© 2007 ibm corporation 4th india steel summit achievement & unfinished agenda august 2010...

© 2007 IBM Corporation

4th India Steel SummitAchievement & Unfinished Agenda

August 2010

Vishal [email protected]

New Paradigm for Green and Sustainability


IBM Sustainability Solutions 2

The four key pressures on organisationsGlobal Pressures

• Increasing regulatory requirements, many enforced globally

• Carbon credits & trading

Regional / Local Pressures

• EU lead the agenda for CO2 reduction

• EU Regulation for energy using products implementing measures under study

Global Pressures

• Customers environmentally aware

• Greater demand for more environmentally preferable products and services


• Corporate policy extending beyond the bounds of law, high efficiency is a basic requirement

• Premiums start at higher costs

• Local talent management

Global Pressures

• Rising energy, raw materials and waste management costs

• Scarcity of resources

• Risk from adverse weather


• Exchange rate $ vs. EUR and ‘export’

• Higher ‘eco’ tax

• Source of local supply and security of source

Global Pressures

• Customers increasing demand for environmentally preferable products and services

• Operational efficiencies


• Availability for resources

• Local competitors

Organisation

Laws, Regulation,StandardsTo reduce emissions of greenhouse gases such as the EU Emissions Trading Scheme, Climate Change Levy or Building Regulations

StakeholderPressuresFrom investors, market and financial analysts, employees, consumers or NGO’s about the environmental and economic consequences of climate change

CostsRising costs of energy, transport, waste disposal and raw materials; risks for physical assets due to climate change / global warming

NewBusinessDevelopments in markets, knowledge and new technologies, which enable business to cut their carbon emissions while increasing productivity and finding potential new revenue opportunities



Aware

Practicing

Optimizing

Leading

Experimenting

TIME

Values-based Self Regulation

Incorporates the company's value system and/or code of conduct to guide business behavior

Growth Platform

Access to new markets, new partnerships or product/service innovations that generate revenue

Legal and Compliance

Adherence to law in the countries of production, operation and distribution

Efficiency

Measurable cost savings through efficient or win-win scenarios

Strategic Philanthropy

Alignment of charitable activities with social issues that support business objectives

The CSR Value Curve: a shift from cost to returns



Pressures & Imperatives Are Shifting

Traditionalist view: I need to do what is right

New sustainability view: I need to do what is smart

Traditional imperatives for green focused on a moral imperative to

preserve safety & lifeThe new pressures are about being responsive to

stakeholders and building a better, sustainable business

Energy

Land & Resources

Air

Water

Conservation & clean energy

Reducing pollution/CO2

Clean water

Protection

Brand & Growth RegulationTalent

Risk Operational effectiveness

Cost reduction

Today’s green business leader doesn’t abandon principle nor business acumen, but embraces both in the new sustainability view.



Why Sustainability takes Center Stage

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



Steel Sector is Important

Wri 2008

Regulations already in Force in Europe -- cascading effect over medium term for the Indian Steel Sector



Scope for improvement balanced with high growth of sector



Adopt Sustainability – Water, Carbon, Safety as part of core business KPIs

Process Change

Technology Enablement

Business Transformational Outsourcing

StrategicRoadmapDevelopment

Degree of Transformation

Supply chain

strategy

Supply chain

strategyProgram Management

Change Management

Product lifecycle

management

Product lifecycle

management

Supply chain

operations

Supply chain

operations

Procurement

ProcurementLogisticsLogistics

Enterprise Asset

Management

Enterprise Asset

Management

Supply chain

planning

Supply chain

planning

• Product/project portfolio• Process/IT collab• Computer aided engineering• Model driven syst eng’ng• Product dev mgmt• Environmental Product

Lifecycle Mgmt

• Demand and distribution planning• Inventory optimization• Supply planning & optimization• SC collaboration, incl S&OP• SCP/BTO• Sustainable SCM Strategy

• Supplier relationship mgmt

• Strategic sourcing• Spend analysis• E-procurement• Contract compliance• Procurement

transformation, inc BTO• Sustainable

Procurement

• SC Ops analytics & transformation• Quality mgmt• Spare parts optimization• MES and plant floor integration• Energy mgmt• Retail solutions• Sustainable Integrated Operations

• Logistics strategy• DC ops• Reverse logistics• RFID• WMS/TMS• Global sourcing• Sustainable

Logistics Operations

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

SC Ent Apps• Package selection• BizProcess

improvement• Training srv’s• Version upgrades• Systems

harmonization

• Real estate and facilities asset lifecycle mgmt (ALM)

• Plan & Production ALM• Mobile ALM• Infrastructure ALM• IT and network ALM• Service lifecycle mgmt• Sustainable ALM



Early Adoption of Sustainability Management as core Business Function

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

1. Defining KPI’s

1. Defining KPI’s

2. Metering

& Baselining

2. Metering

& Baselining

3. Deploying Carbon

Console

3. Deploying Carbon

Console

4. Optimizing Process

4. Optimizing Process

5. Ongoing Control

5. Ongoing Control

Involves using the existing systems and Processes to include Sustainability parameters



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



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



Thank you

© 2007 ibm corporation 4th india steel summit achievement & unfinished agenda august 2010...

Documents

new pressures

sustainability slide

new sustainability view

sustainability water

pressures imperatives

regional local pressures

key pressures

organisations global