Environmentally Preferable Purchasing

Selected Rutgers Purchasing and Contract Research

Biobase

Agriculture Product Research (Lubricants Oil, etc.)

Construction

Furniture

Carpeting

Corn Husk Office Panels

Executive MBA in EPP/Supply Chain Mgt

SCM

Research

Methane Gas Research (Truck Refueling); Heating

Recycled Content Paper Return Research

Green Chemical Research

Lab and Custodial Supply

Waste Mgt/ Recycling Research

Food Recycling (Farm Feed)

Electronics

Computers

Vampire

Feature

E.O. 13221

•Leasing

Plastics Recycling Research

Packaging Research

Greenhouse

NJ Fresh Local Farm

Food for

RU Dining Svcs

Electronic Labeling Research

Bar Code Resource Tracking

Industrial Engineering

Research

Product Development

Rutgers EcoComplex

Rutgers EcoComplex; Methane Project

Rutgers EcoComplex; Greenhouse Project

RU-Camden Ecological FootprintThe ecological footprint is an accounting tool for ecological resources.

Categories of human consumption are translated into areas of productive land required to provide resources and assimilate waste products. The ecological footprint is a measure of how sustainable our life-styles are.

Campus size: 14 Acres, 26 Buildings, $50 Million/Yr

Operating within our means?

EcoFootprint: 1998 (26 Acres), 1999 (22 Acres), 2000 (17 Acres), 2001 (13 Acres), 2002 (12 Acres), 2003 (10 Acres)

Promoting EPP/Economic Development through our contracts:

Contributing to the local economy (MBE/WBE, EPP); $50 Million (1998 – $10 million, 2003 - $39 million)

Waste Reduction, Energy, Local Procurement, Transportation, Food, etc.

Collaborative Partnering With Suppliers and Contractors

Both customers and their supply chains stand to gain by collaborating on environmental and efficiency improvements. Benefits of partnering are:

•the supplier knows the product better than the buyer and can maximize efficiencies and minimize associated wastes;

•two or more perspectives (or different expertise areas) are better than one when it comes to designing greener products and processes;

•working together strengthens the customer-supplier relationship; and

shared savings and mutual benefits make such efforts even more worthwhile.

A few examples of partnering between supplier and customer include:

•collaborating on green design and manufacturing projects

•sharing tools used for environmental improvement

•researching alternative materials, products, equipment, and processes that have lower life cycle impacts

•managing of inventories by the supplier (e.g., chemicals, cleaning supplies, lab supplies, office supplies, etc.)

•devising ways to take back and recycle or refurbish end-of-life items and packaging

Suggestions for Partnering With Suppliers or Contractors

Involve suppliers early

Why? Long lead times necessitate early sourcing and early supplier involvement in green product development

Identify opportunities for improvement that suppliers may be able to help resolve Examples:

•Gather a cross-functional team of staff to brainstorm on product and process improvements; include office, design, manufacturing, procurement, waste handling, and other staff

•Evaluate your current products and supplier products for life cycle impacts

•Evaluate manufacturing, office, maintenance, inventory and other operations against environmental policies, goals, management systems, etc. to determine areas that need improvement

Ask all your suppliers for suggestions

Prioritize the opportunities identified in the previous exercise and determine a set of action items to implement the top opportunities

Example prioritization criteria:

•Start with the "biggest bang for the buck"

•Focus on products or processes that generate the most pollution or highest volume waste stream

•Focus on operations that your staff may not have the sole expertise or time to address, such as chemical inventory management, just-in-time inventory, reusable packaging, process improvements, alternative solvents, energy reduction, scrap recovery, etc.

•Start up the effort with one or two supplier(s) known to provide quality products and service, exhibit some environmental initiatives and interest, or are have a longstanding business relationship with your company

Identify existing and new suppliers that go beyond simply providing a product or basic service, and are willing to help their customers meet environmental goals

Examples:

•When their existing compressed gas supplier refused to take back empty cylinders, Eli Lilly and Company sought out and found a new gas supplier who would take back spent cylinders for recycling

•Anheuser-Busch Companies, Inc., a beverage producer, worked with aluminum can manufacturers to decrease wall thickness and lid diameter, achieving a 30% weight reduction in aluminum cans and changing beverage can design industry-wide

If applicable, establish terms and agreements for the partnership

Examples:

•Will shared savings be adequate compensation for each party?

•Will you need to pay for the supplier's additional services or participation?

•Is the agreement informal or does it need to be an official business document?

Consider becoming an environmental mentor, or find an environmental mentor to assist you

Examples:

•General Motors (GM) Lean Implementation Program mentors suppliers on environmental and other key business issues

GM’s Supplier Environmental Advisory Team provides feedback from key suppliers to help shape GM’s environmental initiatives

Influence up and down the supply chain by providing customers with waste saving ideas, proposals, and initiatives

Example: With persistence and cost data, NACHI convinced one of their largest customers to start using a reusable packaging system

Who's Doing It?

Andersen Corporation implements P2 with supplier input and environmental products

Applied Materials, a semiconductor manufacturer, needed a solution to copper-bearing waste water; they engaged several suppliers in design and development of a closed-loop, zero-discharge water recycling system

Ben & Jerry's worked with suppliers to develop chlorine-free packaging and reduce packaging

In 2000, Bristol-Myers Squibb partnered with suppliers in Egypt, Venezuela, and Greece to eliminate use of methylene chloride

Collins & Aikman work with suppliers to reduce VOCs in carpet products through reformulation of raw materials

Cosmair and suppliers recycle or reuse shipping containers

Eli Lilly and Company and a supplier researched and found an alternative raw material for a lead-bearing catalyst

Levi Strauss & Company works with suppliers worldwide on water quality. More than 35 water treatment systems were built or upgraded at laundry and product finishing facilities. Many recycle the treated water. One launderer in Texas uses the treated water to irrigate an adjacent field.

Herman Miller contracts with their supplier of PVC vinyl edging, to take back the PVC scrap for re-extrusion into new edging

Maytag teamed with a supplier on packaging reductions

Nike seeks partnerships with ecologically responsible suppliers. For example, Nike's Air Sole manufacturing plant diverts approximately 5 million pounds of manufacturing scrap from the waste stream, and 92% is sent to Tetra (currently a subsidiary, formerly an independent supplier), to be processed into new film for Nike's use.

Patagonia works closely with suppliers to minimize their environmental impacts; including helping them successfully grow organic cotton

Roche Vitamins and suppliers redesigned their packaging

Royal Crest Dairy changed to a new supplier who agrees to recycle packaging

SC Johnson Wax works with suppliers on VOC reduction and packaging reduction

Xerox Corporation works with suppliers to make "smarter" parts and products for their office equipment, especially to facilitate remanufacture of the Xerox copiers and other equipment at the end of its useful life

Going To the Customer

Ashland Specialty Supply Company works with customers on product reformulation, distribution, waste disposal, and chemical management

NACHI Technology implements packaging reduction for customers and offers shared savings through a reduced priced product for the customer

Environmentally Preferable PurchasingData obtained from the Pacific Northwest

Pollution Prevention Resources Center

How Can Environmental Procurement and Product Specifications Impact Supply Chain?

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.

• Decide whether to adopt existing industry standards or to develop your own standards and criteria. 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.

• Decide whether criteria will apply to all products and all suppliers, e.g., o Will you differentiate standards for various classes of products? e.g., office

supplies have different specifications than raw materials or equipment o Will you give preference to certain products? o Will you stop purchasing certain substances or products made using those

substances?

• Will you only purchase products with low life cycle impacts?

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".

Establish strong, two-way communication channels with Suppliers

Examples:

• Be accessible for interaction as needed

• Ask them for information

• Offer assistance and education

• Learn and understand their operations and capabilities

For applicable circumstances, establish an evaluation or

rating system

Examples:

Daimler Chrysler uses an environmental rating system for

their suppliers, to make their final purchasing decisions

See Supplier Evaluation and Certification on the EPP

Resources document!

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.

Many suppliers offer education to their customers with

environmental information on products they purchase from their

company

Example:

• Volvo; provides customers with environmental information on their products

• All five (5) RU furniture manufacturer’s and our floor covering suppliers offer extensive information on their products

Who's Doing It?Bristol-Myers Squibb, 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: no wood-derived materials from old growth or frontier forests, and, energy-efficient office equipment

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, a furniture manufacturer and service provider, holds conferences for employees and all suppliers on its environmental procurement policies

Daimler Chrysler, an auto manufacturer, rates suppliers and uses this rating to make purchasing decisions

Eli Lilly and Company, 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

For Resources; See Resources Document

Show PPT on RU Recycled Plastics Research and Tech Transfer

Resources (see Resources Document)