Operational excellence as a starting point for reduction of carbon footprint

As a side effect, operational excellence programs provide the opportunity to gain access to sustainable management. Using a short case from our practice, we explain how exactly this works.

For many companies, it is difficult to find the right approach to sustainable management. It is either unclear, how relevant sustainability strategically is for the future success of the company and which sustainability goals thus shall be adopted. Or a good starting point for measures, e.g. to reduce the CO₂ footprint in alignment with the goals of the company, is not obvious. Using a short case study, we show that operational excellence programs (OPEX) can have positive impacts on sustainable development of a company – not only by achieving certain goals, but also by providing access to sustainable management.

We supported a company in setting up and implementing an OPEX program. An essential part of it was preparing a material balance. In course of the analysis, significant efficiency potentials could be identified. In particular, efficient use of a specific raw material could be greatly improved without significant changes to the products. After having implemented appropriate measures, raw material savings by several tons per year were realized. In addition, the corresponding transport volume was reduced to the same extent.

Both effects – reduction of the use of materials and transport volume – also meant a significant reduction of the carbon footprint. Admittedly, this was an indirect result. However, this example was a reduction of so-called ‘scope 3 emissions’. Scope 3 emissions are defined as the part of the carbon footprint that arises indirectly in the value chain, i.e. not directly within the company itself, but during the production of precursors (suppliers) and by the use and disposal of the products. In practice, the measurement of scope 3 emissions is difficult because it requires cooperation within the value chain. At the same time, it is assumed that the biggest CO₂ reduction potential lies around these emissions for most industries. However, the complexity of measuring scope 3 emissions deters many companies from systematically analyzing corresponding data and realizing efficiency potentials. In our example, the company found such an approach through the perspectives of an OPEX program and material efficiency. And perhaps more importantly, the company developed the motivation to systematically integrate the carbon footprint into the analysis and management of the supply chain.

Our customer may be representative for many other companies: Operational excellence and material efficiency are already within the focus of many, but CO₂ efficiency in the supply chain is not. However, both can be linked, and thus OPEX programs provide a starting point to CO₂ management in the supply chain. In particular, OPEX programs help to create transparency within the supply chain. Subsequently, further measures can be developed that may lead to a sustainable and future-oriented development of the company. These include, for example, uncovering and leveraging innovation potential in the supply chain, or the creation of purchasing guidelines up to certification of suppliers. Strategic considerations in the sense of circular economy can also be derived on the basis of OPEX programs, e.g. for product development.

Eventually, it is important to transfer the findings into a management system. This can also be used to make decisions for investments, also taking into account long-term CO₂ effects, e.g. by combining CO₂ saving potentials with an internal carbon price. In due course, we will discuss the topic of carbon prices in detail in a separate post. The approach of ENDURE consulting also comes into play when it comes to management systems: Based on a holistic analysis, we support companies in setting up and successfully implementing management systems. In doing so, we combine operational excellence and sustainability, thus creating the basis for future viability and long-term success together with our customers.

Have you carried out projects that achieved a CO₂ reduction as a side effect? And to what extent has this facilitated access to sustainable development of the company? Get in touch, we look forward to your examples and to exchanging ideas!

Image source: istockphoto.com/Ivan Bajic