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Friday, 26 February 2010
The Opportunities Pyramid
I've developed the above model to communicate the levels of benefit that "going green" can deliver. Underpinning the whole thing is compliance - if you don't get this right then the whole thing can come tumbling down. One level above that is direct economic benefits - in particular cost cutting but also retaining value in assets and reducing the risk of non-compliance by providing a margin of error.If you raise you sights above this level then you are in a minority, but a very wise minority. The first set of benefits in this rarified atmosphere are internal but intangible - recruiting, retaining and motivating the best staff for the business. Above that is all the new business you will win through beating the competition - as we have seen, companies who focus too much on the cost level (ie expecting a good direct ROI) could miss out on this level of benefits. The business people who understand this will be at a considerable advantage over their less enlightened competitors.
And lastly, at the very top, for a minority of businesses there are some rather large new and emerging markets to exploit.
BTW, in Tuesday's webinar, Deborah was explaining the cost and staff levels and I covered the branding/differentiation and new markets.
Labels: benefits, costs, low carbon economy, markets
# posted by Gareth Kane : 07:00
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Friday, 11 December 2009
The benefits snowball
When I do workshops with either professional or student engineers, I always emphasise the need to take a systems approach to design. If you optimise component by component then you will only get incremental improvements, but if you consider the whole system, you can let benefits accrue like a snowball rolling down a hill. For example if you design a process plant with short, fat, straight pipes to reduce friction, you can reduce the size of pumps required to move things around which cuts both capital and operational costs. Likewise if you design a highly thermal efficient building, you can order a smaller heating system.The same principle applies to your supply chain. Say 60% of your carbon footprint is in the supply chain and 20% from electricity generation and 20% from on-site activities. If you want to cut that footprint by 80% by 2050, it looks like a tall order. But if the supply chain and electricity provider manage to cut their own footprint by, say, 50%, then you're half way there without lifting a finger! So rather than simply trying to optimise your own performance, you may want to directly engage with your supply chain. Walkers Crisps famously found that their suppliers were storing potatoes in a humid environment because Walkers were paying them by wet weight. This not only consumed energy at the warehouses, but it meant that the crisps required more energy to fry (to drive off that water). Now the company buys by dry weight, the humidification systems have been switched off and the frying requires less fuel. Systems thinking = wins all around.
So, always bear the big picture in mind, and allow the benefits to snowball.
Labels: benefits, supply chain, systems thinking
# posted by Gareth Kane : 09:29
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A highly accessible, practical guide to those who want to introduce sustainability into their business or organization quickly and effectively.
