Black and White of Green Procurement – role of procurement professionals
Sourcing offers several opportunities starting with greening the need itself. And one way of doing that is by increasing the percentage of recyclable components in the manufactured product. If the sourcing team, in conjunction with the design and operations team, is able to identify the alternate sources of supply for the recyclable components, they can certainly claim a feather in their green cap. IBM’s case is worth studying for those wanting to do so (refer this article at purchasing.com); those wanting to get more insight and willing to shell out some money can look at attending the Green purchasing summit at San Francisco this October). IBM managed to increase the amount of recyclable materials used in product manufacturing from 3.7% in 2004 to 11.8% in 2006. But this becomes an extremely tedious and challenging process for a company that relies on its suppliers for some key product parts. As Herman Miller, global provider of office furniture found out when they had to convince all their tier I and II suppliers to share the ingredients information after giving umpteenth promises that the information will not be used against them. Talk about supplier collaboration!!
After greening the need, the sourcing team should attempt to source locally provided all other parameters are met. If that is not possible, they should try to influence the suppliers’ mode of transportation. After firming up the delivery lead times, procurement can look inwards to ensure that buyers raise their need well in-time to avoid using costly and carbon emitting logistics. A small yet effective way to go green, I say. This measure has been effectively adopted at a UK based pharmaceutical and health-care major, where I have seen this message incorporated in all their training materials and on the company’s requisition systems.
I have to distinctly call out Procurement’s role in sustainable packaging; for one can write an entire book on it. Suffice it to say for this discussion that it is imperative for the procurement professionals to be well educated with the latest and greatest on sustainable packaging (following projects and events at Sustainable packaging coalition and at Walmart, heard to save upwards of $10 billion in packaging cost in the next five years per an article at environmentalleader.com, should be a great starter kit). From knowing what constitutes sustainable packaging and working with design and marketing team for finalizing the packaging requirements to evaluating supply-base on these requirements and tracking vendor’s compliance to sustainable packaging terms, procurement professionals have, to say the least, their work cut out.
Contracts can certainly play a vital role provided they are viewed in the right light (and not sentenced to a life in a filing cabinet deprived of any light). All arrangements with the suppliers - recyclable content, durability and reusability, disposal terms particularly in the case of electronic manufacturers, green manufacturing processes, packaging requirements - can be captured in writing. Metrics built of the terms will serve as the basis for an effective supplier performance management system.
On an on-going basis, procurement is involved in implementing and tracking vendor score-cards to audit and certify sustainability levels. This continuous improvement activity is by far the most important – after all, it is about sustaining environment sustainability!!