Building the Green Supply Chain

Going green can drive environmental and bottom-line benefits at the same time, but it takes an organizational culture change and a long-term perspective


For the company's supply chain executives, this means that as they think about how to increase the efficiency of Staples' distribution centers or delivery operations, they are also thinking about the environmental impact of their decisions as well. "We're trying to find ways to show people where they can make these linkages and actually not only derive real business value but also do the right thing at the same time." This philosophy has led to a host of initiatives at the retailer, including programs as simple as installing skylights in distribution facilities to cut down on lighting requirements during daylight hours, and as complex as incorporating dual-speed drive motors on conveyer systems with localized controls in the facilities to help reduce energy usage. Through these and other initiatives, Staples has reduced its per-square-foot electricity consumption by close to 15 percent across all its real estate since 2001. The company's goals moving forward include reducing, by 2010, its overall carbon impact by 7 percent on an absolute basis compared to a 2001 baseline.

Green Best Practices at BCH

At Boulder Community Hospital, the organization's green initiatives began at the grassroots when a number of the staff who had been taking recyclables from the hospital to a recycling facility on their own formed a "green team" to set up a formalized recycling process within BCH. They found a sponsor in the organization's chief financial officer, and the hospital's administrators and board of directors subsequently adopted an environmental statement of principles and policies that helped enshrine green in BCH's overall culture. The hospital hired Kai Abelkis as its environmental coordinator in 1999 on a part-time basis, with Abelkis working 10 hours a week for BCH in addition to his full-time job with a recycling company. After two years of working to improve the hospital's recycling program and winning a couple of awards for his work at BCH, Abelkis saw opportunities to expand his work at the organization and was able to convince the hospital's leadership to bring him on full-time.

Abelkis also focuses on culture as a key enabler for the success of green initiatives, specifically on the importance of creating an organizational culture that enables individuals to pursue projects that have bottom-line as well as environmental benefits. "We've empowered people to look at efficiencies and ways to improve upon their departments with the environment in mind," he says. As an example, Abelkis points to George Dempster. When Dempster was the sterile processing director with BCH (he's since left the organization), he realized that about 20 percent of the hospital's waste was so-called "blue wrap," a polypropylene material used to protect patient gowns and toiletries, medical devices and surgical instruments from contamination. Dempster requested and received $120,000 from the hospital's management council to purchase reusable hard containers to replace blue wrap where possible. Within two years, the initiative not only had reduced a significant portion of the waste generated at the hospital's facilities but had also earned back the initial investment and saved the hospital more than $180,000 in blue wrap costs.

BCH also has taken its initiatives upstream, working with its suppliers on environmental projects where possible. Dempster, for instance, convinced Stryker to use custom-made containers for one product that the hospital purchased from the medical devices company, again helping the hospital reduce its blue wrap wastes and costs. Further, Abelkis has promoted green procurement through his work with Novation, an Irving, Texas-based healthcare contracting services company that acts as a group purchasing organization for member hospitals. Abelkis serves on the integrated nursing council at Novation, which in 2007 won the Champions for Change award for the fourth consecutive year from Hospitals for a Healthy Environment (H2E). Novation, which accounted for $31.6 billion in purchases in 2006, works on initiatives that include safer food alternatives, management of pharmaceutical waste, reduction-reuse-recycle initiatives and chemicals management policy on behalf of its members.

In fact, Abelkis envisions a broader role for the GPOs in promoting green procurement by leveraging the members' shared spend in the same way that a channel master like Wal-Mart is able to wield its own massive buying power. Increased GPO involvement in green initiatives could help to drive greater participation across the healthcare industry, which Abelkis sees as key to the long-term success of the green supply chain in his industry. "What's going to sustain this initiative is having the entire industry adopt these principles," he says. "Sustainability has to become part of our decision-making process."

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