The Supply Chain / Green Purchasing Overview   Printer Friendly

Environmentally Preferable Purchasing (EPP) or Green Purchasing refers to the procurement of products and services that have a lesser or reduced effect on human health and the environment when compared with competing products or services that serve the same purpose. This comparison may consider raw materials acquisition, production, manufacturing, packaging, distribution, reuse, operation, maintenance or disposal of the product or service (Figure 1).

In the past, many individuals thought of Purchasing and Supply Chain Management (SCM) as a business function with only bottom-line financial considerations. However, for the past 20+ years purchasing and supply chain professionals have worked to link purchasing and SCM with environmental science and management (as well as other academic disciplines) by researching (and applying) the impacts that purchasing and SCM have on social, economic and environmental processes and systems. Therefore, national and international researchers (including researchers at Rutgers University) have been able to investigate all aspects of global marketplace behavior by going into the field to research the complete life cycle of products and services (from raw material extraction, to packaging, shipping, transportation, use/application, disposal and reuse). By understanding and researching purchasing and the supply chain in this way, purchasing and supply chain professionals hope to demonstrate and apply the benefits of integrating social, ethical and environmental indicators and criteria upstream (where purchasing decisions are made), which have multiple downstream impacts (including better policy and technological enhancements as well as identifying pollution and waste prevention opportunities and discoveries).

Research in this area has consistently shown that professional purchasers and SCM managers who consider environmentally preferable criteria in the procurement process (or early in the supply chain sequence) have the power to reduce or even eliminate waste and environmental impacts as well as reduce costs. In fact, global experience and examples show how environmentally preferable criteria early in the procurement process improve the organizations’ environmental performance, while addressing ethics, social regeneration and economic concerns.

In addition to improved environmental performance, many ‘green’ products work as well or better than traditional products and can even save money. Switching to safer cleaning products, for example, can reduce incidents of allergic reactions, asthma, burns, eye damage, major organ damage, and cancer connected with the hazardous chemicals used in many traditional cleaning products. Buying 100 percent recycled-content paper can reduce energy use by 44 percent, decrease greenhouse gas emissions by 37 percent, cut solid waste emissions in half, decrease water use by 50 percent, and practically eliminate wood use. Similarly, energy-efficient vehicles and renewable energy cut greenhouse gas emissions and harmful air pollutants while lessening our dependence on imported oil. Overall, the implementation and integration of green purchasing concepts constitutes a system-wide process reform that collectively contributes to an organization’s reduction in ecological footprint (cumulative associated ownership to global ecological damage stemming from a demand for natural resource to sustain economic and social balance).

Green purchasing can allow an organization to offset financial and environmental risk, rather than inheriting it from their suppliers. Alternatively, organizations may want to involve their suppliers at the design stage or develop a network to pre-qualify suppliers that have responsible environmental management. Assessments and benchmarking can aid an organization with the process. Green purchasing can bring important benefits for its practitioners: risk management, eco-efficiency, stronger supplier relationships, and improvements in environmental performance, just as a start.

Pollution Prevention, Waste Prevention and Environmental Impact Considerations:

Why Focus on Purchasing and Supply Chain Management?

Supply chain management is an interdisciplinary field that emphasizes cross-functional links and seeks to manage those links to enhance a company’s competitive advantage. It involves forecasting, resource allocation, production planning, flow and process management, inventory management, customer delivery, after-sales support and service, and a host of other activities and processes familiar and basic to business. Competitive pressures are intense. Sophisticated techniques have been devised to expedite information flow, including on-board computers for trucks and ships, satellite tracking systems, and the electronic transmission of order and shipping information.

An increasing number of companies rely on supply chain management as a key competitive weapon. Large and small businesses alike have reported astounding results, including dramatic reductions in cycle time and accelerated cash flows. The magnifier effect is stunning: a $1 reduction in cost from supply chain efficiencies is equivalent to a $12 increase in sales revenues.

An understanding of supply chain management is an asset to any manager, and there is a strong demand for specialists in the area. Managers attracted to SCM are impressed by the variety and challenges in the field, its sophisticated technology, and its importance to the overall economy and the global marketplace. Entrants to the field look forward to an entrepreneurial environment and opportunities to deal with a wide array of people from a variety of organizations. SCM managers also like a hands-on approach. They use sophisticated decision tools, yet they can always envision the underlying physical processes—processes that are familiar enough to be taken for granted, yet subject to managerial initiative and rapid change.

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