North American Supply Chain Report_Dec2010

8/8/2019 North American Supply Chain Report_Dec2010

1/25

North American

Sustainable Supply Chain Report

A brief analysis of eyefortransports rec ent survey

2010

For furthe r deta ils, please c ontac t:McKinley MuireyefortransportWorld phone : +44 (0)207 375 7167US Toll Free: 1 800 814 3459 Ext. 7167

Cana da Toll Free : 1 866 996 1235 Ext. [email protected] om
mailto:[email protected]:[email protected]


2/25

North American Sustainable Supply Chain Report 2010

Table of Contents

I. Introduc tion ............................................................................................. 5

II. Methodology and Approach ................................................................ 6

III. Profile of Respondents ......................................................................... 7

IV. Importanc e of Supply Chain Susta inability .................................. 9

V. Sustainable Supply Chain Initia tives ........................................... 11

VI. Measuring Supply Cha in Sustainability ....................................... 18

VII. Awareness of Sustainability Issues ................................................ 21

VIII. Conc lusions .............................................................................. 25

4th Sustainable Supply Chain Summit

October 28-29, San Franciscowww.eft.com/sustainablesupplychain

2


3/25


List of Charts

Annua l Reve nue ...................................................................................... 7

Business Typ e ...................................................................................... 7

Shipper Ind ustries Represented ................................................................ 8

Importance of Environmental Issues toShipper Sup p ly Cha in Stra tegy ................................................................ 9

Importa nc e of Environmenta l Issues to 3PLSup p ly Cha in Stra tegy ........................................................................... 9

Importa nc e to Shipp ers of Susta inab ility in Other Co mpanies ........ 10

Change in Sc rutiny for Shipp ers over Supp ly Cha inSusta ina b ility .................................................................................... 10

Key Drivers for Shippers Instiga ting Susta inab leSup p ly Cha in Initiatives (2010) .............................................................. 11

Key Drivers for Shippers InstigatingSusta inab le Sup p ly Cha in Initiatives (2009) ......................................... 12

Key Drivers for 3PLs InstigatingSusta inab le Sup p ly Cha in Initiatives (2010) ......................................... 12

Key Drivers for 3PLs InstigatingSusta inab le Sup p ly Cha in Initiatives (2009) ......................................... 13

Bigg est Barriers for Shipp ers Ad op ting GreenSup p ly Cha in Initia tives ......................................................................... 14

Bigg est Barriers for 3PLs Ad op ting GreenSup p ly Cha in Initia tives ......................................................................... 14

Suc c ess of Green Initiatives fo r Shippers ......................................... 15

Suc c ess of Green Initia tives fo r 3PLs ................................................... 16

Ant icipa ted Drive rs for Improving Susta inab ility of

Sup p ly Cha in .................................................................................... 17Shipper Leve ls of Measurem ents or Reduc tions .............................. 18

3PL Leve ls of Measurements or Reduc tions ......................................... 18

Key Reasons for Shippers to Measure Sup p ly Cha inSusta ina b ility .................................................................................... 19

Key Reasons for 3PLs to Measure Sup p ly Cha in Susta inab ility ........ 19

Leve l of Ship per Emission Da ta Collec tion ......................................... 20

Requests by 3PL Custo mers fo r Susta ina b ility Reports ................... 20



3


4/25


Ship per Awareness of Green Prog rams ......................................... 21

3PL Aw areness of Green Prog rams ................................................... 22

Responsib ility fo r Environmenta l Sup p ly Cha in Issues ................... 23

Me tho ds of Disc overing New Supp ly Cha in Tec hno log ies ........ 24



4


5/25


I. Introduc tion

In the a ftermath o f the rec ession, budgets a re still tight a nd initiatives

are b eing heavily sc rutinized for ROI. Whilst tha t would see m to restric tfurther developments in the environmental and sustainability arena, themo re c ha lleng ing b usiness c lima te has resulted in a verita b le surge o fnew initia tives and inc rea sed c om mitment ac ross a w ide-range ofindustries.

The rise o f Sc op e 2&3 emissions red uc tion ta rgets and Life-Cyc leAna lysis show s tha t fa r from being deeme d irreleva nt, susta inab ilityinitia tives a re b eing p rioritized and invested in. Likew ise, theem ergenc e o f susta inab ility sc orec ards from c om panies suc h as Wal-

Ma rt, Proc ter & Ga mb le a nd Ka iser Permanente foreshad ow the needfor sta ndard iza tion and a future in whic h susta inab ility prac tices a reubiquitous.

The 4th in an a nnua l series of reports, the 2010 North Am erica nSusta inab le Supp ly Cha in Rep ort c ap tures a snapshot of the c urrentindustry views, initia tives and cha llenges in regards to susta inab ilitywithin the supp ly cha in. The g oa l of the resea rch is to shed light on theindustrys ma jor conc erns and barriers in this a rea , as well as to highlightthe p rog rams tha t a re b ene fitting c om panies mo st both in terms of

wa ste / em issions red uc tion and ROI.

All of the da ta ga thered in this rep ort will be d isc ussed and deb a ted athe 4th Sustaina ble Supply Chain Summit the industrys most respectedforum for Fortune 500 c ase stud ies and p rac tica l, up to the minutestrategy. This yea r s event is foc using on more a dvanc ed susta inab lesupp ly cha in initiatives and will be showc asing in-dep th c ase stud iesfrom Susta inab ility Thought Lea ders offering met rics and rea l lifeexamp les of wha t s wo rk and wha t hasn t. The Summ it will take plac eOc tober 28-29 2010 in San Franc isc o.

For more information on the rep ort or the 4 th Susta inab le Sup p ly Cha inSummit, p lea se c ontac t Mc Kinley Muir a t mm uir@eft .com , US Toll Free 1800 814 3459 ext. 7167, CAN Toll Free 1 866 996 1235 ext. 7167, or visitthe w eb site a t www.eft.com/sustainablesupplychain



5
mailto:[email protected]://www.eft.com/sustainablesupplychainhttp://www.eft.com/sustainablesupplychainmailto:[email protected]


6/25


II. Methodology a nd App roac h

This survey w as c onduc ted in Ma rc h / Ap ril 2010 with responses solic itedby ta rgeted e-ma il lists, selec t trad e a ssoc iation m em berships, variousrela ted-industry da ta bases and o ther ta rgeted m ethods. The surveylooked at a range of top ic s, inc luding the impo rtanc e o f supp ly c hainsusta inab ility, susta inab le sup p ly cha in initia tives, measuring supp lyc ha in susta inab ility, and awareness of susta inab ility issues. Noindividual responses were analyzed, but rather all responses wereconsolidated.



6


7/25


III. Profile of Respondents

Over 600 profe ssiona ls respond ed to the survey. 48% of theserep resented shippers, with 29% rep resent ing 3PLs and 23% rep resentingsupply chain solution providers.

A la rge p rop ortion of respond ents (34%) rep resented com panies withannua l revenue s above $1 b illion. 15% rep resented c om panies withannual revenues between $250 million and $1 billion, 14% represented

c om panies with annua l revenue s between $50 million and $250 million,and 37% rep resented c om panies with annual revenues below $50million.



7


8/25


The respondents rep resent ing shipp ers c overed a b roa d sp rea d o findustries. The manufac turing / industria l and reta il & c onsumerpac kaged go od s industries saw the highe st num be r of respond ents.



8


9/25


IV. Imp ortanc e o f Supply Cha in Sustainab ility

In both this yea rs survey a nd in last year s, respond ents were a skedhow important env ironm enta l issues a re to the ir c om pany's supp lyc ha in strategy. The large st number of shipp er respond ents sawenvironmenta l issues as being imp orta nt this year, whereas 2009 saw ala rger numb er see ing them as very important. In c ont rast, results from3PLs rem a ined fa irly co nsistent this year and last, with the ma jority o frespond ents see ing environm enta l issues as being important.



9


10/25


Shippers we re a sked to identify to what deg ree does anotherc om pany's susta inab ility affec ts the ir dec ision to do business with the m.The m a jority of respond ents saw it a s being one fa c tor am ong ma nyothers, howeve r, a higher numb er placed greater imp ortanc e to theissue tha n the numb er who d idn t see it a s a c onsideration.

Shipp ers were a lso asked whether they think sc rutiny over the ir

c ompany's supp ly c hain susta inab ility ha s inc rea sed , com pared to ayea r ago . A very simila r pa ttern emerge d to tha t seen in last yea r srep ort, with the va st m a jority see ing a n inc rea se in sc rutiny, be it slight,mode rate , or notable.



10


11/25


V. Sustainab le Supply Chain Initiatives

The rep ort looked a t the key d rivers for dec isions to instiga te susta inab lesupp ly cha in initia tives. On the whole, all respond ents a ttributed lessimp ortanc e to these d rivers this yea r than the y d id last year, howe verthe relative imp ortanc e of the va rious d rivers rema ined ma rkedlysimilar.

This pa ttern was ev ident in the responses from shipp ers, whe re thema jority o f responses in 2009 highlighte d most d rivers as being ve ryimp ortant, whereas they were broad ly highlighte d a s being imp ortantor rea sona b ly important in this yea r s rep ort.

The mo st no ta b le e xce p tion to this was reg a rd ing financ ial ROI, as itwa s the only driver tha t increa sed its imp ortanc e leve l to shippers, frombeing the 9th mo st important d river in last yea r s rep ort, it was viewed asthe 2nd mo st imp ortant d river in this yea r s rep ort.

The rela tive imp ortanc e of the va rious d rivers rem a ined fa irly c onsistentfor shipp ers, with imp rov ing c ustome r relat ions being see n a s the mo stimportant d river in bo th reports, and improving investo r rela tions beingg iven less imp ortanc e in both rep orts.



11


12/25


The same pa ttern was b road ly see n in responses from 3PLs, with mostd rivers having less importanc e tha n last year, but with their relat iveimp orta nc e rem a ining simila r. The excep tions for 3PLs were regard inginc rea sing supp ly c ha in efficiency, dec rea sing fuel expend iture, andimp roving c ustom er relations, all of w hic h ma inta ined the sameimp ortanc e a s last yea r.



12


13/25


Responses show ed less c orrela tion when it c ame to the b iggest b a rriersto a dop tion of g reen supp ly c ha in initia tives, w ith the rela tive size o fthese ba rriers va rying quite ma rkedly betw een the d ifferent groups ofrespondents.

The most notab le b arriers for shipp ers we re p ayback period b eing to olong , cost b eing too high, customers not b eing prepa red to p ay aprem ium, and a lac k of da ta a nd standard iza tion with around 50% ofrespond ents ra ting the se a s being either a b arrier or a b ig ba rrier.

On the who le, most fa c tors p rove d to be b igg er ba rriers for shipperstha n for 3PLs. With the exc ep tion of custome rs not b eing p rep ared topay a p rem ium, all other fac tors were less of a n ob sta c le to 3PLs tha nto shipp ers. A lack of da ta a nd sta ndard iza tion wa s a lso large ly see nas a barrier by 3PLs, thoug h ve ry few respond ents saw it as being a b ig

barrier.

One of the most no ta b le responses from 3PLs was the lac k ofrespond ents, c om pared to shippers, who saw p ayba c k period beingtoo long a s an ob sta c le. While this wa s the m a in conc ern for shipp ers,it wa s only a m inor conc ern for 3PLs. This was a lso reflec ted in thedec rea sed imp ortanc e 3PLs p laced on financ ia l ROI as a d river forinstigating sustainable supply chain initiatives.



13


14/25




14


15/25


Respond ents we re a lso asked to identify the g reen/ environm enta linitia tives their c om pany has in plac e o r a re p lanning to p ut in plac ewithin their supp ly cha in, and how suc cessful they have b een. On thewhole, b oth shipp ers and 3PLs have had b roa d ly simila r levels ofsuc c ess with g reen initiatives, albe it by ut ilizing d ifferent m ethod s. Of a ll

the initia tives tha t the repo rt loo ked a t, a g rea ter number ofrespond ents ha ve rep orted eithe r ve ry or fa irly suc c essful levels of ROI,contrasted with the num ber not see ing any bene fit from the initia tives.

In response to this question, shipp ers rep orted the grea test levels of ROIfrom imp roving energy effic ienc y and rec yc ling materia ls. Aroundthree quarters of respond ents rep orted either very or fa irly suc c essfulROI, c om pared with only 3% not see ing b ene fits from these initia tives.

Other notable responses included strategic warehouse/distribution

c ente r p lacem ent, red uc ing p ackag ing, emission me asuring/red uc tions, and using mo re e ffic ient transport modes, a ll of w hich sawaround 50% of shippers reporting eithe r very o r fa irly suc c essful ROI.



15


16/25


Respond ents rep resenting 3PLs a lso rep orted the grea test levels of ROIfrom imp roving e nergy efficienc y, with red uc ing miles throug h vehic lere-rout ing a s the next most suc cessful initia tive. Ag a in, a round threequa rte rs of respondents rep orted eithe r ve ry or fa irly suc cessful ROI,c om pared with only 3% not see ing b ene fits from these initiatives.

Other notab le responses inc luded horizonta l co llaboration w ith o therc ompanies, near and / or green/ environm enta l sourcing, em issionmeasuring/ reductions, and using more efficient road vehicles, all ofwhich saw around 50% of shippers reporting either very or fairlysuc c essful ROI.

The survey a lso loo ked a t w ha t respond ents think will be "the next b ig

thing" to p rovide a push for com panies to imp rove the susta inability o fthe ir supp ly c ha in. Results were fa irly uniform a c ross the d ifferentgroup s of respond ents, w ith firmer leg isla tion/ reg ula tion and c onsume rdriven d emand be ing the two most antic ipa ted drivers.



16


17/25




17


18/25


VI. Mea suring Supply Cha in Sustaina bility

The rep ort a lso loo ked a t a number of issues reg a rd ing m ea suringsupp ly c ha in susta inab ility. Respond ents were asked to ident ify wha tmeasurements or reductions they are currently undertaking.

Energy c onsump tion wa s mea sured / rep orted / red uced to the g rea testextent by shipp ers, with wa ter c onsump tion, fuel expend iture, solidwa ste, and c a rbon em issions the othe r most no tab le a rea s of foc us.For 3PLs, carbon emissions, air emissions, energy consumption, and fuelexpend iture, were the most notab le responses.



18


19/25


Respond ents were a sked to rank their top rea sons for wo rking tomea sure supp ly c ha in susta inab ility. Overa ll, 3PLs ra ted these fa c to rs asbeing slight ly mo re imp ortant than shippe rs c onsidered them to be,though a simila rity ca n be seen in the relat ive rankings of the fac tors.

The m ost no ta b le va riat ions in the responses was seen in the inc rea sedimportance placed by shippers on reputation for social responsibility,and the increased imp ortanc e p lac ed by 3PLs on g a ining c ustom ers.



19


20/25


Shippers we re asked how advanc ed their em ission da ta c ollec ting is.The ma jority ra ted their da ta c ollec tion as advanced or veryadvanced , while a sizea b le number were still in the d eve lop mentstage . Only a minority considered the ir da ta c ollec tion non-existent,with a g rea ter number for Sc op e 3 than Sc op e 2, and a greate r

numb er for sc op e 2 than scop e 1.

In turn, 3PLs were a sked whether the ir c urrent and potent ial custome rsare a sking for susta inab ility rep orts, inc luding em issions da ta . Thema jority either haven t been asked fo r the informa tion, or have b eenby less tha n ha lf the ir c ustomers. Only 13% see most o f the ir c ustomersreq uesting this sort informa tion.



20


21/25


VII. Awa reness of Sustainability Issues

Respond ents were a sked to identify the ir levels of awarene ss andpartic ipa tion of a variety of green prog rams. The responses show edsimila rities between the va rious group s of respond ents, thoug h the rewere a few no tab le d ifferences.

There was a muc h la rger degree of p a rticipa tion in the EPA Sma rtWayProg ram by 3PLs, with 46% participa ting in it c om pared to 17% ofshippers. In c ontrast, there w as a grea ter degree of p a rtic ipa tion in theLEED-EBOM Program by shipp ers, with 21% partic ipa ting in it c om paredto 5% of 3PLs.



21


22/25


The rep ort a lso loo ked a t w ho is responsib le for environm enta l supp lyc ha in issues within organiza tions. There were som e no ta b le d ifferenc esin the responses, with the responsibility lying with the Operations

Direc to r far more o fte n fo r 3PLs than fo r shippers (25% for 3PLscom pared to 8% for shipp ers).

There w as a lso a highe r number of 3PLs who gave the responsibility to aGreen Tea m o r a Transporta tion Direc tor, while a grea ter numb er ofshipp ers gave the responsibility to either a Supp ly Cha in Direc tor or aProcurement Director.



22


23/25


The final issue in the survey q ueried where respond ents find o ut a boutthe latest supp ly cha in tec hnolog ies for the ir c om pany. In this reg ard ,the re w ere simila rities in the o vera ll pa tte rn of answers, though 3PLsge nerally used a grea ter range of sources c om pared to shippers.

The most freq uent source for all respond ents was in sessions a t

c onferences or trade shows. Webinars and exhibitions a t c onferencesor trade shows we re othe r pop ula r opt ions, bo th o f whic h were utilizedby over 50% of respondents.



23


24/25




24


25/25


VIII. Conc lusions

Diffic ult ec onom ic c irc umstanc es have no t ab ate d the need forimp rovem ent w ithin supp ly c ha in susta inab ility; ra ther, the d a tasugg ests an increa sed awa reness and deve lop ment o f new initiat ives.One of the m ost te lling sta tistics is the advanc em ent of Financ ial ROI asthe 2nd highest d river in 2010 from the 9th highest driver in 2009. Clearly,the link betwe en susta inab ility and goo d business p rac tices is beingforge d and with c ontinually increasing sc rutiny, com panies will belooking to stay ahead o f the c urve w ith the most effic ient a ndprofitab le p rog rams.

The eme rgenc e of susta inab ility rep orting a nd sc ore-ca rd ingdemonstra tes tha t this an a rea of increa sing sc op e the c om paniestha t invest now will be the ma rket lea ders and the ones who lagbehind may find themselves sidelined by com petitors who can de liversupply chain sustainability benefits.

For mo re informa tion on wha t c om panies like Sta rbuc ksProc ter &Ga mb lePep siCoCoc a C olaOffice Dep otAme ric an Elec tricPowerIBMUnileve rSha rp Elec tronicsAp p liedMa te rialsCadburyBT AmericasVerizon and ma ny more a re d oingto enha nc e the susta inab ility o f the ir supp ly cha in, visitwww.eft.com/sustainablesupplychain and join as a t the 4th Sustainable

Supply Cha in Summit, Oc tober 28-29 in San Franc isc o.

For furthe r deta ils about the 4th Susta inab le Sup p ly Cha in Summitplease c ontac t:McKinley MuirHea d of Resea rc h & Ma rket InsightUS Toll Free: 1 800 814 3459 ext. 7167CAN Toll Free: 1 866 996 1235 ext. [email protected]
http://www.eft.com/sustainablesupplychainmailto:[email protected]:[email protected]:[email protected]://www.eft.com/sustainablesupplychain

Documents

North American Supply Chain Report_Dec2010