The Power of Sustainable Procurement...13 Supplier specifications based upon Sustainable development...

10/21/2013

1

Joanne Gorski, President & CEO

CSCP, CFPIM, Green Manufacturing

Specialist

The Power of Sustainable

Procurement

Joanne E. Gorski

• 25 years of business and educational experience

spanning Fortune 100 companies and college faculty

• APICS CFPIM, CSCP, CSCP

• SME Green Manufacturing Specialist

• ISO Auditor: 14001, 20121

• Sustainable Event Alliance: Accredited Professional,

Auditor

• MBA – University of WI, BSBA – The Ohio State

University

• Ironman

10/21/2013

2

Session Overview

Answer three key questions

– What is sustainability?

– What is sustainable procurement?

– Why is sustainable procurement important?

Explain the six steps to sustainable

procurement

Why Sustainability?

10/21/2013

3

What is Sustainability?

There are as many definitions of sustainability as

there are groups trying to define it

Key concepts

• Balance environmental, social, and financial

outcomes

• Ensures current needs are met without

compromising the ability of future generations to

meet their needs

Activity: Imagine Your Favorite Things

• What resources are

needed?

• Do they have limits?

• How does the

sourcing/use affect

the environment?

• Today we will explore

steps to ensuring

their future

10/21/2013

4

What is Sustainable Procurement ?

The process of acquiring goods and services

that:

• Meets the user’s need

• Delivers long term value for money

• Maximizes social and economic benefits

• Minimizes damage to the environment and health

Source: http://www.forumforthefuture.org/sites/default/files/project/downloads/buying-better-world.pdf

Power of Sustainable Procurement

• Purchasing is the gateway into your organization

• Setting guidelines and criteria transfers control over

sustainable performance to your organization

• Drives marketplace toward adopting sustainable

practices for long-term improvement

• Purchasing dollars = power!

10/21/2013

5

Criteria for Sustainable Procurement

• Encourages the use of recycled or sustainably

produced materials

• Ensures fair labor and compensation

• Drives the reduction of waste

• Avoids harmful/toxic substances

• Ensures compliance with environmental and social

legislation

Six Steps to Sustainable Procurement

1. Create a sustainable procurement policy

2. Develop supplier specifications based upon

sustainable development criteria

3. Identify key metrics

4. Work with suppliers and potential suppliers

5. Evaluate supplier performance throughout

procurement cycle

6. Document and implement improvement

opportunities

10/21/2013

6

Six Steps to Sustainable Procurement

•Step 4 Work with Suppliers

•Step 5 Evaluate Supplier Performance

•Step 1 Create Sustainable Procurement Policy

•Step 2 Sustainable Development Criteria

•Step 3 Key Metrics

•Step 6 Document and implement improvements

Act Plan

DoCheck

A Sustainable Procurement Policy

• Provides guidelines for organization to follow

• Ensures adherence to principles of sustainable

development

• Minimizes supply chain risk

• Controls costs

• Enhances brand reputation

• Ensures compliance with environmental and

social legislation

10/21/2013

7


Define purpose of policy

The Big Green Sustainable Music Festival recognizes and is

committed to our responsibility to procure resources in a

manner consistent with the principle of sustainable

development and the mission of our event. We strive to make

purchases in a manner that balances social, economic, and

environmental goals.


Define key sustainability

objectives

Evaluate all the significant

sustainable development

issues associated with your

organization and create

procedures to manage them in

a responsible manner.

• Support local business to

strengthen our community

• Minimize solid waste

• Use local sourcing

• Promote fair working conditions

• Protecting habitats and

biodiversity

• Minimize water waste

• Minimize use of fossil fuels

• Measures and targets for each

objective will be defined and

measured annually or more

frequently as needed.

10/21/2013

8


Define scope of sustainable procurement

This policy applies to all aspects of purchasing activities for The

Big Green Sustainable Music Festival. Purchasing shall

incorporate fiscal responsibility, social equity, community and

environmental stewardship in all procurement decisions. Life

cycle costing, where relevant, will be used to evaluate the long

term value for purchase decisions.


Identify level of performance desired

• It is the goal of our organization to go beyond basic legal

compliance in the context of sustainable procurement in our

organization’s practices. Through the use of supplier

requirements and evaluation sustainability values will be built

into The Big Green Sustainable Music Festival’s supplier

strategies.

• The level of sustainable performance will be identified for all

identified key areas of spend or prioritization.

10/21/2013

9


Identify level of performance desired

• What is defined in your organizational sustainability plan?

• Has your organization made any outside commitments such

as signed the UN Global compact?

• Does your organization have any green labels, seals, or

certifications?

• Examples: Fair Trade, LEED, Green Seal, Forest Stewardship

Council, Greener Choices, Cradle to Cradle Certified

• Any of the above listed commitments need to be included in

your policy


Create process for assessing suppliers during

tender evaluation

• Purchases will be made using the best practices

available in sustainable procurement, and evaluation

techniques will be updated as best practices evolve

and improve. This may involve new standards,

procedures, etc. as practical.

10/21/2013

10


Create process for assessing suppliers during

tender evaluation

• Suppliers will be evaluated and assessed based upon

sustainability criteria developed into a scorecard.

Suppliers will be encouraged to propose

improvements and sustainable solutions that

support the overall purpose of this policy. Suppliers

will have input into the evaluation process and

given reasonable time to adjust to the evaluation

criteria.


Ensure supplier performance requirements are

in line with your own organizational

expectations

Don’t expect more of suppliers than you do of

your internal organization

10/21/2013

11

A Sustainable Procurement PolicyAiming for Measurable Improvement

Targets & measures

Sustainable evaluation criteria

Objectives

Scope

Supplier specifications based upon Sustainable

development criteria

Risk Assessment on key spends

• Many methods available (ISO 31000)

• Prioritize key risks

• Decide for key risks:

– Do nothing

– Share risk

– Reduce risk

– Avoid

10/21/2013

12



• What are the big issues for your industry?

• What are the results of your impacts assessment?

• How are your suppliers and partners managing their

risks?

• Critical issues/risks in your industry? Locations?

Markets?



Think efficient and cradle to cradle

Input Process Output Product End

of Life

What you buy What you do

In your

organization

What your

customer gets

Where

product ends

up

responsible

materials

sourcing

responsible

transport

recycled

content

efficient

low emissions

non-

hazardous

minimal

packaging

transportatio

n efficient

maximize

recyclability

non-toxic

Feedstock for

other

products

Avoid landfill

10/21/2013

13



Significant Environmental Aspects (from ISO 14001)

• Identify environmental aspects of organization’s activities,

products or services that you can have control over

• Determine the aspects that have significant impacts on the

environment

• Manage the significant environmental aspects



Significant Environmental Aspects (from ISO 14001)

– Frequency (Actual Use) – Frequency of use at the facility. Scale 1 to 5.

– Quantities – Volume of aspect involved based on actual quantity

and/or regulatory impacts. Scale 1 to 3.

– Controlled – Control of aspect through environmental permits,

regulations, or not controlled. Scale 1 to 3.

– Severity – Relative to risks to environment (air emissions, land, water,

etc.), employee safety (toxicity, exposure), and/or resource reduction.

Scale 1 to 5.

– Effect on public image or concerns of interested parties (employees,

community, government, etc.). Scale 1 to 5.

• Add each of the individual aspect rankings together for a maximum score

of 21. Total rankings 15 or greater are considered significant

environmental aspects (SEA).

10/21/2013

14



Aspect TeamProcess /

ActivityUnit

Facility

Area

Waste

StreamResp.

Disposal,

Physical

Controls

Fre

qu

en

cy

Qu

an

titi

es

Se

veri

ty

Co

ntr

olle

d

Pu

blic

Im

ag

e

RA

NK

ING

Clean Station 1 ABC Clean line 300 gal/unit Clean lineWaste

water

Operator,

Maintenance

pH control,

wastewater

permit5 3 3 2 3 16

Supplier specifications based upon

Sustainable development criteria

Sustainability Specifications

Prioritized Spend Results

Key Sustainability

Risks

Significant Environmental

Impacts

10/21/2013

15

Supplier specifications based upon

Sustainable development criteria

Solid WasteSignificant Environmental Aspect

Food Vendor Specifications

• Use compostable serve

ware from approved

sources

• Must attend one waste

minimization workshop

• All goods and services must

be approved and consistent

with event mission and

values

• Keep disposable items to a

minimum



Standards ISO 14000

ISO 90000

LEED

Certifications Forest Stewardship Council – FSC

Fair Trade Certified

Green Seal

Energy Star

Processes Organically grown

Cage free

Grass fed

Chlorine free paper

Attribute Locally sourced

GMO free

% recycled content

Minimum Standard of Performance Water footprint

Carbon footprint

Miles per gallon

Useful life

10/21/2013

16

Key Sustainable Metrics

SMART

• Specific

• Measurable

• Attainable/achievable

• Relevant

• Time bound


Example for paper company with objective to

increase their sustainably sourced wood and

paper products

Year Target % of FSC Certified Fiber

2013 50%

2014 60%

2015 80%

10/21/2013

17


How does this fit our criteria?

• Specific – company goal for each year

• Measurable – can be quantified

• Attainable/achievable – based upon reality

• Relevant – addresses significant

environmental impact

• Time bound – gives measures for each year


Helpful tips

• Use existing industry benchmarks,

certifications and frameworks

• Start with smaller scope, then expand

• What you measure, you can manage and thus

change

10/21/2013

18

Key Sustainable MetricsAPICS Fox Valley Example – Sustainable Company of the Year Award

Categories Quantitativ

e Evidence

Soft

Evidence

In Process Negative or Not

Addressed

Score 5 3 1 0

Profit

% of spending done with locally based suppliers at significant locations of operation

% of employees earning a living wage or higher

Positive economic value generated and distributed through business operation

Measurement of gender pay equity among employees

Third party certifications for sustainability

Planet

Measurement of direct and indirect energy consumption with reduction plan

Total water withdrawal measurement with reduction plan

Total solid waste sent to landfill with reduction plan

Total materials used by weight and % recycled or diverted away from landfill

Weight of materials generated deemed hazardous by local or international standards

Green/sustainable supply chain policy in place

Measure GHG emissions Scope 1 & 2

Active Environmental Management System (EMS) in place

People

Active Green Teams with goals and measurements that meet on regular intervals

Published Sustainability Plan w/ continuous improvement process

Communicate sustainability goals and results to all employees at least twice a year

Formal or informal sustainability training

Provide continuing education and measure hours per employee

Community outreach provided and measured

% of employees who receive regular performance and career development reviews

Total Score

Work with suppliers

• Communicate goals, process, timeline

• This should not be the first time supplier

learns about this initiative

• Education – internal and with suppliers

• Implement program

10/21/2013

19

Work with suppliers

Education

Waste Hierarchy

Waste is the result of poor design

Prevent Most Favored

Reduce

Reuse

Recycle

Energy Recovery

Disposal Least Favored

Work with suppliers

Education

Conduct a waste audit

• Sort waste

• Measure waste

• Apply waste hierarchy

• Involve supplier and

employees

• Create waste reduction

plan

Elementary school food waste

10/21/2013

20

Work with suppliers

Education

What a Waste!

• You bought it

• You paid to transport it to

your organization

• You paid to move it to a

dumpster

• You paid to ship it to landfill

• You paid a tipping fee to

dispose of itElementary school food waste

Work with suppliers

Education

Hazardous Substances/ Toxics

• Best to avoid using hazardous/toxic materials

• Conduct life cycle cost analysis to evaluate

different processes

• Keep looking for new technology / processes if

not currently feasible

10/21/2013

21

Work with suppliers

Education

Green Chemistry

Sustainable practice of chemical science and

manufacturing within a framework of industrial

ecology that is safe, non-polluting, consuming

minimum amounts of energy and material

resources while producing virtually no wastes.

Source: Purdue Research Foundation – Included in Green Manufacturing Specialist

BOK

Work with suppliers

Education• Buy less – is this item really needed? Can we use less of it?

• Rent, hire, or borrow instead of purchasing

• Buy things that are reusable & durable

• Buy a used item in good repair

• Buy things that can be recycled

• Buy things that have a low environmental footprint

• Buy things that are non toxic

• Buy things that are made with fair labor and responsible manufacturing

processes

• Buy things made from sustainable materials

• Does someone in organization already have one that can be shared?

• Buy from a local source if possible

10/21/2013

22

Evaluate supplier performance

• Evaluate and measure supplier performance

• Provide feedback on regular intervals and as

needed

• Gather feedback from supplier:

– What is working well

– What is not working well

– Potential improvements

Document and implement Improvement

• Document lessons learned

• Incorporate improvement opportunities into

review process

• Implement changes as needed

10/21/2013

23

Create Your Organizational Action PlanSustainable Procurement Steps In-place at your organization?

1. Have a sustainable procurement

policy

Yes/No

2. Have supplier specifications based

upon sustainable development

criteria

Yes/No

3. Have Key metrics/scorecards Yes/No

4. Working with suppliers and

potential suppliers

Yes/No

5. Evaluating supplier performance

throughout procurement cycle

Yes/No

6. Have documented and

implemented improvement

opportunities

Yes/No

Contact Information

• Joanne Gorski

• Email:

[email protected]

• Website:

• www.sustainableinsightsllc.com

10/21/2013

24

Survey

www.tinyurl.com/kmd5lrs

The Power of Sustainable Procurement...13 Supplier specifications based upon Sustainable development...

Documents

Transcript of The Power of Sustainable Procurement...13 Supplier specifications based upon Sustainable development...