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It's finally time to be green
Lisa Wichmann
A few years ago, I was grabbing a coffee between seminars at a supply chain management conference. I overhead two purchasers discussing what seminar they would go to next. The choice was between green procurement or supplier metrics. Their indifference to the green session was plain to see, and they finally straggled into the metrics talk.
And really, who could blame them? Back then, environmental seminars were added to the agenda more as a ‘token’ than anything else. As a purchasing consultant once told me, you don’t get fired for not getting the best price from a supplier. But you do get fired for shutting down the plant by buying defective parts or using an unreliable logistics partner.
With that kind of pressure, few purchasers could afford to indulge their environmental conscience. But in the years ahead, knowledge of green procurement will be as important to purchasers as negotiation skills. Global warming—which used to be a marginal issue in the business world—has finally infiltrated the executive boardroom.
More than likely, CEOs will champion green procurement out of their own desire, and to keep pace with rivals. Maintaining a positive company image without a green supply chain will be virtually impossible in the next 10 years.
The trend has already kicked off. A report released in March by A.T. Kearney, a global management consulting firm—in conjunction with Institute for Supply Management—showed a new sensitivity toward responsible suppliers.
The study showed 50 per cent of respondents say they deselect suppliers for not meeting sustainability criteria. “Five years ago, it was rare that a company deselected a supplier because the partner failed to meet formal criteria of being green and ethical,” the authors stated.
More than half the Fortune 100 companies surveyed include sustainability metrics in evaluation criteria. Examples include eco-efficiency of materials and packaging, fair labour practices throughout the supply chain, quantification of the carbon footprint, and accounting for full life cycle costs.
A.T. Kearney found the majority of companies still don’t have robust supplier relationship management practices for sustainability. But over the next year, the percentage of companies rewarding suppliers for sustainability will increase 50 per cent. The full report can be found at www.ism.ws/sr
Now that sustainability is on a roll, changes will occur quickly. From one day to the next, procurement managers will be asked to defend their selection of truck carriers based on environmental metrics. They’ll be asked to review travel procurement policies to assess whether corporate travel is always necessary, and can’t be abated through video conferencing.
They will also be asked to spec the viability of wind and solar energy, look into alternative fuels, modify document management programs to minimize paper consumption; deal with facility-related conservation issues, and at the same time, source IT servers requiring less cooling and energy. Supply chain managers who are fluent in those topics will excel. They might even carve themselves out a new niche, such as ‘manager of environmental procurement’.
That said, I’d be surprised to see empty chairs at the next session on green sourcing, surely coming to a conference near you.
—Lisa Wichmann
Editor
Send your letters to the editor to lisa.wichmann@pb2b.rogers.com
Contact the editor at lisa.wichmann@pb2b.rogers.com
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