BUILDING A SUSTAINABLE LOGISTICS NETWORK
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1 BUILDING A SUSTAINABLE LOGISTICS NETWORK Gökhan Çakmak SCM Strategies Summit November 2017 Berlin
2 CONFIDENTIALITY NOTICE This document contains confidential information which is legally privileged. The information is intended only for the internal use of Oriflame Cosmetics employees and respectively approved third parties, as authorized by Oriflame Cosmetics. Any other disclosure, copying, distribution, or taking of any action in reliance on the contents of this document is strictly prohibited without prior written consent of Oriflame Cosmetics AG. Oriflame Cosmetics AG,
3 ORIFLAME AT A GLANCE 3
4 ORIFLAME AT A GLANCE 1.2 billion sales in 2016 Geographic Footprint 65+ Countries, selling direct 3 million Oriflame Consultants 1,000 cosmetics products in portfolio Innovation 250 New or relaunched products per year Europe & Africa LATAM 14,0% 24,0% CIS 24,0% Turkey & ASIA 38,0% 95% of sales in developing countries Oriflame Cosmetics AG,
5 Why Susainabilty is becoming a hot potatoe? Oriflame Cosmetics AG,
6 ORIFLAME S EXISTING SUSTAINABILITY COMMITMENTS Oriflame Cosmetics AG,
7 ORIFLAME S EXISTING SUSTAINABILITY COMMITMENTS Source 100% of catalogue paper from credibly certified origin by Reduce CO2 emissions from global Oriflame operations by 50% by Use only biodegradable cleansing ingredients in 100% of our Personal Care products Send no waste to land-fill from our factories by 2020 Oriflame Cosmetics AG,
8 INTANGIBLE SUBJECT... RATE THE RATERS It attempts to better understand external sustainability ratings and to influence and improve the quality and transparency of such ratings Top 6 most credible ratings are: - CDP - Dow Jones Sustainabilty Index - Access to Medicines Index - FTSE4Good index - Oecom Corporate Ratings - Bloomberg ESG Data 8
9 AMPLE ROOM FOR IMPROVEMENT According to European Commission Study in 2015: 23% of freight vehichles in the EU run empty Average loading of the rest is only 60% payload utilization Overall efficiency is only 46%! 70 billion km/year empty haul in the world European Commission has committed to reduce GHG emission by 20%, to raise the share of energy consumption produced from renewable resources to 20% by 2020 comparing to 1990 levels. Oriflame Cosmetics AG,
10 GREEN - WASHING The act of misleading consumers to present an environmentally responsible public image of a company or the environmental benefits of a product or service Oriflame Cosmetics AG,
11 SUSTAINABILITY AT ORIFLAME A long term commitment to become a sustainable company by focusing on 3 key areas: Create Opportunities to Improve People s Lives Bring Beauty and Wellbeing through Responsible Products Drive Environmental Sustainability Oriflame Cosmetics AG,
12 ORIFLAME S MANUFACTURING PLANTS ACHIEVED LEED CERTIFICATION Noginsk, Russia Roorkee, India LEED is a green building certification Leadership in Energy and Environmental Design 12
13 PAPER IS ORIFLAME S NUMBER ONE RAW MATERIAL Oriflame Cosmetics AG,
14 We commit to sourcing 100% of our paper from credible certified sources or recycled origin by 2020 Oriflame Cosmetics AG,
15 OUR PAPER BASED COMPONENTS; NOW 96% COMES FROM RESPONSIBLE FORESTS! non compliant non controversial 2% 2% compliant 55% 43% non compliant 2% non controversial 96% compliant 55% 96% Oriflame Cosmetics AG,
16 PURCHASING SUSTAINABLE PALM OIL Source: World Wildlife Found 16
17 SUSTAINABLE LOGISTICS NETWORK DESIGN 17
18 SUSTAINABLE LOGISTICS NETWORK DESIGN Logistical CO2 emission Tonne- KMs X % of Utilization X Emission Factor * COST Closer /shorter Supply Chain Compaction Fleet composition Co2 emission factors GHG protocol (gco2e/km) Achieving more while using less UK Government department Defra publish annual lists of factors to calculate carbon emissions based on transport tonne-kms for different classes of vehicle 18
19 CLOSER / SHORTER SUPPLY CHAIN 19
20 SHORTER SC - NEAR SOURCING 1000 km/shipment Less travelled Closer /shorter Supply Chain 8000 km/shipment Less travelled Oriflame Cosmetics AG,
21 COMPACTION 21
22 FIRST CLASS BOARDING Oriflame Cosmetics AG,
23 UTILISATION IMPROVEMENT +36% Utilisation 43 pallet per 40 cnt. +28% Utilisation 55 pallet per truck Improving packaging and loading routines for trucks and containers have achieved major carbon and cost reductions. Oriflame Cosmetics AG,
24 HOW FAR HAVE WE COME? Per Pallet Emission (kg CO2) % 17% 74% % 20% 72% -26% Absolute Emission (1000 Tonnes CO2) 14 9% 19% 72% 15 15% 20% 65% 13 17% 19% 64% % 31% 27% 27% 47% 43% Air Sea Ground -53% Per pallet shipped emissions decreased by 26% Total emissions (absolute) decreased by 53% Oriflame Cosmetics AG,
25 Communicating changes to your customer Set yourself apart from the competition Oriflame Cosmetics AG,
26 WHY TO COMMUNICATE THE SUSTAINABILITY TO CUSTOMERS? Transparency Raise staff engagement / motivation Governmental / Regulatory Create risk awareness Competitors pressure Customer demand WE NEED TO PERCEIVE SUSTAINABILITY AS A POSITIVE FORCE FOR GROWTH NOT SIMPLY A RISK TO BE MANAGED Enhance reputation Oriflame Cosmetics AG,
27 Conclusion Oriflame Cosmetics AG,
28 CONCLUSION Define the sustainability vision Ensure top management support Give right targets to medium management Measure together with relevant external partners The potential is there within every supply chain to deliver a strong and result oriented environmental sustainability program Oriflame Cosmetics AG,
29 Oriflame Cosmetics AG, 2017
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