Margin Enhancement

Aware of the rising water challenges and associated risks, a number of organisations have already achieved significant improvements in operational efficiency and internal costs through focusing on core opportunities.

Having identified the primary areas of impact, companies such as Du Pont, IBM and P&G have changed their water consumption patterns, increased water recycling and, as a consequence, are now gaining significant cost savings across their production and supply chain operations.

Du Pont has made a commitment to reduce water consumption by at least 30% over the next ten years at sites where the renewable freshwater supply is either scarce or stressed. For all other sites, DuPont will hold water consumption flat on an absolute basis through the year 2015, offsetting any increased demand from production volume growth through conservation, reuse and recycle practices.

At a single plant, IBM achieved savings of $3 million while increasing output by 33 percent through improved resource management. This included a 27 percent reduction in water purchases, almost $1 million in water treatment savings, and $1.5 million in energy savings, without incurring any capital cost.

To reduce water consumption, in late 2007 Proctor & Gamble switched all of its liquid detergents to a compact formula. Over the next tear, P&G’s Fabric Care and Home Care segment achieved a 10 percent increase in net sales growth.

Although many companies can achieve external brand and product differentiation through reducing embedded water, others stand to gain even greater bottom line impact from better understanding the strategic opportunities to also improve margins within their businesses