SB'22 San Diego - New Speakers, new sessions!

Supply Chain
How to Drive Human Health, Environmental and Social Impacts with Institutional Purchasing

What could be a dry technical presentation on supply chain metrics is immediately derailed, as presenter Scot Case, Training Developer for the Sustainable Purchasing Leadership Council (SPLC), elects to depart from the predetermined slide show, and instead deliver the content in a workshop-style format. So much for a nice, easy-to-write post.

What followed was half presentation, half networking exchange with a common thread of solid experience. There are experts among us - professionals who have helped brands such as Nestlé, Crayola, Cisco and others do things such as install sensors and solar fields, run responsible purchasing audits, and incorporate environmental invoicing into a supply chain.

Case takes it all in stride, as befits a professional whose background extends into the last century. As he put it, "When I started out, we were going to save the world by getting people to buy 10 percent recycled toilet paper. Then, Energy Star looked like a good idea. And before you know it, we were looking at whole life cycle assessments and it got really complicated."

All of which makes him well qualified to share the in-depth story and vision of the SPLC - a non-profit organization with its roots in government purchasing. With membership that includes federal purchasers, state/local government purchasers, colleges and Fortune 500 companies, SPLC represents some $200 billion in spending power.

"Every purchase decision has hidden human health, environmental and social impacts. And there's currently a lack of standardization in how sustainable purchasing is defined, measured and recognized."

He compares the SPLC mandate to that of LEED, and how that organization has helped scale green building. If a standard can be applied across $10 trillion of institutional purchasing, the impacts will be significant; at its simplest, you can improve your footprint by buying more sustainable products from more sustainable companies.

So far, so good.

Then, Case turns the presentation on its head, asking participants if the concept of 'understanding hidden human health, environmental and social impacts' is even relevant to our situation.

And that's where the expertise, passion and character of the Sustainable Brands community rises up. Quotes fly fast and issues intertwine. This blogger's hunt-and-peck typing skills strain to keep up:

"It's all about leverage... Our purchasing team holds the purse strings.”

"But that only works on non-complex supply chains where you don't have enough buying power."

"That's where the NGOs come in... You need the help, from experts in the complex issues."

"Most of the world does not live in America. In other parts of the world, they only care about price."

Every once in a while, Case steps in to make a point with an appropriate slide, then engages the next exchange.

“Legislation is important to get companies that don't want to, following along."

"Legislators and regulators have no idea with what's involved."

"Are we now expecting our procurement professionals to be chemistry experts as well as supply chain experts?"

"We lost a lot of manufacturing expertise when we outsourced everything. We need to regain the technical knowledge we had."

The group even brings some of their own inspiring examples to the conversation.

"You have to be hugely knowledgeable to get things done, or you won't get the results. When we wanted to move to fabric instead of vinyl for banner printing, it started off as being 50 percent more expensive. But we finally got it to them same price as the vinyl."

"I can't wait for the day our customers are asking us for more information. I would like to be differentiated on issues like where a product is manufactured, where the raw materials come from, what the embedded energy is..."

"Are the criteria for post-recycled consumer waste material offshore the same as they are domestically? Not necessarily. "

"Sustainability procurement and marketing exist in different silos. You have to connect source and storytelling."

Beyond strategic spending

After a brief break, Case brings it all together with a more in-depth look at SPLC thinking.

"Professional purchasers don't think like consumers. They're not comparing product by product," Case said. "They are looking category-wide and they have to prioritize. The question to ask is, 'What is most important for your organization to be focusing on?'"

He then introduces the concept of strategic spending, and builds on it with some practical tools for institutional purchasers. For instance, Conventional Spend Analysis looks at:

  • What are we buying?
  • Who is buying it?
  • From whom are we buying it?

But, Case says, that focus can be too narrow. Sustainability Spend Analysis pairs that with:

  • What are the hidden human health, environmental and social impacts associated with that purchase?
  • What areas of purchasing offer the greatest room for improvement in areas like GHG emissions, human rights, water footprint, supplier diversity, social risk and supply chain resilience?

Case then shows a slide that illustrates a further progression of levels of analysis: building from attribute-based, to product-based to supplier-based to impact-based. He then challenges the audience:

"Can you look through the prism of impact to make your purchasing decisions?

This is the essence of the SPLC message: Focus on impact and use data to discover what is most material.

State vs. federal - a data difference with impact

For me, one slide in Case’s PowerPoint was the most telling: The State of California looked at its Top Purchases Contributing to GHG Emissions for the years 2012 to 2015. It discovered that 54 percent of its impact was created in the delivery of healthcare. By comparison, at the federal level, that impact number was only 4 percent.

No doubt there are a lot of other impacts to be discovered when more procurement professionals analyze their impacts with tools such as those offered by the SPLC.

What's Next for the SPLC?

As with any sustainability focused organization, Case seems to recognize the SPLC is on a journey, and he was interested in what the audience had to offer moving forward.

Some participants wanted a better definition of purchasing vs. procurement. Others recommended that a turnkey auditing process would be most useful for busy purchasers.

What is certain is that the influence of institutional procurement will continue to grow, and with organizations like the SPLC pushing for better standards and processes, a more sustainable direction is more than possible.


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