Over 50% of an average corporation’s carbon emissions are typically from the supply chain rather than within its own four walls. Managing supply chain emissions is therefore critical if we are going to address climate change effectively.

The Carbon Disclosure Project’s Supply Chain program is a unique collaboration of 57 global corporations who are members of CDP Supply Chain. These companies recognize the significance of the supply chain in carbon management. They are actively engaged in working with their suppliers to manage carbon and have the power and influence to really make a difference. This report is based on this work and is the most significant study of how business is managing supply chain emissions. The insights are informed by detailed data and research conducted with 1,000 participating suppliers across industries all over the world.

There are three core results from this year’s research:

1. Supplier carbon reduction ambition still does not meet global carbon reduction requirements to limit the rise of global surface temperature. Only one third of responding suppliers have a target for carbon reduction and even the targets that are in place are not sufficient. Should this status continue, this would mean global emissions by 2015 will increase by 6% instead of the necessary 20% reduction.

2. But there is hope…
Compared to last year, companies have improved in assembling the building blocks for dramatic change – including improved reporting, increased board level responsibility and greater realization that carbon management presents a wider cost and revenue opportunity rather than being a pure risk mitigation activity.

3. CDP Members are leading the way
They have started a chain reaction for engagement in the supply chain – they are increasingly using their influence and power to drive change. They do this by deploying differentiated levers to engage with their suppliers. These include redesigning products, directly reducing demand for carbon intensive purchases, working collaboratively with suppliers to cut emissions and making effective carbon management a supplier selection criterion.

The report highlights that it is still early days in the quest to reduce emissions. While progress has been made, a major step change is required if business is to meet the global requirements. Increased engagement and commitment in the supply chain is indispensable for achieving this. This report highlights that although there is work to do, through leadership – as demonstrated by CDP Members in working with their suppliers – a positive snowball and domino effect in the supply chain can bring about the change needed.

Related posts:

1. CDP Supply Chain Report 2012
2. Ecodesk 2011 Sustainability Transport & Logistics Report
3. The Chief Supply Chain Officer Report 2011

The more companies engage in pollution prevention activities in production and in sustainable development, the better their economic performance is. The more companies pursue activities, such as switching modes of transportation or fleet modernisation, the more sustainable their competitive advantage is likely to be, compared to industry average.

Furthermore, the following key results were found in the study “Excellence in Supply Chain Sustainability” of May, 2011:
• Companies declare sustainability to be a high-priority objective
• Company management and customers push firms towards sustainability
• The lack of commitment is more obstructive than the cost of sustainability
• Companies start with their own production sites when it comes to practising sustainability
• Top performers pursue holistic integration of stakeholders in sustainability strategy formulation
• ISO certifications play the major role
• Survey data provides recommendations on how to become a sustainable corporation

The goal of the study “Excellence in Supply Chain Sustainability” was to investigate sustainability in today’s companies, determine its degree of implementation, and identify driving and impeding factors.
 
This study is based on the collaboration between the Supply Chain Management Institute of EBS Business School, which supplies the scientific capabilities, and Logica, a business and technology service company, which accompanied and supported the study with business insights required to accomplish such a project.

Over 100 companies from a variety of industries participated. The majority of operations are based in Europe but many of the participating companies are globally active. Data gathering took place between November 2010 and February 2011.
In the analysis, special focus was placed on the logistics and transportation sector, due to its importance as one of the three largest industries in Germany, and its large impact on the environment. Within the sample, 49% of the participants come from the logistics and transportation industries.

Related posts:

1. CEOs struggling with supply chain sustainability
2. Ecodesk 2011 Sustainability Transport & Logistics Report
3. Supply Chain Movement Q2 – Sustainability Special

Driving sustainability in supply chains has been a popular subject over the past few years, but recently, this changed. In mid January, research initiated by Actal, a Dutch agency responsible for reducing bureaucracy between government and enterprise, was published, exposing the costs of The Netherlands’ sustainable public procurement policy. The research revealed that the implementation of this sustainable public procurement policy had cost several hundreds of millions of Euros. Needless to say, the tax payers in The Netherlands were not happy about it. Political leaders were quick to argue that the policy should be terminated as quickly as possible…Then on 26th February, CEO of AkzoNobel Nobel Hans Weijers announced that the KPI’s the company had been using to measure the firm’s sustainability performance, would be scrapped. These KPI’s related to the Dow Jones Sustainability Index and although AkzoNobel’s ranking on the index had been used to assess the company’s sustainability performance for many years, it was thought too arbitrary to monitor or reward executive performance…

It just goes to show how difficult it is for the government and public enterprises to integrate corporate social responsibility (CSR) into their businesses, and particularly their purchasing and supply processes. So does the implementation of CSR actually cost money? Does it drive up company costs? Based upon the outcome of recent PhD research at Eindhoven University of Technology, one would say “YES”. Improving animal wellbeing in chicken farms by allowing chickens to wander around in big barns (instead of spending their lives cooped up in small pens), increases the cost price per egg beyond a doubt. Yet Dutch consumers are happy to pay a few cents extra to give chickens a better life… Similarly, forcing light bulb manufacturers to create full supply chain transparency through accurate registration of hazardous materials and components according to the European REACH program (Registration, Evaluation, Authorisation and Restriction of Chemical substances ), requires a massive investment in administration, regulation and procedures in order to comply with EC regulations on environmental safety.

This is obviously the price we have to pay for securing better labor conditions in South East Asian sweatshops and preventing hazardous materials from flowing freely into the environment when products are thrown away. These measures are necessary if we want to create a better world for the next generation, aren’t they? Nobody in our Western economies will disagree with the need to create greater animal wellbeing and a safer environment. The problem is, that investments can be measured whilst the benefits in the long term cannot.

The same is true for other segments of government spending in many European countries, like education. Large sums of money are spent on education and taxpayers argue about the effectiveness of the educational programs. Yet nobody argues that since education comes at a high price, it should be abandoned…

Why then do we argue about the need for sustainability in public procurement practices? In the Dutch instance, it all boils down to a mistake on Actal’s part. Having conducted the research in four sectors, they failed to instruct KPMG to investigate the results (read revenue) from the Dutch public procurement policy on sustainability. Should they have assessed the benefits in correlation to the costs, they may have come up with a more balanced view on the subject. By focusing solely on the costs of the program, the research has given way to opportunistic attacks from certain political parties.

Relating executive pay to the Dow Jones Sustainability Index (where a company is ranked based upon the insights of a limited number of experts), may be a little naïve… Which company actually relates executive pay to the AEX or another European stock exchange index? Company ranking, as you are bound to be aware, is subject to many more factors than company performance alone. It would be far better to relate executive pay to factors that managers can influence. In fact, we would recommend you link executive pay to individual sustainability targets per operating company or business group, for which executives assume direct responsibility. This would be an alternative to general macroeconomic indicators.

Lessons to be learned from this discussion: 1) corporate sustainability programs should be judged on the basis of their costs and their contribution to the environment, society and company performance and 2) executive pay should be related to those business factors that actually influence them.

Whatever the solution, it is important for results from government and corporate sustainability programs to be reported simply and clearly, so that they can be understood by the public (such as the number of trees saved by using recycled paper, or the number of car kilometres saved by using public transport).

When it comes to supply chain managers, the current debate on corporate social responsibility is not encouraging. It is the supply chain, governments and businesses, that has the most impact on the environment. In which case, purchasing and supply chain managers should be motivated, even more so, to adopt sustainable solutions in their supplier relationships. There is compelling academic evidence that promoting sustainability in supply chains drives innovation, company reputation and firm performance . Isn’t it about time we abandoned the single performance criterion that most purchasing and supply organizations suffer from? By this I mean of course hard dollar/euro purchasing cost savings!

By pushing specific sustainability performance measures in supply chain relationships, everyone will be able to make more balanced sourcing decisions. To be able to do so, top managers will have to get their acts together when it comes to creating responsible companies. Executive pay should be tied to sustainable performance first. After that, purchasing and supply chain managers are bound to follow suit.

Arjan van Weele, Professor at Eindhoven University of Technology, Faculty of Industrial Engineering and Innovation Sciences and Board Member of the European Supply Chain Forum.

Related posts:

1. Ecodesk 2011 Sustainability Transport & Logistics Report
2. Excellence in Supply Chain Sustainability
3. CEOs struggling with supply chain sustainability

12             PROFILE PETER BRIGGEMAN

“Expect the unexpected” Thanks to the opportunities on offer within Eastman Chemical, Peter Briggeman – having started his career at the bottom of the ladder – was able to work his way up to his current role as director of Supply Chain and Central Services EMEA. “I caught up on my education and training along the way but I think it’s my experience that is really invaluable to me.” Briggeman often refers to his ‘healthy obsession’ for supply chain. “I wake up every morning with a good feeling inside”.

 18        TO EMBRACE OR CAUTIOUSLY ADOPT?

As with innovation, when it comes to sustainability, businesses fall into one of two categories. Leading the way are the trendsetters – those companies who fully embrace sustainable ideals. Trailing behind is a large group of followers who first examine the situation from every conceivable angle before eventually deciding to invest in sustainability.  In practice, there is considerable overlap between companies who are sustainability trendsetters and those who are innovation trendsetters. Its carbon footprint is the most widespread reason for an organization to adopt a strategy for sustainable innovation, including in its supply chain management activities.

24         COLUMN JAAP-WILLEM BIJSTERBOSCH

Energy Supply: Sometimes I wonder if we are paying the real price for energy, especially the price for oil used in transportation: Bear in mind that fifty percent of oil is used in vehicles. Recently, the price of gasoline at the pump hit another record high. Nobody started screaming though. Perhaps it’s still a bargain for me.

28         ROUNDTABLE S&OP

The delicate balancing act that is S&OP: There is a delicate balance between working capital and corporate strategy. Organisations can make significant gains by improving the collaboration between their financial department and their supply chain managers. In theory, Sales & Operations Planning (S&OP) formalizes this collaboration- but to what extent is this happening in practice, and what form is the collaboration taking? ConQuaestor and S&V Management Consultants invited a number of supply chain and financial professionals to take part in a round-table discussion about this very topic.

 31        CASE STUDY NHR

NHR trades and refurbishes second-hand network hardware for businesses all over the world. Its market value reaches into millions which achieves with just a minimum of stock. The key to their success is reliable information.

38         OPINION IMD PROFESSORS

Re-evaluating the supply chain post-Japanese earthquake: Japan’s devastating earthquake, tsunami and nuclear accident have served as a wake-up call across the world to show just how fragile global supply chain can be, with almost 9% of the world’s economic output coming from Japan, these events have had a direct impact on many companies that rely on Japan for manufacturing parts, and have caused countless disruptions across the global supply chain.

FURTHER IN THIS ISSUE

6          NEWS & BACKGROUND

• Supply Chain and Finance share the same vision
• The cost of sustainability
• Roadmap to sustainable behavior

35         TOOLS & TECHNOLOGY

iPad and iPhone turn Supply Chain Movement green; Supply Chain media goes green with the introduction of its very own free application (or ‘app’) for the iPad and the iPhone, which has been developed especially for its two publications, Supply Chain Magazine and Supply Chain Movement. Having managed to secure the unique ‘supply chain’ name globally for its digital publications, the publishing house is truly embracing this latest technology.

> Download Supply Chain Movement on the iPad here

> Download Supply Chain Movement on Android tablet here

 PERSONS, COMPANIES & ORGANIZATIONS IN THIS ISSUE

Related posts:

1. Supply Chain Movement Q1 2012 – S&OP Special
2. Supply Chain Movement Q4 – Risk Special
3. Supply Chain Movement Q1 2011 – Visibility Special

Results of our European survey “Green Supply Chain : from awareness to action” by BearingPoint are now available in a new White Paper.

Main facts and figures are:
• 70% of surveyed companies declare that green Supply Chain is a true economical lever.
• For 47% of the companies, the return on investment of a green Supply Chain is reached within 3 years.
• More than half of European companies now use environmental criteria to assess their Supply Chain performance: share of recycled packaging material, CO2 emissions,…
• 2/3 of companies adopted or plan to adopt a green policy for their purchases.

The quantitative study was conducted among about 600 European decision-makers by Novamétrie between 2010 and 2011, with a position within Supply Chain, Sustainable Development or Industrial Divisions.

Related posts:

1. Supply Chain Movement Q2 – Sustainability Special

The Ecodesk 2011 Sustainability Transport & Logistics Report is a thorough analysis of sustainability data and strategy, affecting the Transport & Logistics industry. The report includes a detailed analysis of 12 of the world’s major T&L companies. Each company is ranked via four sustainability metrics (carbon emissions (Scope 1+2+3), carbon emissions (Scope 1+2) energy usage and water usage) each broken down into two ranking permutations (gross and intensity). The report also includes exclusive interviews with sustainability managers from leading companies, including DHL, G4S and Eurostar. Each company is fully profiled, with details on sustainability strategy, employee engagement and sustainability record.

Related posts:

1. Carbon Disclosure Project Supply Chain Report 2011
2. The Logistics Report 2011
3. CDP Supply Chain Report 2012

Mick Jones, Vice President of Global Logistics at Lenovo enjoys a challenge. Inspired by Lenovo’s forward-thinking philosophies and incredible drive to succeed, he joined this high-tech computer manufacturer’s battle to help build a world-class supply chain three and a half years ago. “It was about finding the right strategy at the right time. It was about leading the Lenovo way.”

Interview conducted by Martijn Lofvers en Oskar Verkamman, written by Sarah Thompson

Lenovo is one of the world’s largest manufacturers of personal computers and makes innovative PCs including the renowned ThinkPad notebook, as well as products carrying the ThinkCentre, ThinkStation, ThinkServer, IdeaCentre and IdeaPad sub-brands. It is a global corporation of more than 27,000 employees working across 100 countries, selling products to customers in over 160 countries. Its turnover amounts to 21 billion dollars and business is constantly expanding.

As Vice President of Global Logistics at Lenovo, Mick Jones has led a transformation in the company’s logistics division over the past three years. The introduction of a new integrated business model has brought about considerable growth with a shift in the organisation’s supply chain strategies, new key appointments and renewed focus on cost, efficiency and network scalability. This year´s initiatives include sustainability, risk management and further developing customer satisfaction.

What is the Lenovo way?

“The Lenovo Way can be summarised by one statement – ‘We Do What We Say. We Own What We Do’. It has become part and parcel of the way we work each and every day – a real cultural focus on commitment and ownership throughout the organisation”.

“Each and every one of our employee’s focus is on what we call the 5 P’s: We Plan before we pledge; We Perform as we promise; We Prioritize company first; We Practice improving every day; and we constantly act as innovating Pioneers”.

“We’ve gone from 0 to 100 mph in a lot shorter timescale than most organisations would even envisage! While most organisations evolve this kind of network supply chain over 10 years, we’ve done it in just 4. It has been a fantastically interesting and exciting mix of change, growth and development, for our people, our products, our organisation and for me personally. After the merger with IBM’s PC Division in the US, Lenovo was challenged with combining two very different business cultures into one unified force, and it’s worked. Lenovo has an exceptional way of looking at the world which involves innovative thinking, innovative products and sound business philosophies. That is the Lenovo way!”

You mention IBM and mixing business cultures. What else has changed since the merger?

“We’ve grown! And more specifically, we have grown from east to west, something that goes a little against the grain. If you go to any Beijing shopping street, you’ll see more Lenovo signs than any of our western competitors. Our market share in China is a very respectable 35% and we are currently growing at an unprecedented rate and winning market share in all parts of the world. We have been outgrowing the market for 9 consecutive quarters, that’s almost two and a half years! And we have quickly grown in size globally with a 14% market share in the fourth quarter of 2011. We are now #2 in the PC Market. Another way of putting it is that we’ve gone from simply operating to operating very well: from good to great!”

• Martijn Lofvers is Owner, Publisher & Editor-in-Chief of Supply Chain Movement
• Oskar Verkamman is Managing Partner of Inspired-Search

> Read complete interview on the iPad here

> Read complete interview on Android tablet here

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It is an exciting and a challenging time for chief supply chain officers. Recognition of their function’s importance has increased markedly in recent years. The supply chain is playing a more central role in coping with ongoing volatility and looming scarcity risks, while pushing harder to operationalize competitiveness.

For leading practitioners, sustainability has helped to give the function a new dimension and depth: eliminating efficiencies, improving competitiveness, and differentiating the company’s image. And as the focus on sustainability shifts away from compliance assurance and towards a focus on performance, the supply chain team is becoming more cross-functional in nature.

Chief Supply Chain Officer’s Perspectives

This forth point of view in our Lessons From Leaders Series, explores several distinct aspects of how sustainability is affecting the role of the chief supply chain officer and some of the specific supply chain issues addressed within this report include: •What business case exists for implementing sustainability considerations within the supply chain and how are these changing? •What new collaborations, both internally and externally, are emerging as supply chain leaders pursue greater efficiencies? •What implications do these changes have for the current set of skills and expertise within the supply chain? •What are the drivers for greater supply chain transparency and what new opportunities and challenges does this introduce?

Naturally, one close collaborator will be the chief financial officer, who will demand a closer understanding of the link between supply chain sustainability and the wider health of the business. This will be the focus of the next report in this series. Please visit again for more leaders’ insights.

> Download a free copy of the report

Related posts:

1. The Chief Supply Chain Officer Report 2011
2. 3rd Chief Supply Chain Officer Forum Chicago
3. European Chief Supply Chain Officer Forum 2012

Since announcing Unilever’s bold sustainability targets for halving its environmental impact by 2020 and doubling its revenue, the company’s business leaders have been completely transparent about the motivations behind their daring decisions. One crucial factor in achieving their goals will be the global supply chain, and the man in charge of facilitating that in Europe is Neil Humphrey, SVP Supply Chain Europe and Chairman of the Unilever Supply Chain Company. His task for the coming months is to implement new (sustainability) strategies, new business objectives and to reintegrate the supply chain back into the heart of Unilever´s business.

Interview conducted by Martijn Lofvers en Edwin Tuyn, written by Helen Armstrong

The Unilever Supply Chain Company (USCC) was established six years ago to increase Unilever’s focus on its end-to-end supply chain. Neil Humphrey took over the role of chairman at the beginning of 2011. By that time, he had already been with the Anglo-Dutch multi-national for 25 years, 21 of which he had spent in the supply chain and the other 4 years responsible for sales in the Netherlands. His current title is two-fold: Unilever Supply Chain Company Chairman and SVP Supply Chain Europe. What this boils down to is overall leadership of planning, manufacturing, logistics and service for Unilever in Europe.

Humphrey currently works from Supply Chain Europe’s (ESC) head office in Schaffhausen, Switzerland travelling regularly to Rotterdam for team meetings of Unilever’s European Board as well as to many of the circa 60 factory and 10 office locations within Supply Chain Europe.  Supply Chain Movement’s editor-in-chief and publisher, Martijn Lofvers, asks him what his plans are and how he is getting on in his new role.

What is top of Supply Chain Europe’s agenda right now?

“Creating a new strategy, extending the scope of our supply chain and integrating it back into the heart of the business. That´s the number one challenge that I have at the moment.

There have been a lot of changes in Unilever over the past few years and the same applies to the Unilever Supply Chain Company. Since I took on the role, Unilever has communicated some very bold statements about our corporate and supply chain targets.  We now face the challenge of delivering them. We have made a strong start and it´s now my job to keep everyone focussed on our plan and ensure that we have a great team of people to drive us forward.

In order to do this, I need to integrate what we are doing in the supply chain with the rest of the business. We need to bring in marketing to support us on portfolio complexity, bring in sales to support us in improving our Customer Service processes for example, and we need to continue to work closely with our customers and suppliers on issues like waste and sustainable sourcing.”

• Martijn Lofvers is Owner, Publisher & Editor-in-Chief of Supply Chain Movement
• Edwin Tuyn is Founder & Managing Partner of Inspired-Search

> Read complete interview on the iPad here

> Read complete interview on Android tablet here

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1. “If people are highly focused they can fix anything.”
2. Unilever optimizes forecasting and significantly lowers inventory

Companies are increasingly realising that transport can have a major influence, not only on customer satisfaction but also on cost patterns, flexibility and sustainability. And transport optimisation offers unique opportunities for innovation in these areas. Together with Ortec, international provider of advanced planning software, Supply Chain Movement has created a mindmap to outline the route, including road signs indicating potential hazards along the way.

> Download the Mind map about Strategic Transport Optimization here (PDF)

Mind map manual

Not only do certain key market trends have a direct link to transport, such as fuel prices and increasing customer demands, but the greying population and tighter legislation are also having an impact. The first step on the mindmap determines the external triggers for transport optimisation and provides insight into the strategic importance of transport. The trends force companies to take action:

Plan.

The second step on the map indicates the impact of the market trends on a company’s transport characteristics. The company’s plan should take account of these trends. The sector, type of product and the characteristics of demand and of the supply chain all result in specific transport requirements, preferences and criteria from the company’s own perspective. Once these requirements have been ascertained, a company can move on to actually planning the transport:

Do.

In step 3, a company selects transport optimisation concepts based on the first two steps. Transport planning software can handle calculations for several concepts (such as cross-docking and direct store delivery) as well as several rounds of optimisation (such as planning of routes, labour, materials and loads) at once, including what-if analysis. This results in unique insights which often reveal new opportunities for considerable cost savings, unexpected yet effective combinations or chances to do things differently. These calculations can also be fine-tuned, which can reduce transport costs by more than 30 percent without affecting service levels. Once the concept has been decided, the company can move on to implementation:

Check.

Step 4 sees the actual implementation of the transport optimization activities based on all the decisions made in the previous steps. This can be optimisation at strategic, tactical, operational or even real-time level. The most common outcomes are higher profits, lower costs, better management decisions, higher customer and employee satisfaction and a more sustainable society. With the right planning tools, a company can serve the market better:

Act.

Related posts:

1. Free special Inventory Optimization on the iPad
2. Ecodesk 2011 Sustainability Transport & Logistics Report
3. New Models for Addressing Supply Chain and Transport Risk

This is the third consecutive year that SCM World has published its annual Chief Supply Chain Officer Report. In July 2012 almost 1,400 practitioners from a wide range of industries and geographies completed a 40-question survey covering:

• Strategy alignment and value creation
• Digital consumers and eCommerce
• Social and environmental responsibility
• Risk management
• Talent management

The key findings contained in this report can be summarised as follows:

Operating cost reduction is still the foundation of supply chain excellence, with almost two-thirds of survey respondents saying it is “very important”. But increasingly, companies are using high-performing supply chains as a way to support the company’s business strategy. This enables value creation and provides competitive advantage. Hence, supply chain strategy and business strategy must be aligned.

Customer service

The importance of aligning supply chain strategy and business strategy has led to the recognition and appreciation of the supply chain function as an integral part of the company’s business leadership. Over half of the respondents agree that their supply chain is viewed as an integral function for business success. Hence, supply chain and strategy alignment is also linked with organisational alignment within the firm.

There are many ways in which high-performing supply chains can support value creation and competitive advantage. Leading the way, according to our survey participants, is the ability of high-performing supply chains to enhance customer service, leading to customer loyalty. The driving factors for great value to be gained from enhanced customer service are the ability of customer service to generate repeat purchases and customer service becoming an important criterion in determining the customer’s purchasing decisions.

Supplier relationships

The other important ways in which high-performing supply chains can support value creation and competitive advantage provision include stronger supplier relationships, acceleration of new product introduction, and business expansion in existing and new markets. More than two-thirds of respondents say these deliver high or very high value in their companies.

This year’s results are a reconfirmation of last year’s. And the trend is continuing for companies to use supply chain excellence as a means for creating value and competitive advantage. Companies where supply chain management is still viewed as a supporting function, or where supply chain management is only viewed as a way to reduce operating costs, have a lot of catching up to do, as they are missing great opportunities.

 > Download a free copy of the report

The infographic looks at what exactly e-waste is, what contributes to it and so on. It then goes to look at e-waste by the numbers, how much we are getting rid of and what people are doing with their old bits of e-waste.

Increasing market dynamics and volatility put more emphasis on achieving planning excellence and raise the general level of attention for this topic. Although a recognized concept for many years, comprehensive deployment of S&OP has only occurred in recent years within the process industries.

Some of the key findings regarding the current status of S&OP process maturity include:

• Many of the responding companies in the industry sector have already established a well-organized S&OP process, however some weaker areas with improvement potential exist
• A clear link between the planning maturity and profitability of companies confirms a clear value creation hypothesis
• Ongoing economic macro trends suggest that the significance of S&OP will continue in the future

The study highlights the outstanding role of a company-wide integrated Sales & Operations Planning process as a driver for sustainability, customer orientation and profit maximization. Therefore S&OP is an increasingly important element of strategic and operational corporate management.

Therefore, BearingPoint proposes a value-oriented approach to evaluate and improve current S&OP processes to be prepared for upcoming challenges.

> Download a free copy of the report

Unilever announced Green Express, a new initiative to drive more sustainable logistics in Europe. Green Express takes trucks off the road in Italy, equating to an annual CO2 saving of 2,600 tonnes (the equivalent of 260,000 trees). The Green Express train made its first ice cream delivery last week. Green Express is a result of a partnership with Trenitalia and the Italian Ministry for Environment.

As of Friday 5 July, a dedicated line will transport Algida ice creams from the Unilever factory in Caivano, near Naples, 700km to the logistics hub in Parma. The direct connection, linking three lines, means that 3,500 trucks will be taken off the road each year. Other benefits include reducing congestion and potential traffic accidents and an energy saving of 40 million Mega-Joules per year – the equivalent of the annual needs of 4,200 families.

Train as game-changer

David Beauchamp, Vice President Logistics for Europe said: “Traditionally, goods have been transported by road in Italy but this model is designed to be a game-changer. This initiative is an example of great collaboration with Trenitalia and the Italian Ministry for Environment. We hope that other companies in Italy can also adopt similar rail transportation approaches. This is not just beneficial for the environment but also for costs, we estimate that this will achieve a 6% reduction in costs per year – a win-win situation.”

Green Express is part of a wider eco-efficiency programme within Unilever’s Supply Chain to support the Unilever Sustainable Living Plan. By 2020, CO2 emissions from Unilever’s global logistics network will be at or below 2010 levels. This will overall represent a 40% improvement in CO2 efficiency. So far, progress has seen a 10% improvement in CO2 efficiency since 2010. Unilever’s vision is to double the size of the business, whilst reducing its environmental footprint and increasing the positive social impact.

2013 Trends and Strategies in Logistics and Supply Chain Management: Embracing Global Logistics Complexity to Drive Market Advantage

The key results of this study by BVL International on trends and strategies in logistics and supply chain management are summarized, as follows. They are based on 1757 responses collected in an international survey from supply chain executives (including logistics service providers (LSPs), retailers, and manufacturing companies).

Key Trends

The general observation from both the interviews and the study results is that logistics complexity in the form of fragmented channels, increased product variations, and consumer demands for customized solutions has increased. Several trends demonstrate that a number of major challenges lie ahead, as the world becomes a more complex place to operate logistically.

Customer expectations:

In essence, logistics and supply chain management should primarily enable a company to satisfy its customers’ needs. Increasing customer expectations were ranked by respondents of our study as the most important trend, and meeting customer requirements has been ranked by more than 20% of the respondents as the number-one logistics objective. But, as customers are becoming ever more demanding and critical, traditional measures often fail when pursuing strategies to satisfy customers.

Networked economy:

In the past, companies have typically considered themselves to be independent players in the market and, at best, managed interfaces to direct suppliers and customers. In today’s networked economies, this is just not enough anymore. Companies are often forced to collaborate with partners both vertically and horizontally in their extended supply chain network, and these partners expect them to integrate their processes and systems. Companies are forced to adopt network thinking rather than company thinking.

Cost pressure:

Customers continue to expect low costs. Although other requirements such as sustainability, social issues or risk-mitigation capabilities are increasingly discussed in the media, cost pressure seems to remain the ultimate criterion for customers. Given the trend towards increased customer expectations, it has become ever more difficult to reduce costs any further. Logistics costs are playing an important role in reducing overall costs. Logistics costs share of overall revenue is as low as 4% and 6% in the electronics and automotive industries, respectively. However, our results show that costs are on the rise (larger than 8% on average for manufacturing industries). A concerning result is that as many as 14% of the respondents cannot estimate their logistics costs.

Globalization:

As global footprints expand, logistics performance as measured by delivery reliability has deteriorated, due to increasing customer requirements, greater volatility, and problems with infrastructure. Two out of three respondents stated that their company’s logistics capability is negatively influenced by poor transportation infrastructure, which is a problem particularly in emerging markets. In sum, globalization clearly amplifies other trends and leads to an increase in complexity, particularly in regions of growth such as Russia, Eastern Europe,India, and Africa.

Talent shortfalls:

Across all regions and sectors, talent shortages in logistics is considered one of the most important challenges in the coming years. Shortages are being seen at both the operational level as well as the planning and controlling function. In particular, about 70% of the respondents experience a shortage of skilled labor. The most important strategies to cope with talent shortage are training and qualification programs and strategic cooperation with universities and research institutions. In the United States and Europe, talent shortages are also a function of demographics. In emerging nations strong competition from other fields like finance, strategy and IT contributes to the talent shortage. Volatility: In the last years, market turbulence on the supply and demand side has increased. This was amplified by the economic and financial crisis, which demonstrated how fluctuations in one part of the world can build up to dramatic problems in other parts of the world. Respondents of this study believe that volatility will continue to increase and more than 50% of them consider it to be a very important trend in five years.

Sustainability pressure:

This trend has emerged as a very serious topic. Already more than 55% of the respondents stated that green issues are part of their logistics strategy. Corporate social responsibility has also emerged as a highlight for debate. However, there remains a great deal of uncertainty in the deployment of these strategies, especially relative to measurement systems, evaluation and setting goals and strategies for logistics sustainability

Increased risk and disruption:

The majority of companies (irrespective of size, sector, country and position in the supply chain) consider the mitigation of internal and external risks essential. Strategies for 2013 Trends and Strategies in Logistics and Supply Chain Management 9 managing risk around demand and planning are also considered important. Executives concur that strategic frameworks and tools are needed for engaging the entire network in the management of risk and disruptions. Solutions focused on improving transparency of tier two suppliers, inventory and demand impede mitigation and force companies into reactive strategies. Proactive strategies should include research and development, procurement, production and sales.

New technology:

The majority of companies are recognizing the growing need for investments in new technology, with about 60% of the respondents planning to invest in “big data” analysis tools within the next five years. Those tools seek to develop capabilities around the comprehensive handling and intelligent connection of data to increase planning and control outcomes. The new wave of decentralized automated network technologies are in their infancy. Predictions from the last study concerning the use of those technologies have not yet materialized.

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Global ManuChem Strategies 2014
Date: 27-28 February 2014
Venue:Kempinski Hotel Bristol Berlin, Germany
Organisation: we.CONECT Global Leaders
URL: http://production-chemicals2014.we-conect.com/en/

What Can You Expect @ we.CONECT?

MAIN TOPICS:

Strategy Frameworks and Operations Challenges; Process Optimization for Energy and Sustainability; Technologies & Trends; Operations & Production Planning in a Volatile Market; Plant Asset Management;

COMMUNITY:

The manuCHEM is the only European community and business platform that targets operations, manufacturing & production senior executives from all over Europe!

DELEGATES:

100+ senior level executives, board-level attendees and leading professionals from the chemical industry discuss about challenges and solutions, technologies, trends and best practice innovations in the field of production planning, operations management, asset management and future trends for chemical industry in 2014 and beyond.

SPEAKERS & MODERATORS:

25+ pioneers & leaders share their experience and present their best practices of operations- & production management, best-in-class projects and project execution.

NETWORKING:

Multiple opportunities for networking enabling you to meet and greet with those hard-to-meet executives in a relaxed and social setting.

SESSIONS:

30+ innovative & interactive sessions ensure that all key topics are covered / 20+ hours of networking with top level executives from the chemical industry.

FORMAT:

More than 20 Case Studies and up to 12 interactive sessions like the unique we.CONECT World Café Session, our Icebreaker and Challenge Your Peers Roundtables.

If you´re looking for new inspiration, innovative approaches and best practices on how to manage & optimize your chemical operation and plants you shouldn´t miss this event!

A Question of Trust: 2014 Global Sustainability Standards Conference
Date: 20-22 May 2014
Venue: The Crystal, London (UK)
Organiser: ISEAL Alliance
URL: www.isealalliance.org/

Don’t miss the global event for sustainability standards and certification, 20-22 May in London, hosted by ISEAL. Listen to progressive companies and governments and leaders from Fairtrade, Forest Stewardship Council, GoodWeave, Marine Stewardship Council, Rainforest Alliance, UTZ Certified and other influential certifications discuss what brings sustainable supply chains together.

The Global Sustainability Standards Conference (formerly the ISEAL Annual Conference) will bring together over 250 leaders from business, government, civil society and sustainability standards to discuss the many dimensions of trust in the sustainability standards movement.

The growth of sustainability standards in more markets and sectors hinges on trust: trust from companies and government that standards will help them meet their sustainability goals; trust from consumers that the claims and labels on products are accurate; trust from producers that certification will reward them for their good practices; and trust around the world that standards are delivering positive social and environmental impact. In an increasingly discerning world, those standards that are not transparent about how they operate are likely to lose trust. And with the imperative to show results, standards that are unable demonstrate impact are likely to find it difficult to maintain trust.

Programme

Our full day of plenaries, panels and seminars, includes exciting sessions such as:

• The Claims Jungle: What’s Credible, What’s Not?
• Standards in a Post-Certification World
• Standards as Agents of Trust in the Supply Chain
• Trust Plus: Standards as Screens for Responsible Investment
• More than the Audit: How Else Standards Build Trust
• Catalysing a Movement Towards Living Wage through Standards

Click here to read the full programme

Speakers and Panellists

Do not miss this opportunity to hear from ISEAL’s member organisations along with forerunners from progressive businesses, governments and civil society that are engaging with standards to achieve their sustainability goals. Confirmed speakers include the leaders of Fairtrade International, Marine Stewardship Council and Forest Stewardship Council, top sustainability representatives from McDonald’s, Weleda and Woolworths, and experts from WWF, The Sustainability Consortium and the National Wildlife Federation.

Click here to visit our speakers page

The global demand for natural raw materials such as coffee, tea, cocoa and palm oil continues to grow robustly. However, all the signs indicate that the producers of such resources will be unable to meet long-term demand. Therefore, most buyers are attempting to safeguard raw material supplies by investing in sustainability, primarily through independent certification schemes. Nevertheless, it is unclear whether they actually receive the same volumes of sustainable materials as they purchase – especially when it comes to cocoa and palm oil.

By Marcel te Lindert

By 2050 the world population is expected to be nine billion, which is two billion more citizens than today. The global middle class is growing even more rapidly: KPMG has calculated that by 2030 there will be three billion more middle-class consumers than in 2010. Consumption, especially of ‘luxury’ products such as coffee, tea and chocolate, is expected to increase substantially, in particular in the emerging economies in the Far East, South America and parts of Africa.

At the same time, the World Resources Institute forecasts that by 2050 the agricultural land close to the equator, which is where such products are grown, will be yielding 20 to 50 percent less than today due to climate change. The international buyers of cocoa at trading company Amtrada are already noticing diminished harvests from many cocoa trees in terms of both quality and quantity. “On top of that, it’s simply not considered cool to be a cocoa farmer in West Africa,” says Franka Seijbel from Amtrada.

In other words, the demand for coffee, tea and cocoa is growing tremendously while the supply is declining. If nothing changes, food manufacturers who process these natural, renewable raw materials will soon face major problems.

Pruning and weeding

Thankfully, it’s not all bad news; there are some positive signs too. The coffee, tea and cocoa producers who are linked to Fairtrade International, UTZ Certified or Rainforest Alliance are actually seeing increases in the yield from their agricultural land. In January, for instance, UTZ published an impact study which stated that certified coffee growers in Colombia harvest 169 percent more coffee per hectare than their non-certified colleagues.

Rainforest Alliance signalled in 2012 that its member cocoa farmers in Ivory Coast generated 73 percent more yield per hectare than non-members, plus that they earned almost four times as much. That not only means that member farmers are earning a better livelihood, but also makes the profession more appealing to newcomers.

The higher yields are the direct result of training. Member farmers learn the importance of fertilising, pruning and weeding their plants. They are given practical tips, such as to plant trees that create shade and hence protect the crops. Such measures often improve the quality of the harvest as well as the quantity: larger coffee beans, better tea leaves.

Hence, the benefits of the ever-growing presence of a Fairtrade, UTZ or Rainforest Alliance logo on the coffee, tea and chocolate products on supermarket shelves are twofold. Firstly, the logos enable manufacturers – and food retailers who feature them on their privatelabel products – to show consumers that they pay a fair price to coffee, tea and cocoa growers, consider the environment and do not use child labour.

Secondly, certification gives these companies an instrument with which to stimulate the sustainable production of such natural raw materials and hence to safeguard the long-term supply of sufficient coffee, tea and cocoa.

Evidence of payments

Starbucks is one company at the forefront of sourcing sustainably produced commodities. With over 20,000 stores in more than 60 countries, the retailer has set itself the goal of serving only ‘ethically purchased’ coffee by 2015. The company is well on the way to achieving that: in 2012, it was at 93 percent. “Ever since its foundation in 1971, Starbucks has been a company that is very aware of its social role,” explains Jan Huijgens, senior manager of logistics for Starbucks in Europe.
The full article was published in Supply Chain Movement 12

>> To download the full article in PDF, please click on the red button and fill in the fields to activate the green download button

Kakao ve palm yağı zincirleri genellikle ayırt edilmiyor

Cocoa and palm oil chains often unsegregated

Kahve, çay, kakao ve palm yağı gibi doğal hammaddelere yönelik küresel talep şiddetle artmaya devam ediyor. Ancak tüm işaretler, bu kaynakların üreticilerinin uzun vadeli talebi karşılayamayacağını gösteriyor. Dolayısıyla birçok alıcı, öncelikle bağımsız sertifikasyon planları ile sürdürülebilirliğe yatırım yaparak hammadde kaynaklarını korumaya çalışıyor. Buna rağmen, özellikle de söz konusu kakao ve palm yağı olduğunda, gerçekte satın aldıkları ile aynı miktarda sürdürülebilir malzeme elde edip edemeyecekleri belirsiz.

The global demand for natural raw materials such as coffee, tea, cocoa and palm oil continues to grow robustly. However, all the signs indicate that the producers of such resources will be unable to meet long-term demand. Therefore, most buyers are attempting to safeguard raw material supplies by investing in sustainability, primarily through independent certification schemes. Nevertheless, it is unclear whether they actually receive the same volumes of sustainable materials as they purchase – especially when it comes to cocoa and palm oil.

Yazan: Marcel te Lindert

By Marcel te Lindert

2050 yılına kadar dünya nüfusunun dokuz milyar olması bekleniyor, bu da şimdikinden iki milyar fazla kişi anlamına geliyor. Küresel orta sınıf, daha da büyük bir hızla artıyor: KPMG, 2030 yılına kadar 2010 yılından üç milyar daha fazla orta sınıf tüketici olacağını hesapladı. Özellikle Uzakdoğu, Güney Amerika ve Afrika’nın bazı bölümlerindeki yükselen ekonomilerde; tüketimin, özellikle de kahve, çay ve çikolata gibi “lüks” ürünlerin tüketiminin büyük ölçüde artması bekleniyor.

By 2050 the world population is expected to be nine billion, which is two billion more citizens than today. The global middle class is growing even more rapidly: KPMG has calculated that by 2030 there will be three billion more middle-class consumers than in 2010. Consumption, especially of ‘luxury’ products such as coffee, tea and chocolate, is expected to increase substantially, in particular in the emerging economies in the Far East, South America and parts of Africa.

Aynı zamanda Dünya Kaynakları Enstitüsü, 2050 yılına kadar bu tür ürünlerin yetiştiği, ekvatora yakın olan arazilerden iklim değişikliği nedeniyle günümüze göre yüzde 20 ila 50 oranda daha az verim alınacağını tahmin ediyor. Amtrada ticaret şirketindeki uluslararası kakao alıcıları, hem nitelik hem de nicelik açısından birçok kakao ağacından daha düşük hasat alındığını daha şimdiden fark ediyor. Amtrada şirketinden Franka Seijbel şöyle diyor: “En önemlisi de Batı Afrika’da kakao çiftçisi olmak hoş karşılanmıyor.”

At the same time, the World Resources Institute forecasts that by 2050 the agricultural land close to the equator, which is where such products are grown, will be yielding 20 to 50 percent less than today due to climate change. The international buyers of cocoa at trading company Amtrada are already noticing diminished harvests from many cocoa trees in terms of both quality and quantity. “On top of that, it’s simply not considered cool to be a cocoa farmer in West Africa,” says Franka Seijbel from Amtrada.

Başka bir deyişle kahve, çay ve kakaoya yönelik talep olağanüstü derecede artarken arz azalıyor. Hiçbir şey değişmezse bu doğal, yenilenebilir hammaddeleri işleyen gıda üreticileri kısa süre içinde büyük sorunlar yaşayacak.

In other words, the demand for coffee, tea and cocoa is growing tremendously while the supply is declining. If nothing changes, food manufacturers who process these natural, renewable raw materials will soon face major problems.

Budama ve ayıklama

Pruning and weeding

Neyse ki haberlerin hepsi kötü değil; bazı olumlu işaretler de var. Fairtrade International, UTZ Certified veya Rainforest Alliance örgütlerine bağlı olan kahve, çayve kakao üreticileri gerçekten de tarım arazilerinden aldıkları verimde artış görüyor. Örneğin ocak ayında UTZ, Kolombiya’daki onaylı kahve yetiştiricilerinin onaylı olmayan meslektaşlarına nazaran hektar başına yüzde 169 oranında daha fazla kahve hasat ettiğini belirten bir etki çalışması yayımladı. Rainforest Alliance, 2012’de Fildişi Sahili’ndeki üye kakao çiftçilerinin üye olmayanlara nazaran hektar başına yüzde 73 daha fazla verim aldığını ve ayrıca neredeyse dört katı kadar gelir elde ettiğini belirtti. Yani üye çiftçiler daha iyi gelir elde etmenin yanı sıra, yeniler için işi çok daha cazip kılıyor.

Thankfully, it’s not all bad news; there are some positive signs too. The coffee, tea and cocoa producers who are linked to Fairtrade International, UTZ Certified or Rainforest Alliance are actually seeing increases in the yield from their agricultural land. In January, for instance, UTZ published an impact study which stated that certified coffee growers in Colombia harvest 169 percent more coffee per hectare than their non-certified colleagues.

Yüksek verimler, eğitimin doğrudan bir sonucu. Üye çiftçiler, ekinlerini gübrelemenin, budamanın ve ayıklamanın önemini öğreniyor. Çiftçilere, gölge yaratan ve böylece ekinleri koruyan ağaçlar ekmek gibi pratik tüyolar veriliyor. Bu tür tedbirler, genellikle ekinlerin niceliğinin yanı sıra niteliğini de iyileştiriyor: daha büyük kahve çekirdekleri, daha iyi çay yaprakları elde ediliyor.

Rainforest Alliance signalled in 2012 that its member cocoa farmers in Ivory Coast generated 73 percent more yield per hectare than non-members, plus that they earned almost four times as much. That not only means that member farmers are earning a better livelihood, but also makes the profession more appealing to newcomers.

Böylece süpermarket raflarındaki kahve, çay ve çikolata ürünlerinin üzerinde sürekli gelişen Fairtrade, UTZ veya Rainforest Alliance’ın logosunun bulunmasına ilişkin avantajlar iki misline çıkıyor. Öncelikle bu logolar, üreticilerin ve özel markalı ürünlerinin üzerinde bu logolara yer veren gıda perakendecilerinin kahve, çay ve kakao üreticilerine adil bir fiyat ödediklerini, çevreye önem verdiklerini ve çocuk işçi kullanmadıklarını tüketicilere göstermesini sağlıyor. İkincisi sertifikasyon, bu şirketlere bu tür doğal hammaddelerin sürdürülebilir üretimini teşvik etmek ve bu sayede yeterli oranda kahve, çay ve kakao kaynaklarını uzun vadeli olarak korumak için bir araç sağlıyor.

The higher yields are the direct result of training. Member farmers learn the importance of fertilising, pruning and weeding their plants. They are given practical tips, such as to plant trees that create shade and hence protect the crops. Such measures often improve the quality of the harvest as well as the quantity: larger coffee beans, better tea leaves.

Hence, the benefits of the ever-growing presence of a Fairtrade, UTZ or Rainforest Alliance logo on the coffee, tea and chocolate products on supermarket shelves are twofold. Firstly, the logos enable manufacturers – and food retailers who feature them on their privatelabel products – to show consumers that they pay a fair price to coffee, tea and cocoa growers, consider the environment and do not use child labour.

Secondly, certification gives these companies an instrument with which to stimulate the sustainable production of such natural raw materials and hence to safeguard the long-term supply of sufficient coffee, tea and cocoa.

The full article was published in English Supply Chain Movement 12

Now available: the full article in Turkish.

>> To download the full article in PDF, please click on the red button and fill in the fields to activate the green download button

Contents Turkish Special Supply Chain Movement

7 | Election Supply Chain Professional Turkey 2014

The Most Influential Supply Chain Professionals of Turkey will be elected for the first time during a gala dinner at the Suada Club on 17th September 2014. The jury of very experienced academics and experts have determined several categories in which the nominated projects of the candidates fall. This election is a clear recognition of the value of supply chain management in Turkey.

11 | News & Background

- Supply chain software remains hugely popular

12 | IT Subway Map

14 | Profile Jeroen van Weesep, Lego

There are almost as many Lego Minifigures in the world as there are people – but that pales into insignificance compared with all the Lego bricks that have passed through children’s hands since 1957. At the start of this century the family-owned company came close to bankruptcy, but a successful transition from a productfocused to marketing-focused approach managed to turn the tide again within the space of a few years. As Vice President Supply and Inventory Planning Europe and Asia, Jeroen van Weesep is helping to safeguard and sustain that transition in the supply chain. In June of this year, he was voted Supply Chain Professional 2014.

20 | Management: sustainability pays off

The global demand for natural raw materials such as coffee, tea, cocoa and palm oil continues to grow robustly. However, all the signs indicate that the producers of such resources will be unable to meet long-term demand. Therefore, most buyers are attempting to safeguard raw material supplies by investing in sustainability, primarily through independent certification schemes. Nevertheless, it is unclear whether they actually receive the same volumes of sustainable materials as they purchase – especially when it comes to cocoa and palm oil.

27 | Self-assessment S&OP

Your objective is a supply chain which is optimally aligned with market demand. Hence, sales & operations planning (S&OP) is crucial. But what does S&OP really contribute to your company’s performance? Is S&OP delivering demonstrable results? To help you discover how well your S&OP process is actually functioning, Supply Chain Movement and Involvation have developed this practical self-assessment model.

28 | Interview Altan Aytaç, Tofaș

As Supply Chain Director at Tofaş, Altan Aytaç has a unique perspective. He is responsible for the end-to-end supply chain at a complex automotive plant that makes multiple vehicle models on a single production line. He also has responsibility for the ongoing development of the supply chain function and for building and maintaining relationships with the commercial and industrial pillars of the organisation.Furthermore, he plays a vital role in the relationship between the supply chain organisation in Bursa, Turkey and the wider Fiat Chrysler Group of which Tofaş is a part.

34 | Mindmap for strategic transport optimisation

Companies are increasingly realising that transport can have a major influence, not only on customer satisfaction but also on cost patterns, flexibility and sustainability. And transport optimisation offers unique opportunities for innovation in these areas. Together with Ortec, international provider of advanced planning software, Supply Chain Movement has created a mindmap  to outline the route, including road signs indicating potential hazards along the way.

36 | History: Alexander the Great’s talent for logistics

Alexander the Great is known for having lead the longest, uninterrupted military campaign of all time. It was a battle which lasted eleven years (334-323 BC), taking him eastwards from Macedonia through some of the most inhospitable and unexplored areas of the world. He got as far as India, and combined the territories he had conquered into a global empire. Along with this succession of impressive conquests, Alexander also had a talent for logistics, enabling him to supply provisions to tens of thousands of soldiers and their followers throughout the campaign.

40 | Interview Toygar Narbay, Narkonteks

Cutting your coat according to your cloth is giving the Turkish textiles industry a strong reputation in the global clothing market. Toygar Narbay tells the story of Narkonteks’ growthand the role being located in Turkey’s booming textile industry has played in the company’s success. Effective supply chain management has been vital in building a compelling offering –  both as a manufacturer for leading international brands and in developing its own brand.