CASE STUDY:“NESTLE PHILIPPINES:GREENING THE BUSINESS PARTNERS” Reference:GREENING THE SUPPLY CHAIN: A GUIDE FOR MANAGERS IN SOUTHEAST ASIAPurba Halady Rao

CASE STUDY:NESTLE PHILIPPINES:GREENING THE BUSINESS PARTNERSReference:Greening the Supply Chain: A Guide for Managers in Southeast AsiaPurba Halady Rao

Reported by: YUTUC, ANGELOGUECO, LAMBERT

“WHAT IS A

SUPPLY CHAIN?HOW DO YOU MAKE IT

GREEN?

SUPPLY CHAIN: A REVIEW

Is the movement of materials as they flow from their source to the end customer. Supply Chain includes purchasing, manufacturing, warehousing, transportation, customer service, demand planning , supply planning and Supply Chain management.  It is made up of the people, activities, information and resources involved in moving a product from its supplier to customer.http://www.supplychaindefinitions.com/

BRIEF HISTORY:NESTLE PHILIPPINES

◍ Nestle Philippines was established in 1963 starting with coffee brand ‘Nescafe’

◍ It has been well-acknowledged that Nestle Philippines has high standards for environmental performance.

◍ However, this does not guarantee that the supporting vendors, contractors and suppliers abide by these standards.

◍ Hence , the company launched a program to “green” its suppliers .

Nestle Environmental Management System

(NEMS) Nestle

Philippines

• Established in 1996 • The goal is to systematize the

company’s environmental initiatives and to ensure compliance with Nestle environmental policy, legislations and Kaizen (continuous improvement of environmental performance)

Nestle Environmental Management System (NEMS)

RESULTS OF NESTLE EMS:

◍Nestle has no major environmental problems

◍Nestle complies with relevant regulations or, in a few exceptional case, has initiated actions to do so

◍Measures taken are proactive and often anticipate future regulations. Many times, measures taken to improve the environment also reduce costs.

NESTLE PHILIPPINES GREENING THE SUPPLY CHAIN OBJECTIVES

1. To help develop supplier commitment to environmental improvement

2. To demonstrate the business case for integrating environmental management into the corporate culture.

NESTLE PHILIPPINES GREENING THE SUPPLY CHAIN OBJECTIVES

3. To deliver technical assistance and training programs to all its business partners.

NESTLE PHILIPPINES GREENING THE SUPPLY CHAIN OBJECTIVES

GREENING THE SUPPLY CHAIN @ NESTLE

-follows an approach consistent with the development and implementation of NEMS (Nestle Environmental Management System)

Seminars and workshops were conducted with different vendors and suppliers covering:

◍ Introduction to EMS – concepts, elements, structure

◍ Planning – aspects and impacts, legal requirements, policy, objectives, targets, programs

◍ Implementation, documentation and control

◍ EMS audit and review

The Nestle Philippine

Supply Chain

Purchasing and Inbound LogisticsProduction

Distribution and Outbound Logistics Reverse

Logistics

To reduce the overall adverse environmental impacts of the company,

one might look at the environmental aspects and impacts at each phase of the supply chain to determine what causes them and how they can be

controlled.

Purchasing and Inbound

LogisticsProduction

Distribution and

Outbound Logistics

Reverse Logistics

NESTLE PHILIPPINESENVIRONMENTAL

MANAGEMENT PROGRAMME

ENVT’L ASPECTS

SIGNIFICANT IMPACTS OBJECTIVES

TARGETS TIME SCALE RESPONSIBILITY

INBOUND LOGISTICS

our office

ENVIRONMENTAL ASPECT

Use of chemical fertilizers and pesticide

SIGNIFICANT IMPACTS Soil Erosion; water pollution; soil contamination;

OBJECTIVES • Eliminate chemical fertilizer use thus also eliminating adverse effects on soil and water

• Reduce pesticide useTARGETS Not mentioned

TIME SCALE Not mentioned

RESPONSIBILITY Nestle – not specified

RESULT Discouraged use of chemical fertilizers, instead encouraged the use of biological or cultural farming methods and Sloping Agricultural Land Technology (SALT)

Nestle established a local agricultural services department tasked to implement a growers program centered on the transfer of proven and well-tested technology to local farmers who supplied the company with their produce.

These agronomy programs also educated the farmers on how to consume the least amount of energy, protect water resources and preserve and improve natural soil productivity.

Jute sacks were farmers contain their produce are returned to them for reuse.

INBOUND LOGISTICS

PRODUCTIONENVIRONMENTAL ASPECT Excessive industrial residues

SIGNIFICANT IMPACTS • Solid waste• Water and air pollution

OBJECTIVES • Find ways to use industrial residues to make value-added products

• Reduce total emissions and effluents

TARGETS Not mentioned

TIME SCALE Not mentioned

RESPONSIBILITY Pollution Control Officer (PCO)

RESULT During coffee production, the coffee beans were crushed and the juice extracted leaving behind solid waste or pulp. This was dried thoroughly and used as fuel for boilers. The solid waste disposal system installed in the coffee production center in CDO also helped produced steam which was used for manufacturing and other services.

PRODUCTIONENVIRONMENTAL ASPECT

• Use of refrigerant gases such as CFC and HCFC

SIGNIFICANT IMPACTS • Depletion of ozone layer that contributes to global warming

OBJECTIVES • Substitute environmentally harmful refrigerant gases

TARGETS Not mentioned

TIME SCALE Not mentioned

RESPONSIBILITY Pollution Control Officer (PCO)

RESULT The refrigeration system was continuously monitored to check for leakage of CFCs. The use od CFCs and HCFC had since ceased with the company using other types of refrigerant gases like ammonia which did not contribute to global warming. Moreover, air emissions from the production process were checked using advanced equipment.

DISTRIBUTION & INBOUND LOGISTICS

ENV’TL ASPECT • Discharge of wastewater

SIGNIFICANT IMPACTS • Pollution in natural bodies of water• Adverse effect to marine animals

OBJECTIVES • Treat wastewater before discharge to eliminate pollutants

TARGETS Not mentioned

TIME SCALE Not mentioned

RESPONSIBILITY Pollution Control Officer (PCO)

RESULT • Wastewater treatment facilities in every plant designed to biologically treat wastewater to eliminate pollutants. The treated water is discharged to rivers, ponds and other water bodies where tilapia grew abundantly

• The residue or sludge left after treatment were used as fertilizers ,land fill, soil conditioner in banana plantation.

DISTRIBUTION & INBOUND LOGISTICS

ENVT’L ASPECT • Overall energy use and waste generationSIGNIFICANT IMPACTS • Abundant energy requirement taken from

municipal and internal power source. Generation of these energy results to emission and affluence that adversely affect the environment

OBJECTIVES • To conserve energy and reduce waste over the entire supply chain

TARGETS Within legal standards

TIME SCALE Annually

RESPONSIBILITY Energy conservation committee

RESULT • All sales vans were subjected to regular checkups (to check smoke belchers, etc.)

• All factories had efficient lighting system to reduce electricity consumption

• War on waste campaign dubbed “Walang Aksaya”

◍ The commitment of Nestle Philippines toward sustainability and the environment has long been acknowledged.

◍ This realization urged the company to embark on a greening endeavor encompassing its business partners associated with its operations.

◍ Through its endeavor towards sustainability, the company achieved good business performance in terms of risk reduction and direct tangible savings; still the company felt that one was not “truly there” until one’s business partners were “also there”.◍ The company intended to extend its resources to its

business partners so that they, too, would develop a similar commitment toward environmental protection.

Summary:

QUESTIONS?

Thanks for listening!

Prepared for:Engr. Ruby Pineda-Henson,

Ph.D., PIEPresented by:

Yutuc, Angelo | Gueco, Lambert