Sustainable procurement<\/a> provides tools and tactics for enacting part of the strategy.<\/li>\n<\/ul>\nInnovation<\/strong><\/p>\n\n- Every organisation has established mechanisms for reviewing what it does and how it does it. Sustainability provides a new mechanism which looks at different inputs and thus produces different outputs.<\/li>\n
- Improvement is incremental whereas innovation is radical and transformational. Small cost savings can be achieved with incremental improvements, large-scale austerity cuts require radical approaches<\/li>\n
- Philips send electrical engineers on sustainability masters level degree courses so they can design better future-proof products<\/li>\n
- Innovation is often the preserve of research and development or those in senior management. Organisations become truly transformational and adaptive when staff at all levels are enabled and encouraged to innovate<\/li>\n
- Beauty in design often comes from constraint. Imposing new constraints presents new opportunities for beautiful solutions.<\/li>\n
- Stakeholders should contribute to product, service and process innovation. This can be achieved during the procurement process by stipulating the problem and not the solution. This encourages supply chain innovation therefore placing the challenge with those that have the technical expertise.<\/li>\n<\/ul>\n
Process Efficiency<\/strong><\/p>\n\n- It is, in essence a shortening of the distance between the start of your activities and customer satisfaction.<\/li>\n
- All organisations, systems and processes have multiple drivers. Cost is just one of these. If a process has already been cost optimised yet further savings are needed there are two options: A) Radically re-engineer the process B) Terminate the process.<\/li>\n
- Delivering projects to budget is now even more crucial than ever. Generating project processes using sustainability principles will assist. For example; the Birmingham Construction Partnership delivered regenerative construction works. In supporting Birmingham City Council, the Office of Government Commerce and the Local Government Task Force enabled an innovative approach to the project that has harnessed sustainability within procurement. The benefits have seen a 52% improvement in projects delivered to time and a 29% improvement in projects delivered to budget.<\/li>\n
- A sustainable approach may be to explore staff retention and redeployment over redundancy. However, it is acknowledged that to achieve organisational sustainability, strategic redundancy may be necessary on occasion.<\/li>\n
- Ford Motor Company has always been a keen advocate of business sustainability. This has resulted in step changes to society and industry. Providing transport and independence to the masses required ingenuity. Ford pioneered the production line process but also and less well known were its experimentation with soy based materials and ethanol with the Model T. In another example of forward thinking the crates used to ship the Model A truck were dismantled at its destination and became the trucks floorboards.<\/li>\n
- The UK Government?s Department for Work and Pensions (DWP) has undertaken a study relating to its grey fleet (business travel using employee owned vehicles) management. They discovered that DWP staff travelled approximately 45 million miles per year and this accounted for 57% total business mileage. The study?s objectives aimed to improve the health, safety and welfare of its staff, seek out business and financial efficiencies and discover environmental improvements. The DWP established a travel hierarchy and policy that provides employees with guidance and has subsequently benefited in the following ways:<\/li>\n
- o \u00a33.6M direct savings;<\/li>\n
- o 3000 tonnes carbon prevented;<\/li>\n
- o An increase of utilised work hours (non-travel);<\/li>\n
- o Enhanced health, safety and welfare;<\/li>\n
- o Promotion of more sustainable modes of transport.<\/li>\n
- Some of the benefits available to organisations adapting their processes are:<\/li>\n
- o Improvements to process that are proactive not reactive and therefore provide continual organisational advantage;<\/li>\n
- o More informed decision making at all organisational levels enabling reduced complexity;<\/li>\n
- o An ability to thrive not just survive;<\/li>\n
- o An aptitude for questioning process validity will achieve improvements in speed and process adoption;<\/li>\n
- o Process adaptation engenders a culture of sustainable thinking that enables efficiency of processes providing organisational longevity;<\/li>\n
- o Acknowledgement of sustainability considerations that impact or have the ability to impact the organisation now and into the future such as resource availability, water scarcity, work force migration trends, organisational opportunities and threats and so on;<\/li>\n
- o Streamlined operational functions;<\/li>\n
- o Supply chain resilience, important as no organisation is an island and indeed most organisations often have critical suppliers that could cause considerable disruption to operation should they fail.<\/li>\n
- Resource Efficiency<\/strong><\/li>\n<\/ul>\n
\n- Every organisational system requires a flow of materials and energy that can be defined as inputs, outputs and by-products. Each input, output and by-product carries a variable quantity of economic, environmental and social consequence and opportunity.<\/li>\n
- Eliminating, reducing and altering the flow of material and energy at each of these points provide considerable opportunities for efficiencies.<\/li>\n
- Add to this the opportunities that can be realised with effective deployment and placement of knowledge, a powerfully efficient organisation is achievable.<\/li>\n
- In essence organisational sustainability assists in achieving more for less. However, it does go a number of steps further. For example, many energy companies are moving ahead of their competitors by using more renewable sources and encouraging consumers to use less. Even though this may appear counterproductive these organisations have realised that to continue to thrive in the long term they need to maintain their resources. In the short term they understand that customers welcome environmental initiatives.<\/li>\n
- Achieving efficiency at input provides greater reduction of economic, environmental and social consequences than efficiencies realised at output or by-product.<\/li>\n
- Peterborough City Council have installed innovative energy saving software on 4,500 PC?s in order to minimise the energy resource that they use. This has resulted in a saving of ?50,000 and a reduction of 250 tonnes carbon dioxide. The payback period of the software purchase is less than 6 months.<\/li>\n
- Kent County Council have made significant resource efficiencies with LED traffic lights and important improvements to its social and economic performance. Replacing traditional traffic lights with LED?s provides ?1.8M direct savings in the first five years, reduces energy consumption by 70% and as they last for 10 years compared with the 6 months of the tungsten-halogen lamps they replace will result in greater health, safety and welfare and re-deployable resources due to the significantly reduced need to carry out maintenance and replacement. The by-products and outputs are also far more efficient due to the reduction in the number of units to be disposed and associated packaging.<\/li>\n
- Advancements in the field of sustainable procurement are seeking better outcomes with better cost management, both upstream and throughout the product lifecycle.<\/li>\n
- No one organisation operates as an island and systems therefore go beyond the boundary of the organisation. This is where sustainable procurement is gaining momentum.<\/li>\n<\/ul>\n
Checklist<\/strong><\/p>\nThis checklist provides simple questions to help establish whether your organisation is likely to achieve the greatest benefits from necessary austerity.<\/p>\n
Strategy<\/strong><\/p>\n1. Is there a proper strategic approach to corporate sustainability in your organisation?<\/p>\n
2. Are sustainability goals directly linked to and driven by overarching corporate strategy?<\/p>\n
3. Have strategic goals been reviewed in light of recent spending cuts?<\/p>\n
4. Are the resources still going to be available to deliver the strategy?<\/p>\n
Innovation<\/strong><\/p>\n1. Has there been a structured approach for engaging staff ideas for ways to reduce costs?<\/p>\n
2. Are all staff aware of the sustainability strategy and their role in delivering it?<\/p>\n
3. Are staff supported and rewarded for finding efficiencies and better ways of delivering organisational objectives?<\/p>\n
Process efficiency<\/strong><\/p>\n1. Are all business functions that are currently undertaken necessary to achieving the fundamental purpose of the organisation?<\/p>\n
2. Do all business functions enable effective and efficient progression towards the fundamental purpose of the organisation?<\/p>\n
3. Do any business functions exist entirely to facilitate a link between business functions?<\/p>\n
Resource efficiency<\/strong><\/p>\n1. Is the relationship between the outputs of the organisation and that of its inputs acceptable?<\/p>\n
2. Does an analysis of inputs and outputs present an imbalance? For example; unnecessarily high overheads, under-utilisation or significant raw material or energy wastage.<\/p>\n
3. Can comparisons be sought of resource use models at similar scope organisations?<\/p>\n
Conclusions \/ Summary<\/strong><\/p>\nThere is a true synergy between intelligent cost management and some elements of sustainable development. Reengineering systems, processes and organisations to meet sustainability targets can generate cost savings. Reengineering to reduce cost can give rise to more sustainable outcomes. But this won?t happen by accident.<\/p>\n
An organisation can cut costs in a downward spiral of worsening performance or create a virtuous circle where sustainability and cost targets are driven concomitantly for the benefit of all.<\/p>\n