Presentation at the 55th EOQ Congress, Budapest, Hungary.

1. 55th EOQ CONGRESS, BUDAPEST, HUNGARY
June 20-23, 2011
INTEGRATION OF SUSTAINABILITY
INTO THE BUSINESS PROCESSES
Author: K. Gaži Pavelić, mag.oec.,
Senior Project Manager
EOQ Quality Systems Manager and Auditor

2. Presentation overview
55th EOQ CONGRESS, BUDAPEST, HUNGARY
June 20-23, 2011
• Present and desirable state of SD in
Podravka d.d.
• Sustainable development strategy
• Measuring SD benefits
• Starting steps

3. Coordinated data gathering,
monitoring and analyzing
Costs ?
Good coordination and
organization within the
given framework
Compliance with relevant
regulations, laws and
codes
Risks, prevention
and correction?
Continuous
improvement?
Reducing water
and energy
consumption?
Using renewable
energy sources?
Waste and pollution
reduction?
Reporting
HACCP
ISO 9001
Halal
Security and product control
A collective agreement,
WU involved in the
management decision-
making
Workplace Safety
ISO 14001?
LCA, marketing, PR?
Data and files not
systematized, organized and
consistent
Regulatory requirements considered
as the maximum requirements

4. 55th EOQ CONGRESS, BUDAPEST, HUNGARY, June 20-23, 2011
Desirable state
• Podravka's business based on the principles of
sustainable development integrated into all processes.
• Management systems continuous improvement
• Communication with stakeholders (national and local
administrative bodies, governmental and non-relevant
associations, retail) is constant, open and timely.
• Voluntarily initiated long-term sustainability
• Active cooperation with suppliers and other partners in
the food chain in order to maintain high environmental
standards and achieve broader goals of the long-term
sustainable development
4

5. 55th EOQ CONGRESS, BUDAPEST, HUNGARY, June 20-23, 2011
Sustainability as the business strategy
For food companies, with the usual investment in
social and economic development programs,
stability and prosperity of the society and
environment from which they provide resources, in
which they produce, distribute and sell their
products, are vital for continued business success.
5

6. 55th EOQ CONGRESS, BUDAPEST, HUNGARY, June 20-23, 2011
relationships
communication
collaboration
Strategy
Sustainable development
strategy
Social
respons-
ibility
Business
efficiency
Competitive
advantage

7. 7
Challenge
• The successful strategy for effective
sustainability requires a combination of
strategic actions, organizational
capabilities and appropriate technology.
• Significant potential to reduce overall
costs and waste, and to win new
customers is a real business challenge

8. Barriers
• ROI analysis for the
sustainable development
implementation often is not
enforced
• The difficulty of determining
sustainable development ROI

9. 9
Benefits
Three key areas that benefit from SD implementation
1. Costs:
- Steady reduction in energy costs (depending on the
volume of business)
- Continuous cost reduction of waste (depending on the
volume of business)
- Steady reduction in production costs (depending on the
volume of business)
2. Safety and quality
Annual decrease in errors/ non-conforming product
3. Increase of business opportunities
Customer growth as a result of SD/ CR initiatives
Source: Aberdeen Group, February 2009

10. 55th EOQ CONGRESS, BUDAPEST, HUNGARY, June 20-23, 2011
Sustainable development KPIs
Indicators must be:
• objective
• easy to measure and understand
• verifiable (can be to audited)
• meaningful for the company and stakeholders
• attainable, but with a small portion of desirability
• assessed, wherever possible, using already collected,
existing data relevant to company business
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11. Significant indicators
socialprogress
environment
consumptionofnatural
resources
economicgrowthand
employment
additional indicators

12. 55th EOQ CONGRESS, BUDAPEST, HUNGARY, June 20-23, 2011
First steps toward implementation
• Active support of the top management
• Determin and confirm the SD implementation
team
• SD reporting standardization
• Continue with the EMS implementation
• Develope activities that will arouse the of all
employees' interest for the SD
• Initiate the change of the Podravka's vision,
mission and policies
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13. 55th EOQ CONGRESS, BUDAPEST, HUNGARY, June 20-23, 2011
• Create and activate the SD site on company
Intranet
• Initiate the change of the Podravka's vision,
mission and policies
• Food industry initiatives through the Croatian
Business Council for Sustainable Development
• Active communications with relevant
government institutions
• Active contribution to the committees that draft
SD laws and regulations relevant to Podravka
13
First steps toward implementation/cont.

14. THANK YOU!