Download Dec 16 OT Meeting

4th India Steel Summit
Achievement & Unfinished Agenda
New Paradigm for Green and Sustainability
August 2010
Vishal Mehta
[email protected]
© 2007 IBM Corporation
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IBM Sustainability Solutions
The four key pressures on organisations
Global Pressures
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Increasing regulatory
requirements, many enforced
globally
Carbon credits & trading
Regional / Local Pressures
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EU lead the agenda for CO2
reduction
EU Regulation for energy
using products implementing
measures under study
Costs
Laws,
Regulation,
Standards
Rising costs of
energy, transport,
waste disposal and
raw materials;
risks for physical
assets due to climate
change / global
warming
To reduce emissions of
greenhouse gases
such as the EU
Emissions Trading
Scheme, Climate
Change Levy or
Building Regulations
Global Pressures
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Rising energy, raw materials
and waste management costs
Scarcity of resources
Risk from adverse weather
Regional / Local Pressures
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Exchange rate $ vs. EUR and
‘export’
Higher ‘eco’ tax
Source of local supply and
security of source
Organisation
Global Pressures
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Customers environmentally
aware
Greater demand for more
environmentally preferable
products and services
Regional / Local Pressures
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Corporate policy extending
beyond the bounds of law, high
efficiency is a basic
requirement
Premiums start at higher costs
Local talent management
Stakeholder
Pressures
New
Business
From investors, market
and financial analysts,
employees, consumers
or NGO’s about the
environmental and
economic
consequences of
climate change
Developments in
markets, knowledge
and new technologies,
which enable business
to cut their carbon
emissions while
increasing productivity
and finding potential
new revenue
opportunities
Global Pressures
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Customers increasing demand
for environmentally preferable
products and services
Operational efficiencies
Regional / Local Pressures
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Availability for resources
Local competitors
© 2007 IBM Corporation
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The CSR Value Curve: a shift from cost to returns
Growth
Platform
Leading
Values-based
Self Regulation
Optimizing
Strategic
Philanthropy
Practicing
Legal and
Compliance
Experimenting
Aware
Adherence to
law in the
countries of
production,
operation and
distribution
Alignment of
charitable
activities with
social issues
that support
business
objectives
Incorporates
the company's
value system
and/or code of
conduct to
guide
business
behavior
Efficiency
Measurable
cost savings
through
efficient or winwin scenarios
Access to new
markets, new
partnerships or
product/service
innovations that
generate
revenue
TIME
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Pressures & Imperatives Are Shifting
New sustainability view:
I need to do what is smart
Traditionalist view:
I need to do what is right
Energy
Air
Water
Land &
Resources
Brand & Growth
Talent
Regulation
Operational
effectiveness
Cost reduction
Conservation &
clean energy
Reducing pollution/
CO2
Clean
water
Protection
Risk
Traditional imperatives for green
focused on a moral imperative to
preserve safety & life
The new pressures are about being responsive to
stakeholders and building a better, sustainable business
Today’s green business leader doesn’t abandon principle nor business acumen, but
embraces both in the new sustainability view.
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Why Sustainability takes Center Stage
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Stake holders are now very involved
Delay or inability to start green field projects ( Perception of polluting industry)
Very active Civil Society
Global pressure on adopting cleaner, greener product ( non trade barriers)
Recent examples of investor activism in the west against companies with suspect
track record
Non renewable resources getting scares
There is likely to be a price to pollute in India in near future
Cant rely on regulations alone – need to move beyond in a globalized world
The nature of steel industry makes it a very visible entity
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Steel Sector is Important
Wri 2008
Regulations already in Force in Europe -- cascading effect over medium term for the Indian Steel Sector
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Scope for improvement balanced with high growth of sector
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Adopt Sustainability – Water, Carbon, Safety as part of core business KPIs
• Real estate and facilities
asset lifecycle mgmt
(ALM)
• Plan & Production ALM
• Mobile ALM
• Infrastructure ALM
• IT and network ALM
• Service lifecycle mgmt
• Sustainable ALM
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Logistics strategy
DC ops
Reverse logistics
RFID
WMS/TMS
Global sourcing
Sustainable
Logistics
Operations
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Product/project portfolio
Process/IT collab
Computer aided engineering
Model driven syst eng’ng
Product dev mgmt
Environmental Product
Lifecycle Mgmt
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Product
lifecycle
managemen
t
Demand and distribution planning
Inventory optimization
Supply planning & optimization
SC collaboration, incl S&OP
SCP/BTO
Sustainable SCM Strategy
Enterprise
Asset
Managemen
t
Supply
chain
planning
Supply
chain
strategy
Program
Management
Change
Management
Logistics
Supply chain strategy
• SC assessment & benchmarking
• Transformation strat development
• Business model & governance devel
• SC ops improvement & optimization
• Technology/systems assessment
• M&A support
• Sustainable SCM Strategy, Carbon Tradeoff
Model, Sustainable Logistics Operations
Strategic
Roadmap
Development
Supply
chain
operations
Process
Change
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Procuremen
t
SC Ops analytics & transformation
Quality mgmt
Spare parts optimization
MES and plant floor integration
Energy mgmt
Retail solutions
Sustainable Integrated Operations
Technology
Enablement
SC Ent Apps
• Package selection
• BizProcess
improvement
• Training srv’s
• Version upgrades
• Systems
harmonization
• Supplier relationship
mgmt
• Strategic sourcing
• Spend analysis
• E-procurement
• Contract compliance
• Procurement
transformation, inc BTO
• Sustainable
Procurement
Business
Transformational
Outsourcing
Degree of Transformation
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Early Adoption of Sustainability Management as core Business Function
1.
Definin
g
KPI’s
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2.
Meteri
ng
&
Baseli
ning
3.
Deploy
ing
Carbon
Consol
e
4.
Optimiz
ing
Proces
s
5.
Ongoin
g
Control
Define KPI’s - Build carbon, water or solid waste key process indicator (KPI) set
(regulatory & stakeholder driven)
Metering - Deploy mobile metering capability, establish energy use baseline & identify
opportunities for improvement
Deploy Carbon Console – Deploy web based management system
Optimize Process – Use applied Lean Sigma techniques to analyze, improve and
optimize identified high energy (or other) use areas
Ongoing Control – Deploy follow-on controls across defined kpi’s, deploy additional
metering & management capability
Involves using the existing systems and Processes to include Sustainability parameters
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Adoption of concepts like Green Sigma for Continuous improvements
• Gas savings of ~20%-25% within one European site – equates to saving
close to 1,000 tonnes of CO2 per annum
• Electricity savings within US-based Green SigmaTM project is projected to
achieve savings of 10-15% minimally
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What next
 Leadership in Energy Efficiency, CO2 emissions and climate change
 Development of new generation products ( Invest in R&D and IP creation)
 Adoption of Technology & innovation ( Low carbon steel, CCS pilot studies)
 Financial robustness and cost competitiveness
 Stakeholder engagement and community initiatives in a transparent way
 Move beyond regulations and report HSE parameters
 Value creation for stakeholders with Shareholders
 Sustainability as a KPI in entire Value Chain and not just a silo function
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Thank you
© 2007 IBM Corporation