Life Cycle Management for Sustainable Value Chains: Building Capacity and Promoting Innovation
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International Life Cycle Partnership
To bring science-based life cycle approaches into
practice worldwide
UNEP/SETAC Life-Cycle
Initiative
Life Cycle Management Capability
Maturity Model (LCM-CMM)
Building Capacity for
Sustainable Value Chains
SUSTAINABILE VALUE CHAINS
Global Issues, international
standards, certifications, reporting
LEARNING CURVE CHALLENGE
Incremental improvements to build capability
10 - 20 years of learning
Today’s
Best
Practices
SUSTAINABILITY CHALLENGE
Local concerns,
development priorities
Global logic of markets
vs.
Local logic of sustainability
Global Issues, international
standards, certifications, reporting
•
Complements
performance measures
–
Fewer but targeted
–
Quality control
•
Aligns near term targets
with longer term
development need
•
More fundamental
concept that applies
across industries,
products & regions
5
Capability Framework Promotes
Balanced Improvement Efforts
LIFE CYCLE ASSESSMENT
ISO- 14040 & 14044
BETTER DECISIONS &
IMPROVED PERFORMANCE
•
Use of diverse sources of information,
•
Sensitivity to boundary definition and
interconnections,
•
Systemic view of problem,
•
Causal analysis to promote innovative solutions,
•
Inclusive process to resolve conflicts and build
support, and
•
Open communications to build trust and
collaboration.
Improved decision- making supports innovation,
operational excellence, risk management
MAKING A BUSINESS CASE
•
Economic
–
Income inequality
–
Outsourcing jobs
–
Trade imbalances
•
Environmental
–
Climate change- extreme
weather, rising sea, 90°F
days, crop damage
–
Peak oil, price volatility
–
Air quality- respiratory
illness, asthma
–
Resource depletion- e.g. rare
earths
–
Toxic chemicals
–
Water scarcity, quality
–
Land use
–
Biodiversity & species
extinctions
•
Social
–
Child, forced labor
–
Supply chain mgmt in
developing economies
–
Socially responsible
investors
–
Fair trade
EXTERNAL
DRIVERS
•
Products / Customers
–
New products & services,
brand value
–
Market restrictions
–
Taxes- e.g. carbon tax
•
Factories/ Communities
–
License to operate, ease of
permitting
–
Improved process efficiency
–
Employee morale,
productivity
–
Taxes, fines, liabilities
•
Supply Chain
–
Public campaigns, supply
interruptions
–
Liability for clean up
–
Access to quality suppliers
•
Public/ Communications
–
Access to capital
–
Recruitment & retention
–
Reputation, brand value,
stock P/E ratio
IMPACT ON COMPANY
Life Cycle Management Capability
Maturity Model (LCM - CMM)
Continual Improvement
Multiple P-D-L-A Cycles
Logical sequence of improvements based on experiences of
global leaders to speed learning
Table of Contents
1.
A Quick Tour
2.
Competitive Context
3.
Conducting a Maturity Assessment
4.
Developing an Improvement Plan
5.
Align Improvements with Business
Strategy
6.
Moving from Events to Management
Systems
These training materials are intended primarily for the LCA or environmental specialist that is promoting the adoption of LC methods and business practices. The material can be used by a motivated individual for self- guided learning in support of their efforts to champion the adoption of LCA & LCM within their organization. Alternatively, the materials can be used by a consultant to support a train- the – trainer approach to promote adoption of LCA and LCM across multiple organizations (e.g. as part of a corporate supply chain management program.) The intent was to present the information in a structured manner that would enable users with a basic understanding of LCA and/ or LCM to successfully tailor the methods to their specific situation and help mainstream their usage in decision making processes.
There are two fundamental objectives of the training materials:
• Provide sufficient understanding of the Life Cycle Management Capability Maturity Model (LCM – CMM) to enable users to successfully implement improvement actions that address both sustainability and business objectives, and
• To facilitate formation of a peer- to- peer learning network among users so they may help each other in a bottom- up capacity building of sustainable value chains.
This content delves into the Life Cycle Management Capability Maturity Model (LCM-CMM) aimed at enhancing sustainable value chains globally. It emphasizes the importance of bringing science-based life cycle approaches into practical implementation to address global issues, international standards, certifications, reporting, and learning curve challenges. The focus is on sustainability challenges, capability frameworks for balanced improvement efforts, and the significance of life cycle assessment (ISO 14040 & 14044) in making better decisions for improved performance. The content also explores how to make a business case considering external drivers impacting company value.
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Presentation Transcript
UNEP/SETAC Life-Cycle Initiative Life Cycle Management Capability Maturity Model (LCM-CMM) Building Capacity for Sustainable Value Chains International Life Cycle Partnership To bring science-based life cycle approaches into practice worldwide
SUSTAINABILE VALUE CHAINS Global Issues, international standards, certifications, reporting
LEARNING CURVE CHALLENGE Today s Best Practices Incremental improvements to build capability 10 - 20 years of learning
SUSTAINABILITY CHALLENGE Global Issues, international standards, certifications, reporting Local concerns, development priorities Global logic of markets vs. Local logic of sustainability
Capability Framework Promotes Balanced Improvement Efforts Complements performance measures Fewer but targeted Quality control Aligns near term targets with longer term development need More fundamental concept that applies across industries, products & regions Focused Results Heroic efforts (Accountability) Performance Underutilized Investments Capability (Learning) 5
LIFE CYCLE ASSESSMENT ISO- 14040 & 14044 Goal and Scope Definition 1 4 Interpretation Inventory Analysis 2 Impact Assessment 3
BETTER DECISIONS & IMPROVED PERFORMANCE Use of diverse sources of information, Sensitivity to boundary definition and interconnections, Systemic view of problem, Causal analysis to promote innovative solutions, Inclusive process to resolve conflicts and build support, and Open communications to build trust and collaboration. Improved decision- making supports innovation, operational excellence, risk management
MAKING A BUSINESS CASE EXTERNAL DRIVERS IMPACT ON COMPANY CAPTURING VALUE Products / Customers New products & services, brand value Market restrictions Taxes- e.g. carbon tax Factories/ Communities License to operate, ease of permitting Improved process efficiency Employee morale, productivity Taxes, fines, liabilities Supply Chain Public campaigns, supply interruptions Liability for clean up Access to quality suppliers Public/ Communications Access to capital Recruitment & retention Reputation, brand value, stock P/E ratio Economic Income inequality Outsourcing jobs Trade imbalances Environmental Climate change- extreme weather, rising sea, 90 F days, crop damage Peak oil, price volatility Air quality- respiratory illness, asthma Resource depletion- e.g. rare earths Toxic chemicals Water scarcity, quality Land use Biodiversity & species extinctions Social Child, forced labor Supply chain mgmt in developing economies Socially responsible investors Fair trade Revenue Margin Cost of Sales ROIC Working Capital Invested Capital Fixed Capital
Life Cycle Management Capability Maturity Model (LCM - CMM) Level Span of control / influence Metrics Decision Process Business case Qualified Project Compliance- yes/no Process outputs Team-based, visible trade-offs Risk Avoidance; license to operate Efficient Enterprise Process inputs/ outputs Eco- efficiency Rule-based trade- offs to achieve enterprise goals Improved operating margins Labor & resource efficiency Effective Value chain Cradle to grave, integrated across value chain Fact-based to anticipate value chain trade-offs Top line growth, Innovative products, new markets Adaptive Society Sustainability measures Resiliency Value-based to co- develop business goals & social expectations Strong balance sheet Long- term competitive advantage
Continual Improvement Multiple P-D-L-A Cycles Capability Adaptive Scope Society Business case Capital preservation; sustainable prosperity Top line growth - Innovative products, new markets Process efficiency; improved margins Risk avoidance; license to operate Effective Value chain Efficient Company Qualified Facility/ Process Logical sequence of improvements based on experiences of global leaders to speed learning
Table of Contents 1. A Quick Tour 2. Competitive Context 3. Conducting a Maturity Assessment 4. Developing an Improvement Plan 5. Align Improvements with Business Strategy 6. Moving from Events to Management Systems
