In the past, companies have struggled with the challenges of applying LCA across their entire product portfolio. For example, a product-by-product LCA process can take years in retail environments, where there may be thousands of different products from a variety of suppliers.
To solve this challenge, The Delphi Group and Kalypso Designs (www.kalypsodesigns.com) have formed a strategic alliance to offer a scalable and efficient process to analyze the relative environmental impacts, such as carbon footprint and embedded energy, of all the product types in a retailer's portfolio in a fraction of the time and cost. This Portfolio life cycle analysis (LCA) service offers significant insights into customers’ products and supply chain from a top-down perspective. The resulting intelligence can produce a competitive advantage and superior sustainability strategy with quantifiable performance metrics. More specifically, the results of our analysis can be used for:
- Screening analysis and hotspot identification - customers can quantitatively analyze their product portfolios and identify the highest impact areas across several metrics of interest.
- Commodity price risk assessment - the potential impacts of commodity price shifts can be estimated in relation to product margins or cost of goods sold (COGS).
- Scenario planning and risk assessment - the potential regulatory cost of for example carbon can also be analyzed to identify potential margin risk if carbon were to be taxed or otherwise became a direct cost as a result of regulations. The results can then be integrated into corporate strategic planning and risk management/mitigation processes.
- Sourcing strategy - high impact suppliers can be identified for follow up actions as well as reasonable mitigating actions. For example, by comparing the relative environmental impacts of alternate countries of origin of the same product, a sourcing manager can develop a fuller cost benefit analysis of broad sourcing strategies.
- Enhanced Reporting and Transparency - customers can begin to track and report on the harder to understand impacts of their supply chain. Whether used in internal or external reporting, this data provides powerful insight into trends that are usually only tracked through anecdotal evidence.
________________________________________________________________________
Canadian Tire Corporation was the first retailer to apply the service and benefits from the increased understanding of every product’s footprint. “We started using this tool in 2008 and it has provided us with significant insight into the energy and carbon footprint of our products,” said Tyler Elm, Vice President, Business Sustainability, Canadian Tire Corporation. “The partnership between Delphi and Kalypso, two long-term reliable suppliers, allows us to advance our work in quantifying the embedded energy and carbon in the products we sell.”
________________________________________________________________________
One of the greatest advantages of the Portfolio approach is that customers can use data that they are already collecting, thereby avoiding a cumbersome and costly supply chain data acquisition effort.
The possibilities do not end with the standard LCA metrics, either. These metrics, such as embedded fuels or carbon, can serve as the inputs for further analytics that provide an even greater understanding of hidden costs and opportunities.
The Delphi-Kalypso service builds upon:
- A powerful lifecycle data model of the entire economy, called Economic Input-Output LCA (EIO-LCA), which was developed by researchers at Carnegie Mellon University, and
- The work of LCA expert Nathan Taylor (CEO of Kalypso Designs) who has been developing a hybrid LCA methodology which combines the strengths of both top-down economic (EIO-LCA) and bottom-up process LCA into a proprietary model built specifically for retailers.
For more information please see our press release by clicking here.
