Supply Chain Project
Defining sustainability in the supply chain
We worked with a global battery company to develop their first sustainability strategy and during the process it became clear how important, and vulnerable, their supply chain was. The impacts along the supply chain are significant, from extraction to smelting and refining, distribution and production. Batteries rely on mined raw materials which bring a set of risks and impacts that need to be carefully monitored, but the viability of the very product itself – which had not changed much in 40 years – was also called into question. As the demand of battery power increases, the availability of key raw materials decreases. The company relied on a set of critical materials such as silver which is fast running out; innovation of battery design and/or changing the way materials were sourced became pressing issues.
What we did
We mapped their Value Chain from extraction through to customer end use & landfill, in a linear process showing each linkage of the value chain. Using sector Life Cycle Analysis data, we identified the key impacts across social, environmental and governance at each stage, and highlighted where the opportunities and vulnerabilities were. We did desk research to highlight the raw material supply issues, which opened the conversation for how their linear model of operating needed to evolve. Circular economy became a critical concept for the long-term viability of the company as a new source of materials as well as a way to responsibly manage their impacts. We then helped them move from a linear value chain mindset to a circular economy value chain mindset.
Outcomes
The supply chain department realised they needed better sight of the supply chain beyond Tier 1 supplier and implemented a methodology to better identify impacts and responsibilities. This helped the core team to agree what standards of business they wanted for their supply chain (e.g. human rights, H&S etc) beyond compliance. A new code of conduct and auditing was initiated and purchasing contracts reviewed and updated. The company also embraced the concept of circular economy as a long term objective. Several projects were initiated, including retailer and end user engagement to recover batteries for disassembly and reuse; this has led to a refreshed relationship with retailers and ‘hero brand’ status, with an increase in point-of-sale recovery displays/collections. The R&D team launched research projects to redesign batteries, experiment with more sustainable materials, and design for recovery and disassembly. The company have publicly embraced the ambition into become a circular economy business.
