Whilst standard procurement activity attempts to match the needs for materials and services against success criteria such as cost, quality and lead time, businesses are finding increasing pressure from internal and external stakeholders to incorporate sustainability or green buying requirements into their decision making. Sustainability encompasses, in addition to standard QCD criteria, benefits that not only meet the needs of the organization but broader society by reducing the short and long term impacts to the organizations environmental footprint.
Increased awareness surrounding issues such as climate change, energy usage and ethics has meant that many companies have implemented corporate responsibility strategies that encourage green purchasing and a strategic move towards sustainability. Typically this will result in organizations reviewing commodities (for example paper, furniture, office equipment) and implementing structured processes ensuring procurement practices reflect corporate targets and that sourcing and products meet sustainable selection criteria. Importantly organizations are discovering that implementing sustainability projects does not just achieve environmental objectives but can have cost saving consequences too.
For example, Indiana state university launched a project that targeted reducing CO2 emissions from poor energy usage. Through utilizing energy management software within computer operating systems PC’s were put into deep sleep mode when not in use. This can dramatically reduce power consumption (and resultant CO2) and save energy costs for each machine that’s in use. So for example of you can save upto $25 dollars per year, and you have 1000 computers – that’s $25,000 in savings
Change can be difficult – companies need to set targets and change mindsets and processes. With clear and understandable objectives procurement teams can ably support the activity and can help make green purchasing become a habit within the organization.
This can be achieved in a variety of ways for example:
• Providing information
• Establishing rules and policies
• Promoting through life costs rather than just initial acquisition costs
• Spotlighting suitable products (eg recyclable paper)
• Sourcing alternatives
• Working closely with the end users to review requirements in line with sustainability criteria
• Benefit measurement
In order to promote sustainability especially if your organization is decentralized communication is key in both establishing and setting the message and in following it up to ensure that there is little or no maverick activity – consider instruction leaflets, briefings, and policies and regular reviews on progress against targets.
Understanding the financial impact can be a significant barrier –changes must come in that products must not be purely viewed by their initial acquisition cost but in their total cost of ownership (e.g. procurement, storage and disposal.)
Summary
Sustainability and green buying has shown garnered increasing importance within the supply chain community – it is rare to find corporate responsibility targets that do not include some form of sustainable procurement criteria. Supply Chain must be ready to support these in the form of communication, policies and in execution. Organizations should not forget that cost savings and sustainability can go hand in hand. Finally sustainability is about change and as in all change communication about the strategy and its impact is key.