6 Steps to Green Sourcing

Green Sourcing_Earth (2014)Happy Earth Day!

Since 1970, people have been celebrating Earth Day in a variety of ways: gardening, recycling, educating others about sustainable practices, saving energy, etc. But, as a modern sourcing pro, what can you do in your organization to help celebrate Earth Day?

I came across a whitepaper from Deloitte titled, “A Practical Guide to Green Sourcing.” The whitepaper discusses a 6 step strategic green sourcing process and the “green” steps you can take in your organization to emphasize in sustainable sourcing:

#1-Assess Opportunity: Step one consists of understanding your spend in a given category (materials, logistics, maintenance costs, etc). The five most common areas to consider include: electricity and other energy costs; disposal and recycling; packaging; commodity substitution (alternative materials to replace other materials); and water (or other related resources). Once these costs are identified, they should be incorporated into the spend analysis project in this step.

#2-Assess Internal Supply Chain: Step two consists of engaging internal supply chain stakeholders. Make sure you understand the business requirements, product specifications, and internal stakeholder perspectives in your supply chain. What is your industry’s most environmentally sound products and services? Ensuring your organization’s product specifications within any given category reflect the industry’s latest offerings can help you capture significant benefits.

#3-Assess Supply Market: Engage new and existing vendors in step three. Be sure to cite green opportunities and possible commodity substitutions and new manufacturing processes within a RFI. You’ll want your supply base to include vendors who specialize in more efficient, sustainable products to embrace the benefits of green sourcing.

#4-Develop Sourcing Strategy: Step four is the most important because it depends on the quality of the information gathered in the RFI and will help determine the outcome, implementation, and continued success of the sourcing process.

#5-Implement the Sourcing Strategy: In step five, bid analysis/evaluation quantifies cost and benefits of sustainability attributes. Clearly identifying and communicating the evaluation criteria is essential to gaining support of diverse stakeholders in the green sourcing process.

#6-Institutionalize the Sourcing Strategy: Now that you’ve selected your vendor(s) and the contracts have been finalized, it’s time for the procurement process to begin. Sustainability attributes should be closely tracked and audited during this final step. Be sure to define metrics for the supplier based on performance, delivery, compliance, etc, and consider both your organization’s sustainability goals and the results of the sourcing process when setting these metrics.

For more information about these green sourcing steps, read the entire whitepaper here.

What are you doing in your organization to green source? Share your tips by commenting below or tweeting @iasta.

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