Saint-Gobain Optimizes Supply Chain Transport to Help Reach Goal of Carbon Neutrality by 2050
As organizations strive to become more sustainable and reduce CO2 emissions, many focus their efforts on optimizing transportation in their supply chain.
Compagnie de Saint-Gobain S.A., a global manufacturer headquartered in Paris, France, operates dozens of well-known brands worldwide and is on a mission to achieve carbon neutrality by the year 2050. By optimizing transport in its supply chain, Saint-Gobain has yielded notable results that put it on track to achieve its goal.
Transport optimization key to reducing carbon emissions
Saint-Gobain's Net-Zero Carbon initiative aims to reach carbon neutrality in 2050 by reducing direct and indirect carbon dioxide emissions in its value chain.1 The roadmap to 2050 includes several stages with targets in 2025 and 2030. The company has achieved targets thus far and is on track to reduce Scope 1 and Scope 2 emissions by 20% between 2010 and 2025.
This commitment to carbon neutrality guides the actions and decisions at all levels of the organization, said Pierre-André de Chalendar, Chairman and Chief Executive Officer of Saint-Gobain, in a press release.2 "Our commitment to carbon neutrality guides our actions and decisions at all levels of the organization…We have an important responsibility as a major industrial group and committed actor, and finding solutions to environmental challenges has been at the heart of our strategy for many years now," he said.
To accomplish this, Saint-Gobain is focusing on four key levers:
- Optimizing and reducing energy usage
- Innovating industrial and product design processes
- Transitioning towards carbon-free energy
- Mobilizing suppliers and new initiatives in transport
One area in which Saint-Gobain is paying close attention is the environmental impact of transport in its manufacturing and distribution businesses. In 2012, Saint-Gobain Building Distribution France launched Evoluvert, an initiative to optimize delivery routes, order grouping, and modal transport with double-decker trucks, natural gas vehicles, and electric cars. The approach has so far saved the company more than 25,000 tons of emissions.
The organization has since expanded this model to new divisions around the globe with notable progress in its LATAM operations, including Argentina, Brazil, Chile, Colombia, Mexico, and Peru. Brazil, the single largest country in which the company operates, has experienced significant benefits by optimizing its transport routes. With more than 1.7 kilometers of highway, 3,900 transportation routes, and 13,000+ potential network configurations, Saint-Gobain was able to analyze major logistics networks and identify supply chain synergies between brands. "At some point, you have two businesses that may be going to the same route, transporting goods to customers located in the same city or state," said Fabricio Saraiva Moreira, Operational Excellence Director LATAM at Saint-Gobain.
These efforts, applied across more than 60 projects in the past year and leveraging Coupa’s Supply Chain Modeler product, have led to transport emissions reductions of 40–60% for several S-G brands.
The transport control tower
The key to optimizing operations and achieving these results is the Transport Control Tower. In its LATAM operations, the control tower team is supported by several industrial businesses and seeks to optimize logistics flows by finding synergies between the companies.
This control tower concept first came into development in 2016 when the division tapped the assistance of an external consulting agency to help analyze and optimize transportation routes. After seeing some instant results, Saint-Gobain hired a manager and three analysts to work full-time on route optimization. In 2019, the company implemented LLamasoft (now Coupa) and began expanding the concept to other countries.
Saint-Gobain uses benchmarking and compares each business’ transport models but aims to leverage potential synergies without interfering with the individual mission and objectives for each brand. "Since we are a multi-business company, we wanted to preserve the autonomy of the business units and not interfere with planning, schedules, or day-to-day work," said Moreira.
The company ensured business unit autonomy by putting together a team of people who had a holistic view of the organization and were dedicated to identifying and analyzing opportunities in transportation. The organization currently has 16 business units that drive the reduction of two primary KPIs: cost and emissions. This team operates as a shared service across the region to understand the needs of business units and propose scenarios to them. By merging the control tower team with corporate purchasing and each business unit, they can work collaboratively towards organizational excellence, said Moreira.
Making sustainable decisions
Saint-Gobain uses Coupa to aid in the design and implementation of its transport optimization initiatives. To help evaluate costs and decisions, the company can now present business unit directors with different scenarios for them to evaluate and ultimately select the one best suited to meet their needs. For example, when a person from supply chain asks where to open a new distribution center, they now have the data and analysts to make the most optimal decisions that also factor in sustainability and CO2 emissions.
"They can make the decision that's best for them. There's no rule saying what they have to do. Every business has the impact objectives that they need to attend to based on objectives set for 2025, 2030, and 2050," said Moreira.
Saint-Gobain is also working on a partnership with 3PLs using an emissions calculator to identify the most sustainable options. This has partly led to the implementation of four electric vehicles in the retail business and has spurred studies on using natural gas and solar panels on trucks. In October 2020, the organization also started a project enabling it to quickly analyze transport and emissions factors in each country. Saint-Gobain is also looking externally to other businesses for opportunities to reduce empty miles on return legs — a recent collaboration with Heineken led to emissions reductions of 40%!
Coupa helps its customers achieve greater sustainability and deliver measurable impact for their business and the broader community. The platform enables customers to align their insights and supplier data for ESG goals and optimize supply chain routes to minimize emissions.
1 "Net Zero Carbon," Saint-Gobain.
2 "Press Release: Saint-Gobain Sets Out Its CO2 Roadmap Towards Carbon Neutrality by 2050," Saint-Gobain, 12 Nov 2020.