Date post: | 28-Dec-2015 |
Category: |
Documents |
Upload: | theodora-gibson |
View: | 216 times |
Download: | 0 times |
WEC Asia-Pacific Roundtable October 18-19, 2005
Karl F. SchmidtVP, WW Process Excellence
Greening the Supply Chain
Agenda
• J&J background
• Supply Chain areas of focus
• Case studies/Examples
• Benefits
Overview / Strategic Principles
• Most broadly- based Human Health Care Company– 114,000 employees, 3 major segments
• Decentralized Management– 200 companies, 57 countries
• Manage for the Long Term– 72 consecutive years of sales increases
– 43 consecutive years of dividend increases• Credo-based values
– Customers, employees, community, shareholders
Supply Chain Areas of Focus
• J&J WW Environmental Program
– Vision, Goals, policy• Initial focus: risk reduction
• Current: includes operational efficiencies
• WEC Cleaner Production Project
– Mexico, Brazil
• EPA / Green Supplier Network
– Specific projects applying Lean production
Environmental Vision
“We are committed to environmental leadership, instilling the highest
environmental values in all employees, utilizing the best environmental practices in all
we do, and focusing on global sustainable growth.”
AirDrinking
WaterWastewater
HazardousNPO
PCB’s
ChemicalEmergency
PreparednessStorage Tanks
Site Remediation
Non-HazardousWaste
Handlingand Storage
External Manufacturers
SupplierResponsibility
Commitment& Policy
EnvironmentalPlanning
Checking & Review
Implement &Operate
Compliance &
External Mfg.
Continuous Improvement toward “0”
• All EM’s Audited & Acceptable
Management System Goals
• ISO 14001 Cert. Of all Mfg/R&D Sites
New Products & Processes
• EI Assessments for all new Products & Packages
Conservation & Community Outreach
• Protection of Ecological Systems
• Outreach Plans implemented
CO2 / Energy
• Reduce CO2 Emissions
• Increase Energy Efficiency
Water
• Reduce Water Use
• Employ Best Practices
Raw Material & Packaging
• Reduce Raw Material & Packaging Use
Waste Reduction
• Reduce Waste
• Increase reuse, recycling, reclamation
2001-2005 Global Standards & Goals
Key Business Benefits:• Enhances Reputation
•Reduces Regulatory & Market Risks• Builds Credibility in our Communities
• Reduces Cost & Improves Operational Efficiency
Supply Chain - Why does it matter?
Increasing Volume and Dollar ($) spend on Suppliers and External Manufacturers (EM)
Knowledge / control of suppliers and EMs can be limited:
Compliance , safety and regulatory risks
Labor concerns
Business Continuity Planning issues
Public expectations and risk to reputation
External Manufacturer (EM) Metrics Dashboard Criteria
Category On-Target Caution Needs Attention
External Manufacturing
(EM) Agreement
More than 95% of EM have contracts or written agreements to comply with EHS laws and regulations. (2 points)
80-94% of EM have contracts or written agreements to comply with EHS laws and regulations (1 point)
Less than 80% of EM have contracts or written agreements to comply with EHS laws and regulations. (0 points)
EM Assessments
100% of new EM evaluated before use (2 pts)
Plan and budget approved to assess all EM by end of 2005 (2 pts)
Budget is allocated to assess all EM by end of 2005 (1 pt)
Less than 100% of all new EM evaluated before use. (0 pt)
No plan or budget in place (0 pt)
EM Program Effectiveness
Less than 10% “repeat marginal” sites used. (2 pt)
No “Unacceptable” EM being used. (2 pt)
11-30% of “repeat
marginal” sites used. (1 pt)
‘Unacceptable” EM on track to become “acceptable” in one year. (1 pt)
More than 30% of EM used are ‘repeat marginal” (0 pt)
“Unacceptable” EM still in use one year after assessment. (0 pt)
Dashboard color based on points
9- 10 points 5-8 points 4 points or less
“Win – Win” for Risk Reduction
2004 EM Assessment Status*
• Over 300 EMs audited since 1999
• Now <2% Repeat Marginal ratings
• No Repeat Unacceptable ratings
• Janssen’s Success with Hanjiang Pharmaceutical
• McNeil’s Success with Cardinal Healthcare
* N = 1250 EM in database
Supply Chain-Scope of Environmental, Health & Safety Involvement
Product Development
Manufacturing Distribution Use
Before
Now and future
Increasing volumeby external 3rd party
WEC: Capacity Building for Environment
“Greening the Supply Chain Project”
Focus: drive environment and sustainable development among SMEs in the developing world
What: leverage influence of MNEs to promote Cleaner Production and Energy Efficiency improvements among the thousands of supplier SMEs
Who: partnership with WEC, USAID, MNE (both Corp and in country), local technical partner, supplier SME
How: 2 day training workshops, technical visit/assessment of opportunity, action plan and follow-up report
Benefits for Supplier SME
• Increased competitiveness (less waste, increased efficiency, lower cost)
• Market responsiveness (more attractive for other MNE to use)
• Promotes sustainable development (social/economic/environment gain)
J&J/ Supplier Examples in Mexico and Brazil
• J&J Mexico and J&J Brazil hosted 2 supplier sessions with World Environment Council (WEC) in
– Pueblo, Mexico, 12 suppliers
– Sao Jose dos Campos, Brazil
13 suppliers
• Typical Pilot Impacts:
– Printing Co: $26,500/yr in recycling/avoided disposal
– Packaging Co: 100,000 gal/yr water savings
– Chemical Co: add’l $8,000/yr
revenue for cleaned drums13 key suppliers are participating in Lean Manufacturing Assessment project in Brazil- Kick-off meeting held in April, 2004
Green Suppliers Network (GSN)
An Innovative Industry-Government Collaboration including
• EPA/GSN/ Dept of Commerce, OEMs
• Green Suppliers provides “Lean & Clean” technical assistance to small and mid-sized manufacturers yielding improved competitiveness through environmental and economic benefits
• Lean & Clean approach expands the traditional Lean definition of waste from eliminating non-value added time, labor, money to include environmental wastes (energy, emissions)
• Since 2004, over $9.7MM in savings from just 20 projects
Lean & Clean Approach
Clean Strives For...
– Nature-friendly Substitutes
– Optimized Material And Energy
Efficiency
– Waste Elimination
– Air/Water Emission Reductions
– Solid/ Haz Waste Reduction
– Toxic Material Reduction Or
Substitution
– Efficient Packaging
Lean Eliminates...
– Defects
– Overproduction
– Waiting
– Non-utilized People
– Transportation
– Inventory
– Motion
– Extra processing
How Green Suppliers Network Works
Step 1. EPA engages one or multiple OEMs
Step 2. Facilitate Supplier Engagement
Step 3. EPA engages Tech.Consultant to provide Lean and Clean assistance to supplier
Step 4. Tech. Consultant works with supplier facility to identify, prioritize and implement solutions that achieve business and environmental results
Step 5. Consultant aggregates data for EPA and OEM
Step 6. All cost savings and company sensitive data remain with supplier
Lean Thinking and Continuous Improvement
• Lean Thinking is a Systematic Approach of Identifying and Eliminating Waste (non-value-added activities) Through Continuous Improvement
• Green Suppliers Network Reviews Focus On The First Three Steps
• Use of Six Sigma and Lean tools:
–Process maps
–Root cause analysis
–Value Stream maps
Understand the Current State
Analyze System Conditions
Generate Options for
Improvement
Implement
Evaluate Performance
Standardize Processes
Continuous Improvement
Benefits to J&J
US EPA ,US Department of Commerce , Green Supplier Network partnering with J&J local company suppliers in Puerto Rico
• Suppliers trained in Lean, at minimal cost to J&J
• Suppliers reduce waste, save money, improve cost
• Collaboration with government agencies enhance reputation
Typical supplier savings (1st project with bottle supplier)
• $180,000/yr from “leaned” changeover process
• Now able to replicate on other internal processes
Summary
“Greening the Supply Chain” Benefits:
• Enhances Reputation
• Reduces Regulatory & Market Risks
• Builds Credibility in our Communities
• Reduces Cost & Improves Operational Efficiency
• Promotes Sustainable Development