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Date
A short article from strategyzer.com recently caught my attention – an article about, of all things, tires.
The article led me down the road (pun intended) to some interesting research about haulage companies and the change in business model, driven (pun intended again) by sustainability.
The article starts off:
We believe sustainability can mean business, too. By turning it into a creative constraint and taking an entire business model perspective, there is an opportunity to generate superior value for the organization, for the customer, and for the planet.
The company they’re talking about? Michelin. The change in business model? Michelin began selling miles (or kilometers) instead of tires. It’s an interesting twist because rather than just donating money to sustainability-related causes, or improving efficiency (good ideas, still), they took on an entirely different perspective. From the article:
The traditional approach on environmental or social sustainability in large companies has typically been to respond with a big cheque (philanthropy), a nice ad (public relations), or a team of lobbyists (to influence regulation).
Michelin essentially re-architected its business model to give haulage companies its tires away for free. The organization would provide a suite of services and start charging its customers by the kilometre (chips inside the tires would monitor distance and maintenance needs). This change to the business model transformed the customer relationship from being transactional into one focused on long-term contracts.
On Michelin’s website, the focus on sustainability is evident.
To improve Group sites' environmental performance, we need to be able to measure it. This is why Michelin defined an environmental performance indicator in 2005.
Called the Michelin Environmental Footprint (MEF), it spans the six most important environmental factors for the Group's medium-term manufacturing operations. This compound indicator comprises:
- resource usage (water, energy and waste generation),
- atmospheric emissions (VOCs and CO2),
- waste sent to landfill.”
This is timely, as well, because in mid-June, Michelin ran its sustainability conference, Movin’ On, in Montreal, and it returns there next year in June 2018.
If you’re interested in the concept of selling miles instead of tires, and how this may apply to your business (or project), you’ll find an article from Harvard Business school here. It’s a great example of People, Planet, Profit, and Projects – with results:
By encouraging careful handling of the truck equipment, the company has unlocked significant savings for their customers: a reduction in fuel consumption of 2.5 litres per 100km represents annual savings of €3,200 for long-haul transport travelling over 120,000 km (at least 2.1% reduction in total cost of ownership and 8 tonnes in CO2 emissions).
So, when it comes to a focus on sustainability – keep on truckin’!
Posted
by
Richard Maltzman
on: June 16, 2017 11:45 PM |
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