Environmental purchasing: benchmarking our German counterparts.

INTRODUCTION

One need only consider the media attention that surrounded the grounding of the Exxon Valdez and the chemical disaster at Bohpal, or the marketing efforts of firms such as the Body Shop to understand that consumers and individuals are becoming increasingly aware of environmental issues. An ever greater number of firms are becoming environmentally proactive, and are taking the initiative to develop and implement "green" strategies that preserve the environment while enhancing the firm's efficiency and effectiveness. Proactive environmental policies include developing green products and packages, conserving energy, reducing waste, recycling, and creating a corporate culture that is environmentally sensitive. These trends are even more pronounced in many parts of Europe where, for example, regulations are in place that will require manufacturers to take back and recycle not only packaging but also consumer durables such as automobiles.[1] Germany in particular has been identified as the most environmentally progressive nation in the world.[2] Yet there have been relatively few studies comparing the supply chain and operating activities of these more environmentally involved European organizations to those of U.S. organizations.[3]

Besides the interest in environmental concerns by businesses in general, purchasing managers in particular are becoming more focused upon these issues. For example, a recent study by Murphy et al.[4] found that one of the significant logistics strategies for managing environmental issues consists of rejecting suppliers who lack environmental concerns. In addition, case studies and narratives have suggested that there are a number of organizational factors that can impact the management of environmental activities, including the existence of managers who make a sincere commitment and take personal responsibility for organizational adoption of an environmentally friendly philosophy, and the presence of explicit goals, training, and an evaluation system that take into account these activities.[5]

Despite the potential importance of environmental affairs to purchasing management, research that examines purchasing's involvement in environmental activities is only now beginning to emerge. Further, the authors are unaware of any empirical examination of why and to what extent cross-national differences might exist, or of how organizational factors might impact purchasing's involvement in environmental activities.

Purpose and Definition

The role of purchasing in these environmental ventures is a concept that the authors term "environmental purchasing," which is defined as purchasing's involvement in supply chain management activities in order to facilitate recycling, reuse, and resource reduction. The purpose of this article is to demonstrate the key role that purchasing can play in environmental endeavors at both the organization and supply chain levels, to examine the company-specific factors that can impact a firm's environmental purchasing, and to compare environmental purchasing in U.S. and German organizations.

Effective environmental purchasing can contribute to an organization's overall environmental goals and undertakings in a number of ways. For example, at Patagonia, Inc., a manufacturer of outdoor clothing and accessories, purchasing managers identified several sources of recycled inputs. Purchasing then worked with Patagonia's engineers to design fleece outerwear that was less expensive to produce, marketed the outerwear to consumers as being more environmentally friendly, and sold the product at a premium price. Similarly, purchasing can identify packaging that can more easily be recycled or reused. This is an activity that can have a significant environmental impact, since packaging is the primary material disposed of in landfills.