Getting It Right

By Michael Kalfopoulos, Boston Scientific Director, Global Procurement on November 27, 2013

Boston Scientific makes wise choices when it comes to greening the supply chain.

By using a simple and robust sustainability platform, educating users, and engaging strategic suppliers, we are on track to make a positive impact on the planet, for people as well as our business.

Michael Kalfopoulos, Boston Scientific Director, Global Procurement

There are many components to Boston Scientific’s environmental sustainability program. Significant, targeted efforts during the past few years have produced improvements to our internal operations, resulting in the reduction of environmental impact, product costs, and operating risks. By sharing our vision of sustainability and working with our supplier community, many of our suppliers have become active participants in our program. Together we have been able to achieve a "triple win:" a win for the environment, a win for the people that work for us and with us, and a win for our business. With annual revenues of more than $7 billion, our global infrastructure includes a complex supply chain, which supports significant manufacturing and distribution facilities on four continents. We have developed an approach simple enough for a range of suppliers to use consistently to achieve improvements in areas that make a meaningful difference.

In 2012, working collaboratively with our supply base, we launched a Green Supply Chain program to build sustainability into the procurement of goods and services used in our business. Our goal was to expand our business processes with suppliers to continuously increase environmental sustainability within our supply chain. The framework for the program includes four principal components. The first involved engaging key suppliers in an annual environmental sustainability assessment. The assessment involved measuring and base-lining strategic suppliers in greenhouse gas emissions, waste generation, reuse/recycle and environmental management practices in order to drive future reductions. The assessment is aligned with Boston Scientific’s internal practices and programs, and is intended to enhance the opportunities to collaborate and leverage knowledge. This collaboration results in continuous improvement as the desired objective.

To enable and increase communication within the supply chain to meet our goals, the second component involves the inclusion of sustainability practices in our supplier business review process and incorporates sustainability language in Boston Scientific’s Supplier Guidebook.

Further building on these elements, the third component involves a sustainability assessment in the supplier selection process. This assessment is a component of the overall selection process for new opportunities and provides information on the sustainability profile of bidders. This process allows Boston Scientific to compare and evaluate suppliers based on their sustainable practices.

The fourth tenet of our program, our Master Supply Agreement, designed to formalize engagement and a commitment to environmental sustainable practices between our suppliers, has been expanded to include language confirming a supplier’s participation in the program.

We invested significant time developing the metrics for measuring our success, as well as effectively communicating expectations to ensure our valued suppliers would be able to participate. We chose to measure our strategic suppliers based on the same metrics that we measure ourselves, with examples such as energy use, waste, and recycling. Most importantly, our metrics are based on quantitative measurement. We developed a method for measuring the performance of our supplier chain through reductions in waste, electrical consumption, oil consumption, etc. Our program philosophy is "make a difference." We will continue to monitor results by measuring year-to-year improvements in our supply chain, and if our metrics improve, we know we are doing our part in reducing our impact on the environment.

We believe that we have made good progress in this area and consider ourselves in the early stages of program development compared to some of the companies with whom we benchmarked. As we learn through ongoing peer discussions and experiences, we fully expect our program will mature. We are now focused on increased education about sustainability and the "triple win" among internal resources, business units, and employees. We plan to further promote the program across the supply chain to increase supplier participation. By using a simple and robust sustainability platform, educating users, and engaging strategic suppliers, we are on track to make a positive impact on the planet, for people as well as our business.