GSK pushes Green buying backto the product design stage
By William Atkinson -- Purchasing, 1/15/2009 2:00:00 AM
R. Gregg Brandyberry had a stark realization recently. The vice president, procurement, global systems and operations for GlaxoSmithKline determined that many companies—perhaps more than most realize—engage in Green initiatives not to help the environment directly, but rather for brand recognition, public relations, consumer satisfaction, or even a move toward self-regulation as a way to avoid government regulation. All of which is well and good when the economy is thriving but can and will companies maintain this stance in tough times? As the current financial markets continue to struggle, Brandyberry believes that it may become more difficult for these companies to continue their Green initiatives, given the shortage of capital, which could have a long-term impact on the supply chain.
Such is not a problem for GSK in Research Triangle Park, N.C. though. For one thing, the company has an unwaveringly strong commitment to corporate responsibility, including environmental issues. For another, the company has found a way to do so profitably. For GSK, environmental initiatives are a source of profit, not cost.
One of the company's policies is titled Environmental Compliance and Commitment. It has four elements, and everyone in the company is responsible for following them:
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Operate GSK business in an environmentally and socially responsible manner.
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Commit to continuous improvement in GSK's environmental performance.
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Comply with all legal requirements.
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Make environmental stewardship integral to all business processes, planning, and decision-making.
"For most people in GSK, this relates to a lot of things they do internally in the company," he points out. "For us in procurement, this also extends to suppliers."
In terms of product design, GSK utilizes a five-module strategy to ensure Green products are incorporated in product development from the earliest stage.
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A Green Chemistry/Technology Guide offers guidance to the company's scientists and engineers on how to utilize green chemistry in product design applications.
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Materials Guides offer information on Green-friendly materials for products.
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The Green Packaging Guide is a packaging assessment tool and business process to evaluate and select Green-friendly packaging options. One segment, known as WRAP (Wizard for the Rapid Assessment of Packaging), allows these assessments to occur more quickly.
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Fast Lifecycle Assessment for Synthetic Chemistry (FLASC) is a web-based application that allows scientists to perform streamlined evaluations of the lifecycle environmental impacts of new or existing processes, such as the mass of materials used, energy required, and greenhouse gas equivalents.
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The Chemicals Legislation Guide (CLG) anticipates various chemical-related legislation around the world, allowing GSK scientists to begin working on ways to phase out certain substances before legislation requires it.
Procurement, of course, is actively involved in these initiatives. Packaging in particular is one place where the organization has experienced significant success. For example, GSK has a large nutritional business in the U.K., the majority of which are bottled products. One is called Ribena, a fruit juice drink. Another is called Lucozade, an energy drink.
"Two or three years ago, we began using some recycled PET in the bottles," reports Brandyberry. "We eventually got to 100% recycled PET." This saves between 7,500 and 10,000 tons of CO2 annually. GSK also worked with suppliers to reduce the amount of material being used in the bottles. Together, the company and its suppliers were able to develop a new bottle sleeve that is 25% lighter, and also eases removal and separation at recycling facilities.
Since 2000, GSK and its suppliers have found ways to remove a total of 8 grams from its 500 ml Lucozade bottle. This has helped to reduce PET use by almost 600 tons, which reduces the carbon footprint by almost 3,000 tons of CO2, and saves GSK $120,000.
GSK also found ways to remove 7 grams of PET from the 500 ml bottle of Ribena, which saved 350 tons of PET, 1,700 tons of CO2, and generates a savings for us of about $70,000.
At the same time, GSK began working with communities to collect used bottles to make sure they were being recycled properly. Recycling is now at 95%, leading to significant Green benefits and savings.
As a result of these efforts, GSK won the Big Tick in 2008, an Awards for Excellence presented by Business in the Community, given to companies that are engaged in responsible business practices. Business in the Community is comprised of over 800 U.K. companies committed to having a positive impact on society.
GSK is also involved in "lightweighting" its paper packaging. "We are getting big savings here," Brandyberry says. "We also make sure that we bring in paper and board that is environmentally aligned, including recycled content, and making sure that the paper comes from certified forests."
Efforts go beyond packaging, though. Procurement works together with R&D, manufacturing, and EH&S to set Green targets for energy usage. "There is a strong collaboration across these groups," he states. One goal is to reduce energy usage from operations and transportation by 20% per unit sales by 2010 (from 2006 levels), and by 45% by 2015.
Each GSK plant also has a "vision factory," which allows employees and visitors to see how the plant is performing in areas such as waste reduction, energy consumption, and water usage.
"We have a number of different projects in place to address energy conservation and alternate energy systems that we plan to deploy," states Brandyberry. "These have some significant capital investments on the table."
Over the next year or so, he adds, GSK procurement will evolve from managing a large number of individual projects to utilizing a holistic approach. "This will affect everything we do in procurement," he concludes.
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