You're the Buyer - You Negotiate It!
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Chapter One

Chapter Two

Chapter Three

Chapter Four

Chapter Five

Chapter Six

Chapter Seven

Chapter Eight



CHAPTER ONE

 

The economics of business drives green purchasing to achieve cost savings such as energy reduction and conservation, Reuse/Reduce/Recycle (3R) programs, construction, facilities, and chemical management while political factors like diversity, environment, and governmental concerns drive the CSR aspects.  Economics is very much under purchasing’s control and skill set while CSR is far less so but green purchasing must be informed and conversant in both.  CSR issues are already forcing major organizations such as Wal-Mart, Proctor & Gamble, Home Depot and many other multi-billion dollar business giants to adopt sustainability as a corporate goal.  Even such giants cannot achieve their sustainability goals on their own; they must count the gains of their suppliers throughout the supply chain.  Therefore, it arrives at purchasing’s door to drive sustainability throughout the supply chain to meet the demands of customers, prospective work force, and society at large.  The old adage of “fore warned is fore armed” applies.

The five main areas of sustainability

  • Energy    Electricity, motor, and power
  • 3Rs         Reduce/Reuse/Recycle
  • Construction and Facilities
  • Chemical/Environmental Management
  • CSR        Corporate Social Responsibility

Green purchasing practices dominate the first four and provide the fodder and funds for CSR.  For example, the Limited retail chain boasts huge CSR contributions, almost all of which are bankrolled from the cost savings of green purchasing in the other four categories. 

Some things we must know

When viewed through the lens of commerce, sustainability is not a matter what to do.  Society is screaming for it, including those who are not exactly sure what sustainability really is.  The big question to answer is how to do it.  That is the essence of this manual.  Apropos, there will be great amounts of science, engineering, and green purchasing practice required to become a sustainable operation.  Accordingly, we need to know about many disciplines that might be beyond our skill and knowledge.  Professionals constantly invest in continuing education.  We will need to investigate some arcane areas of knowledge if we are to become sustainable.  The good news as we shall soon see is that green purchasing saves money.



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CHAPTER TWO

 

Ohm’s Law
The basis of electricity for engineers and physicists 

We can’t see electricity so we don’t understand it, even though we use it constantly.  It is easier to view electricity by comparing it to a more familiar and equivalent system, water. 

Here are simplified basics that make electricity more user-friendly.

Ohm’s Law  E = IR                    where
E is voltage, I is current, and R is resistance of a system 

To compare an electrical system and a water system 

  • Voltage (Electromotive force) is equivalent to the pressure driving water and is measured by Volts
  • Amperage (current or electron flow) is equivalent to the flow of the water and is measured by Amps or amperes
  • Resistance Conductor size and material (copper, aluminum, etc) resist electron flow just as pipe size and material (concrete, plastic, etc) does in a water system.  It is measured in Ohms.

An interesting development proceeds from Ohm’s Law that will help you understand the tangible relationship amongst voltage, amperage, and resistance.  In a simplified system, power is equal to voltage multiplied by amperage. That is, E x I = Watts.

Applying Ohm’s law to a 120 W light bulb attached to a 120 volt (house) circuit shows amperage draw of 1 Amp. 

  • E x I  = Watts        
  • Substituting , E @ 120 V and Watts @ 120 and solving for I
  • I = 120/120 = 1 Amp

 



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CHAPTER THREE

 

EXERCISE REUSE

  1. Which two are sustainability benefits of Xeriscaping ? (pick the best two)
    1. It conserves water 
    2. It eliminates landfill space
    3. It minimizes maintenance energy       
    4. It does not require packaging

 

  1. How does gray water contribute to sustainability? (pick two) 
    1. It conserves the existing water supply
    2. It is a natural organic fertilizer
    3. It reuses rain water
    4. It is paperless
  1. How can fly ash used in concrete be considered sustainable? (pick two)
    1. It cannot be considered sustainable
    2. It reuses waste created by coal combustion
    3. It substitutes for a proportion of Portland cement in concrete products
    4.  It conserves water

 

  1. Which one cannot be reused? (pick one)
    1. Universal grocery pallet
    2. Re-writeable CDs
    3. Ink on printed pages
    4. Rain water


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CHAPTER FOUR

Concrete

Concrete is a mixture of approximately 85% sand and gravel, 15% Portland cement, and water. Portland cement, for real and/or exaggerated reasons, is the most notorious of concrete’s ingredients in a sustainability context.

Cement production creates a dual impact on sustainability in terms of GHG emissions.  Huge amounts of all fossil and other fuels are consumed to fire up the 3,000 degree F kilns needed to breakdown the limestone, the predominant raw material.  Limestone is principally a composed of Calcium (Ca) and Carbon-Oxide compounds, mostly CaCO3.  When limestone is heated, it liberates CO2 in the approximate proportion approximately one ton of CO2 for every ton of cement created.  Thus, the cement industry looms large in the cross hairs of many so called environmentalist organizations.

High on the hierarchy of ironies, CO2, despite being identified by some, including the EPA, as an atmospheric pollutant, is a requirement for animal life on earth.  Vegetation ingests CO2 as part of the photosynthesis process and gives off the waste product of oxygen.  The waste of the flora world is the breath of the fauna world and vice versa.  Both CO2 and oxygen are needed for the earth to sustain.  However, the mandate of reducing GHG emissions is not likely to go away and thus must be incorporated into any sustainability program.

As with global warming claims, there is no clear and convincing body of evidence on the effect that man made GHG do or do not have as alleged by the sides in this argument.  It is a fact, however, that the planet’s human population is growing exponentially.  As such, civilization will need more concrete and cement, the universal building material of all humanity.

Energy intensive industries like electrical power generation, cement, steel, and others consume enormous amounts of fossil fuels like coal, coke, oil, and gas, etc.  These fuels are more Btu intensive per dollar than other fuels.  They are also more emission intensive so herein lay the balancing act.

Some cement and power plants also burn waste of all kinds from scrap lumber, corrugated products, skis, nut shells, shredded tires, waste oils, and other combustibles including dehydrated sewerage.  Technology is ever improving to limit atmospheric contaminants in the form of GHG and particulate matter.  Many are reclaimed and treated.

Produced at a rate of about 25 billion tons per year and growing, concrete requires a tremendous amount of energy to produce, transport, and maintain.  Cement production may create substantial GHG, but how does that work out over its life time?  Concrete is not fully recognized by the any existing standards for its durability.  Put in the language of sustainability, its Life Cycle Assessment has yet to be fully recognized. 

To make the point consider this one amazing statistic: A typical family car produces 11,760 lbs of CO2 per year.  The concrete driveway it parks on, measuring approximately 24’ X 50’ produced 5,880 lbs of CO2 the one time its cement was manufactured.  The car produces twice as much CO2 every year.  And, over a 30 year life span of the driveway, the concrete’s contribution to GHG shrinks to less than 200 pounds per year, an amazing 60 times less that the car every year.




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CHAPTER FIVE

 

Carbon Foot Print

This is probably the most well known term in sustainability.  It is at once the most prized and reviled status, depending upon viewpoint. It is also difficult to distinguish truth from fiction; i.e. one can find carbon foot print calculators on multiple web sites and compute nearly as many different answers.  As with many other sustainability concepts that we have studied, there is no universal definition.  Furthermore, the many sciences and political combatants involved combine to generate so many divergent view points as to make “carbon footprint” an understandable yet vague term.

There are many competing definitions that are both precise and accurate, but are so colored by the competing parties that they are useless in general application.  We also will not venture deeply into the murky world of “carbon offsets”, a subject of many greenwashing charges.  As has been the habit in many controversies in this online course, we homogenize the available research data to arrive at the best, most useful average interpretation.

The table below was compiled from a variety of sources to compare carbon emissions generated by eight fuels.  The reader will recall a similar table in Chapter Two that compared Btu/$ for many of these same fuels.  This one shows the carbon-dioxide (CO2 liberated for each equivalent unit of fuel used to create electric energy. The physics is complicated but the simplicity of the over all pattern is obvious.  Some fuels, shown here in descending order, have a greater carbon foot print than others.  The emissions are in grams instead of pounds of CO2 equivalents per kWh because at 454 grams per pound, the values at the lower end of the scale would be infinitesimally small.  The order of magnitude is more important for our purposes than actual values. 

Fuel Source

Electric gCO2eq/kWh

Coal

955

Oil

893

Natural gas

600

Geothermal

100

Uranium/Nuclear

60

Wind

21

Solar

20

Hydro

15




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CHAPTER SIX

 

EXERCISE            Corporate Social Responsibility

  1. Why might B2C companies be more aligned to CSR that are B2B companies? (pick the best two ) 
    1. The B2C customer demographic favors         
    2. The B2B customer demographic favors CSR
    3. B2C companies don’t have many energy reduction options         
    4. B2B companies concentrate on non CSR gains       

 

  1. Which of these are considered CSR initiatives? (pick the best two )
    1. Community tree planting program
    2. Home insulation projects
    3. Cost saving programs
    4. Company outings

 

  1. Which of these are organizations/publications concentrate on CSR? (pick as many as appropriate)
    1. Corporate Knight
    2. Purchasing Magazine
    3. Fortune
    4. Corporate Responsibility
  1. For B2C companies, what might be by-CSR products that buyers should recognize? (pick the best  two)
    1. The CSR could be greenwashing
    2. CSR does not produce cost savings
    3. CSR may be used to justify price increases
    4. Cost savings are not CSR gains



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CHAPTER SEVEN

 

In this chapter we will unify everything we lave learned to create a comprehensive, practical, and user friendly plan that serves the interests of our company and the sustainability movement at large.

Now that we have studied many ways that green purchasing can and should lead and manage sustainability initiatives enterprise wide, we are in a position to present the hard How-To’s of writing a green purchasing plan.  Before doing so, three essential prerequisites must be in place:

  1. Vigorous management buy-in
  2. Active, announced support, and
  3. Enforcement authority 

Without these, the plan will be relegated to less than priority status or fail outright for lack of participation. 

Whether green purchasing has direct or indirect control or influence over energy, the 3Rs construction & facilities, chemical/environmental, and CSR, it must also rise to the challenge of writing and leading implementation of the plan.  Talent that might otherwise be in a position to do so, such as Human Resources and Organizational Development, lack the background, knowledge, and skill sets needed to competently plan, manage and implement it.

As we develop how to craft a green procurement plan, we will draw upon the specifics we have already mastered in previous chapters so as to create a template of how an organization may draft its own customized plan.  Where applicable, we will cite references for taking additional steps. 

For purchasing pros that have been around a while such as baby boomers, many have been involved in writing policies and procedures for green purchasing, and perhaps ISO, and even best practices.  For others, volunteering to take on these growth and leadership opportunities will differentiate you from others who either fear a challenge or lack the knowledge beyond purchasing operations. 

To this point, we have cited many mini-sustainability plans.  For instance, the 3Rs apply to all products from raw material to waste streams and energy conservation or avoidance of waste or loss have been detailed. 

The green procurement plan must be as practical and applicable as possible.  Since purchasing is a dollars and numbers driven profession, we will quantify elements of the plan to the greatest extent possible.  At the very least, we will draw attention to areas so that individuals will know to obtain further information resources.

A green procurement plan is really a sustainability plan for the entire enterprise because most of the gains will have cost savings attached.  It is a mixture of policies and procedures, training & instruction manual, and step by step “how to” assembly guide.  It draws upon organizational talent, content expertise, and management skills.  Since the plan’s greatest sustainability gains will come at the hands of green purchasing, we need to be the ones crafting this document and leading its implementation. About the only areas where green purchasing needs much assistance are CSR, to a greater degree, and Chemical/Environmental, to a lesser degree. 




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CHAPTER EIGHT

 

We can expect that much of the commercial business world, as opposed to public, academic, and non-profit organizations, at least in the close-in years, will resist participating in the green revolution. They may not be comfortable with the motivations of the sustainability movement or may not be confident in their ability to manage the risks involved in green initiatives and in deed, lack the credentials, knowledge, and skills necessary to deal with the challenge.

Still others will remain dubious as they (justifiably) do not see the technologies in place that proves the case for sustainability.  For instance, those on the cusp may prefer to wait until a customer demands a reduction in GHG emissions such as we mentioned with the Wal-Mart model for suppliers.  Some may not adopt sustainability until competitors demonstrate commitment or a law establishing a standard procedure mandates their commitment.  Nevertheless, the tide is approaching and the time is here.

Amidst this conflagration, we may take refuge in some good news.  That is, for green purchasing pros, all of these arguments are extraneous and superfluous to our profession. Politics and personal beliefs do not drive the process.  We do not have to make the choices that lawyers must sometimes do in setting aside their values to represent clients.  For us, the choice of green purchasing is merely a matter of cost savings, our core competency.  These cost savings will yield huge sustainability gains as a direct result of our expertise.    



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