What exactly is so exciting about glass? Well, apart from being one of the most versatile materials on the planet, it links to any and every industry you can think of. From the windows of a house, skyscraper or aircraft to protecting drivers under a transparent umbrella that screens them from the elements, glass is pretty much everywhere in some form or another.
As an integral component of innovation in the 21st Century, glass is also key in facilitating some of the major technological shifts that require devices like phones, tablets, computers, and even safety cameras mounted to the inside of vehicles behind the car windscreen.
With innovation more widespread, the industry is scaling up growth while reducing its environmental and social impact, contributing to all innovative processes in between to ensure that materials are fit for a more sustainable future of construction, technology, and automotive manufacturing and, quite frankly, any industry.
Somewhat ironically, glass must be transparent, and the same must be said when sourcing materials, particularly in terms of sustainability. As far as sourcing goes, sustainability doesn’t come without understanding the impacts of the industry and, more importantly, how to fix them.
This is what was learned by John Wilgar, Chief Procurement Officer at NSG Group, who leads the procurement function of the business and is committed to sustainable change, adopting all necessary technologies to do so.
Founded towards the end of the First World War in 1918, NSG Group is one of the world’s largest manufacturers of glass and glazing products for the automotive, construction, and electronics industries—priding itself on this fact, in addition to being one of the major suppliers of glass to cars across the globe.
Part of the Sumitomo Group, NSG is becoming more invested in the development of glass products to meet the growing demand of the renewable energy sector, especially that of the solar energy network.
Another of the major trends supported by the organisation is the shift to electric mobility (e-mobility), which sees companies adopting more and more technology solutions to reap the benefits of an all-electric power system that’s capable of supporting more advanced solutions housed behind transparent glass windscreens.
Sustainable procurement transformation aligned with NSG values
The transformation of NSG starts with the programme named ‘Shape to Shine’. Beginning back in late-2020, the initiative is partly a response to the knowledge gained from COVID-19 and other disruptions.
As Wilgar explains: “The ‘Shape’ phase lasted around 18 months and, towards the end of that period, we began to focus more on the ‘Shine’ agenda, which is about asking ‘How can NSG contribute to a more positive future?’.”
This led to the organisation’s current strategy for procurement, which is governed by the core values of the business. A digital-first approach enables the company to instil its values.
“We began to establish a really clear and cohesive strategy for digital transformation to aid procurement in the company,” says Wilgar. “We’re evaluating how to get more from the digital tools we have today, such as SAP Ariba, but also looking for new tools that can support us in areas like supplier connectivity or supplier risk management.”
Secondly, NSG’s procurement team is looking at its operational approach, which is traditionally driven by a set procurement matrix, to provide greater opportunities to optimise its processes through standardisation and centralised procure-to-pay (P2P) activities.
“We centralised those, more than 10 years ago, into shared service centres, but we believe there is scope to improve other processes, such as sourcing, category management, and supply risk management,” says Wilgar. “I envisage centres of excellence for these processes in the near future.”
A further area NSG is acting upon is the physical footprint of the organisation. When looking at emissions reduction, the procurement team is tasked with indirect procurement functions to reduce real-estate footprint and emissions, which results in the shift of premises globally and most likely a reduction as teams work more from home.
“In procurement, we are progressively changing our offices around the world to be more suitable for hybrid working and space efficiency,” says Wilgar.
This is also helped by NSG’s commitment to the Science-Based Targets initiative (SBTi), allowing the company to drill down into its Scope 3 emissions to meet rigorous sustainability milestones.
“We have a target to reduce our overall emissions 30% by the year 2030 and reach carbon neutrality by 2050 – importantly this includes Scope 3 emissions in our supply chain. We launched a sustainable supply chain programme earlier this year, and this will help us address the Scope 3 challenge, but it doesn’t end with carbon reduction,” says Wilgar.
“We are also looking at the environmental impact of our suppliers, what they are doing to address waste and water consumption, and their actions on human rights.”
Wilgar also addresses the importance of personnel as a key pillar in sustainable digital transformation, noting that diversity, equity, and inclusion (DEI) plays a critical role in driving forward transformation and hitting its targets. Although diversity is a critical aspect of human resources from a social perspective, it is also something he has to consider when training or upskilling staff in a digital world.
“It’s really about creating the conditions for our people to realise their full potential and promote a fully diverse, inclusive workforce in procurement,” Wilgar says. “For example, we implemented a female focus group to help us understand the barriers for women to progress to top positions in the function.”
“We’ve been expanding our mentoring and trainer training programmes, including things like mental resilience to support our people through very difficult and challenging periods. We also make sure each person in procurement has a personal development plan.”
A sustainable future influence by suppliers
One of the points discussed with Wilgar—one that rears its head in many sustainability discussions—is around cost. At an integral point of the supply chain, much of the precedence is taken by cost optimisation and ensuring viability of products from a financial standpoint. But, as sustainability is often a costly shift to make, it’s interesting to see how businesses like NSG are able to transition to new and greener pastures, particularly when, like NSG, 50% of spend is tied in the upstream supply chain.
One of the important activities that Wilgar must undertake is foresight; seeing the costs and understanding the wider global implications of the company’s sustainability agenda.
“I try to visualise the impact and value of procurement and of our supply base as an iceberg: the traditional financial measures are clearly visible above the waterline, but increasingly, the greater part of this impact and value is below it,” says Wilgar.
“In other areas like supplier innovation, speed-to-market risk management, and sustainability, suppliers—both current and new—will contribute greatly to these new aspects of value creation for the company.”
This is where he highlights Shell Energy as a key partner in the activities at NSG. Shell Energy is a key enabler of the company’s targets and broadening its scope for other aspects, such as energy security and carbon reduction.
Specifically, NSG has been working to introduce alternative fuels such as hydrogen that will power the production of glass as well as biofuels as drop-in replacements for their fossil fuel counterparts. It is in areas such as these that partners like Shell can help NSG accelerate on its path to decarbonisation.
“Suppliers like Shell are really key in enabling some of our important projects, bringing technical capability and in some cases financing. They are also able to help us scale these actions on a global stage to realise our potential in different regions,” says Wilgar.
“We’re very pleased to be working with them initially in Europe, but hopefully in other regions in the future. Shell is a company that shares our core values for doing business in an ethical way and contributing to the communities in which they work.”
With many fruitful years to come, NSG will delve further into the capabilities of technology for streamlining procurement, allowing the team to take a more strategic approach to sourcing sustainable alternatives, and adhering to its SBTis.
Growing the team and the technology it uses will allow NSG’s procurement colleagues to specialise in certain areas of the business to establish a much higher level procurement function and take the helm on further strategic processes like category management, risk management and mitigation, sustainable sourcing, and so on.
“It’s also my goal that the makeup of our procurement function is much more diverse than it is today. Not only in terms of gender, but in other aspects, such as ethnicity, sexual orientation, or importantly, diversity of thought,” says Wilgar. “Today, around a third of our global Procurement team are women and around a quarter in management positions. This has to change – a more diverse team will better reflect the world we live and operate in and enable us to bring more and better ideas forward”
“The same principles apply to our supply base. My hope is that the impact and value of procurement—and, indeed, our supply base—is measured more in terms of those below the waterline activities and less on the purely traditional financial measures.”
This holistic view of sustainability in procurement will allow NSG to address all areas, from environmental impacts through technical innovation in the industry to meeting social needs both at work and beyond.
With the automotive industry ingrained into him, Wilgar fully appreciates the pressures that lie ahead, but is also excited for the e-mobility revolution, which will provide more challenges and opportunities for NSG. Electrification has become a testbed for technology that ties in with the demand for a supplier of both theoretical and physical transparency.