Different types of tools are used in procurement, whether in the private sector or in the federal system. These tools may be simple, such as specific ecolabels (described in Chapter 3), or more complex, such as tracking and reporting software or customized search engines used for purchasing and maintaining inventories. Complicating matters is that there are many different attributes of products, a variety of stakeholders with diverging opinions as to what attributes are important, trade-offs between attributes, a range of methodologies and terminology to define them, and many different technical platforms to convey this information (Figure 4-1).
Edward Rau from the Division of Environmental Protection at the National Institutes of Health (NIH) said that NIH’s success in implementing sustainable procurement will depend on the availability of clear, complete criteria and on data that enable suppliers to access sustainable procurement criteria and distinguish compliant products from others. Success will also depend on purchasers selecting the most sustainable and competitive products in efficiently placed procurement transactions, and on procurement managers collecting and consolidating the acquisition data needed to assess how well the requirements have been implemented. Chris O’Brien from American University described several important factors that should be considered as new tools or technology for procurement are developed: stakeholder engagement, comparative capabilities, ability to integrate with other systems, alignment with policies, and format and aesthetics.
Figure 4-1 The landscape of product sustainability tools.
SOURCE: Anastasia O’Rouke presentation, December 7, 2011.
Three programs familiar to Mr. O’Brien in a university setting are the Sustainability, Tracking, Assessment, and Rating System (STARS),1 Leadership in Energy and Environmental Design (LEED),2 and American College and University Presidents’ Climate Commitment (ACUPCC).3 All three programs are voluntary, Mr. O’Brien commented, and have successfully become de facto standards for universities—a result he attributed to the time invested in engaging stakeholders as the programs were developed. That investment resulted in immediate “buy-in” so that when the programs were released, they were readily taken up by stakeholders. Similarly, the openness of a tool—whether it is public or private in design—is important, he said; for example, the information provided to STARS and ACUPCC are public and available online, but data for LEED are generally not. A program is also informative if it allows benchmarking against peers, Mr. O’Brien added; with STARS or ACUPCC users are rated or provided a score and are able to compare themselves against peer scores in that system.
Mr. O’Brien emphasized that a tool used for procurement needs to be able to be integrated with other systems and especially with financial tools. Ideally, financial decision making and sustainable procurement should be part of the same tool, so that comparisons of data are made within a single integrated system. Also commenting on integration was
Better Sustainable Purchasing Tools:
Integrated with financial systems
Integrated with other sustainability-related systems
Openness - online and optionally public
Aesthetically beautiful to motivate users
Enables behavior change
Chris O’Brien, American University, December 8, 2011.
Josh Saunders from Greencurement, who said that having to use multiple systems for a purchase is a challenge to sustainable procurement. Right now, he noted, one might have to go to supplier Web sites, a certification Web site, internal spreadsheets or an internal Web site, a manufacturer’s Web site, and of course, one’s own procurement systems to gather the necessary information for a single sustainable purchase. Integration is needed so that new tools can share data and information in an accessible and usable fashion, Mr. Saunders said.
Peter Graf of SAP noted that as soon as people have to use systems running at different companies, the process slows down dramatically. These systems should work more effectively with each other, he said. Another important aspect of integration is that procurement is not a self-contained process; it is connected to many components of the organization, such as sourcing, contracting, financing, analytics, and auditing. Procurement tools that incorporate all parts of the process and integrate information on the financial impact would be very useful.
None of the three tools described earlier—STARS, LEED, or ACUPCC-—have attained this financial integration, said Mr. O’Brien; however, they have all incorporated policies that require sustainable purchasing, even though they cover different aspects of it. In developing policy language to enable sustainable procurement of paper, for example, Mr. O’Brien said that in some cases he has to compare and contrast three different sets of guidance.
Usability of tools is also important, he added, noting that STARS is Web-based and straightforward to view and navigate. LEED certifications and ACUPCC, by contrast, are based on spreadsheets, and managing the voluminous amount of data and numerous tabs can make data gathering for these programs challenging. Engaging people with these tools is important, he said; to achieve sustainability goals, people need tools they can relate to and use readily or behavior will not change very quickly.
Figure 4-2 Screenshot of energy efficiency dashboard used at American University.
Source : Chris O’Brien presentation, December 8, 2011.
Well-designed dashboards are another way to represent and foster integration, Mr. O’Brien added, presenting an energy dashboard that incorporates energy purchasing decisions into a graphical display. These data are projected on screens in every building on American University’s campus, and occasionally energy efficiency competitions are held between buildings (Figure 4-2).
EMERGING REQUIREMENTS AND CRITERIA
Tools that are designed to work within or take into account an entire procurement process, not just the purchasing step, will be critical (see Figure 3-1), said Dr. Graf, who commented on emerging functional requirements, or, as he stated, “the evolution of procurement.” Emerging functional requirements are focused on compliance, active management of suppliers, and optimization. Even more important is the recognition
that procurement is not simply one company or organization procuring products from suppliers; rather, it is an entire economy encompassing a network of companies and organizations.
Addressing compliance entails looking at, among other things, the bill of material, which helps to ensure that supplier codes of conduct for regulatory compliance are met, Dr. Graf said. Addressing compliance also often includes aggregating data across an entire network of suppliers. One active management approach is to use a questionnaire or other check-the-box type format, such as that done to generate an Energy Star rating. For example, a company can take the bill of material of what was purchased and, based on data and information related to the material, convert energy use into a carbon footprint.
The optimization stage is a significant challenge, Dr. Graf noted. It requires understanding the complete supply chain for a product, the most relevant attributes, and how those attributes can be compared with those of products provided by another supply chain. Optimization is where comparisons and benchmarks become important. The benchmarks are sometimes between products and other times between suppliers. Dr. Graf commented that the transition from compliance to active management to optimization used to be considered in the context of a single company. It has since expanded to the whole supply chain of that company, and now to entire networks of companies and organizations and their respective supply chains.
Josh Saunders from Greencurement noted that all stages of the procurement process—defining purchasing requirements, contract RFP writing, deciding what to buy, contract administration, compliance, reporting, and measurement—are ripe for tool development.
Tools could be developed to overcome the current barriers to sustainable purchasing, such as information overload, Mr. Saunders said. For example, although ecolabels are important for sustainable purchasing, there are hundreds of ecolabels in the market. Purchasers already need to understand a great deal of information, and new information is constantly being generated. Tools that provide the right information to the right users at the right times would greatly assist procurement professionals, he said.
Related to information overload is the need for procurement professionals to make trade-offs among the different criteria and policies guiding them, Mr. Saunders added. Procurement professionals are primarily focused on optimizing price, availability, and the performance or quality of a given product. A tool is needed to allow sustainable criteria to be integrated into this focus so that procurement professionals can find products that are competitive with or lower in price than non-green products and that perform as well or better.
Procurement Components with Opportunity
for New Tool Development:
Request for proposals (RFPs)
Purchase decisionmaking, e.g., trade offs
Compliance with sustainability policies
Measurement and tracking
Overcoming barriers to sustainability: information overload, cost assessment, and establishing criteria
Josh Saunders, Greencurement, December 8, 2011.
Integration and interoperability are also important, and shared semantics and application programming interfaces need to be developed where appropriate. Interoperability between tools is about translation between tools, said Anastasia O’Rourke of Big Room; it is fundamentally about how what one person says is translated for another person to understand. The potential benefit of making this work is increased data flow and accessibility of information. Another benefit would be increased accountability, because effective interoperability could allow information to be tracked across different systems. It could also allow for an increase in the scale and scope of accessible information and allow for better comparisons, helping purchasers gain more clarity. To move this forward, she stated, purchasers need to identify necessary tools and types of format; develop common glossaries and classification systems or methods for translating between systems; collaborate to map and compare systems; develop data frameworks and reporting templates; develop the ability to export data as appropriate to other systems; and participate in various multi-stakeholder forums. With so many stakeholders interested in sustainability issues, she added, purchasers need to be part of those conversations.
Procurement tools will increasingly incorporate more data into their functions, Ms. O’Rourke said. If, for instance, a tool displays a green button to indicate a good product, the data that helps determine whether that green button should be displayed may be only available elsewhere, or the metric indicated by the button may depend on near-real-time information. Such situations may require access to other systems and real-time connectivity.
Dr. Graf also commented on cloud computing and mobility. More
Figure 4-3 Technical requirements for sustainable procurement.
Source : Peter Graf presentation, December 8, 2011.
and more, he noted, companies want to leverage cloud-based tools and systems in part because they can usually be deployed more quickly. Also, individuals want information to be accessible wherever they happen to be, not only through their desktop computers but from mobile devices. A procurement manager who needs to approve a specific purchase, for example, could see from glancing at his or her mobile device that a requisition is urgent. Figure 4-3 summarizes what many participants described as the technical requirements for sustainable procurement, including data management.
COMMON THEMES GOING FORWARD
During the last session of the workshop, participants discussed major gaps in knowledge for sustainable procurement, positive or negative attributes that characterize sustainable procurement, and what those attributes should be moving forward. The following are themes and issues many participants observed to be relevant and in need of further attention as sustainable procurement continues to be adopted by private and public sector organizations.
• Semantics and units of measurement were raised as an issue, especially regarding relevance and materiality. For example, even if the same unit of measurement is being used for the rating of a given product, the rating and information presented within a single product category are often not reported in the same away across
organizations. Increasing cohesiveness in the measurement and language used, such as by using product category rules, would bring more clarity to ratings and reports on products and be useful to purchasers.
• Certifiers could be urged to disclose more information and data from the companies they are certifying so that the process is more transparent, many participants felt.
• Many participants observed a disconnect between certifications/ ecolabels and outcomes. The actual environmental health or societal impacts of products bearing such labels are typically not tracked and accounted for in any systematic way. A related issue is how inputs relate to the output of certified products, and how products could be designed with more consideration of outcomes.
• Harmonizing definitions on product types or moving toward unique identifiers like a sku number would allow different purchasers and procurement systems to readily identify the same product. This could also improve interoperability between technologies and data sharing among systems.
• In addition to the purchasing phase of procurement, many participants felt that contracting is also important. However, it may not be possible to address outcomes in this context; it may be better to address sustainability concerns by writing constraints into a statement of work. In this case, tracking and evaluating work performance in an effective way would be a more accurate assessment of sustainability practices.