This blog post highlights how supply chain, new ISO14001 and sustainability are linked.
The article “ISO14001 Revisions – An End To Box-Ticking Culture For Sustainable Procurement?” by Mark Plant, CEO of Ecodesk, highlights the new standard ISO14001, which is to be drafted this year and released in 2015. What will be the impact on companies and their sustainability practices?
For a short reminder, the ISO 14000 standard system focuses on environmental management. The International Organization for Standardization defines it as “practical tools for companies and organizations looking to identify and control their environmental impact and constantly improve their environmental performance.” The main goal is to help companies “effectively measure and reduce their environmental footprint”.
ISO standards are not compulsory at all, but it is an excellent sign of good practices and a requirement for most large tenders. Large companies are more likely to go through the ISO certification as they are expected to be leaders in these good practices, toward their customers, suppliers and societal partners.
What are the goals of ISO14001?
- Improves business performance through rational use of resources and processes
- Reduces raw material usage, waste generation and disposal costs
- Lowers energy consumption
- Fosters optimal use of recoverable resources
Although it sounds very theoretical, these standards have shaped numerous sustainability policies and practices.
Companies in the following sectors will be more likely to adopt ISO14001:
- Waste management
- Heavy machinery
- Petrochemical industry
- Agro- industry
- Pharmaceutical and medical sectors
Companies will have to improve their “sustainable procurement strategy”, as mentioned by Mark Plant, “a set of environmental procurement requirements will have to be set and communicated to the supply chain.”
Taking into account environmental aspects (carbon footprint, type of materials, hazardous waste management) becomes a key factor in implementing and maintaining your supply chain, i.e. acquiring goods or services at the best possible cost in terms of quantity, quality, location and time.
How do we link sustainability, supply chain and ISO14001?
We often only think of the supply chain as a one-way path. Nevertheless, ISO14001 reinforces the importance of thinking about the other hidden side of the value chain. What happens to a company’s surplus? Should it end up in a laydown yard or be sent to a landfill?
Surplus asset management, also called “investment recovery” by practitioners, meets the goals of ISO14001, and should be practices complementary to your procurement program.
||Managing your surplus assets
|Improve business performance through rational use of resources and processes
||Identify assets and recover the highest value of idle items
|Reduce raw material usage, waste generation and disposal costs
||Send materials to raw material streams through scrapping and recycling
|Lower energy consumption
||Buying second-hand assets saves on transportation and manufacturing new units
|Foster optimal use of recoverable resources
||Reusing and redeploying avoid manufacturing and buying new units
We can also add to this chart that the investment recovery process provides a full audit trail, required by any ISO standard, mitigates risks and reduce corporate exposure to environmental liabilities.
“Essentially ISO14001 is an opportunity to put in place value chain processes that can have a tangible benefit to the business but the hurdles to jump are higher and for any businesses not prepared to take supply chain sustainability seriously, the road to accreditation could also be a very long one” said Mark Plant. You can reach sustainability by also managing your surplus assets.
Go further with:
Investment Recovery: http://en.wikipedia.org/wiki/Asset_recovery
Sustainability, Investment Recovery and Supply Chain: https://veracityamg.wordpress.com/2014/05/22/article-highlight-sustainability-investment-recovery-and-supply-chain/
Rejuvenating equipment: an alternative to buying new: https://veracityamg.wordpress.com/2014/05/14/rejuvenating-equipment-an-alternative-to-buying-new/
The article “ISO14001 Revisions – An End To Box-Ticking Culture For Sustainable Procurement?” by Mark Plant: http://www.procurementleaders.com/blog/my-blog–guest-blog/iso14001-revisions—an-end-to-box-ticking-culture-for-sustainable-procurement
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