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.
Suggestions for Greening Suppliers Through Environmental Procurement and Product Specifications
Develop procurement policy and product specifications
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".
Offer assistance and education to suppliers and contractors in meeting the established requirements
Example: See Outreach and Assistance to Suppliers
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?
Establish strong, two-way communication channels
For applicable circumstances, establish an evaluation or rating systemExamples:
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.
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