It's Not Easy Being Green

Many years ago Kermit the Frog of Muppet fame, came out with his hit single (okay, maybe not quite a hit) "It's not Easy Being Green", and for many in the procurement profession the words ring true .

Today, being "Green" or environmentally friendly is in vogue. Let's face it -- Al Gore -- has reinvented himself into the Oracle of Delphi for the Green movement. And to say anything contrary to this movement could result in being shunned.

But how "Green" are corporations in general. Oh yes, everybody talks the good talk, but is there actually true effort beyond lip service being given in many organizations. Everybody has their blue boxes in their offices and there is double-sided printing -- but is this really making a difference.

If an organization truly wanted to be heralded as environmentally friendly it would need to truly set its current practices on its head.

For the procurement profession, it would mean firstly stopping the process of having paper RFP's sent out and allowing suppliers to provide reams of binders and glossies as part of a response -- the electronic tools are here, why aren't we using them. Of course even with the electronic tools, the option to PRINT still remains -- and I will accept that I am guilty of that as well -- but if when we went out to tender for computer screens we thought of making them more "eye" friendly perhaps we would not need so much paper.

A "green" commissioner should be appointed in organizations, much like integrity commissioners seem to be the flavour de jour. These green advocates, would report directly to the CEO and be responsible for creating strategy and policy around the greening of the corporation -- from lights being on, products being bought and suppliers being used.

The latter is of extreme importance and it talks to a corporation's social responsibility. In the rush for cheaper goods, a lot of offshoring is used and a blind eye is being turned to the lesser environmental requirements in some locales like China, India and Mexico. This is by no means an exclusive list, but it highlights some of the major sectors for offshore manufacturing -- where pollutants are being spewed into the atmosphere, but, so what? -- the products are cheaper!

Corporate responsibility would say that we ensure that no one, anywhere now or in the future will be harmed by our decisions today.

We need a corporate titan to stand up and be counted and say "hey, we may be a little more expensive, but we are ensuring that we are not killing you and your descendants tomorrow, for a little more profit today!"

I'd buy that!

It's in the Fine Print....

As consumers we are constantly barraged with accepting or signing contract of which we nary take a look, figuring that "What are the chances...." of something going awry. But it is for that very reason that items are noted in contracts, board and securities filings -- for that day when things do go off the tracks.

Recently there has been a lot of media attention on the woes of the former executive of Hollinger International. For those of you who have not been keeping up with the trial, it is basically a question of whether non-competes negotiated by/for the leadership are fraudulent or whether they had been exposed to the required scrutiny and been passed by the board's audit committee, through SEC filings and rulings obtained by lawyers.

It seems the more the trial progresses that it seems to be the latter. Maybe not in the absolute best interests of shareholders, but not fraud and thereby not criminal (note -- as I am not sitting in the courtroom and just reading sanitized versions of the proceedings in the newspaper I am giving an opinion and not passing judgement).

During the trial what truly was amazing however was the fact that the Board members who sat on the very important audit committee, signed their names to documents that had these very "non-compete" payments for all to see. Granted it was buried in dozens of pages of other corporate meanderings, but nevertheless do not seem to have been hidden.

This brought to mind the question of how many in corporations sign legal documents without reading what is put in front of them. Most likely it happens thousands of times a day, trust in those that are providing the documents have not put a blank cheque in sheep's clothing for signing.

It is important for all those who are officers of companies and have the legal status to commit the organization to do their due diligence and read that which they sign. If the contracts are more or less the same, then an exception report can be attached for discussion purposes.

Do you initial every page of the document you are signing? You should, because it is not outside the realm of possibilities that these could be switched.

I understand that it is difficult to keep up with much of the paperwork that comes one's way, but as seen in the Hollinger trial, it is imperative not to just skim and/or scan, but to exercise more due diligence and focus. After all, think of how you would look on the witness stand if you haven't!

Ethanol, Corn Shortage and a Healthier Diet

This corn cob mascot better start taking some lessons in self defense pretty soon, otherwise the makers of ethanol will be tracking him down and turning him into clean fuel.

Yes, our direction to a cleaner environment, which we all agree is a good thing, has corn cobs everywhere running for cover, knowing that soon there will be a struggle of the titans -- the ethanol producers and those who bring us tasty treats!

There are shudders running up and down the corridors of supply chain personnel in the food industry -- where are we going to get the corn when the acceptance of ethanol explodes?

Recent statistics have the US converting over 50 million tons of corn to ethanol in 2008. By 2012 ethanol availability has to double (as a result of a US federal requirement) to 7.5 Billion.Analysts predict increasing competition between the fuel industry, and supermarkets.

So corn prices are going up and moreover the supply for food products will keep on dwindling. Let's face it, there is no federal requirement to increase the amount of corn chips that are produced.

This issue has started to percolate and will reach the boiling point sometime soon. Have you ever looked at the index of ingredients on food packages. Almost everything has some corn product in it -- simple thing like cornstarch, corn oil, condiments, snack foods (and my favorite corn relish)-- well the list goes on and on.

So the supply chain has to become creative in its approach to this issue. Do the food producers start buying up fields of corn, or invest in locations overseas to do this? Are the substitutes for corn (can you imagine non-corn corn chips?) a viable alternative -- do they pass the consumer taste test?
But there is a further issue also to be dealt with -- a significant amount of corn exports go to developing nations. Just as the anti-hunger movement has gone into high gear, another issue challenges the desire to feed the less fortunate.

It is a true dilemma and one that was probably not anticipated by the policy creators, as they usually have one focus only and certainly don't consult with supply chain experts who would have identified the issues and tried to determine reasonable alternatives before making broad spectrum changes.

Perhaps the food industry reliant on corn should mandate a corn growing in every backyard ---"You want to work for us -- well then are you willing to give up your lawn for the greater corn good?"

I don't know about you, but I'm thinking of turning my backyard into a mini-corn field -- and then selling to the highest bidder!