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Using CCWG Data to Create Sustainable Supply Chains
Sarah FlaggGlobal Head of Sustainable LogisticsDamco International B.V.TransPacific Maritime Conference 2013Long Beach Convention CenterMarch 4, 2013
Agenda
February 28, 20131
Sustainable Logistics
Case Study Marks & Spencer Sustainable Supply Chain
SUSTAINABLE LOGISTICS
February 28, 20132
February 28, 20133
Top 10 Global Logistics Provider
10,800+ Employees in Over 90 Countries
Manage over 2.5 Million TEUs and 110,000 Tonnes of Air Freight Annually
Part of A.P Moller –Maersk Group
February 28, 20134
Each year until 2030, at least 150 million people will be entering the middle class.
This will bring almost 60% of the world’s Population into a middle income bracket.
Over the same period energy demand is projected to increase by 40%, and water demand is expected to outstrip supply by 40%.
World Economic Forum Sustainable Consumption Initiative
Sustainability will Change Business Operations
● Drive to manage supply chain impacts will change retailer-supplier relationships
● Business models will change to incorporate closed loop processes and create value chains
● Gain entrance in to new geographies
● Enter new markets by developing products that cater to sustainably conscious consumers
● Reduce dependency on scarce resources and volatile energy prices
February 28, 20135
Sustainability is no longer about cost and risk reduction –it is an opportunity for business growth
Carbon in the Supply Chain
Grams of CO2 emitted by transporting 1 ton of goods 1 kmGrams of CO2 emitted by transporting 1 ton of goods 1 km
February 28, 20136
Air(NTM average, Boeing
747-400)
Truck(NTM global average)
Rail Electric(NTM global average)
Ocean(CCWG global average, dry) 7
18
21
47
560
Rail Diesel(NTM global average)
Origin Services Destination Services
Supply Chain Sustainability = Efficiency
February 28, 20137
Network Optimisation
Equipment Utilisation
Carrier Selection
Packaging Transport Mode
MARKS & SPENCER SUSTAINABLE SUPPLY CHAIN
February 28, 20138
Marks & Spencer Plan A
● Ultimate goal to become the world's most sustainable major retailer
● Establishes 180 ethical and environmental commitments to achieve by 2015
● A robust and transparent governance structure is in place to ensure delivery against targets
● Plan A carbon reductions must be aligned with logistics and supply chain strategy
● M&S is the first major retailer to go carbon neutral and 31% of its products have a Plan A attribute
February 28, 20139
Marks & Spencer - Damco Partnership
February 28, 201310
• Damco conducted workshops to help M&S employees understand the environmental implications of supply chain decisions in procurement, sourcing, and supply chain design
Build Internal Knowledge and Awareness
• Provides visibility of carbon impacts from the entire M&S supply chain
• Allows M&S to mitigate future supply chain risks and distortion by enabling carbon-aware procurement and network design decisions
• Documented a 38% reduction in CO2 per cubic meter shipped since 2007
Global SupplyChain CarbonDashboard
• Damco continues to work with M&S to identify and manage drivers with a higher impact on the supply chain to reduce CO2 emissions and eliminate waste
• Example: Damco presented a route-to-market analysis, identifying a 50%+ reduction in CO2
through mode switch and cargo consolidation at origin
Strategy Development
Marks & Spencer Supplier Network
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Destination
Origin
Origin & Destination
International Hubs
UK Exports WHS
Damco Global SupplyChain CarbonDashboardMarks & Spencer
February 28, 201312
Total CO2 Emissions FY 2007-2011
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-
100,000
200,000
300,000
400,000
500,000
600,000
-
20
40
60
80
100
120
140
Q1/Q22007
Q3/Q42007
Q1/Q22008
Q3/Q42008
Q1/Q22009
Q3/Q42009
Q1/Q22010
Q3/Q42010
Q1/Q22011
volu
me
(m3
)
Emis
sio
n (
CO
2 K
g/
m3
)
Volume (m3) C02 Kg/m3
Carbon Intensity
Shipments
Emissions
37,4%* Kg CO2/m3
55,9 %
3 %
Reduced air freight volumes
Increased origin consolidation
New routes to market
Overseas network development
*Average CO2 across GM supply chain from 2007-2011
Impact of Efficiency Improvements
CFS UsageCFS Usage Airfreight VolumesAirfreight Volumes
International Hubs ImplementationInternational Hubs Implementation
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0%
10%
20%
30%
40%
50%
0
20
40
60
80
100
120
2007 2008 2009 2010 2011
%
Use
of
CFS
Kg
C0
2/
m3
Emissions (CO2 Kg)/m3 % CFS
-
20,000
40,000
60,000
80,000
100,000
2007 2008 2009 2010 2011
Total Emissions (CO2 t) "Expected emissions"
Air Volumes (m3)
Emis
sio
ns
- 20 40 60 80 100 120 140
-
40,000
80,000
120,000
160,000
200,000
2007 2008 2009 2010 2011
Kg
CO
2 /
m3
Vol
um
e (m
3)
Hemel Hampstead (Volume) Hemel Hampstead (Exp. Vol.) Hubs (Volume)
Int. Hubs (Exp. Vol.) Emissions C02 Kg/m3
Results and Next Steps● Challenges
● Multiple stakeholders
● Issues with data quality and level of detail
● Industry Recognition
● SCM Logistics Excellence 2012 Sustainable Supply Chain Award
● ‘Highly commended’ at the 2012 European Supply Chain Excellence Awards, category Contribution to Environmental Improvement: Climate Change
● Next Steps
● Utilize the Global SupplyChain CarbonDashboard to integrate CO2 goals in to decision making
● Continue M&S – Damco Partnership
● Engage with external partners (i.e. UK Low Carbon Shipping Initiative)
February 28, 201315
“At M&S, our ambition is to be the world’s most sustainable retailer by 2015.
Projects and partnerships such as the Global SupplyChain CarbonDashboard
project with Damco are a crucial part of this, and we are delighted with the many
benefits it has delivered so far.”
Adam Elman, M&S Head of Delivery Plan A and Sustainable Business
February 28, 201316
If you’re talking to a business or operations person, and you talk about productivity improvement, their eyes brighten up.
They get excited. [If] you talk to them about making that same facility more sustainable, they might not get it.
But what they are realizing more and more is that the two are really the same thing.”
Linda Fisher, Chief Commercial OfficerDuPont
THANK YOU
Sarah FlaggGlobal Head of Sustainable LogisticsDamco International [email protected]+31 (0)70-3023807
