Archive for April, 2009

Is LEED an important element of retail construction project sourcing and should retail companies pursue certification adherence for their suppliers?

Thursday, April 30th, 2009

According to Wikipedia, The Leadership in Energy and Environmental Design (LEED) Green Building Rating System, developed by the U.S. Green Building Council (USGBC), provides a suite of standards for environmentally sustainable construction. Since its inception in 1998, LEED has grown to encompass more than 14,000 projects in 50 U.S. States and 30 countries covering 1.062 billion square feet (99 km²) of development area. The hallmark of LEED is that it is an open and transparent process where the technical criteria proposed by the LEED committees are publicly reviewed for approval by the more than 10,000 membership organizations that currently constitute the USGBC.

Individuals recognized for their knowledge of the LEED rating system are permitted to use the LEED Accredited Professional (AP) acronym after their name, indicating they have passed the accreditation exam given by the Green Building Certification Institute (a third-party organization that handles accreditation for the USGBC.

There are many sources of education and certification courses available on line or in the class room. One good source is everblue training institute.

Please support triple bottom line and do your part to hold your suppliers accountable to LEED certification for your construction projects.

We look forward to and appreciate your comments

What is EcoLogo and why should retail companies pursue certification adherence?

Wednesday, April 29th, 2009

In an effort to reduce their carbon footprints support triple bottom line accounting and add some meat to their CSR initiatives, there is not better place to start than ecoLogo certification internally and in partnership with your supply chain and other business partners. It just makes good sense.

About Ecologo

Twenty year old EcoLogo was founded in 1988 by the Government of Canada but now recognized world-wide, EcoLogo is North America’s largest, most respected environmental standard and certification mark. EcoLogo provides customers – public, corporate and consumer – with assurance that the products and services bearing the logo meet stringent standards of environmental leadership. EcoLogo certifies environmental leaders in over 120 product and service categories, helping customers find and trust the world’s most sustainable products.

The EcoLogo Program is a Type I eco-label, as defined by the International Organization for Standardization (ISO). This means that the Program compares products/services with others in the same category, develops rigorous and scientifically relevant criteria that reflect the entire lifecycle of the product, and awards the EcoLogo to those that are verified by an independent third party as complying with the criteria.

The EcoLogo Program is one of two such programs in North America that has been successfully audited by the Global Eco Labeling Network (GEN) as meeting ISO 14024 standards for eco-labeling.

Do your part and hold your suppliers accountable EcoLogo certification.. To learn more please visit the EcoLogo website.

We look forward to and appreciate your comments.

What does the low carbon fuel rule now proposed by California and sure to follow in other states mean to retail companies ?

Tuesday, April 28th, 2009

The State of California on April 23rd adopted a first-ever rule to slash carbon emissions in automotive fuels, and spur the market for cleaner fuel alternatives. This also impacts all types of diesel fuel used to move or global supply chain..

A little education is probably in order as you consider how low carbon diesel may evolve because it is headed at us like a freight train.

The California rule for the nation’s largest market for transportation fuel will require fuel providers to demonstrate reductions in global warming pollution per unit of energy delivered, regardless of fuel source. It is no surprise that transportation-related emissions which are responsible for nearly 40 percent of the United States’ total global warming pollution is driving this initiative in California and similar plans world wide. Simply stated, companies need more efficient transportation choices, fewer transportation miles and lower-carbon fuels. Simply stated, lower carbon fuels generate significantly less heat-trapping gases per unit of energy delivered than today’s petroleum-based gasoline and diesel.

Some promising work is being done on diesel products that will certainly fall within the lifecycle of the California ruling.

A new report from the US Department of Energy (DOE) National Energy Technology Laboratory (NETL) concludes that coupling a Coal to Liquids (CTL) process with carbon capture and sequestration (CCS) yields a fuel with 5-12% less lifecycle greenhouse gas (GHG) emissions compared to the average emissions profile of petroleum-derived diesel, based on the US national average in 2005. These synthetic fuels are economically competitive with petro-diesel when the crude oil price (COP) is at or above $86 per barrel (based on a 20% rate of return, in January 2008 dollars, with a carbon price of zero). I’m sure most of us agree that by the dates suggested in the California legislation and sure to include diesel fuel that oil prices will once again rise to much more than $86 per barrel.

Is is critically important that those responsible for sourcing fuels stay involved and aware of the rapid changes within the petroleum and fuel market places.

We look forward to and appreciate your comments.

There are number of ways to impact your total carbon footprint. How GREEN is your toner purchasing?

Monday, April 27th, 2009

Do you remember the days when the toner for your printer would run low and shaking the container almost always resulted in getting you and everything else around you covered with black soot that would not come off?

A common sourcing event in the office supplies space is that of toner cartridges for laser printers. The majority of toner sold is made from petroleum based products. Another common practice when sourcing toner is to source recycled toner cartridges. We are all aware that recycling is a good thing.

There is a less expensive and greener alternative today that not many companies are considering yet. That is the use of toner derived from soybean oil. In fact, soy based toner can be as much as 20% less expensive than traditional toner that is based on petroleum products. Recycled petroleum based toners are still less expensive than new soy cartridges. Another benefit to soy based toner is that paper printed with soy based toner is also easier and less costly to recycle.

A very simple four step process for adding soy based toner to your next e-negottiioan event is as follows.

1. Add a question to your RFI as to whether or not your prospective or incumbent suppliers carry soy based toner products.
2. Include a line item in your event for an identical specification of soy based toner for each petroleum based line item.
3. Ask for pre event samples of soy based toner.
4. Test the toner sample for volume and print quality.

The above process may also allow you to evaluate companies you wish to do business with in the future that are more flexible and support your environmental social responsibility initiatives by offering these types of green alternatives.

This simple process supports the reduction of petroleum based products, supports the environment and may in fact save you some money. Best of luck.

We look forward to and appreciate your comments.

We should all be as angry as hell at companies who continue to reduce costs the same old way.

Friday, April 24th, 2009

Deloitte /Forbes Insights survey shows some results that should concern us all.

I was listening to the radio today and heard that a local supermarket chain would be closing some stores. The number and location of the stores was not mentioned as the news was relatively fresh. The reasoning surmised by the reporter was that this was a response to the current economic condition as a way to reduce losses and shore up earnings.

As a manager, this author has never agreed with this type of response to tough times. It is typically taught MBA management style ands seems like the only response that senior management ever has to reducing costs and improving earnings.

In support of my opinion (and it is just that, My Opinion) a snap shot of the aforementioned survey was published in the Thursday April 23rd USA TODAY MONEY Section. The results are interesting. The research was conducted January 8th through January 30th of this year amongst 326 senior business leaders and human resource executives as to the top workplace changes to reduce costs. The top changes were as follows.

1. Restructuring Jobs 52%
2. Headcount Reduction 39%
3. Bonus Reduction 35%
4. Hiring Part time Employees 31%
5. Promoting Early Retirement 28%

During this earnings season, these five categories will be rolled out regularly to justify losses and answer queries as to what companies plan to do in order to improve earnings over the balance of the year. Excuses, excuses!

It’s interesting to me that reduction in cost of goods or procurement related expenses is not mentioned as a top initiative. It is entirely possible to reduce costs and expenses immediately that will result in earnings improvements of up to 100%. I have posted on this subject a number of times. When cost of goods exceeds 70% and suppliers are looking for new business opportunities it does not take a rocket scientist to figure out where to focus their energy. We will be glad to prove this to any company that wants to retain employees and still improve earnings.

We appreciate and look forward to your comments.

Ron Southard

Environmental baby steps are a good thing. So, there is no need for criticism.

Wednesday, April 22nd, 2009

Plastic bag manufacturers announce long range recycled content plan.

I was reading April 21st article in USA TODAY by Bruce Horovitz titled Plastic Bag makers get into recycling. In the article a quote from the Earth Day Network surprised me. Kathleen Rogers the President of Earth Day Network called the announcement annoying and transparent. She went on to say that the death knell has sounded for plastic bags and the manufacturers are just trying to continue to make a bad thing. Ouch!

These comments seem like politics as usual to this author. Our company is very focused on safety and environmental standard adherence in the supply chain. We well understand the waste created by non recyclable or disposable bags. We also understand that baby steps are necessary to progress. In this case the manufacturers are taking some. Is it enough? Probably not. If it is not enough, manufacturers will be forced sooner rather than later to do more. In the meantime, let’s applaud any movement and hold them accountable to at least what they are committing to. For those companies that want to do more, they can stop purchasing plastic bags and offer reusable bags at a reasonable cost. For consumers that care, they can stop using plastic bags in favor reusable bags.

In the present economy, for a company to offer to spend a significant amount of money to reengineer the products to the benefit of the environment is not such a bad thing.

As always, we look forward to and appreciate your comments.

Retail collective buyer organizations and consortiums need to evolve.

Tuesday, April 21st, 2009

These business structures have been around for a long time. Many have evolved to use cutting edge e- procurement tools. Do their retailers also benefit from their use of these tools in order to reduce their net landed costs in every way possible?

These types of organization can go by many different names such as wholesaler, collective buyer, consortium, cooperative, share groups and more. They all have one thing in common. They consolidate purchasing volumes for a wide array of groups that may have very similar business structures, but for the savvy consortium can also be wildly different.

In the retail vertical, companies may actually belong to several different buying groups because their primary group does not offer expertise in a certain area.

Consortiums need to evolve and also focus on a mixed market where it makes sense. In general consortiums tend to be vertically focused such as a drug industry consortium with the members generally representing the drug industry only. However some consortiums are beginning to market them selves outside of the vertical to retailers or other companies who want to take advantage of expertise that the consortium possesses in the categories that are common across more than their own vertical and offer increased volumes. An example might be drug stores sourcing very similar products that health care organizations like hospitals source.

Today’s advanced e-procurement tools make it much easier to accomplish collective buying and aggregating outside of a consortiums initial area of expertise. Large and small retailers alike now have the capability of viewing a much broader universe of suppliers and other companies while also coordinating and participating in collaborative events from hundreds if not thousands of miles away. Suppliers now have an opportunity to earn business they could never compete for in the past.

Retailers should ask their collective buyers how they plan to make the use of these tools available to them and what they have to offer in terms of introductions to other companies for increased volume.

We look forward to and appreciate your comments.

What are LEED Certification and the U.S. Green Building Council?

Monday, April 20th, 2009

Should this be a major consideration of retailers as they source materials for new and modeled brick and mortar locations?

Wikipedia tells us that the Leadership in Energy and Environmental Design (LEED) Green Building Rating System, developed by the U.S. Green Building Council (USGBC), provides a suite of standards for environmentally sustainable construction. Since its inception in 1998, LEED has grown to encompass more than 14,000 projects in 50 U.S. States and 30 countries covering 1.062 billion square feet (99 km²) of development area.] The hallmark of LEED is that it is an open and transparent process where the technical criteria proposed by the LEED committees are publicly reviewed for approval by the more than 10,000 membership organizations that currently constitute the USGBC.

Green building is A sustainable building, or green building is an outcome of a design which focuses on increasing the efficiency of resource use such as energy, water and materials which result in reducing buildings impact on human health and the environment during the building’s lifecycle.

It is this author’s belief that best practices in sourcing has to include holding general and sub contractors accountable to LEED certification among other standards in order to support the efforts of retail and other companies to reduce their carbon footprint and stakeholder safety. LEED is one of over forty certifications that over 300,000 suppliers are held accountable to in the SafeSourceIt™ supplier database. What is your e-negotiation provider doing to support green sourcing?

We appreciate and look forward to your comments.

If a tree falls in the forest and no one is there does it make a sound?

Friday, April 17th, 2009

If a frog swims in your farm pond does it mean your produce contains e-coli?

I was recently reading an article about central coast California growers that have been shooting and poisoning wildlife because over three years ago, wild pigs were linked to a deadly e-coli outbreak of California spinach.

I’m not sure how one goes about testing wild animals or which ones to test in order to determine that they are responsible for contaminating a food product. I wonder if they get tested for rabies at the same time.

The fish and game department released results of that testing this month that indicates that wild life is not the problem many thought it was and that the extreme measures mentioned above are not necessary.

Evidently the spinich that sickened thousands and killed three was grown on a cattle ranch east of Salinas California. This obviously begs the question as to whether or not the cattle were tested or if the farmers are shooting their cattle.

So let’s hope that our underfunded government organizations leave the frogs, deer, birds and wild pigs are to their foraging and we invest our underfunded and understaffed resources in a more logical pursuit of food safety.

While we are talking about wild pigs, let’s also hope that the federal government stops using their relatives (domestic pigs) in crash testing for military vehicle safety.

Sometimes daily events just make you wonder.

We look forward to and appreciate your comments.
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The Food & Drug Administration is criticized for their claims that BPA is safe.

Wednesday, April 15th, 2009

An international group of professionals has found that the FDA’s claim that BPA found in food containers and other household products is safe to be unreliable and have rejected the findings.

As such, procurement professionals should refresh their knowledge relative to purchasing products that contain Bisphenol A.

“Bisphenol A” is a toxic plastics chemical that has inherent risks associated with the human consumption of the product. The following is taken from an excellent organization the Environmental Working Group or EWG’s website.

The mission of the Environmental Working Group (EWG) is to use the power of public information, to protect public health and the environment. EWG is a 501(c) (3) non-profit organization, founded in 1993 by Ken Cook and Richard Wiles.

Our testing of canned foods found that BPA leaches from the liner into the food itself. Sensitive groups such as kids and pregnant women should limit canned food consumption. Beverages appear to contain less BPA residues, while canned pasta and soups contain the highest levels. Rinsing canned fruit or vegetables with water prior to heating and serving could lessen BPA ingestion.

BPA is found in polycarbonate plastic food containers often marked on the bottom with the letters “PC” recycling label #7. Not all #7 labeled products are polycarbonate but this is a reasonable guideline for a category of plastics to avoid. Polycarbonate plastics are rigid and transparent and used for sippy cups, baby bottles, food storage, and water bottles. Some polycarbonate water bottles are marketed as ‘non-leaching’ for minimizing plastic taste or odor, however there is still a possibility that trace amounts of BPA will migrate from these containers, particularly if used to heat liquids.

Risk levels associated with the consumption of BPA can be viewed at the EWG website.

This author recommends that when buying any of the products listed above that procurement professionals ask their suppliers the specific question; do the containers for these products contain BPA? If so, do you have the same product for the same price in container that does not contain BPA?

We appreciate and look forward to your comments