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3.2 Sustainable Supply Chain to Reduce Risks
3.2.1 What Leading Companies Are Saying About Sustainability
Value Creation Through Risk Avoidance?
Nestlé Example
Better management of risks that arise from sustainability issues begins with detecting key
risks of operational disruptions from climate change, resource scarcity, or community
issues (such as boycotts or delays in getting permits for manufacturing) (Carbon Disclosure
Project 2013 ). Faced with potential supply constraints, Nestlé, for example, launched a plan
in 2009 that coordinates activities to promote sustainable cocoa: producing 12 million
stronger and more productive plants over the next ten years, teaching local farmers effi cient
and sustainable methods, purchasing beans from farms that use sustainable practices, and
working with organizations to help tackle issues like child labor and poor access to health
care and education. (Bonini and Schwartz 2014 )
Michelin Example
Around 40% of a truck tire by weight is natural rubber and tire manufacturing uses 70% of
the world’s output of natural rubber, whose exceptional physical properties make it irreplaceable for truck, aircraft, agricultural and earthmover tires. (Michelin 2010 )
Demand is constantly rising and therefore developing and maintaining rubber
tree farms is a major priority for Michelin, which uses nearly 10 % of the world’s
natural rubber output.
Michelin recognized the risk represented by the raw materials, energy and nonrenewable resources required for its products and production, as these resources,
like oil or natural rubber, are becoming scarcer and more expensive. “In 2010, raw
material costs represented 27 % of Michelin’s net sales. Optimizing their use is
essential if these resources are to be conserved over the long term and if tires are to
remain affordably priced.” (Michelin 2010 ).
Michelin is therefore working on engineering lighter tires that require less raw
material and improve energy effi ciency by optimizing the rolling resistance.
Besides this strategy, the tire maker is also investigating alternative solutions to
limit the pressure on primary resource supply through regrooving and retreading.
Michelin is applying the life cycle assessment approach to ensure that such alternatives will not create value for Michelin while shifting environmental burdens
elsewhere.
S. Harbi et al.
3.2 Sustainable Supply Chain to Reduce Risks
3.2.1 What Leading Companies Are Saying About Sustainability
Value Creation Through Risk Avoidance?
Nestlé Example
Better management of risks that arise from sustainability issues begins with detecting key
risks of operational disruptions from climate change, resource scarcity, or community
issues (such as boycotts or delays in getting permits for manufacturing) (Carbon Disclosure
Project 2013 ). Faced with potential supply constraints, Nestlé, for example, launched a plan
in 2009 that coordinates activities to promote sustainable cocoa: producing 12 million
stronger and more productive plants over the next ten years, teaching local farmers effi cient
and sustainable methods, purchasing beans from farms that use sustainable practices, and
working with organizations to help tackle issues like child labor and poor access to health
care and education. (Bonini and Schwartz 2014 )
Michelin Example
Around 40% of a truck tire by weight is natural rubber and tire manufacturing uses 70% of
the world’s output of natural rubber, whose exceptional physical properties make it irreplaceable for truck, aircraft, agricultural and earthmover tires. (Michelin 2010 )
Demand is constantly rising and therefore developing and maintaining rubber
tree farms is a major priority for Michelin, which uses nearly 10 % of the world’s
natural rubber output.
Michelin recognized the risk represented by the raw materials, energy and nonrenewable resources required for its products and production, as these resources,
like oil or natural rubber, are becoming scarcer and more expensive. “In 2010, raw
material costs represented 27 % of Michelin’s net sales. Optimizing their use is
essential if these resources are to be conserved over the long term and if tires are to
remain affordably priced.” (Michelin 2010 ).
Michelin is therefore working on engineering lighter tires that require less raw
material and improve energy effi ciency by optimizing the rolling resistance.
Besides this strategy, the tire maker is also investigating alternative solutions to
limit the pressure on primary resource supply through regrooving and retreading.
Michelin is applying the life cycle assessment approach to ensure that such alternatives will not create value for Michelin while shifting environmental burdens
elsewhere.
S. Harbi et al.