It was only in the past decade that business, politics and society switched onto the idea of sustainable economies. Yet companies have as much responsibility as anyone to incorporate the principles of sustainability into their long-term strategies. How to do this without placing a huge financial and administrative burden on a company was demonstrated by tractor and farming equipment specialist John Deere, which introduced a software-aided sustainability index at its four sites in Germany. A central role in the project was played by Hartmut Bauer, student at the Steinbeis Business Academy at Steinbeis University Berlin.
In 2001, the Chairman of the Supervisory Board at Deere & Company, Robert W Lane, instructed all of its sites to gain environmental management system certification in keeping with ISO 14001. The aim was to create uniform environmental standards across all units. The John Deere works in Mannheim rose to the challenge and created its own sustainability index which was easy to understand for everyone involved; from managers and employees to the local communities where John Deere divisions are based.
In the meantime another three divisions have introduced a sustainability index – the John Deere works in Zweibrucken, the John Deere works in Bruchsal, and the European replacement parts depot. The sustainability index helps company managers, employees, customers and investors to estimate the current status within the company and understand improvement potential. The project was managed by Hartmut Bauer as part of his Economic BBA degree at the Steinbeis Business Academy (SBA) at the Steinbeis University Berlin. Even during his current masters degree at the SBA, Bauer continues to play a central role in the project team responsible for launching and upgrading the index.
The sustainability index pulls together all key environmental figures at each site and regularly tracks changes, both positive and negative. The sustainability indices at the four John Deere divisions are subdivided in up to 10 separate categories. At all three worksites and the replacement parts depot, one of the pivotal factors is energy consumption. Other key criteria are the environmental performance of suppliers, packaging, waste volumes, VOC emission levels and recycling rates.
One person is responsible for each category and has to ensure figures are updated regularly. To raise awareness for the issue of environmental protection among departmental heads, the sustainability index has been integrated into the company balanced score card which is one of the company’s most important management instruments.
As part of his student project, Bauer worked out that the ERP system used at John Deere (SAP R/3) could play an instrumental role in providing up-to-the-minute data for monitoring environmental performance, dovetailing with the sustainability index. After mapping the software constraints in providing data, he then had to save data and processes provided by SAP and set up organizational and technical interfaces. The result: a comprehensive list of requirements covering 20 criteria. This formed the basis for six alternative software solutions, the most useful of which turned out to be a partially automated, cost-neutral solution offering the flexibility needed to gain acceptance for the sustainability index within the company.
Bauer’s next step was to create a specification list to be sent out to 35 pre-selected software providers. The provider finally chosen created a test version of its software solution which was then evaluated among an internal sample for user satisfaction. The test version was a resounding success as a result of which the software was recommended without reservation for immediate introduction at all four John Deere sites. The solution will soon make it possible to plot environmental performance within the company within a short period of time. Employees already have Internet access to sustainability index data – at all levels of the company. During the past financial years all four John Deere divisions improved their sustainability index, with some major successes in certain areas.
Matthias Fritschi
Steinbeis Business Academy (Berlin/Kuppenheim)
stz638@stw.de