When you’re shopping for a new piece of equipment, do you care if the oil filter is a cartridge or a canister? Do you consider the number of pounds of steel and how they were made, the distances the materials were shipped, how many gallons of lubricant it consumes and the fluid’s biodegradability?
We’re no longer surprised that many consumers apparently are willing to place a value on sustainability — how green they perceive a potential purchase to be — and choose that product over one they believe to be less green. If they have the money, they’re often even willing to pay more.
Marketers have picked this up and brought it to your plant, where it might be affecting materials sourcing, product packaging and perhaps even geographical deployment of manufacturing facilities. The procurement folks call it sustainable sourcing: taking into consideration how products are made, where and from whom they (and their components) come, how they are transported and their ultimate disposal. Companies excelling at sustainable sourcing strive to ensure that their products and components meet or exceed environmental and social expectations.
[pullquote]The U.S. Postal Service, Wal-Mart and Toyota are typical of the few and large companies that have pressured suppliers to certify the environmental footprints of their goods. But equipment purchases are still largely made on function and price. There’s increasing attention to lifecycle cost, but unless the greener machine also is cheaper to buy and run, who cares?
So, pressing your suppliers to be green is relatively rare. According to a recent study by Accenture of 245 supply chain executives, only 10% have implemented green supply chain initiatives. But once they do, the hows and whys readily transfer to capital equipment as well as MRO materials and supplies. Your procurement people will be schooled in sustainability, and their software will keep track of and give credit for the greenness of your purchase orders.
“Supply chain technologies and processes also are the heart of sustainable physical asset management,” reports Accenture, “extending green operations through greater adherence to power usage, water consumption, waste output, cooling requirements and lighting/heating issues.”
On Accenture’s list of rewards for sustainable procurement, the most relevant might be managing risk: achieving “corporate assurance” by understanding and proactively managing brand and reputation, anticipating regulatory shifts, culling irresponsible or incompliant vendors, and developing innovative approaches to capturing socially conscious consumers and meeting regulations.
The notion that you might ask your compressor manufacturer to demonstrate its sustainability still seems pretty far-fetched to me, but not to Judi Seal at Sullair. She proudly showed me how the company’s manufacturing facility in Michigan City, Ind., built sustainability into its S-energy line of compressors with biodegradable oil, a total containment base and low-impact oil and air filters. Those are in addition to high energy efficiency and optional heat recovery, which would figure into any lifecycle cost analysis. Seal said, “We don’t just paint them green.”
The facility was impressive when I toured it about five years ago, but it has since been transformed according to lean principles and 5-S. Seal pointed out the predominance of returnable packaging (which gives the advantage to local suppliers), recycling and assiduous effluent control, right down to waterless bathroom fixtures.
Accenture says sustainable procurement helps a company grow revenue-introducing new or differentiated products and services, comply with the environmentally driven shifts of key business partners, enhance its brand and nurture a reputation for social and environmental responsibility. But maybe most important, “Organizations that excel in sustainable sourcing typically have a more integrated business model. They understand that most business functions play a role in increasing shareholder value, so they’re careful not to make cost-reduction their sole sourcing and procurement mission.”
Sullair’s bent toward sustainability is driven from the top by parent company United Technologies, a source of pride for employees, and appreciated by the lakefront community of Michigan City, but I wonder if the company’s compressor customers are paying any attention?