Sustainable Value Creation SCOR(r) enabled

Michael Dheur shared.value.chain

Dr. Ren Schmidpeter Center for Humane Market Economy
SCC Europe Conference, Frankfurt, 07 October 2013
2013 Supply Chain Council. ALL RIGHTS RESERVED. |

Sustainable Value Creation

Slide 1

October 2013

Your Presenters

Michael Dheur

Dr. Ren Schmidpeter

Founder & Managing Director

shared.value.chain Management Consultants
Munich, GERMANY

Academic Director
Centre for Humane Market Economy
Salzburg, AUSTRIA

Editor of CSR und Value Chain Management

(Springer-Gabler, October 2013)

Lecturer: Advanced Business Ethics & Economics

University of Eichstaett-Ingolstadt, GERMANY

2013 Supply Chain Council. ALL RIGHTS RESERVED. |

Sustainable Value Creation

Slide 2

October 2013

The Context for Business and Society is Set by

Constant Change and Higher Interdependencies
Business Challenges
Market Volatility

Volatility of
Demand / Supply
New markets
Changing
demographics
Global Value Chain

Accelerators

Natural resources

Natural disasters

What is the right

approach to value
creation?

Fossil Fuels
Rare Earths
Fertile Farmland
Freshwater

Profit vs. Purpose

Man made
disasters

Interdependencies
Disruption risks
Stability of supply
networks

Record Profits
Societal Issues
Compliance

2013 Supply Chain Council. ALL RIGHTS RESERVED. |

Sustainable Value Creation

Key Question

Slide 3

October 2013

The Question is How Businesses Approach the New

Context to Drive Value Creation
Growth
Paradigm

Approach of
Economy

Value Creation
Approach

2013 Supply Chain Council. ALL RIGHTS RESERVED. |

Perpetual

Sustainable

Sole Focus on
Economic Value

Economic, Ecologic,
Societal Value

Linear

Circular

Resource depleting

Resource building

Two Worlds

Two sides of the

same coin

CORPORATE SOCIAL
RESPONSIBILITY OR VALUE
CHAIN MANAGEMENT

Sustainable Value Creation

Slide 4

October 2013

CORPORATE SOCIAL
RESPONSIBILITY AND VALUE
CHAIN MANAGEMENT

Outside-In View: Governments and Society Expect

More from Businesses When it Comes to CSR
CSR is a process whereby companies integrate
social, environmental and ethical issues into their
business operations and strategy in close
interaction with their stakeholders, going beyond the
requirements of applicable legislation and collective
agreements.
A strategic approach to CSR is increasingly
important to the competitiveness of enterprises,
helping them to create value both for owners and
shareholders to win the trust and respect of
citizens
Source: European Union CSR Strategy 2020
2013 Supply Chain Council. ALL RIGHTS RESERVED. |

Sustainable Value Creation

Slide 5

October 2013

CSR Needs to be a Management Approach to Fulfil

the High Expectations

Source: Edelman Trust Barometer 2011

2013 Supply Chain Council. ALL RIGHTS RESERVED. |

Sustainable Value Creation

Slide 6

October 2013

CSR Applied as Part of a Management Approach can

Deliver Value Business and Society (Shared Value)

2013 Supply Chain Council. ALL RIGHTS RESERVED. |

Sustainable Value Creation

Slide 7

October 2013

Capturing the Value Opportunities Requires Driving

The Change Inside-Out From the Core Business

Stakeholder/
Society

Organisation

The Core Business

New Products and Services
New Processes
(Products & Value
New Markets
Chains)
New Business Models
New Management- and Reportingsystems

Source: Eva Grieshuber (2012) in Schneider/Schmidpeter (Hrsg.): Corporate Social Responsibility, p. 375
2013 Supply Chain Council. ALL RIGHTS RESERVED. |

Sustainable Value Creation

Slide 8

October 2013

However, In Many Companies There is a Gap

Between CSR and the Core Business
CSR / Sustainability

Product Development
R

Lifecycle Management

Global Value Chain

Global Value Chain

Operations
Quelle: shared.value.chain (2013)

Legend: (P) Plan, (S) Source, (M) Make, (D) Deliver, (R) Return
2013 Supply Chain Council. ALL RIGHTS RESERVED. |

Sustainable Value Creation

Slide 9

October 2013

To Bridge the Gap Integration of Sustainability and Core

Business Needs to Happen Across the Value Chain

The SCC xCOR Toolkit can be used as a

reference to start the integration from the Core
2013 Supply Chain Council. ALL RIGHTS RESERVED. |

Sustainable Value Creation

Slide 10

October 2013

The xCOR Toolkit Helps to Bridge the Gap and Enables

the 8 Building Blocks of Sustainable Value Creation
1

Value Creation
Strategy

Product Strategy
Value Chain Strategy
Communication
Strategy

Stakeholder
Collaboration

Stakeholder
Engagement
Obtain Voice of the
customer
Obtain Voice of the
community

SCC xCOR Toolkit as Modeling Language

Sustainable
Sustainable
2
3
Operations
Products
Design Philosophie
(Cradle to Cradle /
Co-Creation)
Lifecycle
Management
Launch Management

Value Chain
Configuration
Source, Make,
Deliver, Return
Practices

Business
Planning

2013 Supply Chain Council. ALL RIGHTS RESERVED. |

Sustainable Value Creation

Slide 11

Enterprise
Architecture

Agile Organization
Metrics & Reports
IT Systems
Infrastructure

Continuous Cost
Reduction

Supplier & Partner

Networks

Product Cost
Reduction
Operations Cost
Reduction
Environmental
Impact Reduction

Joint Innovation
Business Continuity
Supply Assurance
Lead time Reduction

End-to-end Value
chain transparency
Planning Practices
(Sales & Operations
Planning / Integrated
Business Planning)

October 2013

xCOR Supports the Transition From Supply Chains

Towards Integrated Value Chains

Supplier processes

Supply Chain

Sales & Support

CCOR

Supply Chain SCOR

An invaluable source of knowledge, frameworks, metrics and

benchmarks Eventually enabling your teams to make progress
based on a common language and facts (instead of emotions)

2013 Supply Chain Council. ALL RIGHTS RESERVED. |

Sustainable Value Creation

Slide 12

October 2013

Employees

Product Design
DCOR

Customer

Product Lifecycle Management

Customer processes

Product

The SCC xCOR Value Chain Toolkit

Applying xCOR to the Value Creations Points Can

Help to Bridge the Gap Example: Sourcing
How xCOR can help

Review Areas

Product

Economic

Supplier inclusion into

development process
Lifecycle management
process

Purchase Price
Product Quality
Supplier Delivery Performance
Supplier Reliability

Ecologic
Depletion of local resources
Impact on biodiversity
Options for renewable sources

Value
Creation Point

SOURCE

Societal
Working conditions of supplier
Local impact of SOURCE
process

Sustainable Value Creation

Process templates
Best practices for sourcing
& supplier collaboration
Joint metrics for economic,
ecologic and societal KPIs
Collaboration
Mapping stakeholders and
understanding of their
requirements

Source: shared.value.chain (2013)

2013 Supply Chain Council. ALL RIGHTS RESERVED. |

Supply Chain

Slide 13

October 2013

xCOR can Help to Connect all Dots and to Enable

Sustainability in the Core Business
Your Organization

Supplier
Raw Material
& Services

Sustainable Product (PD & LCM)

Customer
Use Phase &
End-of-Life

PLAN
Innovation

Innovation

DELIVER

MAKE

SOURCE

RETURN

RETURN
PLAN

Sustainable Operations (SCM)

2013 Supply Chain Council. ALL RIGHTS RESERVED. |

Sustainable Value Creation

Slide 14

October 2013

Several Companies Have Decided to Lead the Way

Towards Sustainable Value Creation

Value Creation
Strategy

Sustainable
Products

Sustainable
Operations

Enterprise
Architecture

2013 Supply Chain Council. ALL RIGHTS RESERVED. |

Creating
Shared Value
Program

Plan A
Committment
Energy Saving
ICs
Reduced
Impacts during
Use Phase
Sustainable
Supply Chain
Sustainable
Apparel & SC
Integrated
Scorecard
Measuring
sustainability in
the Agro SC
Sustainable Value Creation

Slide 15

Stakeholder
Collaboration

Business
Planning

Continuous Cost
7
Reduction

Regional
Administration
Development
Partnership
Safe & Fair Labour
Planning for Asset
Recovery
Demand-Supply
Synchronization
Logistics Cost
Reduction
Environmental P&L

Supplier &
Partner Networks
October 2013

Empowering rural
women
Localized Vanilla
SC

Conclusion Sustainable Value Creation Needs to be

Driven Through the Core Business

Change Perspective Drive sustainable value

creation through the core business (Inside-Out)

Collaborate for Opportunities Integrate

Sustainability across the Value Chain

Get started - the xCOR toolkit gives you a

excellent starting position. Add the 6th sense
of business (Sustainability) into the Model
going forward

2013 Supply Chain Council. ALL RIGHTS RESERVED. |

Sustainable Value Creation

Slide 16

October 2013

Find out more in CSR und Value Chain Management

Sustainable Value Creation in Action

Independent
Capital
Management AG

Springer Publishers, German Language, Publishing Date October 2013

For more Information please visit http://bit.ly/1fTcrWg
2013 Supply Chain Council. ALL RIGHTS RESERVED. |

Sustainable Value Creation

Slide 17

October 2013

THANK YOU

Michael Dheur, shared.value.chain

+49 170 768 58 61
mdheur@sharedvaluechain.com
Dr. Ren Schmidpeter, Center for Humane Market Economy
+49 173 255 48 59
Rene.schmidpeter@gmx.de
2013 Supply Chain Council. ALL RIGHTS RESERVED. |

Sustainable Value Creation

Slide 18

October 2013