Supply chain mapping

& evaluation
Prof Mickey Howard
Professor of Supply Management
 Agenda
Define the links between sustainable supply strategy,
policy, tools and implementation
Living planet and the circular economy
Describe the various types and purpose of supply chain
mapping
Evaluate the concept of Lean and Green
Evaluate the use of tools such as carbon footprinting &
Lifecycle Assessment (LCA)
Describe the challenges of introducing sustainable supply
strategy
Case study: Desso carpet tiles
Analyse trends in policy and implications for supply chains
The Living Planet Report (WWF 2010)

The implications are clear. Rich nations must find

ways to live much more lightly on the Earth to
sharply reduce their footprint, including in
particular their reliance on fossil fuels. The
rapidly growing emerging economies must also
find new model for growth one that allows them
to improve the well-being of their citizens in ways
the Earth can actually sustain.
 The S3 Framework
Figure 11.1: Framework linking Sustainable Supply Strategy, policy, tools & implementation

POLICY DRIVERS STRATEGY POLICY MAKERS

Environmental groups Create Vision National government
e.g. WWF Sustainable supply chain management Regional e.g. European
Human rights parliament
e.g. Amnesty International, Environmental legislation
World Health Organization International standards
Other non-governmental Set Goals organizations e.g. ISO
organizations Targets and performance criteria
e.g. Lobbyists &
campaigners

Communicate
Values and vision
Types of impact and priority

Validate Develop
Continuous training Environmental mgt systems
Continuous improvement Code of conduct
IMPLEMENTATION
Cross-functional teams Ethical practice

Build Specify
Supplier and customer Purchasing requirements
partnerships and alliances Contractual obligations
of suppliers

TOOLS
Process mapping Supply chain value analysis Carbon footprint
Lifecycle analysis Ethical supplier audits

Source: Johnsen, Howard & Miemczyk (2014) p329

Aim: transition towards a circular
economy
Raw materials Supplier Manufacturer
Logistic
s Customer
Consum
er

Take, make, waste

Product

Disposa
Manufacturer
l

Customer

The circular
Supplier economy
Consum
er

Re-manufacture
Raw materials

Used material
Return & recycle
 Dj vu?
Reverse Engineering, Remanufacture, Design for disassembly
Recognised the wastefulness of linear input-output supply models
Reverse logistics thinking first emerged in the 1970s
Closed-loop thinking and cycles of supply
Biomimicry: mankind copying natures cycle of re-use
 Supply chain value analysis & mapping
Can be useful as a means of gauging level of waste &
identifying carbon hotspots
Various types of map:

Process map
Showing general process-related detail within the firm or..
Across several firms: i.e. the lean enterprise

Value stream map

Typically, very detailed current state and future state maps:
forecast, schedule, inventory, batch size, cycle time, takt time..
Strong links between lean and sustainability

Big picture map

Total supply chain & industry level e.g. 3DayCar
Process map auto supplier
Process map to identify opportunities to remove stress, risk, and hidden waste
EDI - Delfor Vehicle
Tier 2 Tier 1
Supplier 26 week Manufacturer
Suppliers
MRP (SAP) forecast
e.g. Seals Onscreen There are 3 customers
H 10 day build at this facility with
Steel ribs review (smoothed similar levels of
Granules Data of little average) duplication!
Schedule Q
Data hand- Fax faxed to tier 2 use
keyed into tier 2 automatically suppliers PC
system generated
Hard copy Sequence
printed and information
Safety copy filed by T1
D 4 hours VM sends T1 a file
T1 would like an ahead of of cars produced 2
ASN from T2 to line days in arrears from
ASN consignment stock
confirm delivery ? to SAP
VCC email (back-up)
Production Meant to Generates invoice
build plan have been
from VM stopped in Processed through
D 2003 SAP

SAP should be
Finance controlling Paint &
Mould - but lack of
(SAP) confidence in data
Invoice posted T1 Accounts
to T1 Q/D
30-day
payments
BACS Paint plan
Excel

SAP
spreadsheet
Paint to stock

sto
ck loc
Goods In H
Q/D
Delivery:

ator
Daily Prod. plan
Weekly E.g. 25 tons of plastic Goods received
note (GRN) hand- Excel
Monthly granules delivered a spreadsheet
week keyed into MRP
(Manual)

Q/D
Back flush - scan barcode
Mould plan
Excel
spreadsheet
This is not
Kanban!
Moulding Painting Assembly SILS store Despatch
Silo feed to moulding
machine 700 a day
Av. 8 hour run Some manual C. 2 Reinforcing ribs Final assembly 2 hourly
prod. cycle
counting of stock Configuration
Min: 250 of foglamps
4 hours

Stock control
If 2 days or more: SAP
If less than 2: VCC -
smoothed average

15.1.04

EXAMPLES OF PROCESS WASTE: KEY / SYMBOLS

P Paperwork
H Hand-keying & re-entry of data P 1
D Duplication (e.g. two systems - same function)
F/T Transmission of data by fax or telephone
B Batch processing or queuing Process waste Explanation Function, sub-unit, Information or Data or Inventory / Buffer Physical pull Customer
Q Poor quality data (inaccurate, inconsistent..) (Paperwork) or recommendation or system product-related process physical flow stock (days)
 Origins of Lean: automotive
Concept developed by Toyota in post-war Japan
Taichi Ohno (1912-1990) - a Toyota engineer
Experimented with early kanban systems at Toyota in 1950s

Monden (1983): The Toyota Production System

Portrayal of Toyota as a coherent production approach

Womack, Jones & Roos (1990): The Machine that changed

the world
Original IMVP work was a five year collaborative study (1985-1990)
Revealed existence of a 2:1 productivity gap: Japan and the West

Womack & Jones (1996, 2003): Lean Thinking

Viewed as arguably the
paradigm for product & service operations
 Intro

www.3daycar.com
 The system is out of balance
Inventory Profile of the Automotive Supply Chain
(UK 1999 Figures , Volume Car Stock Levels)

100

90 Max
Average Inbound OEM / Vehicle Outbound Market -
80 First Tier Supplier Logistics Place
Min Logistics Manufacturer
Days of Inventory

70

60

50

40

30

20

10

Production W IP
Assembly W IP
In-house built

Pre-Assembly

Components

On-site Part

Marketplace
Bought-out

Loading &

Customer
Outbound
Inbound Transit
Raw Material

Despatch

Transit
Finished
Parts

(VM)
Parts

Vehicle
W IP

Source: 3DayCar 2001

 Lean & green is a well established match
Florida 1996, King & Lenox 2001, Mollenkopf et al 2009
Common theme: efficiency paradigm
Lean: focus on practical implementation
Strong track record in industry since 90s over BPR & TQM
Results-focused, directly engages workforce
Other tools are more product than process based e.g. LCA
Limitations
Emerged from auto sector, lean services only latterly
Uses efficiency as a starting point: is this radical enough?
 Flexible & versatile method
Initial familiarisation / literature review
Review of journal papers, policy docs, corporate, and white papers
Action Learning sets
See: Centre for Leadership Studies (CLS), Exeter
Lean mapping workshops
A collaborative event adapted to engage procurement based & other
staff from the organization on process waste & carbon related issues
Based on Value Stream Mapping (Rother & Shook 1998; Womack & Jones 1996)
 Lean mapping workshops
1. Specify Value
2. Identify the Value Stream
3. Flow
4. Pull
5. Perfection
(Womack & Jones, 1996; 2003)
 Current state map to show order fulfilment process for work wear at firm X (REVISED)
Payment to supplier by BACS or cheque
Current state
Invoice
*Management Team
Supplier 2 days2 months
i.e Alexandra CMT* Students
Alternative suppliers:
FWB or alternative Marketing
PUMA
CIS Email: pay.. Check logo
Finance Scan
Combination of:
invoice Complete College
Fax for DB Source the
Post Paper order Department goods, call,
Telephone Requisition (n = 80) quotes etc
QLX Budget
Email Local Office
Internal by hand
Finance (n = 25)
Holder or 2 wks!
System signatory post Goods
Internal post delivered
One site only by post
White /pink copy Internal Check 1st approval room
post or Order no Email for
of order back compliance BH approve by accountt
by hand generated approval
to dept to rules & sign or dept.
added to order of payment Staff
by hand (check for Post Room
define need
quality
damage..)
Order no generated paper Orders > than 10k
copies distributed as follows :
Blue copy: local office
Pink copy: budget holder Purchasing
CEO
White copy: supplier to approve
CEO approve
& sign

Delivery of goods by van or truck Delivery

Packaging
Reduce frequency

Sign for
delivery note

Internal process: Order generation Checking Approval Requisition Delivery

1 x 4 = 4hrs 1 x 4 = 4hrs
Effort = no. of people x hrs:
1 x 4 = 4hrs 2 x 16 = 32hrs 2 x 16 = 32hrs 1 x 80 = 80hrs 1 x 4 = 4hrs 160 total hrs

Equivalent carbon produced: 000 000 000 000 000

Total
Footprint
Key to symbols:

Primary stakeholder Flow of data, cash,

Potential waste Inventory (in bold), department Process or activity IT system / ICT goods or services
or office
 Future
Future state map to show proposed generic order fulfilment process for x, c. 2011

CMT*

XML confirmation?

Operational
Finance
planning

Supplier Email order

Local offices
Purchase
system Prompt

Individual
Sign
Staff member

Select
Budget preferred
supplier Request to
holder
purchase

Check
Check compliance

Budget
check

Delivery

Process: Order generation Checking Approval Requisition Delivery

Effort = no. of people x hrs:

Equivalent carbon 000 000 000 000 000

Total
000 Carbon
Key to symbols: Indicator

Primary stakeholder, Flow of data, cash,

Waste Inventory department or office Process or activity IT system or ICT goods & services
 Mapping approach: discussion
Incremental or strategic change?
Lean: speaks more to the efficiency than the efficacy paradigm
LCP often requires big changes in organizational behaviour

Methodological issues
Process mapping: oversimplifying the problems?
Role of workshop facilitator key: bringing staff & management together
Issues of reflexivity

Public (and private) procurement

Lean mapping created benefits for UK public procurement
Barriers to LCP implementation: the managers!
Lean creates the link with cost reduction, but longer term difficult
LCP implementation requires clear definitions & targets from govt and a
greater level of carbon literacy from all UK procurers: public, private &
SMEs
 Carbon footprinting
The carbon footprint starts with the supply chain
Mapping tools evolved from Lean thinking
Supply networks add further complexity to process mapping

Carbon footprint of the product

Lifecycle Analysis (LCA)
Some leading firms beginning to show footprint reductions
LCA
Some examples
 Case study:
Rethinking closed-loop supply systems
Desso and the Cradle-to-Cradle challenge

g es 23
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Prof Mickey Howard
S
 Desso case overview

Commercial carpet manufacturer

Founded 1938, management buyout in 2007
New CEO Stef Kranendijk (ex-P&G)
Appoints: CCO Alexander Collot dEscury (ex-Nestle)
Director of Sustainability Rudi Daelmans
Key competitor - Interface
Sustainability increasingly top of agenda
Discovers Cradle-to-Cradle
..early 2007
 Cradle-to-cradle
Play on the term cradle to grave
C2C popularised by McDonough & Braungart (2002)

All materials are considered nutrients

Whether natural/organic or synthetic

Downcycling and upcycling

Refines the concept of recycling
..what we [society] do is use high quality materials and make park
park benches out of them Rudi Daelmans, Sustainability Director
 Biomimicry & copying nature
Biological & technical nutrients
Biological nutrients can be broken down organically
Once separated, technical or synthetic nutrients
can be circulated endlessly too..
EMFs Butterfly model: the circular economy
Separates biological & technical nutrients

Source: Ellen McArthur Foundation Material flows in a Circular Economy (2015)

Questions for class

1. What does Dessos system of supply look like for carpet tile
production after adopting C2C?

2. What factors or challenges must Desso consider in moving

forward with C2C implementation?
Rethinking closed-loop supply systems
Desso and the Cradle-to-Cradle challenge

Part
Two..
Prof Mickey Howard
Associate Professor in Purchasing & Supply Management
Question 1 The new supply system
 Knowledge flow - not just material flow Potential for new economic models
of ownership e.g. leasing

US customers require a
Braungart & Customers
minimum of 30%
McDonough

et
Desso recycled material in

rp
ca
Cradle-to-cradle commercial carpet
Manufacturing

ed
e
rp
US consultancy

Us
plant,

Ca
Take

t
Netherlands Back
Installers scheme

Incentives devised for

installers to return used
Supplier carpet Logistics
1 Supplier partners
3
Supplier Used carpet
2

Desso, Process
separation
Aquafil, Italy
Processor Polyolefine, PP, PA6
Remelting
Bitumen
Aquafil,
Caprolactam Slovenia Used Nylon
Material, product or service Processor / Construction
flow De- Old fishing
Knowledge
net industry
exchange polymerisation Imported
Material store E.g. Cement, road
from US
construction
Agent, plant or
process Source: Miemczyk, Howard & Johnsen (2015)
 Question 2 Challenges
What factors or challenges must Desso consider in moving
forward with its C2C implementation?

Leadership C2C requires radical systemic change

Stakeholder engagement suppliers & closed-loop systems
Technological innovation e.g. non toxic colour in carpets
Public policy & legislation C2C requires new rules, but EU
policy still evolving
New business models circular economy, leasing system
 Challenges (2)
Working with suppliers to detoxify the SC
Aims to become more eco-effective

Governance: changing the rules of the game

Needs a different type of producer-consumer relationship

2.2 Waste material awaits depolymerisation at Aquafil

 Challenges (3)
Economics of the circular value chain
Take back system an integral part of C2C

Raising awareness & building a community

Stef: I make speeches with Braungart ..

Supplier responsiveness & information sharing

2.3 Taking back used carpet tiles at Desso

 Desso - conclusions
Closed loop systems & process of change
Desso still No. 2 and converting other carpet products to C2C
Stef Kranendjik stepped down in 2014

C2C and the circular economy is high profile

Desso participation at Davos 2014

Big issue: implementation or how do we do this?

Tools, concepts & methodological development required

Next steps and further research: services

Integrate the idea of services, value and service management into
the original product based closed loop supply system at Desso
 Agenda
Define the links between sustainable supply strategy,
policy, tools and implementation
Living planet and the circular economy
Describe the various types and purpose of supply chain
mapping
Evaluate the concept of Lean and Green
Evaluate the use of tools such as carbon footprinting &
Lifecycle Assessment (LCA)
Describe the challenges of introducing sustainable supply
strategy
Case study: Desso carpet tiles
Analyse trends in policy and implications for supply chains
Supply chain mapping
& evaluation
Prof Mickey Howard
Professor of Supply Management