Introduction and challenges
After years of fairly relaxed legislation on the matter, the environment is now at the forefront of the agenda for many business leaders. For industries where reputation is critical, such as luxury, it is considered their number one priority.
Environmental impact can be categorised into four areas: climate, biodiversity, resources and health. Measuring these categories within the entire value chain, from raw material to recycled products, and identifying the ways to reduce negative impact, is becoming essential for businesses.
Beyond the technical complexity, this can lead to many challenges such as:
- The ability to measure multiple environmental impacts rather than just C02 emissions, and defining the appropriate KPIs for each category
- The necessity to consider holistically the environmental cost of changes, rather than treating changes in isolation. For example, reducing batch sizes limits the risk of old stock, but would generate more waste
- Potential conflict with the company’s other objectives. For example, air transport in the luxury industry allows agility and stock reduction
It will ultimately mean that the classic operations triangle of cost, stock and service becomes a square, as environment will become the fourth criterion to be included.
How we can help
In addition to systematically integrating environmental impact into our business transformation projects, we can support our clients in an initial environmental impact analysis phase and the subsequent implementation phases.
The levers to be explored deal with the entire value chain, such as:
- Adaptation of the product offer: speed of renewal and sustainability of products
- Upstream operations: choice of raw materials, CSR compatibility and sourcing local suppliers, packaging optimisation throughout the chain, etc
- Production: reduction of waste and resource consumption (energy and water), shift towards less polluting industrial processes
- Supply chain: adjustment of ordered or manufactured batch sizes, improvement of forecasting, optimisation of stock location, modes of transport, last mile.
- Retail: optimisation of store allocations, limitation of physical assortments, elimination of plastic packaging
- Second life: recycling and over cycling
Argon & Co also provides appropriate support during the implementation phases:
- Definition of KPIs (carbon footprint reduction, product recyclability rate, supplier environmental sustainability index, mileage travelled, water use reduction, energy consumption reduction)
- Powering up the organisation
- Management of the transformation program
- Provider of expertise whenever necessary on specialist subjects
- Support in managing the human effects of transformation