Tapered roller bearing
The pilots were intended to test the methodology proposed in the handbook during the 3rd phase of the Roundtable for Product Social Metrics.
The pilot was conducted by BMW Group & Mahindra Sanyo Special Steel. The product selected was a tapered roller bearing produced by Mahindra Sanyo and then used in the BMW 1 Series. The goal of the pilot was to verify that the methodologies and the indicators selected are suitable for assessing a product that has its life cycle spread across geographical borders and in different countries. In this pilot the steel rings for the bearings are produced in India, after which they are warehoused in Hungary; the bearings are then manufactured in Hungary and finally assembled in the BMW cars produced in Germany. Production at Mahindra Sanyo is carried out using the electric arc furnace method which reduces the extraction intensity of raw materials, thereby to a large extent softening the impact on environmental and social footprints.
The social impacts of the product were assessed from cradle to gate, from extraction of the raw materials for steel manufacturing, throughout the manufacturing phase of the bearing rings, delivery and the assembly phases of the tapered rolling bearings and car assembly. The use phase was not considered because the use of the car is not affected by this specific component.
Application of the Methodology
We implemented the scales-based and the quantitative approaches to prove their feasibility and that of the relative indicators. In the pilot, we assessed the employees and local communities stakeholder groups. We did not consider the consumer because the use phase is not relevant for this component of the car. We considered all indicators presented in the handbook relative to the two stakeholder groups. As the product life cycle includes an emerging country, India, it was meaningful to test all the indicators and their feasibility, by considering the different local contexts. Although India is considered to be a country with perceived high social hotspots, these risks can be seen as an opportunity for all companies that have a good level of commitment towards their social responsibility, since they can make a difference and improve the local conditions.
Aggregation was not the focus of the pilot implementation. We wanted to verify the methodology and assess the social impact of the product as it moves across the value chain, and then develop an action plan for risk mitigation, if necessary. Aggregation is important for summarising the results and making comparison of products easier, but it is not needed to identify hotspots, develop an action plan or define improvement opportunities.
Operationalisation and Feasibility
Mahindra and BMW involved all relevant companies in the supply chain. These companies are located in different countries: Germany, Hungary and India, and not all of them are members of the Roundtable for Product Social Metrics. Therefore, it took more than 3 months to explain the value of social assessment, raise awareness on the importance, clarify the goal of the project and the need for primary data collection. Once the target of the project and the importance was clear, the collection of the data took 4 weeks. One of the companies was not prepared to deliver the social data even though it was available. The companies who were willing to participate involved their human resource department, and either their product sustainability department or, if applicable, their life cycle assessment department. At BMW and Mahindra the procurement departments were also involved at the beginning of the project to connect with the relevant stakeholders at the companies. After the initial meeting, the project was handled by the human resources and sustainability departments.
Once the date was collected, the assessment lasted no more than 3 days. When the assessment was finalised, the results were presented to the companies and internal departments involved in the data collection to demonstrate the importance and the potential of the methodology in supporting decision-making. A report for senior management level showing the aggregated value for the stakeholders group may help to communicate the existing social footprint, since the single score is easy for non-experts to understand. On the other hand, the results at indicator level are important to help those involved in operations to identify the appropriate actions, measurements and implementation routes for improving the social conditions of the stakeholder groups included in the product life cycle.
The Mahindra Sanyo and BMW Group are both strongly engaged in developing a comprehensive sustainability assessment. The main objective is the future integration of Product Social Impact Assessment in the current product development process. In particular, the quantitative approach can be integrated easily with environmental life cycle assessment to reach a comprehensive life cycle sustainability assessment, and can support decision-making in product development to improve the value of the product.
We had the opportunity with this study to verify that the indicators and references introduced in the handbook are valid and feasible in different countries and, in particular, in emerging countries such as India.