Estimating Impacts Using LCA in Procurement Processes : A case study for a multinational networking and telecommunications company

Sammanfattning: This thesis investigates how a company can implement life cycle analysis (LCA) into procurement. The thesis also explores the potential synergies between the LCA and procurement. A single casestudy was utilized for this purpose. It uses LCAs using a simplified methodology, interviews, and a literature review to carry out the study. The thesis was conducted in a global telecommunications equipment company. The thesis found that the most significant benefit of implementing LCAs into procurement would be that the case company would gain the ability to know what suppliers have more environmental products. This would, in turn, enable them to premiere those suppliers. That can be done through volume purchasing agreements, where the suppliers with greener products are awarded larger purchasing volumes. It can also be done by setting emissions requirements for products, where products that do not meet the criteria are not considered for the final business award. Additionally, using LCAs over other methods or measurables allows the case company and its sourcing managers to assess the emissions a product creates using one variable, not multiple. Introducing LCAs into sourcing has its drawbacks. LCAs are inherently resource-demanding. This means that any party that conducts LCAs, either the case company or their suppliers, will have to divert resources to perform the analyses. Additionally, at this point, few sourcing managers likely know how to interpret and use the results of an LCA. Some of these issues can, to some degree, be mitigated. The case company can try to develop an LCA tool that combines the information already gathered in current systems and integrate it into the LCA. They can also try to create the LCA jointly with suppliers; through this, they can try to develop a tool that minimizes the amount of input required by suppliers while still having a high degree of detail in the analysis and results. This would likely require a significant initial investment but only the necessary resources to maintain the tool afterward. The case company could also divert resources to educate sourcing managers on LCAs, how to interpret their results, and how to push suppliers to reduce their emissions. This would again become a cost issue, and the question of how much resources the company can dedicate to educating sourcing managers will arise. Having LCAs as a tool to assess suppliers could become a new competitive advantage to the case company. Through LCAs, the case company can show its customers they are dedicated to environmental sustainability. The case company could push its industry to adopt these tools and practices through its strong market position. Further, if adopted by all the case company’s suppliers, this could influence industries beyond telecom to adopt LCAs in procurement.