Extreme weather events worldwide -- floods, droughts, fierce storms -- seem to suggest climate change is now the predicted climate crisis. The media is full of dire scientific predictions about the fate of our planet. Organizations can reduce their impact upon their own environment, both directly and indirectly and leverage some simple strategies for doing so. Within that, any battle against climate change can empower a potential new and very challenging frontier for contracting. Organizations are on the frontline of this battle, and they need to start thinking carefully about every potential action and decision that will directly and indirectly impact the environment.
To help organizations do this, I created a simple mnemonic titled STOP WASTE. A mnemonic is a pattern of letters, ideas, or associations that helps us remember something. STOP WASTE, supported by the concept of Value Analysis (VA),1 is the study of the relationship between the design, function and waste of any product, material, or service in worldwide use today. STOPWASTE seeks to reduce all wasteful environmental realities by either modifying the design or material specifications, or by using a more efficient manufacturing process or by possibly substituting a related item or service.
STOP WASTE principles can help you win the battle against climate change.
Use standardization to keep it simple. Variety is the enemy of waste reduction programs. Two examples are excess inventory, wherein each type of product must be stored and too many contractors expected to provide a variety of solutions. The standardization process can start with using a limited number of universal specifications agreed between contract specifications and the stakeholders. Often, variety results from a policy reflecting the lowest cost solutions. Therefore, it is vital to use the existing materials’ significant coding systems to help identify marginal differences among items, because these items will be highlighted by the similarity of the code. For example, codes 75421 and 75422 may only be a difference of color or packaging.
Consider changing your transportation practices. Many times, we discover that goods are being delivered via a transport that has not really been evaluated according to environmental impact. Organizations could use low carbon footprint systems without significantly reducing service levels. For example, consider goods once urgently needed had to be delivered via couriers. Although this has mostly changed, the use of a high carbon footprint continues. Maybe these items can be delivered via the postal system.
Alternatively, on the plus side are drones that emerged recently as a disruptive, yet desirable technology in the logistics and transportation industries. Drones' capacity to fly across tough terrain and reach remote sites has made them appealing to many organizations. In fact, using drones is now becoming part of the distribution system along with electric vehicles.
Make sure contracted goods or services fit their stated purposes. In other words, they are over-specified and perform above and beyond the known needs. As a result, stakeholders might be tempted to specify goods and services that have greater capacity than the situation requires. Gold plating refers to unnecessarily adding extra features, functionality or enhancements that are beyond a product’s agreed-upon requirements. This gold plating might represent more unjustified waste.
Ensure your packaging is environmentally fertile. Packaging is expensive and has a direct impact upon the environment, especially regarding oil and recycling for plastics. The process of examining the type of packaging, waste, recycling opportunities and utility of packaging should be regularly reviewed, with the full support and co-operation of the contractors and stakeholders. Currently many brands seek to make a wholesale change from plastic to paper-based solutions.
Use local options or substitutes to get stronger benefits. Many UK organizations are moving away from global sourcing to more local options, partly because of the of the Covid and Brexit impacts plus the exposure of our over dependency on these distant sources of supply. The advantage of this localization is a lower carbon footprint. But we must balance this option contractually, case-by-case, because some overseas contractors are more efficient and less wasteful of resources when delivering the required product or service. This means that the days of cut flowers grown in Africa and flown to UK supermarkets must surely be unsustainable in today’s battle against climate change.
Use lower weight substitute products. Evidence of excessive processing and generally over-engineered products becomes obvious in their gross weight. Using low weight substitutes can be very revealing. Substitute materials should be considered. For example, paper or wood can replace metal or plastic. Excess weight not only implies wasteful use of resources, but also reveals the additional energy required to transport weightier products.
Any unnecessary processing can cause a great deal of extra waste and little added value. This could include the process of embossing a contractor’s name on a piece of equipment via a major review of the whole production process. This method needs the fullest co-operation of the contractor and is often quoted as a major advantage of a progressive and collaborative style relationship between buyer and seller.
Use contractors’ contributions to reduce waste. From a technical point of view, the contractor is in the best position to advise on issues such as design, packaging and processing. Obviously, it is vital to have a close and co-operative relationship with your contractor. Mutual benefit for each side is essential to commit to close and collaborative efforts and actions to reduce waste.
Failure to reduce the contractor’s wastes might result from requirements that may need to be redefined. Consider the case of a snack company that claimed to be first to market paper-based packaging. The contractor unveiled a foil lined paper crisp packet that could be recycled, but foil lined bags take 80 years to break down and decompose!
Consider which is most efficient -- making the product in house or outsourcing it. Often the very complex decision to make the product in house attempts to determine whether the organization has the resources to successfully make a particular item (or provide a service) more effectively than outsourcing. The trend, over the past 20 years or more has undoubtedly been toward outsourcing services. However, recently, a reversal of that trend is to make outsourcing decisions from the perspective of security of supply and reduced environmental impact.
Let’s ask and answer: can we eliminate contracting altogether? Your answer could mean selecting alternatives to outsourcing – possibly specific to leasing or rental options. Or it could mean eliminating the item or service. The key is to ask, “What would be the impact of not providing this service or using it in an alternative format?” Carefully reviewing the item’s added value to the organization may reveal that its contribution is significantly less than the resources it wastes. In this case, total elimination would be recommended.
We need only look behind us to see a potentially dark future. Historically, the West has been not only the main generator of greenhouse gases,2 but also culturally very wasteful in its use of natural resources.3 Some experts say this is due to the readily availability of these resources. They were accessible from all over the world and secured at relatively low cost. For example, why would local authorities build expensive insulated houses when coal was cheap, plentiful and every room had a fireplace? Even today, with disaster4 staring us in the face, the UK government has issued new drilling licences,5 cut back on its loft insulation program6 and commercial house builders’ bulk against installing heat pumps.7
By applying the above examples of STOP WASTE, contract managers can constantly question and review the impact of what and how resources are secured with a strong push to reduce total waste and contribute to the battle against climate change -- a battle the planet must win!
END NOTES
- Value Analytics (VA) definition
- What are greenhouse gases? National Grid
- Steward Natural Resources and Address Climate Change, National Academy of Public Administration, Justice Fairness, Inclusion and Performance
- The Effects of Climate Change, NASA – Earth will continue to warm and effects will be profound
- Hundreds of new North Sea oil and gas licenses to boost British energy independence and grow the economy, UK government news release.
Opposing source: ‘Grossly irresponsible’: UK hands out 24 new North Sea oil and gas licenses to “grant 17 companies the right to drill for fossil fuel…”
- Building regulations for loft conversions in the UK 2024, Greenmatch
- Over half of UK builders unable to advise on heat pumps due to a lack of knowledge, article by e-on.
See also heat-pumps article Commercial Heat Pumps published by heat-pumps
ABOUT THE AUTHOR
Dr. Ray Carter, a second degree connection and second creator of 10C Model is the author of several titles related to procurement and contracting, including Practical Contract Management, Practical Procurement, Stores Management and Contracting Business Models,
Dr. Carter has over 30 years’ experience in training and consultancy (both UK and Worldwide) specializing in Contract & Commercial Management, Procurement, Supply Chain & other related subjects. His company, DPSS Consultants, is accredited by CIPS, World Commerce & Contracting (formerly IACCM), APMG & ISO. Currently, he is working on the new Master Classes regarding his 10C Model and Contract & Commercial Management. During his working career has been fortunate to work with many companies and cultures which has helped him develop successful training courses. See also video about the author.
ABOUT DPSS
Developing People Serving the Supply Chain (DPSS) is an international training and development consultancy made up of 25 plus specialist consultants recognized for their expertise in contract management, procurement, sales and commercial management and supply chain management training and consulting. DPSS has over 30 years’ experience in providing generic and bespoke, tailored, and customized solutions. Their courses are certified by internationally recognized awarding bodies, including CIPS, WorldCC, BTEC and the British CPD Standards Office. Consultants are well known as international Centre of Excellence World class presenters and published experts with many years of practical experience achieving outstanding results.
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