Greening your MRO spend

From the December 2020 print edition

Discussions on sustainability are becoming commonplace in many organizations in terms of how an organization presents itself on the corporate stage and to its customers as an environmental ally.

There are largescale initiatives that are visible in the mainstream media, in part due to retailers becoming vocal in their demands for reduced packaging and shifting fleets to greener alternatives such as electric and hybrid vehicles. Luckily, sustainability is possible across many industries in their core operations such as manufacturing, construction and others. MRO (maintenance, repair and operations) purchasing is a prime area of opportunity for an organization to implement or improve its sustainability practices.

Sustainability as a strategy can offer itself as a competitive advantage to customers, employees and shareholders. Customers and employees alike see the positive brand story a sustainable organization offers, which can help attract and retain both new and existing customers and employees. Employees value the opportunity to work for an organization that believes and lives for a larger cause of sustainability. Investors and shareholders directly benefit from cost savings driven from sustainability initiatives such as reduced consumption of hazardous goods and reduced disposal or handling costs; as well as a risk mitigation strategy for maintaining a positive brand reputation.

Incorporating sustainability metrics into MRO contracts should be implemented early on in the process when a contract goes out to tender. A variety of metrics can be included in the tender, such as: percentage of recycled content (eg: paper, oil, plastics); type of recycled content used (eg: consumer versus industrial); ability of the product to be recycled or re-used at end-of-life; not compromised of hazardous materials (such as VOC in paints, CFCs in aerosols); type of disposal needed (special hazardous goods disposal or standard disposal methods); country of origin (for example, local, domestic or global); type of energy used during manufacturing of goods (for example, coal,
oil, electric, solar, wind); shipment methods (rail, truck or air) and finally, having the supplier provide their own sustainability initiatives such as waste reduction, emissions reduction, supporting environmental and conversation causes and so on.

Showing commitment
A key element is to engage suppliers by communicating the organization’s strategy and expectations but also sharing its own best practices and targets to illustrate its commitment to sustainability. Items for consideration include integrating a scoring system with respect to offering sustainable products and solutions similar to the other tender’s criteria such as quality, service and pricing. Other sustainability attributes to include in the tender include use reduction and the lifecycle of products:

Use reduction – reducing the consumption of a product by using one product over another. For example, the case of single-use plastic bags as opposed to using metal containers for disposal or storage of goods.

Product lifecycle – covers the full process from “cradle-to-grave” of sourcing of raw materials (virgin versus recycled), packaging, manufacturing, distribution, servicing, maintaining and disposal at end-of-life. For example, hydraulic fluid made of virgin base oil and shipped across the globe, which requires extensive multi-layer packaging due to excess transportation and generating a large carbon footprint as compared to hydraulic fluid made of recycled base oil and shipped from a local manufacturer with a minimal carbon footprint.

Cost savings through environmental MRO choices is possible when approaching sustainable procurement from a whole-of-life perspective, as compared to just the invoice price. Balancing the long- and short-term costs is what drives the savings for an organization. The initial investment in new equipment or tools may seem like a huge cost, however when amortized over the duration of the life of the equipment the annual cost is reduced. For example, through installing LED lighting or reduced water plumbing fixtures, the average energy and water consumption reduction helps to offset the higher initial investment. In addition to the longer lifespan of the equipment there is less servicing and replacement required.

By sourcing environmentally friendlier MRO supplies, organizations can also save a great deal in disposal and handling fees. For example, when using harsh chemicals to clean equipment, an organization needs to invest in the proper PPE (personal protective equipment) for employees to ensure their safety. As well, the disposal of spent cleaning chemicals needs to be processed by a hazardous waste service. This can be both costly as compared to using gentler chemicals which may not require PPE (or as much) and special disposal.

When commencing a new sustainability sourcing initiative for MRO supplies, there are several third-party certifications that can offer guidance as it relates to a product’s environmentally superior performance as compared to traditional products. Some Canadian and North American certifications include: Forest Stewardship Council (paper products); CSA Sustainable Forest Management (paper products); CSA Energy Efficiency Mark (gas appliances, HVAC); ECOLOGO by Underwriters Laboratories (paint, sealants, disinfectants, hand cleaners); GREENGUARD by Underwriters Laboratories (adhesives, sealants); Energy Star (lighting, HVAC); US EPA (cleaners, plumbing fixtures) and USDA Biopreferred (lubricants, building materials).

These certifications offer assurance that a third-party has rigorously evaluated and confirmed a manufacturer’s claims of being a sustainable product. These certifications can be easily identified as a certification mark on a product’s packaging or can be verified by contacting the respective certifying body.

Making the shift
Best practices for making MRO purchasing more sustainable include ensuring all stakeholders are aware of the strategy and are involved in both the decision-making process as well as in the initial input of the strategy as part of a strong change management process. To ensure success when shifting to sustainable procurement, it is best to start small with simple changes such as switching to greener alternatives on high consumption products like personal protection, cleaning products, lubricants and cutting tools.

For example, Watson Gloves offers the “Green Monkey” nitrile glove which has enhanced biodegradability in landfills of 10 years versus traditional nitrile gloves which degrade in 200 years. As well, O2 Industries’ O2 Curve has protection levels similar to a single-use N95 respirator while being re-usable and having only disposable inner filters, saving space and ensuring N95 availability to healthcare professionals.

Simple Green offers an extensive line of biodegradable and non-toxic cleaning chemicals as well. Cascades offers recycled content paper towels. Lubriplate’s extensive eco-friendly lubricants lineup includes low-toxicity ZF Series hydraulic fluid, biodegradable Syncool air compressor fluids and biobased penetrating oils. Greenfield Industries purchased from customers used high-speed steel cutting tools and processes into new tools.

More extensive sustainability initiatives can also be implemented as part of a long-term strategy with respects to capital investments such as lighting and plumbing. For example, GE’s extensive line of LED lighting combined with motion sensors can assist with reducing energy.

A full line of low-flow and water conserving plumbing fixtures such as toilets, sinks and faucets is available from manufacturers such as Sloan and American Standard. For those organizations that are looking for a turn-key sustainability approach there is the option of engaging a third-party service provider. Such providers offer additional support through an energy audit or other sustainability initiatives such as recycling services or waste diversion programs such as TerraCycle.

Sustainable sourcing within MRO is no longer just a fad. It is now a solid strategy to build a competitive advantage in the marketplace for an organization’s customers, employees and shareholders. There are several tools at an organization’s disposal to assist with implementing a more sustainable MRO procurement program from third-party certification bodies to sustainability service providers and even working with existing suppliers to gain a better understanding of their environmentally friendlier product options.

Mariete F. Pacheco, MBA, PMP is managing director, FRW Services Ltd.