W O R K P L A C E F U T U R E S THE CRYSTAL February 12 th, 2012 With thanks to our sponsors

Sustainable Supply Chain Collaboration Paul Worland – February 2013

My paper today Sustainable Supply Chains and FM Sustainable Procurement- BS8903 Supply chain collaboration-BS11000 Where are we on the journey?

Sustainable Supply Chains & FM Who is the customer? Who can impact consumption? What is the role of FM? How is the supply chain engaged? Can FM make a difference?

Sustainable Development

FM Matters The Facility is at the heart of consumption Do you know what your facility manager buys Do you know how sustainable your supply chain is

Sustainable Procurement Procuring the Future – June 2006 “Sustainable Procurement is a process whereby organisations meet their needs for goods, services, works and utilities in a way that achieves value for money on a whole life basis in terms of generating benefits to society and the economy, whilst minimising damage to the environment”. Sustainable Procurement should consider the environmental, social and economic consequences of: Design; - Non-renewable material use; - Manufacture and production methods; - Logistics; - Service delivery; - Use; operation; maintenance; - Reuse; recycling options; disposal; -... and suppliers' capabilities to address these consequences throughout the supply chain.”

BS8903 Principles & Framework for Procuring Sustainably – Guide World first standard for sustainable procurement practice Builds on current thinking Drafted by Action Sustainability Published September 2010

Objectives Examples of Key Sustainability Issues Environmental IssuesSocial IssuesEconomic Issues Emissions to air (e.g. greenhouse gases, such as carbon dioxide, and other pollutants) Releases to water (e.g. chemical pollution of water courses) Releases to land (e.g. chemical fertilizers) Use of raw materials and natural resources (e.g. sustainable forestry, biodiversity) Use of energy (e.g. renewables) Energy emitted (e.g. heat, radiation, vibration, noise) Waste and by-products (e.g. recycling and waste prevention) Encouraging a diverse base of suppliers (e.g. minority or under- represented suppliers) Promoting fair employment practices (e.g. fair wages, avoidance of bonded labour, workforce equality and diversity) Promoting workforce welfare (e.g. health and safety, trade union membership) Enabling training opportunities and skills development (e.g. apprenticeships) Community benefits (e.g. supporting community groups, volunteering) Fair trade and ethical sourcing practices (e.g. fair pricing policies) Job creation (e.g. green technologies, creating markets for recycled products) Whole life costing Achieving value for money Supporting small and medium enterprises (SMEs) (e.g. facilitating opportunities for small businesses) Reducing entry barriers (e.g. facilitating open competition) Ensuring operating business remains a viable operation able to provide employment Ensuring suppliers’ agreements are at fair and viable margins

BS 8903 Process Foundation Level 1 Embed Level 2 Practice Level 3 Enhance Level 4 Lead Level 5 People Sustainable procurement champion identified. Key procurement staff have received basic training in sustainable procurement principles. Sustainable procurement is included as part of a key employee induction programme. All procurement staff have received basic training in sustainable procurement principles. Key staff have received advanced training on sustainable procurement principles Targeted refresher training on latest sustainable procurement principles. Performance objectives and appraisals include sustainable procurement factors. Simple incentive programme in place Sustainable procurement included in competencies and selection criteria. Sustainable procurement is included as part of employee induction programme. Achievements are publicised and used to attract procurement professionals. Internal and external awards are received for achievements. Focus is on benefits achieved. Good practice shared with other organisations. Policy, Strategy & Communications Agree overarching sustainability objectives. Simple sustainable procurement policy in place endorsed by CEO. Communicate to staff and key suppliers. Review and enhance sustainable procurement policy, in particular consider supplier engagement. Ensure it is part of wider Sustainable Development strategy. Communicate to staff, suppliers and key stakeholders. Augment the sustainable procurement policy into a strategy covering risk, process integration marketing, supplier engagement, measurement and a review process. Strategy endorsed by CEO. Review and enhance the sustainable procurement strategy, in particular recognising the potential of new technologies. Try to link strategy to EMS and include in overall corporate strategy. Strategy is: reviewed regularly, externally scrutinised and directly linked to organisations EMS. The Sustainable Procurement strategy recognised by political leaders, is communicated widely. A detailed review is undertaken to determine future priorities and a new strategy is produced beyond this framework. Procurement Process Expenditure analysis undertaken and key sustainability impacts identified. Key contracts start to include general sustainability criteria. Contracts awarded based on value-for-money, not lowest price. Procurers adopt Quick Wins Detailed expenditure analysis undertaken, key suitability risks assessed and used for prioritisation. Sustainability is considered at an early stage in the procurement process of most contracts. Whole-life- cost analysis adopted. All contracts are assessed for general sustainability risks and management actions identified. Risks managed throughout all stages of procurement process. Targets to improve sustainability are agreed with key suppliers. Detailed sustainability risks assessed for high impact contracts/ Project/ contract sustainability governance is in place. A life-cycle approach to cost/ impact assessment is applied. Life-cycle analysis has been undertaken for key commodity areas. Sustainability Key Performance Indicators agreed with key suppliers. Progress is rewarded or penalised based on performance. Barriers to sustainable procurement have been removed. Best practice shared with other organisations. Engaging Suppliers Key supplier spend analysis undertaken and high sustainability impact suppliers identified. Key suppliers targeted for engagement and views on procurement policy sought. Detailed supplier spend analysis undertaken. General programme of supplier engagement initiated, with senior manager involvement. Targeted supplier engagement programme in place, promoting continual sustainability improvement. Two way communication between procurer and supplier exists with incentives. Supply chains for key spend areas have been mapped. Key suppliers targeted for intensive development. Sustainability audits and supply chain improvement programmes in place. Achievements are formally recorded. CEO involved in the supplier engagement programme. Suppliers recognised as essential to delivery of organisations’ sustainable procurement strategy. CEO engages with suppliers. Best practice shared with other/ peer organisations. Suppliers recognise they must continually improve their sustainability profile to keep the clients business. Measurements & Results Key sustainability impact of procurement activity have been identified. Detailed appraisal of the sustainability impacts of the procurement activity has been undertaken. Measures implemented to manage the identified high risk impact areas. Sustainability measures refined from general departmental measures to include individual procurers and are linked to development objectives. Measures are integrated into a balanced score card approach reflecting both input and output. Comparison is made with peer organisations. Benefit statements have been produced. Measures used to drive organisational sustainable development strategy direction. Progress formally benchmarked with peer organisations. Benefits from sustainable procurement are clearly evidenced. Independent audit reports available in public domain.

Supply Chain Collaboration Bringing together two world class standards BS – BS 8903 Collaboration is the only way we can meet the sustainability challenge Open communication and shared objectives important Changing behaviours It is not just about cost reduction “FM can make a difference”

BS PreparePartner Awareness Executive sponsor Business objectives Business case Identify focus Initial risk assessment Key individuals Working Relationship Governance Partnering charter Joint objectives Processes and plan Joint risk management Measurement Knowledge Identify drivers Benchmark Knowledge map Strategy Risk management Exit strategy Additional Value Creation Define value Functional improvement teams (FIT) Continuous improvement process Innovation groups Staff development Future options PlanPart Internal Assessment Self assessment Constraints Skills / processes Appoint a leader Partner profile Action plan Staying Together Key performance indicators Performance monitoring Health checks Improvement plans Dispute management Escalation Partner Selection Assess partners Strength analysis MAP assessment Evaluate Select partner Joint objectives Exit Strategy Set boundaries Monitor change Establish change Assess liabilities Manage knowledge Review future

Our Sustainable Procurement Use sustainability criteria in our buying process Educate our supply chain Monitor supplier performance Develop and demonstrate a whole life cost approach Sustainability appraisals in key decisions Achieve BS8903 Competent status in 2013 Meet Government buying standards

Where are we on the journey Collaboration 120 people through KAM training 700 people through customer excellence programme Customer feedback reviews Staff feedback reviews Personal Performance Plans to 85% of staff Sustainable Procurement Application of BS 8903 to our supply chain Embedding procedures in our business Measuring our performance

In Summary It is all about working and collaborating together Strategic partnerships Using best technology Using the best supply chain Meeting our customer challenge of Sustainable business practise

Thank You