Case 3 B Q Topics Environmental Green Issues Purchasing Supply Strategies Supplier Environ Q33615582

CASE 3: B&Q TOPICS Environmental or ‘green’ issues in purchasing and supply strategies Supplier environmental audit The DIY retail chain, B&Q, a member of the Kingfisher Group, is at the fore front of developments with regard to the formation and implementation of green’ purchasing and supply strategies in relation to environmental issues. At first sight, it might seem strange that a retailer should show such concern for environmental problems. There is a tendency to focus attention on manufac- such as the petro-chemical companies, when thinking about environmental problems. The control of the emission of pollutants that might affect air and water and the safe disposal of waste products are subjects that receive much attention. However, an important aspect of B & Q’s environ- with the purchasing and supply of many of the turing firms, mental strategy is products displayed and sold in its retail outlets. Increasingly, firms are coming under pressure to consciously think out what might be called a from cradle to grave’ approach in assessing the environmen- tal impact of products. This covers stages of obtaining natural raw materials, manufacturing processes, retailing of products, products in use and disposal of products at the end of their life. Government legislation, such as the 1990 Environmental Protection Act, and European Community initiatives fo labels’ and ‘eco-audit regulations’ are providing pressure for firms to do so. In r influence and public concern for products that are environ- mentally friendly are forces that firms cannot afford to ignore. While controversy over the value of being assessed by third parties in relation to the standard for quality management systems (BS $750, ISO 9000, EN 29000), a new standard, BS 7750, has emerged. This operates in the same way for en vironmental management systems. Other European partners have made faster progress than the United Kingdom in some areas. Germany, for instance, has introduced regulations to increase the recycling of materials ahead of European tion, customer Community legislation. B & Q, however, took the initiative itself and decided actively to develop an environmental policy as a long-term strategy, even though it did not expect an immediate short-term payback. A corporate responsibility for the environment has implications for its purchasing and supply activities. When considering the potential impact of products on the environment, it became clear to B & Q that a number of key raw materials embodied in its product range had significant environmental implications. Timber is one particular case that can be examined in more detail. The purchasing strategies adopted to minimise the environ- mental impact can then be investigated. As regards timber, most publicity has tended to focus on the destruction of tropical rainforests, as the result of indiscriminate felling of hardwood trees, 321 Part Two The implications of purchasing and supply chain management strategies and on the failure to make good use of the areas that have been cleared. Destruction of the environment seems to be the long-term consequence of the pursuit of short-term profit. However, from B &Q’s point of view, softwood timber products from the temperate forest zones are more important. Doors, cut timber and garden furniture are typical products sold by B &Q. Is it pos- sible to supply such products to satisfy the demands of customers and still protect the environment? This is the fundamental environmental question that confronts a firm like B & Q In 1991, the board of B &Q decided to adopt the 1995 target of the World Wide Fund for Nature (WWF), and buy timber from sources that were well managed and where a policy of sustainable production was pursued. Providing a continuous yield is one aspect of sustainable production, but, in addition, good management should also take into account the need both to maintain the balance of plant and animal life and to provide benefits to local populations. This policy means that B & Q has to be able to trace its timber supplies back to their original sources, and then ensure that these sources are being managed in a proper manner To achieve the first objective of traceability, B & Q has introduced a supplier environmental audit questionnaire, which timber suppliers have to complete. These suppliers can extend the analysis to their suppliers as well. Visits to sup- pliers and to the forest areas, as well as seminars, helped to increase general understanding of the problems. Experimental projects are being funded to study the viability of sustainable timber production. The idea of independent certification is being discussed as a way of proving that satisfactory forest man- agement standards are being maintained by sources. Similar approaches are being applied by B&Q to other product areas and the audit procedure has been used with over 200 suppliers. Packaging is another area that receives close attention, in order to look for ways of reducing the amount of packaging needed and to increase the amount of material that can be recycled. Buyers are becoming more aware of the environmental issues associ- ated with the products for which they have responsibility. Environmental criteria are being included in the assessment and selection of suppliers. TASKS 1 What reasons might be used to justify the introduction of ‘green’ strategies 2 Select a company and make an assessment of the potential of its operations in purchasing and supply arrangements? to cause ‘environmental harm’. Do the same for both its major ‘upstream suppliers and its downstream’ customers. 322 Show transcribed image text