Dec 4, 2020

Coca-Cola European Partners Strives for Net Zero Emissions

Technology
Supply Chain
Sustainability
emissions
Oliver Freeman
4 min
Coca-Cola European Partners have announced their ambition to reach net-zero emissions across their entire value chain by 2040...

Coca-Cola European Partners (CCEP) is set to accelerate the decarbonisation of its business by reducing absolute greenhouse gas (GHG) emissions across its entire value chain - including scope 1, 2 and 3 emissions - by 30 per cent by 2030 (vs 2019)** and setting a path to become a Net Zero business by 2040, in alignment with a 1.5˚C pathway and the Paris Climate Agreement.

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The Key Takeaways: 

  • Reducing greenhouse gases across all five pillars of CCEP’s value chain ─ ingredients, packaging, operations, transport, refrigeration.
  • A commitment from CCEP to support its strategic suppliers to set their own science-based targets and use 100 per cent renewable energy.
  • Unlock support in the form of a three-year, €250mn investment providing targeted financial support to aid its decarbonisation programme.
  • See the inclusion of greenhouse gas emissions reduction target in CCEP’s long-term management incentive plan (LTIP).

CCEP will reduce GHG emissions across all five areas of its value chain – ingredients, packaging, operations, transportation and refrigeration. Crucially, there is a significant focus on reducing scope three emissions via a commitment to support strategic suppliers to set their own science-based carbon reduction targets and use 100 per cent renewable electricity.

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CCEP’s immediate action plan is supported by a three-year €250m investment which will provide targeted financial support to decarbonise its business. This includes sustainable packaging initiatives, such as the progression of its 100 per cent rPET roadmap and investing in the scaling of depolymerisation technology, which will help accelerate the delivery of its longer-term net-zero objectives.

The ambition is underpinned by the inclusion of a GHG emissions reduction target in CCEP’s long term management incentive plan (LTIP) – 15 per cent of the LTIP awarded in 2020 will be based on the extent to which CCEP reduces GHG emissions over the next three years.

It builds on work undertaken over the last decade to reduce GHG emissions across CCEP’s entire value chain by 30.5 per cent (vs 2010) as part of This is Forward, its joint sustainability plan with Coca-Cola in Western Europe. CCEP’s 2030 GHG reduction commitment has been approved by the Science-Based Targets initiative (SBTi) as being in line with a 1.5˚C reduction pathway as recommended by the Intergovernmental Panel on Climate Change (IPCC).

As part of its journey to Net Zero, CCEP will invest in projects which remove carbon from the atmosphere or verified carbon offset projects. However, it will focus on reducing emissions as far as possible and will only offset where essential and where it can’t reduce emissions any further.

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Commentaries From the Executive

Damian Gammell, CEO of Coca-Cola European Partners

“Our vision has always been to deliver loved brands, done sustainably, and today we recognise the even greater urgency to address climate change, one of the most serious and complex challenges facing society and our planet. We have developed an ambitious plan to reduce greenhouse gas emissions which uses absolute science-based carbon reduction targets to underpin our ambition and chart our progress.”

“We have a responsibility to the communities we serve to keep taking this action on climate. We know it will be a long and challenging journey – there are no quick fixes or silver bullets - but we are determined to drive this change as fast as we can and to play our part in helping and influencing others. We’ve made significant progress so far, and looking ahead, we will continue to help lead the transition to a low carbon future by putting environmental impact at the heart our decision-making.”

María Mendiluce, CEO of the We Mean Business coalition

“Coca-Cola European Partners is showing clear leadership by aligning its development strategy with the 1.5ºC pathway and the Paris Agreement. By engaging key suppliers in the shared objective of aligning with science and investing in renewable energy, not only will they tackle the biggest emission reduction challenges but also contribute to the green recovery.

They are ensuring their business is ready to grasp the opportunity and excel in the transition to a zero-carbon economy.”  

Joe Franses, Vice-President, Sustainability at Coca-Cola European Partners

“The world is at a critical point, and we must all play our part to cut greenhouse gas emissions, to limit global temperature increase to 1.5°C and protect the future of our planet. Climate change may be bigger than all of us, but it is not beyond us. That’s why CCEP is working towards a Net Zero future. And why we’re taking action now to reduce greenhouse gas emissions across our entire value chain, from the ingredients we source, packaging we use, to the drinks we sell. As we move through our first three-year plan, we will continue to adapt and solve key challenges to help set new milestones to achieve our longer-term reduction vision.”

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Jun 11, 2021

NTT DATA Services, Remodelling Supply Chains for Resilience

NTTDATA
supplychain
Supplychainriskmanagement
Procurement
6 min
Joey Dean, Managing Director of healthcare consulting at NTT DATA Services, shares remodelling strategies for more resilient supply chains

Joey Dean, the man with the coolest name ever and Managing Director in the healthcare consulting practice for NTT DATA and is focused on delivering workplace transformation and enabling the future workforce for healthcare providers. Dean also leads client innovation programs to enhance service delivery and business outcomes for clients.

The pandemic has shifted priorities and created opportunities to do things differently, and companies are now looking to build more resilient supply chains, none needed more urgently than those within the healthcare system. Dean shares with us how he feels they can get there.

A Multi-Vendor Sourcing Approach

“Healthcare systems cannot afford delays in the supply chain when there are lives at stake. Healthcare procurement teams are looking at multi-vendor sourcing strategies, stockpiling more inventory, and ways to use data and AI to have a predictive view into the future and drive greater efficiency.

“The priority should be to shore up procurement channels and re-evaluate inventory management norms, i.e. stockpiling for assurance. Health systems should take the opportunity to renegotiate with their current vendors and broaden the supplier channel. Through those efforts, work with suppliers that have greater geographic diversity and transparency around manufacturing data, process, and continuity plans,” says Dean.

But here ensues the never-ending battle of domestic vs global supply chains. As I see it, domestic sourcing limits the high-risk exposure related to offshore sourcing— Canada’s issue with importing the vaccine is a good example of that. So, of course, I had to ask, for lifesaving products, is building domestic capabilities an option that is being considered?

“Domestic supply chains are sparse or have a high dependence on overseas centres for parts and raw materials. There are measures being discussed from a legislative perspective to drive more domestic sourcing, and there will need to be a concerted effort by Western countries through a mix of investments and financial incentives,” Dean explains.

Wielding Big Tech for Better Outcomes

So, that’s a long way off. In the meantime, leveraging technology is another way to mitigate the risks that lie within global supply chains while decreasing costs and improving quality. Dean expands on the potential of blockchain and AI in the industry

“Blockchain is particularly interesting in creating more transparency and visibility across all supply chain activities. Organisations can create a decentralised record of all transactions to track assets from production to delivery or use by end-user. This increased supply chain transparency provides more visibility to both buyers and suppliers to resolve disputes and build more trusting relationships. Another benefit is that the validation of data is more efficient to prioritise time on the delivery of goods and services to reduce cost and improve quality. 

“Artificial Intelligence and Machine Learning (AI/ML) is another area where there’s incredible value in processing massive amounts of data to aggregate and normalise the data to produce proactive recommendations on actions to improve the speed and cost-efficiency of the supply chain.”

Evolving Procurement Models 

From asking more of suppliers to beefing up stocks, Dean believes procurement models should be remodelled to favour resilience, mitigate risk and ensure the needs of the customer are kept in view. 

“The bottom line is that healthcare systems are expecting more from their suppliers. While transactional approaches focused solely on price and transactions have been the norm, collaborative relationships, where the buyer and supplier establish mutual objectives and outcomes, drives a trusting and transparent relationship. Healthcare systems are also looking to multi-vendor strategies to mitigate risk, so it is imperative for suppliers to stand out and embrace evolving procurement models.

“Healthcare systems are looking at partners that can establish domestic centres for supplies to mitigate the risks of having ‘all of their eggs’ in overseas locations. Suppliers should look to perform a strategic evaluation review that includes a distribution network analysis and distribution footprint review to understand cost, service, flexibility, and risks. Included in that strategy should be a “voice of the customer” assessment to understand current pain points and needs of customers.”

“Healthcare supply chain leaders are re-evaluating the Just In Time (JIT) model with supplies delivered on a regular basis. The approach does not require an investment in infrastructure but leaves organisations open to risk of disruption. Having domestic centres and warehousing from suppliers gives healthcare systems the ability to have inventory on hand without having to invest in their own infrastructure. Also, in the spirit of transparency, having predictive views into inventory levels can help enable better decision making from both sides.”

But, again, I had to ask, what about the risks and associated costs that come with higher inventory levels, such as expired product if there isn’t fast enough turnover, tying up cash flow, warehousing and inventory management costs?

“In the current supply chain environment, it is advisable for buyers to carry an in-house inventory on a just-in-time basis, while suppliers take a just-in-case approach, preserving capacity for surges, retaining safety stock, and building rapid replenishment channels for restock. But the risk of expired product is very real. This could be curbed with better data intelligence and improved technology that could forecast surges and predictively automate future supply needs. In this way, ordering would be more data-driven and rationalised to align with anticipated surges. Further adoption of data and intelligence and will be crucial for modernised buying in the new normal.

The Challenges

These are tough tasks, so I asked Dean to speak to some of the challenges. Luckily, he’s a patient guy with a lot to say.

On managing stakeholders and ensuring alignment on priorities and objectives, Dean says, “In order for managing stakeholders to stay aligned on priorities, they’ll need more transparency and collaborative win-win business relationships in which both healthcare systems and medical device manufacturers are equally committed to each other’s success. On the healthcare side, they need to understand where parts and products are manufactured to perform more predictive data and analytics for forecasting and planning efforts. And the manufacturers should offer more data transparency which will result in better planning and forecasting to navigate the ebbs and flows and enable better decision-making by healthcare systems.

Due to the sensitive nature of the information being requested, the effort to increase visibility is typically met with a lot of reluctance and push back. Dean essentially puts the onus back on suppliers to get with the times. “Traditionally, the relationships between buyers and suppliers are transactional, based only on the transaction between the two parties: what is the supplier providing, at what cost, and for what length of time. The relationship begins and ends there. The tide is shifting, and buyers expect more from their suppliers, especially given what the pandemic exposed around the fragility of the supply chain. The suppliers that get ahead of this will not only reap the benefits of improved relationships, but they will be able to take action on insights derived from greater visibility to manage risks more effectively.”

He offers a final tip. “A first step in enabling a supply chain data exchange is to make sure partners and buyers are aware of the conditions throughout the supply chain based on real-time data to enable predictive views into delays and disruptions. With well understand data sets, both parties can respond more effectively and work together when disruptions occur.”

As for where supply chain is heading, Dean says, “Moving forward, we’ll continue to see a shift toward Robotic Process Automation (RPA), Artificial Intelligence (AI), and advanced analytics to optimise the supply chain. The pandemic, as it has done in many other industries, will accelerate the move to digital, with the benefits of improving efficiency, visibility, and error rate. AI can consume enormous amounts of data to drive real-time pattern detection and mitigate risk from global disruptive events.”

 

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