Paradigm Group goes global with Green procurement strategy
By William Atkinson -- Purchasing, 3/13/2008 2:00:00 AM
Harry Brix thinks Green is a very "in" color. "More and more companies are taking steps to become Green," says Brix, director of procurement for Paradigm Group in Syosset, N.Y. Paradigm is a developer and distributor of environmentally responsible janitorial and sanitary products and outsources its manufacturing to a number of contractors around the world.
But developing eco-friendly products requires a list of Green suppliers. And Brix says as Paradigm Group worked to expand its Green supply base, it grew difficult because more and more of these suppliers were using their capacity for higher-end, noneco-friendly commodities.
"For us, global sourcing has become the answer [to finding Green suppliers]," says Brix. "The opportunity for sourcing eco-friendly products from overseas is huge." Paradigm sources products from a number of global markets, including China, Turkey, and several in South America.
The use of online tools has driven a good deal of this work. Brix says Paradigm uses the Web extensively to locate both Green and conventional suppliers and is noticing a marked increase in the number of online resources for locating Green suppliers (see sidebar).
The company also locates potential new suppliers in global markets at trade shows. "In fact, we went to one trade show recently where the whole theme of the show was Green, and we were able to make contact with a lot of new potential suppliers," he says.
With corporate sustainability and environmentally friendly procurement strategies gaining such a focus in recent years, it's no surprise that more and more suppliers are billing themselves as Green. However, whether or not they really are is more of a challenge to determine. After all, a supplier could make one minor change in its business that was deemed eco-friendly, and then claim to be a Green supplier.
"We have to conduct the proper due diligence," Brix says. "The process of bringing on a new supplier can take six to 12 months."
The first step is to obtain a physical sample of the product from the supplier. In some cases, Paradigm will send this sample to a laboratory to make sure it meets the company's requirements and contains what the supplier says it contains.
The next step is a plant inspection. Paradigm utilizes on-site inspections and audits. For domestic suppliers in close proximity, it will usually conduct these inspections and audits itself. For overseas and other distant suppliers, Paradigm relies on third-party inspectors.
Paradigm also provides suppliers with specifications, and they must meet these specifications. "If a supplier is not willing to provide us with the documentation we require, we won't do business with them," says Brix.
In addition, the company is always looking for new sources, and it therefore always has backup suppliers, in case some current suppliers don't continue to meet its requirements, or, for whatever reason, decide to cease production of eco-friendly products.
Pricing is also an issue that must be addressed in Green procurement. Most buyers may be willing to pay a little more for eco-friendly products, such as 10–20%, according to Brix. "But when we go out to bid, we also have to remain competitive," he says. "For example, if a supplier can offer a product that qualifies as recycled and is within 15% of the low cost, that supplier will likely win the bid."
Paradigm takes this strategy knowing it can usually pass this along to its customers. "For example, we are willing to pay 40% more for an eco-friendly hot cup, which is a bit high, but it seems to be selling. If the price point moves down, it will sell even better."
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