Supply Chain case study: BMW

From petrol to electric

BMW calculated that the transition from petrol to electric car production would increase the carbon footprint of their supply chain from 10 tonnes per vehicle in 2019 to 14 tonnes in 2030 if no countermeasures were taken. The energy required for electric car batteries is higher at the outset than for petrol engines, with the use of the electric car offsetting this production through reduced lifetime emissions. 

Working with Suppliers

By working with 70,000 first and second tier suppliers BMW will increase the proportion of recycled materials from 30% to 50% and reduce their CO2 emissions overall to bring the average down to 8 tonnes per vehicle. One of the methods used to incentivise supplier compliance is through using the supplier’s carbon footprint as a deciding factor in the contract award process. The company is also the first automobile manufacturer worldwide to establish concrete supply chain carbon footprint targets.

Through engaging with their suppliers BMW are able to build a holistic sustainability strategy and reduce risk through the value chain. Since 2009 they have required suppliers to assess and manage the sustainability of their operations and activities. They engage with suppliers to train and involve them in resource efficiency improvements and initiatives. Risk management in their large and complex supply chain is key to ensuring compliance with social, ecological, legislative, and health & safety requirements which all impact on the sustainability of the end product.

Supplier assessment

Suppliers are required to submit self-assessment regarding resource efficiency, ecological, social and governance compliance as well as Life Cycle Assessment of their goods. Additionally the group conducts in-depth supply chain assessments to ensure sustainability compliance across the board. This ensures transparency of materials mapping from raw extraction to end product. 

Carbon Footprint

As the supply chain of BMW products accounts for more than 70% of their carbon footprint they are demanding increasing efforts from suppliers who compete for contracts. This way of future-proofing their business model is a concrete reminder to suppliers that to do successful business with BMW relies on achieving stringent sustainability targets.