Making the Value Chain Transparent – From Tier 1 to Raw Material Origin
For a mid-sized mechanical engineering company, we structured, visualized, and audit-proofed the entire value chain—creating the foundation for ESG risk assessment and sustainability reporting.
Initial Situation
- First sustainability report planned without a formalized data and information foundation
- No systematic analysis and fragmented knowledge of the full value chain, from upstream activities through core business operations to downstream stages
- Limited transparency, particularly beyond Tier-1 suppliers, extending to raw material extraction and pre-production
- Regulatory and strategic need to identify, assess, and map ESG impacts, risks, and opportunities
Approach
- Structured definition of the value chain based on the company’s business model, products, and services
- Identification of key inputs, actors, and geographic hotspots along all stages of the value chain
- Involvement of five functional departments across seven countries to validate processes, supplier structures, and sales markets
- Systematic identification of knowledge gaps and blind spots, combined with the use of appropriate proxy data from scientific studies, ENCORE, and supplier management platforms
Impact
- Consolidation of results into a robust, audit-ready structure as a foundation for ESG assessment and reporting
- Comprehensive visualization of the value chain as a central management and communication tool for sustainability reporting
- Significantly improved and consistent representation of the business model for internal and external stakeholders
- Transparent and structured mapping of ESG impacts, risks, and opportunities across the entire value chain—including areas beyond the company’s direct operations
- Strengthened and more structured enterprise risk management through the systematic integration of sustainability-related risks
- Identification of eight priority risk hotspots along the value chain
Key insight:
The value chain becomes a true management tool once it is not only described, but structured according to risks and impacts across actors, materials, and regions.
References
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