How Carbon Report For Automotive Companies Works
In the automotive industry, there is a well-defined structure of manufacturing partners. Brands at the bottom of the value chain, including companies like Ford, Tesla, Volkswagen, Toyota, and many more. Brands assemble parts that have been manufactured by their Tier 1 suppliers.
Tier 1 suppliers like Magna, Bushuko, Yazaki, Yanfeng, and many more assemble components and modules. Typically they’re either buying individual parts from Tier 2 manufacturers or directly manufacturing those parts and modules in house.
Tier 2 manufacturers are usually manufacturing small, individual parts under contract from a Tier 1 manufacturer. Tier 2 manufacturers will buy materials to make parts from Tier 3 bulk material suppliers, either metal, plastic, rubber, natural, or otherwise.
Brands ask their Tier 1 for a Carbon Report of their Sub Assemblies & Modules, Tier 1 suppliers ask for a Carbon Report from their Tier 2 part manufacturers, and Tier 2 manufacturers ask for a Carbon Report from their Tier 3 bulk material suppliers.
Simplifying Scope 3 Emissions For Automotive Manufacturers
In the simplest terms, a company’s emissions are the energy and resources required to make a product, the delivery of that product, the use of that product, and the end of life for that product.
Each partner in the automotive supply chain has a small role to play in this calculation, and when done properly this process takes 5 minutes.
Tier 3 bulk material suppliers
Tier 3 bulk material suppliers are providing Tier 2 suppliers a Carbon Report of their material, which is an LCA plus the logistics from their warehouse to their customer.
Tier 2 part manufacturers
Tier 2 part manufacturers are taking the Carbon Report for bulk materials from their suppliers, and converting that into a Part-Level Carbon Report for each unit they produce. This includes the factory’s energy, packaging, and logistics to their customer’s factory, in addition to the material Carbon Report.
Tier 1 manufacturers
Tier 1 manufacturers are assembling multiple Part-level Carbon Reports’ into one Sub Assembly or Module Carbon Report. This includes the factory energy, packaging, and logistics to their customer’s factory, in addition to every Part-level Carbon Report.
Brand owners
Brand owners are assembling multiple Sub Assembly and Module Carbon Reports’ into one finished Product Carbon Report. This includes the factory’s energy, packaging, and logistics to their customer’s factory, in addition to every Sub Assembly Carbon Report. The last part brands are required to do is understand the use and end of life of their products.
Lets Focus On Income Streams, Not Compliance
Carbon Report is a tool designed to help understand carbon emissions, but more importantly, its a tool to understand value potential in your supply chain.
Our team is able to identify scrape that can be converted into income for manufacturers, reduce logistics costs by providing competitive information during negotiations, and identify energy outliers that can be mitigated.
All of these tactical changes allow manufacturers to reduce their costs and eliminate landfill while creating new revenue streams.
Derived Value Ensures Partner Engagement With Carbon Report
Imagine you’re a supplier for a moment, and you have Ford, Toyota, Volkswagen, and Tesla as your customers. Each of them has a different Carbon Accounting platform that does not share or connect to one another. Every one of them asks you to pay $5000 for access to theirs. $20,000 in fees to hire a new employee to manage reporting software is not a real ask.
Lets reverse this scenario, imagine you’re a supplier with Carbon Report, and when you’re bidding on new programs for your customers your reports can be shared immediately with any of them, and integrated into their systems automatically. Now imagine that the process takes 5 minutes, and the outcome for you is an opportunity to reduce the costs of the program by 5%. Carbon Report is no longer a pesky compliance tool but a needed optimization tool empowering stronger negotiations with your vendors. These recommendations could include better-negotiated pricing for logistics, new income channels for scrape material, or opportunities for better energy and packaging.
Now imagine this process taking 5 minutes and costing $9.99.
As a supplier to dozens of brands, you’re now empowered to create a Carbon Report for all of your products because its creating new business and reducing your costs.
Your customers are happy and you’re happy, because everyone gets what they want.
Simple, fast, low cost.