Chrysler 2013 Annual Report Download - page 98

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Report on
Operations
Given the nature and intensity of economic change, in addition to the existing monitoring programs, the Group has also adopted models of
consultation and collaboration with suppliers based on effective, interactive communication processes. Initiatives such as local seminars,
discussion forums and training programs have been developed over the years to facilitate the exchange of ideas and know-how and increase
the level of collaboration.
On the environmental front, for example, suppliers are encouraged to develop internal policies and guidelines and adopt a certified environmental
management system. In 2013, as part of the Group’s commitment to supporting suppliers in addressing climate change issues and focusing
their attention on the importance of reducing greenhouse gas emissions, a select number of suppliers were invited to participate in the Carbon
Disclosure Project’s Supply Chain program, which each year collects information from participating suppliers on the strategies and initiatives
they have implemented to address climate change and manage water resources. The 45 suppliers that participated (out of 68 selected)
achieved a score of 68/100 for transparency in disclosure and placed in the ‘C’ performance band for commitment toward reducing carbon
emissions. The results revealed that measures implemented by those suppliers had yielded a 39 million ton reduction in CO2 emissions. The
Group has also initiated a series of consultations with several strategic suppliers to monitor water management within the supply chain and,
over the next few years, develop a risk management strategy for areas where water resources are scarce.
Another important area of long-term focus for the Group, in collaboration with industry peers and stakeholders, is the respect of human rights
and working conditions at all levels in the supply chain. One of the greatest challenges is extending Group practices beyond the first level of
suppliers, where the risk of sub-standard working conditions may exist. To address that potential risk, Tier 1 suppliers are required to implement
a system of supply chain management. In addition, in 2013, a free online training course on responsible working conditions was also extended
to Tier 2 suppliers, with approximately 100 companies participating, predominantly from the EMEA region. The Group’s objective is to develop
new approaches to involve downstream suppliers with which there is no direct contractual relationship. This will improve the ability to evaluate
the overall level of commitment, conformity and effectiveness and, as a consequence, the ability to ensure sustainable practices throughout
the supply chain.
REDUCING THE ENVIRONMENTAL IMPACT OF MANUFACTURING AND NON-MANUFACTURING PROCESSES
The Group sees its commitment to the environment and conservation of natural resources as essential to the process of responsible and
sustainable development. It is fully committed to minimizing the impact of its activities on the environment in all areas from manufacturing
processes to logistics, dealerships and commercial and administrative offices. Efforts to reduce its environmental footprint and continuously
improve environmental performance are an integral part of the Group’s overall industrial strategy.
The Group’s focus on the environment also includes targeted activities such as eComau, a division of Comau whose primary activity is working
with customers on innovative environmental solutions for their industrial processes. In 2013, eComau reported a 67% year-over-year increase
in revenues to around €1.5 million.
WORLD CLASS MANUFACTURING PROCESSES
The World Class Manufacturing (WCM) program – first adopted by the Group about 10 years ago and now implemented at nearly all
manufacturing sites worldwide – represents the concrete application of the Group’s focus on the environment and reducing the impacts of its
production processes. WCM is a rigorous and integrated manufacturing methodology that involves the entire organization and encompasses all
phases of production and distribution. In 2013, some 41,700 WCM-related projects were implemented, including several specifically targeted
at reducing environmental impacts. Through the Environmental Pillar, WCM develops and applies tools and methodologies to reduce waste
and optimize use of natural resources. Approximately 3,000 projects based on this pillar led to significant reductions in energy consumption
and approximately €70 million in cost savings.