Green Purchasing
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Environmentally Preferable Purchasing “Green Purchasing” Overview
Environmentally Preferable Purchasing (EPP) or Green Purchasing refers to the procurement of products and services that have a lesser or reduced effect on human health and the environment when compared with competing products or services that serve the same purpose. This comparison may consider raw materials acquisition, production, manufacturing, packaging, distribution, reuse, operation, maintenance or disposal of the product or service (Figure 1).
Figure 1. Life-cycle model for products and services
In the past, many individuals thought of Purchasing and Supply Chain Management (SCM) as a business function with only bottom-line financial considerations. However, for the past 20+ years I have worked to link Purchasing and SCM with environmental management (as well as other disciplines) by researching (and applying) the impacts that Purchasing and SCM have on social, economic and environmental processes and systems. Therefore, I have been able to investigate all aspects of global marketplace behavior by going into the field to research the life/death/life of products and services (from raw material extraction, to packaging, shipping, transportation, use/application, and disposal). By understanding and researching the purchasing and the supply chain in this way, we hope to demonstrate and apply the benefits of integrating social, ethical and environmental indicators and criteria upstream, which have multiple downstream impacts (including better policy and technological enhancements and discoveries).
My research in this area has consistently shown that professional purchaser’s that consider environmentally responsible criteria in the procurement process (or early in the supply chain sequence) have the power to reduce or even eliminate waste and environmental impacts. In fact, there is global experience and examples that show how sustainability criteria (using Sustainable Development as a point of reference) in the ‘upstream’ procurement process and decision-making of public and private agencies, organizations and corporate entities can both improve environmental performance, while addressing ethics, social regeneration and economic concerns (e.g. the ‘triple bottom-line’).
In addition to improved environmental performance, many environmentally preferable products work as well or better than traditional products and can even save money. Switching to safer cleaning products, for example, can reduce incidents of allergic reactions, asthma, burns, eye damage, major organ damage, and cancer connected with the hazardous chemicals used in many traditional cleaning products. Buying 100 percent recycled-content paper can reduce energy use by 44 percent, decrease greenhouse gas emissions by 37 percent, cut solid waste emissions in half, decrease water use by 50 percent, and practically eliminate wood use. Similarly, energy-efficient vehicles and renewable energy cut greenhouse gas emissions and harmful air pollutants while lessening our dependence on imported oil. Overall, the implementation of ERP constitutes a system-wide process reforms that collectively contributes to an organizations’ reduction in ecological footprint (cumulative associated ownership to global ecological damage stemming from a demand for natural resource to sustain economic and social balance).
Environmentally Responsible Purchasing can allow and organization to offset financial and environmental risk, rather than inheriting it from your suppliers. Alternatively, you may want to involve your suppliers at the design stage or develop a network to pre-qualify suppliers that have responsible environmental management. Assessments and benchmarking can aid an organization with the process. ERP can bring important benefits for its practitioners: risk management, eco-efficiency, stronger supplier relationships, and improvements in environmental performance, just as a start.
Pollution Prevention/Environmental Impact Considerations:
- Energy efficiency and conservation
- Natural resource depletion
- Forest and ecosystem protection
- Water efficiency
- Waste minimization
- Hazardous waste reduction
- Toxic material content
- Adverse effects to workers, animals, plants, air, water and soil
- Recyclable content
- Recyclability of waste resources
- Resource conservation
- Renewable material percentages
- Green house gas emissions
- Packaging
- Transportation
- Others
Why Focus on Supply Chain Management?
Supply chain management is an interdisciplinary field that emphasizes cross-functional links and seeks to manage those links to enhance a company’s competitive advantage. It involves forecasting, resource allocation, production planning, flow and process management, inventory management, customer delivery, after-sales support and service, and a host of other activities and processes familiar and basic to business. Competitive pressures are intense. Sophisticated techniques have been devised to expedite information flow, including on-board computers for trucks and ships, satellite tracking systems, and the electronic transmission of order and shipping information.
An increasing number of companies rely on supply chain management as a key competitive weapon. Large and small businesses alike have reported astounding results, including dramatic reductions in cycle time and accelerated cash flows. The magnifier effect is stunning: a $1 reduction in cost from supply chain efficiencies is equivalent to a $12 increase in sales revenues.
An understanding of supply chain management is an asset to any manager, and there is a strong demand for specialists in the area. Managers attracted to SCM are impressed by the variety and challenges in the field, its sophisticated technology, and its importance to the overall economy and the global marketplace. Entrants to the field look forward to an entrepreneurial environment and opportunities to deal with a wide array of people from a variety of organizations. SCM managers also like a hands-on approach. They use sophisticated decision tools, yet they can always envision the underlying physical processes—processes that are familiar enough to be taken for granted, yet subject to managerial initiative and rapid change.
Source: ‘SU Martin J. Whitman School of Management/Rutgers School of Business Newark’
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