1. July 11, 2011
Ariba Knowledge Nuggets
Sourcing: Green Strategies
With companies eager to adapt to a new era of
customer needs, regulations and competitive
What Could Green
realities, green sourcing has become
Sourcing Mean
tantamount to ensuring that goods and
• Waste Reduction services maintain high environmental
Initiatives that result standards while maximizing revenue potential.
from green policies But going green isn’t easy.
can save you
hundreds of millions
of dollars. The green sourcing wave has begun to roll,
and is far from a feel-good fad. Green sourcing is fast emerging as a key
• Green Buildings will business imperative that can deliver bottom-line results. Closely aligned with
save you significant the foundations and best practices of strategic sourcing, green sourcing is all
energy costs,
improve the about understanding your spend, proactively managing your suppliers, and
environment, and making sure that your organization's priorities are accurately reflected in every
even improve your dollar your company spends.
health. (Fresh air
with increased
oxygen content is Tips For A Green Office
the best cure for the
new wave of • To conserve energy and reduce internal heat gain, turn off computers, monitors, printers and copiers
environmental during non-business hours. Do not leave equipment in sleep mode overnight because it will continue to
illness that results draw a small amount of power.
when some people • To save energy during periods of inactivity, ensure that the built-in power management system for your
are locked in closed office equipment is active.
steel and concrete • Ensure your screen saver is compatible with the computer's power management features, and that the
buildings with stale setup allows the system to go into power saver mode.
air for long periods • Laptop computers use 90% less energy than a desktop system
of time. • When purchasing new office equipment, look for ENERGY STAR. The ENERGY STAR office equip-
ment program promotes energy-efficient computers, monitors, printers, fax machines, scanners, copiers
• Green Buyers can and multi-function devices that automatically power down during extended inactivity. Energy saving of
50% or more is possible.
avoid environmental
taxes and resultant • Install plug load controllers in cubicles to control multiple loads like monitors, task lights and fans. These
devises use a motion sensor that is incorporated with a plug load surge suppressor. Inactive equipment
cost increases. can be shut down when the cubicle is unoccupied.
• Use e-mail instead of sending memos and faxing documents
• Green Products
• If you need to print, consider double-sided printing and reusing paper.
improve market
share. • Educate and encourage employees to be energy-conscious and to offer ideas about how energy can be
saved. Employee buy-in and involvement can make or break your company's efforts to conserve energy
• Designate a "responsible party" to be responsible for and to promote good energy practices for the
organization and/or facility. This individual should work with management to facilitate energy savings
ideas and strategies - optimizing energy use and costs minimizes overhead and operation costs.

2. Ten Tips for Greening Supply Chains
1. Know Where You Stand
Understanding your organization's spend, supply chain and consumption patterns is the first step because
you can't affect what you can't see. A simple assessment of your organization’s “green” status of a more
detailed carbon footprint study will provide you with the information you need to determine how well your
supply chain is positioned for the changes on the horizon.
2. Have a Plan
Once you know where you stand, create a set of goals and, even more important, metrics that can be used
to track progress against these goals.
3. Have a Single Point of Accountability
Many organizations have appointed "chief sustainability officers" to oversee their green efforts. The
appropriateness of this specific position will depend on your organization and industry, but the key is to
have a single point of accountability empowered to effect change.
4. Market Your Progress Internally and Externally
Half the battle is getting the word out and bringing people on board. Be sure to communicate to all levels
why green efforts are being undertaken, what will be measured and how the company is going to get there.
5. Incorporate "Green" Into Your Existing Sourcing and Procurement Processes
Sourcing and procurement have always been about more than just price. Be sure to include green criteria in
your requests for proposals (RFPs) and create clear metrics for measuring them as part of supplier
performance management.
6. Communicate Your Goals and Standards to Your Supplier Community
“It ain’t easy By setting clear expectations of your supply base during the sourcing process and proactively monitoring
compliance/progress, you can quickly improve your sustainability performance. Outline what suppliers will
being green” be expected to provide and how they will be measured to ensure that they are delivering and putting in
~Kermit the Frog place the processes and procedures to drive compliance.
Up-to-
7. Stay Up-to-Date With Global Regulations
Environmental regulations such as the Restriction of Hazardous Substances (RoHS) directive in the
European Union will increasingly affect how your supply chain functions regardless of your location. You
need a method for keeping up with changes in this rapidly evolving area to avoid costly mistakes in your
supply chain.
8. Keep Up With New Materials, Technologies and Processes
Significant work is being done to develop new approaches that can cost-effectively address the
challenges and opportunities that green initiatives present. Stay up-to-date in your industry, participate in
trade groups and do whatever it takes to maintain your competitive advantage and not be left behind.
9. Do the "Easy Stuff" First
You don't need to overhaul your supply chain to see gains from sustainability efforts. Instead, identify "quick
wins" such as simple improvements in energy efficiency that can both deliver bottom-line results and kick-
start your green initiative.
10. Get Everyone Involved
As with any broad initiative, it is nearly impossible for just one functional area to have an impact on the
entire organization through its efforts alone. To be effective, get Engineering, Design, Sales, Finance,
Operations and everyone else involved.

3. Green Sourcing — Focus on Asking the Right Questions First
If your company hasn’t already joined embraced green sourcing, it’s possible that you
are…quite frankly…a little scared. Scared that making a switch to a greener product line
could backfire, either financially by driving up costs or from a PR/brand perspective if your
new “green” decisions don’t deliver as expected. You can have great intentions to shift to
a greener supply chain, but wind up publicly embarrassed when your suppliers either:
Procurement is
already a) misrepresent themselves or
transforming from b) their green standards don’t live up to consumers’ expectations.
a back office
function to more The way to avoid succumbing to ‘greenwashing’ is to stop it at the source. If your RFx
of a business focuses on uncovering the right information, you’ll greatly decrease the chances of a
partnership and surprise in the future. Each product or service you source is different, so you’ll need to
the whole green adjust your RFx accordingly.
sourcing agenda
is a big factor that Green Sourcing RFx Questions for your potential suppliers:
will really
accelerate that • Do you have energy efficient production technology?
transition. If you
• Do you have manufacturing facilities running on renewable energy?
are to have an
effective green
• What are your waste management strategies (i.e. recycling or landfill or composting)?
procurement
• Do you have an Social and Environmental Corporate Responsibility Program?
strategy then the • Do you have an environmental management system (EMS)?
procurement • Do you consider environmental issues in the design process?
professionals • Do you provide any data on your company’s environmental impacts?
really do need to • Are any toxic materials in your manufacturing process? If so, please identify.
be working in
• Do you incorporate any recycled material, particularly from post-consumer sources, in your
close partnership production?
with all other
• Are you Forest Stewardship Council (FSC) certified?
departments.
• Are you Sustainable Forestry Initiative (SFI) certified?
• Are you ISO 14001 certified?
•
Luckily, there are several guidelines and certification organizations who help you and your
supply base achieve their sustainability goes. For example, the ISO 14001 certification
helps organizations minimize how their operations negatively effect the environment,
comply with applicable laws and regulations. And their stamp of approval ensures that
these issues have been vetted:
• Design and functionality of the product
• Extraction and processing of materials
• Manufacturing processes
• Packaging and distribution
• How the product is used
• Recycling, reuse and disposal
*Adapted from Supply Excellence article by Kimberly Davis-Gerst, Ariba