How many light bulbs does it take to change a supply chain? In the case of Baxter Healthcare Corp., just three.
When Jenni Cawein, manager of corporate environmental health and safety engineering at the Illinois-based $9.8 billion health-care giant, arrived six years ago, she saw that the company was losing ground on waste. "I asked my boss, 'Who's working with purchasing?' It turned out it was nobody," she says. Cawein set out to build a case for integrating environmental criteria into the company's procurement process.
"I asked what the purchasing department cared about the most," Cawein explains. "I did a lot of research, and of course they care about cost reduction, and had made certain commitments to reduce costs."
Armed with details about the department's goals, Cawein set up a time to address the purchasing staff. At that meeting, she offered an illustrative example involving three fluorescent light bulbs: one cost $1 and was expected to last 2 years; another cost $5 and lasted 8 years; the third cost $2 and lasted 2 years, but used 30 percent less electricity.
"When I ran the actual numbers, including real costs of electricity for all of our facilities around the world, plus labor and disposal costs, and showed them the data, their eyes just opened up," says Cawein. "I showed them that the cheapest bulb would cost us $50 million more than the most efficient bulb."
Cawein's message was clear: greening the supply chain is a strategic, bottom-line issue. Largely as a result of Cawein's light-bulb inspiration, Baxter has embarked on an effort to integrate environmental thinking into every aspect of supply-chain management.
And that's the subject of my column this month in Grist: how companies are using their supply chains to decrease the use of toxic and non-renewable materials, use energy more efficiently, reduce labor costs, and promote greater employee participation in environmental improvement activities.
The Center for American Progress has kicked off a campaign for American energy independence called Kick the Oil Habit. Find out more and take the pledge at www.KickTheOilHabit.org and watch Mark Pike and his buddies try to drive across the US using only ethanol - their video blog is available on You Tube. We need your help - you can make a difference - contribute to the collective genius (and bring a friend). Thanks!
Posted by: americanprogress | July 20, 2006 at 07:10 AM
Joel, Loved your Baxter blog on supply chain. At McDonald's, we're not a manufacturer, but we are driving good environmental management upstream into our supply chain. I recently wrote about our sustainable fisheries program and our work with our packaging supplier. And most recently I did a blog (http://csr.blogs.mcdonalds.com/)about another initiative--our environmental scorecard for suppliers of agricultural products.
While sometimes I think stakeholders have impractical expectation as to how much we can directly influence our suppliers, the fact is we do have influence, and we should exercise it as a part of doing business. Sustainability factors should be side by side with price, quality and availability.
Posted by: Bob Langert | August 28, 2006 at 05:37 PM
Good column, Joel. It's striking how a single, persistent voice from within a company can spark, and then drive, change. I've seen this not just with respect to the environment but with other issues like gay rights.
Posted by: Marc Gunther | August 29, 2006 at 12:29 PM