Supply Chain Management for Environmental Improvement

How Can Environmental Procurement and Product Specifications Impact Supply Chains?

Buyers can use their purchasing power to influence suppliers and help create a more reliable market for greener products. By specifying purchasing preferences for products that have lesser environmental impacts, organizations can spur manufacturers to: use clean manufacturing processes and materials, design for the environment (DfE), consume less energy or water, minimize waste, or create less toxic products or emissions.

There is no cookie-cutter approach, as evidenced from the examples in the "Who's Doing It?" Section below. A policy may be as simple as restricting certain substances used in manufacturing or contained in any purchased products purchased, or as complex a comprehensive procurement policy and product specifications that cover every supplier and product.

Who's Doing It?

King County, Washington Environmental Purchasing for Indirect Materials (login required)

Bristol-Myers Squibb (see page 34), a developer of beauty, nutritional and pharmaceutical products, educates their own procurers in environmental costs of products and materials they purchase

Commonwealth of Massachusetts, a state agency, requires suppliers to provide environmental products

Hewlett Packard on procuring environmentally responsible materials from suppliers

Home Depot (& supplier Collinswood) pioneered market for certified sustainable wood products

Just a few of Nike's purchasing policy mandates include: zero toxic substances, no wood-derived materials from old growth or frontier forests, organic cotton, and on the energy side, energy-efficient office equipment and green power purchases.

Patagonia, an apparel manufacturer/retailer, specifies organically grown cotton from textile suppliers

The Gap, McDonalds, and Kinkos require suppliers to use certified sustainable wood

Herman Miller (see page 32), a furniture manufacturer and service provider, holds conferences for employees and all suppliers on its environmental procurement policies

Daimler Chrysler (see page 32), an auto manufaturer, rates suppliers and uses this rating to make purchasing decisions

Eli Lilly and Company (see page 33), creates and delivers medicines. They fine tuned their purchasing specifications to eliminate lead in a raw material, which then eliminated lead content in the sludge

Quantum Corporation worked with other electronics manufacturers to develop a database of environmentally restricted substances, which are prohibited (with a few exceptions) in supplier products

Fetzner Vineyards', a wine producer, published purchasing specifications requiring organic grapes

Additional Resources

The Green Business Letter "How Supply Chain Management Practices are Greening Procurement"

EPA's Environmentally Preferable Purchasing website

EPA's Purchasing Tools Suite

EPA's Comprehensive Procurement Guidelines

Buying for the Future: Contract Management and the Environmental Challenge by Kevin Lyons

How Supply Chain Management Practices Are Greening Procurement - Insight and tips on greening your suppliers

Pollution Prevention Regional Information Center (P2RIC) Green Procurement Hub

Sustainable Product Purchasers Coalition

Pollution Prevention Resource Center's Topical Report on Environmental Purchasing and Green Purchasing as an Extended Producer Responsibility Tool

Center for Advanced Purchasing Studies (CAPS)

Northeast Recycling Council's Green Purchasing on the Net

Suggestions for Greening Suppliers Through Environmental Procurement and Product Specifications

checkbox Develop procurement policy and product specifications

Examples:

  • Decide whether to adopt existing industry standards or to develop your own standards and critieria. A few examples of existing ecolabel product certification include Greenseal, Germany's Blue Angel, U.S. EPA's Energy Star, and certified wood per the Forest Stewardship Council
  • Determine if the criteria will apply to supplier's practices and operations as well as their products. If yes, also see Supplier Standards and Evaluation
  • Decide whether criteria will apply to all products and all suppliers, e.g.,
    • Will you differentiate standards for various classes of products? e.g., office supplies have different specifiations than raw materials or equipment
    • Will you give preference to certain products?
    • Will you stop purchasing certain substances or products made using those substances?
    • Will you only purchase products with low life cycle impacts?

checkbox Carefully, clearly and consistently introduce the information to suppliers and contractors

Example: The Green Business Letter article "How Supply Chain Management Practices are Greening Procurement" says not to expect immediate acceptance from all suppliers. It "is not a matter of merely handing down an edict", and some suppliers may tell you to take your business elsewhere. "It's not that suppliers don't want to reduce the environmental impacts ... it's just that many find themselves facing a bewildering array of corporate environmental ... criteria".

checkbox Offer assistance and education to suppliers and contractors in meeting the established requirements

Example: See Outreach and Assistance to Suppliers

checkbox Decide how to finalize the agreement

Example: Will the the environmental specifications be included in contract language, verbal discussion, or some intermedicate level of formality?

checkbox Establish strong, two-way communication channels

Examples:

  • Be accessible for interaction as needed
  • Ask them for information
  • Offer assistance and education
  • Learn and understand their operations and capabilities

checkbox For applicable circumstances, establish an evaluation or rating system

Examples:

checkbox Work to establish long-term relationships and commitments with your qualified, green suppliers

Example: According to a study conducted by Business for Social Responsibility (BSR), Suppliers' Perspectives on Greening the Supply Chain (2001), many suppliers have responded to requests from their corporate customers to address environmental issues in their products and practices. Several suppliers in this study "expressed frustration with customers who have issued environmental ... expectations which are not reflected in actual purchasing decisions" by their customers.

checkbox Educate your customers with environmental information on products they purchase from your company

Example: Volvo (see pg. 9, 10, 16) provides customers with environmental information on their products

 

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