Green Procurement MBA

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By Professor Terry Harrison

Several years ago, even before the Penn State Smeal MBA Program began to offer its official concentration in Sustainability and Social Innovation, there existed a marked student interest in learning more about sustainable business. To meet that interest, a group of MBA students—with my support as a faculty member in supply chain management—approached the university’s procurement services department to seek partnership on a real-world project.

The partnership our Penn State Smeal MBA Program forged with procurement services exemplifies an educational model that allows students to learn about sustainable procurement in a meaningful way while promoting university sustainability practices.

Why Procurement?

Procurement is a key driver of many sustainability strategies and integrates economic, environmental and social dimensions. It’s also a crucial aspect of an organization’s function. Aligning existing organizational goals with sustainability goals has become increasingly important, particularly with regard to supplier selection, as organizations become more conscious and proactive in addressing issues in sustainability.

Furthermore, procurement offers a wealth of opportunities in the university community because of the scale and importance of the function. Penn State is a large organization, with our University Park campus boasting more than 45, 000 students and 15, 000 employees. However, even smaller institutions must outfit and furnish countless dormitories, classrooms, office spaces and other facilities across any number of buildings.

Newsletter SignupThe Case: Sourcing Janitorial Paper

In 2008, when the students approached procurement services about a possible partnership, the department was nearing the end of its janitorial paper products contract and was facing pressure from an environmental student action group to consider sustainability factors in vendor selection. Procurement services had agreed to investigate other options, but they had never before been tasked with the evaluation of suppliers in accordance with any significant sustainability standards. Thus, a project between MBA students and procurement services was born.

This project was offered as a practicum to students interested in sustainability. Throughout the 16-week practicum course, students first met with various stakeholders to gain a full understanding of each group’s points of view. Because they had little knowledge of the tissue paper industry, they also conducted background research to find out what kind of environmental certifications already existed. Finally, they developed a framework for comparing suppliers based on university needs, stakeholder requests and sustainability metrics.

The team derived a set of sustainability criteria, including both quantitative and qualitative measures, that allowed the comparable evaluation of suppliers using a two-stage evaluation process.

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