CSCP, UNEP, WBCSD, WI, InWEnt, UEAP ME Life Cycle Management Navigator: 15_PR_RSCM 1 The Life Cycle Management Navigator Responsible Supply Chain Management Training Session 15

CSCP, UNEP, WBCSD, WI, InWEnt, UEAP ME Life Cycle Management Navigator: 15_PR_RSCM 2 Responsible Supply Chain Management What is it? What? Responsible supply chain management is the integration of social and environmental aspects into the supply chain. Information exchange and cooperation along the supply chain are great social, environmental, and economic opportunities!... are great social, environmental, and economic opportunities!

CSCP, UNEP, WBCSD, WI, InWEnt, UEAP ME Life Cycle Management Navigator: 15_PR_RSCM 3 Responsible Supply Chain Management What is a Supply Chain? What? The key elements of the supply chain are 1. Actors 2. Flows of -material -information -money Source: Adopted from Ganeshan and Harrison & UNEP, 2007, Life Cycle Management A supply chain comprises procurement, operations, and logistics from raw materials acquistions to customer satisfaction.

CSCP, UNEP, WBCSD, WI, InWEnt, UEAP ME Life Cycle Management Navigator: 15_PR_RSCM 4 Responsible Supply Chain Management Business is a Team Game! What? Supplier 1 Supplier 2 Operation Customer 2 Customer 1 Flow of goods (and money!) Flow of information time Value Source: Adopted from Alan Powell

CSCP, UNEP, WBCSD, WI, InWEnt, UEAP ME Life Cycle Management Navigator: 15_PR_RSCM 5 Responsible Supply Chain Management Interaction with Internal and External Stakeholders What? Source: UNEP, 2007, Life Cycle Management - A Business Guide to Sustainability

CSCP, UNEP, WBCSD, WI, InWEnt, UEAP ME Life Cycle Management Navigator: 15_PR_RSCM 6 Responsible Supply Chain Management What are the key decisions? What? For the operating company SCM involves: supplier decisions; purchasing decisions; material management decisions; production scheduling decisions; inventory decisions; transportation decisions; customer service. Source: CESMB Needed is information and cooperation!

CSCP, UNEP, WBCSD, WI, InWEnt, UEAP ME Life Cycle Management Navigator: 15_PR_RSCM 7 Responsible Supply Chain Management What are the Main Functions involved? Where? ProductionProcurement Material handling Process schedule Supplier selection Purchasing criteria Supplier selection Purchasing criteria Inventory decisions Transportation decisions Inventory decisions Transportation decisions Customer service Supplier Customer Marketing/Sales

CSCP, UNEP, WBCSD, WI, InWEnt, UEAP ME Life Cycle Management Navigator: 15_PR_RSCM 8 Responsible Supply Chain Management Benefits Why?... of making demands on suppliers: Potential to find a good supplier; Indentify the effect the supplier has on your environmental performance; Establish a dialogue e.g. on technology exchange; Being seen as an “environmental champion“; Improve the overall business performance.... of getting environmental demands from customer: Identify ineffective production and distribution processes; Fulfill legal demands from extended producer responsibility; Better customer relationship; New markets. Source: CESMB

CSCP, UNEP, WBCSD, WI, InWEnt, UEAP ME Life Cycle Management Navigator: 15_PR_RSCM 9 Responsible Supply Chain Management Steps to Go! How? Take the simplest step first! Step 4Step 3 Step 2 Customer 1 Step 1 Customer 2 Supplier 2 Operation Supplier 1 Communicate and cooperate!

CSCP, UNEP, WBCSD, WI, InWEnt, UEAP ME Life Cycle Management Navigator: 15_PR_RSCM 10 Responsible Supply Chain Management Green Purchasing How? The easiest step to take is responsible purchasing! 1. Select a product for pilot project 2. Select a key supplier 4. Develop a partnership! 3. Foster communication with that supplier!

CSCP, UNEP, WBCSD, WI, InWEnt, UEAP ME Life Cycle Management Navigator: 15_PR_RSCM 11 Responsible Supply Chain Management Green Purchasing How? A product can be selected on the basis of Benefit to company (sales, environment, competitive position) Cost to company Environmental impact along the life cycle (see LCA) Interest by product chain partners 1. Select a product for pilot project

CSCP, UNEP, WBCSD, WI, InWEnt, UEAP ME Life Cycle Management Navigator: 15_PR_RSCM 12 Responsible Supply Chain Management Green Purchasing How? The most important suppliers are often called key suppliers. The designation depends, for example, on: Amount of deliveries Supplier´s product quality Supplier´s special expertise Supplier´s delivery reliability 2. Select a key supplier

CSCP, UNEP, WBCSD, WI, InWEnt, UEAP ME Life Cycle Management Navigator: 15_PR_RSCM 13 Responsible Supply Chain Management Green Purchasing How? Product mass Recyclability Toxicity of material Amount of packaging... Product mass Recyclability Toxicity of material Amount of packaging... Take back of packaging Environmental reporting Use of EMS... Take back of packaging Environmental reporting Use of EMS... Ask for product aspects Ask for supplier behavior 3. Foster communication with that supplier!

CSCP, UNEP, WBCSD, WI, InWEnt, UEAP ME Life Cycle Management Navigator: 15_PR_RSCM 14 Responsible Supply Chain Management Green Purchasing How? Establishing good partnerships will improve your overall business performance in the long run.... and you will win the team game. joint trial projects 4. Develop a partnership! long-term alliances

CSCP, UNEP, WBCSD, WI, InWEnt, UEAP ME Life Cycle Management Navigator: 15_PR_RSCM 15 Responsible Supply Chain Management Sambazon and the Açai Berry Business Example Sustainable Management of the Brazilian Amazon 1. Sustainable harvesting of Açai berries in the Amazon estuary. 2. Supporting local communities and businesses through premium prices. 3. Marketing organic Açai products to health and fitness conscious consumers in California and US.

CSCP, UNEP, WBCSD, WI, InWEnt, UEAP ME Life Cycle Management Navigator: 15_PR_RSCM 16 Responsible Supply Chain Management Sambazon and the Açai Berry Business Example create bio-socio indicators to assess the impact of the Açaí trade develop and implement sustainable Agro- Forestry Management outreach projects establish an Açaí Technical Centre aimed to develop and disseminate economically feasible technologies to recycle Açaí by- products Training programmes on agricultural management benefiting the local cooperating families Steps of the Açai Project

CSCP, UNEP, WBCSD, WI, InWEnt, UEAP ME Life Cycle Management Navigator: 15_PR_RSCM 17 Responsible Supply Chain Management Sambazon and the Açai Berry Business Example Environmental Avoiding de-forestation through logging and mining Protecting biodiversity No use of pesticides or fertiliser Social Empowering marginalised rainforest people and culture Learning and training opportunities through the Sustainable Açaí Project Health food for US consumers Economic Secure income & employment for ribeirinhos Increased income per hectare in comparison to cattle farming or logging Mechanism for expanding project Implications of the Açai Project

CSCP, UNEP, WBCSD, WI, InWEnt, UEAP ME Life Cycle Management Navigator: 15_PR_RSCM 18 Responsible Supply Chain Management CSR-Project Case Study Source: UNEP, 2007, CSR in China‘s ICT Sector Information and Communication Sector, China Identification of strategies and activities to improve social and environmental conditions meet requirements of customers thus stay in market Conduct a cost-benefit analysis to understand and prioritize CSR improvements Implement management and performance measurement systems Improve worker-management communication Take ownership of improvements and implement CSR with own suppliers Challenges for SMEs as suppliers Goal Approach Constructed as multi- stakeholder initiative, e.g. with Government, Shenzhen Electronics Industries Association, Global eSustainability Initiative Key elements: Diagnostic assessment, Workshop, Summary report, Pilote project

CSCP, UNEP, WBCSD, WI, InWEnt, UEAP ME Life Cycle Management Navigator: 15_PR_RSCM 19 Responsible Supply Chain Management Purchasing of Green Cleaning Products Case Study Medium-sized manufacturer of generic and “store brand” pharmaceuticals and personal care products. Initial problem: Bad indoor air quality. Saving more than $ 35,000 annually after switching to green cleaning products (and interviewing suppliers). Reasons for savings: -some green cleaning products are less expensive than the traditional ones; -new bulk purchasing opportunities; -fewer workers’ compensation claims; -rising employee productivity. Source: Perrigo, USA

CSCP, UNEP, WBCSD, WI, InWEnt, UEAP ME Life Cycle Management Navigator: 15_PR_RSCM 20 Responsible Supply Chain Management Increasing pressure on SMEs in supply chains Case Study BASF is member of Responsible Care program and expect his business partners to comply with standards such as environmental protection, occupational health and safety, process safety, emergency response, etc.. SMEs represent large percentage of business partners and BASF is committed to work closely with them to attain these standards. Special focus on 3 groups of partners (mainly SMEs): 1- Logistic partners Safety and Quality Assessment is conducted to maintain high safety standards for transportation of products. 2- Contractors Bonus system for safe working practices. 3- Raw material suppliers Rank suppliers on a safety matrix according to supplier and product risk. On-site visits and evaluations are conducted Support suppliers in achieving and maintaining EHS requirements Source: UNEP, Industry and Environment, Volume 26, Oct.-Dec BASF, Germany

CSCP, UNEP, WBCSD, WI, InWEnt, UEAP ME Life Cycle Management Navigator: 15_PR_RSCM 21 Responsible Supply Chain Management Tips for Action! Tips Be proactive - think about new business opportunities working with your suppliers! Don´t start too fast - take easier steps first! Demonstrate supply chain performance to your customer, engage with second tear suppliers!