by: Joel Makower
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.
Original Post: http://makower.typepad.com/joel_makower/2006/07/chain_reaction_.html
