of charitable activities with social issues that support business objectives
The CSR Value Curve: a shift from cost to returns
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Pressures & Imperatives Are Shifting
Traditionalist view: I need to do what is right
New sustainability view: I need to do what is smart
Traditional imperatives for green focused on a moral imperative to
preserve safety & lifeThe new pressures are about being responsive to
stakeholders and building a better, sustainable business
Energy
Land & Resources
Air
Water
Conservation & clean energy
Reducing pollution/CO2
Clean water
Protection
Brand & Growth RegulationTalent
Risk Operational effectiveness
Cost reduction
Today’s green business leader doesn’t abandon principle nor business acumen, but embraces both in the new sustainability view.
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Why Sustainability takes Center Stage
Stake holders are now very involved Delay or inability to start green field projects ( Perception of polluting industry) Very active Civil Society Global pressure on adopting cleaner, greener product ( non trade barriers) Recent examples of investor activism in the west against companies with suspect
track record Non renewable resources getting scares There is likely to be a price to pollute in India in near future Cant rely on regulations alone – need to move beyond in a globalized world The nature of steel industry makes it a very visible entity
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Steel Sector is Important
Wri 2008
Regulations already in Force in Europe -- cascading effect over medium term for the Indian Steel Sector
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Scope for improvement balanced with high growth of sector
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Adopt Sustainability – Water, Carbon, Safety as part of core business KPIs
Process Change
Technology Enablement
Business Transformational Outsourcing
StrategicRoadmapDevelopment
Degree of Transformation
Supply chain
strategy
Supply chain
strategyProgram Management
Change Management
Product lifecycle
management
Product lifecycle
management
Supply chain
operations
Supply chain
operations
Procurement
ProcurementLogisticsLogistics
Enterprise Asset
Management
Enterprise Asset
Management
Supply chain
planning
Supply chain
planning
• Product/project portfolio• Process/IT collab• Computer aided engineering• Model driven syst eng’ng• Product dev mgmt• Environmental Product
Lifecycle Mgmt
• Demand and distribution planning• Inventory optimization• Supply planning & optimization• SC collaboration, incl S&OP• SCP/BTO• Sustainable SCM Strategy
• Supplier relationship mgmt
• Strategic sourcing• Spend analysis• E-procurement• Contract compliance• Procurement
transformation, inc BTO• Sustainable
Procurement
• SC Ops analytics & transformation• Quality mgmt• Spare parts optimization• MES and plant floor integration• Energy mgmt• Retail solutions• Sustainable Integrated Operations
• Logistics strategy• DC ops• Reverse logistics• RFID• WMS/TMS• Global sourcing• Sustainable
Logistics Operations
Supply chain strategy• SC assessment & benchmarking• Transformation strat development• Business model & governance devel• SC ops improvement & optimization• Technology/systems assessment• M&A support• Sustainable SCM Strategy, Carbon Tradeoff
Model, Sustainable Logistics Operations
SC Ent Apps• Package selection• BizProcess
improvement• Training srv’s• Version upgrades• Systems
harmonization
• Real estate and facilities asset lifecycle mgmt (ALM)
• Plan & Production ALM• Mobile ALM• Infrastructure ALM• IT and network ALM• Service lifecycle mgmt• Sustainable ALM
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Early Adoption of Sustainability Management as core Business Function
Define KPI’s - Build carbon, water or solid waste key process indicator (KPI) set (regulatory & stakeholder driven)
Metering - Deploy mobile metering capability, establish energy use baseline & identify opportunities for improvement
Deploy Carbon Console – Deploy web based management system Optimize Process – Use applied Lean Sigma techniques to analyze, improve and
optimize identified high energy (or other) use areas Ongoing Control – Deploy follow-on controls across defined kpi’s, deploy additional
metering & management capability
1. Defining KPI’s
1. Defining KPI’s
2. Metering
& Baselining
2. Metering
& Baselining
3. Deploying Carbon
Console
3. Deploying Carbon
Console
4. Optimizing Process
4. Optimizing Process
5. Ongoing Control
5. Ongoing Control
Involves using the existing systems and Processes to include Sustainability parameters
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Adoption of concepts like Green Sigma for Continuous improvements
• Gas savings of ~20%-25% within one European site – equates to saving close to 1,000 tonnes of CO2 per annum
• Electricity savings within US-based Green SigmaTM project is projected to achieve savings of 10-15% minimally
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What next
Leadership in Energy Efficiency, CO2 emissions and climate change
Development of new generation products ( Invest in R&D and IP creation)
Adoption of Technology & innovation ( Low carbon steel, CCS pilot studies)
Financial robustness and cost competitiveness
Stakeholder engagement and community initiatives in a transparent way
Move beyond regulations and report HSE parameters
Value creation for stakeholders with Shareholders
Sustainability as a KPI in entire Value Chain and not just a silo function
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Thank you