Establishing Your Organization’s Green Baseline

In the last Green Procurement blog, the topic of ‘What is Green’ was covered. In that blog the idea of an absolute standard for being green was developed and, by necessity, the concepts were broader than just Green Procurement or Green Purchasing. In establishing your organization’s Green Baseline one can discuss the baseline for the entire organization or a baseline for your procurement department. For this blog, we will limit the discussion back to Procurement and Purchasing. Looking at the entire entity will be developed as a future topic.

How do you baseline the level of green in your department?

Currently, there are no known assessments of a Purchasing department for its green activities and effectiveness. What Procurement does is inherent in just about everything the overall organization does so the assessment is critical. Absent a tool, how can one approach a viable assessment? First, try to break down the purchasing function by activities and stakeholders. One can start with Internal Elements and External Elements [or outward-looking elements]. The Internal Elements are those actions taken within Procurement to enact or assure green purchasing and procurement activities. The External Elements are those stakeholders that either influence your group or that can be influenced by your group [e.g., your internal customers and direct suppliers].

Much of what you will baseline for your Internal Elements will be based on your department’s organization. Differences in job responsibilities is one of the most obvious items to baseline, but so are regional, or other organizational breakdown, differences. The interrelationship between people, functions and responsibilities is also key. So too is the concept, and level, of being green. As with any business process, there are activities and hand-offs. Another way to state it is that there are inputs and outputs. For every job function, there is the receipt of something, for example a purchase requisition, the activity, entering a purchase order, and an output, releasing the purchase order. To begin, therefore, an audit of inputs, activities and outputs is needed. You may choose to even create a process diagram to help establish each activity to be audited.

What is the initial audit to do? The audit, for lack of a better term, is meant to find what is being done, at each level, that is green. Following the basic example of a purchase requisition to purchase order, here are some sample questions you might ask:

• Is there any harm being created [what are you purchasing];
• Are you leaving it as you found it [is the end state of your purchase anticipated];
• Are you creating waste [how will you dispose of the items and of your purchase records after the purchase];
• Does your system require natural resources [do you work from a paperless requisition];
• Can your system be made more efficient are the process steps that can be removed];
• Does you organization have a green policy [are you acting on accordance with it]?

The first, most obvious, item to achieve is green leadership in your procurement department. Without it, all efforts will be individual and uncoordinated. The overall impact will be meaningless. So, foremost, make sure the purchasing leadership are in agreement that there should be a green policy. The second item is to define what ‘green’ means for your organization. As stated before on previous blog editions, the true measure of green is not to use resources. Anything else is relative. So, define your measurement of how close to perfect, that is not using resources or balancing your use to provide no impact, you need to achieve for success. At this point in time, any step toward more green is better than no step at all. Higher ambitions are better.

To continue, assume that the first elements of policy and standard [e.g., goal] are in place. As stated before, a gap analysis will be necessary to determine the immediate actions to take and many will be tactical. Your organization’s level of green, it goals, will determine the gap to close and the strategies and tactics to do so. Assume, for now, all strategies and tactics are in place. The assessment, your baseline, still needs to identify compliance to your strategy and tactical actions. To accomplish this goal, one must have some written form of plan and working documents, such as training plans, forms, etc. that are implemented before an approach can be assessed. Or, at least, the intent of those documents and work papers should be included in the assessment to form your baseline.

Once you have completed your assessment of: policy, goals and tools; you can still assess the level of implementation of these items. Ask:

• Are the tools being used;
• Are the tools aligned with the goals;
• Is progress being made?

At this point, you can begin to have a full understanding of your organization’s baseline, and from it, derive additional steps necessary to improve. Similar steps can be taken with your External Elements. With you internal customers, you can begin to assess how specifications and requirements documents are drafted. Is there a bias toward specifying green? If not, why not? Are engineers educated in green choices? Does your end user identify requirements in printed documents or in e-media?

For your supplier base, the same forms of questions can be asked and can be started with the same basic criteria you apply to your own organization. Does your supplier have a policy for green products? Does the supplier have one for green purchasing practices? Does the supplier train its personnel on green concepts and alternative decisions? The same assessment you utilize for your organization can be changed for your internal customers. The sum of all of those internal assessments can be simplified and turned into a supplier assessment. This is your beginning. It will not be easy, but it will be worth it. The world is changing and companies that do not value environmental results, and sensitivities, will be punished by the marketplace. Start now, set high goals and be honest. The next blog edition is about ‘greenwashing.’ A pun on the term whitewashing in which organizations claim to be green when they really are not. Again, it is a tough issue as there is no standard at this time. Nonetheless, your actions need to prove your organization is moving beyond words and the is the root of the term ‘greenwashing.’

Please continue reading more about green procurement and purchasing at www.recyclechain.com .

© 2010

This entry was posted on 3. May 2010 at 03:34 and is filed under Green Procurement. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response or trackback from your own site.

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