Page 253 - Materials Chemistry, Second Edition

A CASE STUDY OF THE PRACTICE OF SUSTAINABLE SUPPLY 241

implying they are able to observe trends in these metrics and set informed
improvement goals. The vast majority of those who provided partial data or
did not respond were simply not yet measuring or reporting these measures.
In April 2011, a revised scorecard was launched via webinar to approximately
600 suppliers (http://pgsupplier.com/) and completion of the sustainability
scorecard is now factored into supplier ratings. Supplier responses for envi-
ronmental sustainability are integrated with metrics for commercial, opera-
tional, relationship and innovation-related performance indicators also used
in P&G's annual supplier rating process.
The supplier sustainability scorecard results are presented below for its first
two years of use: 2010 (360 companies) and 2011 (500 companies) - part of the
2011 data are still being collected and analyzed. Results appear very similar
between the two annual samples, and are shared in sections to highlight dif-
ferent aspects to the scorecard and evolving sustainable supply management
system.
P&G's suppliers and agencies reported at different scope levels in both 2010
and 2011. In 2010,10% (32 companies) of those who reported had the capability
to isolate sustainability data specific to P&G (Customer) production or services
only, while 40% (124 companies) could report based on their Sites related to the
materials or services purchased by P&G. 50% (153 companies) reported their
Corporate totals. The scope split for 2011 was about the same. Notably, the
companies that could report at the P&G scope had an overall mean improve-
ment across all metrics of 12.2%, based on production intensity. In contrast,
companies that reported at the Site level had overall 8.1% mean (intensity),
and those reporting at the Corporate level had 3.6%. It appears that as compa-
nies focus on their ability to track with greater precision, they realize greater
improvements across the areas in the scorecard.
Three aspects to this different reporting scope are important to understand.
First, Customer-specific data are on the scale needed to develop life cycle
inventories (LCIs). It is ultimately this scale of data that will be used by P&G's
LCA practitioners to build more accurate models that guide sustainable prod-
uct development. Secondly, this 10:40:50 split gives insight into the level of
specificity that different data systems can achieve for each supplier or agency
at this point in time. In other words, this split implies that 10% of companies
are capable of delivering new LCIs readily, whereas 40% may have to invest
significant time and money to create systems to develop LCIs. 50% of compa-
nies might not be able to provide LCIs and contribute to LCAs at this point.
Finally, this split may also by influenced by suppliers trying to protect data
that could be used to renegotiate pricing; in theory, some kinds of customer-
specific information could be modeled to estimate production costs relative
to buyer price. It is due to this legitimate concern and respect for P&G's sup-
plier partners business confidentiality that the scorecard metrics have been
designed with the flexible scope.
The metrics used allow the scorecard to be flexible enough to apply to any
industry. As Figure 10.3 illustrates, scorecard respondents represented all
industries - from capital and chemicals, to external manufacturing, packaging,