2010 Green Supply Chain Awards

'Sustainability Becomes Strategic'


By the Editors of Supply & Demand Chain Executive

Amidst all the belt-tightening of the post-Great Recession economy, sustainability has remained an important priority for a large number of enterprises, as evidenced by a number of studies released this year that found "green" and sustainability high on the corporate agenda. For example, the "2010 Global 500" report from the Carbon Disclosure Project found that 85 percent of leading global companies surveyed have board- or senior executive-level responsibility for climate change and nearly half now embed climate change initiatives into the overall business strategy and across the organization. A review of other studies from this year produced the same message: Leaders are forging ahead with a range of sustainability initiatives that are having a direct impact on the supply chain.

With the 2010 Green Supply Chain Awards, Supply & Demand Chain Executive magazine is recognizing these leaders for their work in making sustainability a core part of their supply chain strategies. The Awards also highlight a variety of approaches to sustainability and the range of strategies and solutions that companies are employing to incorporate sustainability into the supply chain. And, finally, the Green Supply Chain Awards puts the spotlight on concrete results that many of these leaders are seeing thanks to their sustainability initiatives.

Supply & Demand Chain Executive collected 120 submissions for the 2010 Green Supply Chain Awards through an open nomination process. Nominations were made in two categories: companies implementing sustainability strategies within their own supply chains, and providers of supply chain solutions and services that are assisting their customers in achieving sustainability goals. The magazine's editorial staff reviewed the submissions based on the clarity and content of the goals and strategy, the extent of the steps being taken, and the impact of the results to date and projected results.

The recipients of the 2010 Green Supply Chain Awards are listed below, along with summaries of their projects.

Featured Leader
Kaiser Permanente Makes Environmental Stewardship a Core Business Value

Headquartered in Oakland, Calif., Kaiser Permanente (kp.org) is the largest nonprofit healthcare system in the United States, with more than $40 billion in revenues and $14 billion in spending with suppliers. Driven by its organizational mission to improve the health of its members and the communities it serves, Kaiser Permanente has put sustainability at the center of its business and its supply chain strategy. "Our mission and principles, and our focus on prevention and health promotion, make environmental stewardship a natural core business value," says David Hearn, vice president for IT and facilities procurement and supply, environmentally preferable purchasing, at Kaiser Permanente.

The governance structure for sustainability at the organization is led by its Environmental Stewardship Council, the stated mission of which is to maximize the organization's ability to affect positive change in reducing health risks associated with environmental factors. The Executive Committee under the Council features C-level representation, including the chief procurement officer and chief compliance officer, as well as the environmental stewardship officer. The Council's Working Group includes functional representation across Compliance, EH&S, Facilities Services and Procurement & Supply, but also Brand Marketing, Human Resources and medical groups, so that doctors and nurses are part of the process and ensure a holistic view as the organization looks at solutions.

Within Procurement & Supply, sustainability is managed by the CPO (vice president, procurement and supply) and the executive director for procurement and supply, as well as the environmental supply chain manager. Having a dedicated staff member who has subject matter expertise in environmental issues within the healthcare setting enables deeper and broader penetration of the program within Procurement & Supply. In addition, sustainability is managed as both a top-down process, with the requirement of annual goals and performance against expectations; and bottom-up, with individuals encouraged and enabled to identify opportunities that they have the power to impact.

Kaiser Permanente's environmental team has documented significant benefits from its various initiatives, publishing 14 internal success stories in 2009 alone to inform key audiences within the organization of the results. Those accomplishments included energy conservation (61 million kWh/year), fuel conservation (19,500 gallons), plastics savings (330 tons), waste eliminated (2,050 tons), and mercury and PVC reduction. In all, the Procurement & Supply team documented $20 million in savings as a result of the sustainability initiatives. "Many people think it costs you extra to have environmentally preferable products or services, which is not the case at all," notes Hearn.

In May 2010 Kaiser Permanente extended sustainability into its supply chain when it became the largest healthcare organization to announce that it would require its suppliers to provide environmental data for $1 billion worth of medical equipment and products used in its hospitals, medical offices and other facilities. Eventually the scorecard is expected to influence as much as $10 billion in medical purchasing. "Kaiser Permanente recognizes we can improve health today and for the future by taking a close look at the products we purchase," said Dean Edwards, CPO with the organization, in announcing the scorecard. "With Kaiser Permanente's size and influence, the work we're doing is continuing to move the industry."

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