Is There a Problem with LEED?

Christine Bullen, GSC Board

If you are not familiar with the publication Miller-McCune, I recommend it as an extremely useful source for information on leading edge issues in our society. In a recent issue, there was an article about a lawsuit challenging the claims of the LEED (Leadership in Energy and Environmental Design) certification. This program is run by the U.S. Green Building Council and their website is a source for information about the certification and its application. It was officially launched in 2000.

The lawsuit is being brought by Henry Gifford, who designs mechanical systems for energy-efficient buildings, and works primarily in New York City. While admitting that the LEED certification has had a very positive effect in making people aware of the need for energy-efficient buildings, he challenges the notion that LEED-certified buildings save as much energy as the US Green Building Council claims. His lawsuit was filed in October 2010 for $100 million. There are other building industry experts who agree with Gifford and have documented energy shortfalls in LEED-certified buildings. Read more

Green Habits Stay Home on Vacation

A study from Norway finds that “people who are environmentally responsible in their everyday lives seem to cast aside their green habits when traveling for leisure.” Read the full article in Miller-McCune on line.

How is this related to global sourcing? It makes one think about the increased air travel that good management of an off-shore sourcing engagement requires…

Selections from the GSC October 2011 Newsletter

Alison Owens, Associate Professor, Director, CQUniversity International Education Research Centre, Sydney

Australian Organisations Test Offshore Waters

The Australian economy continues to enjoy modest annual growth and unemployment of less than 5% against the economic trends of US and European slumped economies. In this context, however, it is almost impossible for organisations with large customer-facing service commitments to recruit and retain quality staff for contact centre work, traditionally considered low-value, temporary and non-career employment by Australians.

In the current market, an Australian agent will cost approximately AUD$8,500 per month with on-costs included, compared to a US agent at AUD$3,600 or a Filipino agent at AUD$1,900. For such reasons, Australian organisations are looking abroad for their contact centre talent and exploiting American experience and expertise in rolling out their offshore business solutions.

Over 70% of offshoring of contact centre work remains US or UK derived but Australian business is cautiously growing offshore delivery of business processes, both back and front of office. Given the costs of scarce onshore labour, there is a developing view that there is no alternative if Australian organisations are to remain competitive.

Recent research conducted in collaboration between CQUniversity Australia and Sykes Enterprises sought the views of C-level executive staff in a selection of Australian telecommunication, media-entertainment and financial services organisations on their offshore contact centre ventures. Cost savings of between 30% and 60% were reported by participant organisations but the benefits of offshoring contact centre work were considered far more comprehensive. The capacity to offshore after hours’ work of a 24/7 service is popular with domestic staff and can be spread across time zones to minimise the disruptions of shift work and expensive overtime payrolls. Indeed, Australian customer service has helped populate US managed contact centres in Manila which were empty over the day as American customers slept but Australians worked. Further to this, offshoring has provided Australian organisations with critical flexibility for seasonal spikes in demand precluding the hiring and firing scramble associated with short term, intense demands and delivering inexpert services.

Sending a business process offshore is a decision that needs careful consideration of cultural alignment and empathy, language proficiency, local infrastructure and labour market characteristics and trends, as well as consideration of which processes to migrate; well-defined, repeatable and robust tasks preferred. Offshoring such processes can actually improve quality metrics and also provide a powerful benchmarking activity for organisations that invest in adequate training, proper remuneration and customer care.

For a wide range of reasons, including high Australian tolerance for the US influenced Filipino accent, the strong customer service focus of Filipino culture and friendly time zone proximities, Australian organisations are finding the Philippines a successful offshore extension to their contact centre services.

GSC October Newsletter Articles

Global Trade News by Josh Green, CEO, Panjiva

 

Solid, Seasonal Growth in August

In August, the number of waterborne shipments coming through U.S. ports grew at a solid rate. Specifically, we saw a 4% month-over-month increase. This is consistent with last year’s month-over-month increase.  And it compares favorably with month-over-month changes from years past: 3% in 2009, flat in 2008, and down 2% in 2007.

In terms of absolute level of trade activity, we’re continuing to run about 1% behind where we were this time last year.  Pretty good news, particularly given the various pieces of economic bad news that are circulating.

How do we make sense of this, given all the doom and gloom from analysts?  Well, the most important takeaway is that, amazingly, retailers have bet on a reasonably healthy holiday season.  This is good news, to be sure.  However, if the holiday season is not as healthy as expected, we’re going to be faced with an ugly first half of 2012, as retailers — and their supply chain partners — will be coping with way too much inventory.

Expect seasonal declines in the months ahead, and buckle your seatbelts for the holiday season.  It will tell us a lot about what we can expect in the first half of 2012.

Reprinted with permission of Cargo Business News. This column appeared in Volume 89, issue no. 12 of the magazine.

Josh Green is the CEO of Panjiva, an intelligence platform for global trade professionals and can be reached at josh@panjiva.com.

 

GSC October 2011 Newsletter Articles

From the Desk of the President, Michael Gibbons

 

Supplier Diversity

The history of the melting pot theory can be traced back to Letters from an American Farmer (1782) when J. Hector de Crevecoeur, a French settler in New York, envisioned the United States not only as land of opportunity, but as a society where individuals of all nations are melted into a new race of men, whose labors and posterity will one day cause changes in the world.

Our nation is ever-changing. The great melting pot continues to morph, but with different concentrations. Oftentimes, minorities are shut out of business opportunities. Progressive companies and the US government are taking steps to implement supplier diversity programs and these programs are paying off.

As a consultant in the past, when bidding on an RFP, certain diverse suppliers were given preference in the vetting process. Invariably we would always poll the group to see what people we might have on board that might help us meet these criteria. This is certainly not what the supplier diversity programs had in mind – and it never worked.

Supplier Diversity is a business program that encourages the use of suppliers in the following categories:

  • Minority-owned
  • Women-owned
  • Veteran-owned
  • Service disabled veteran-owned
  • Historically underutilized business
  • SBA-defined small business vendors

It is not directly correlated with supply chain diversification, although utilizing more vendors often enhances supply chain diversification.

Minority- and women-owned business enterprises (MWBEs) are among the fastest-growing segments of the U.S. economy. Minority-owned businesses generate an (1997) estimated $495 billion in annual revenue and employ nearly 4 million workers, while women-owned firms employ about 19 million people and generate $2.5 trillion in annual sales.

Veteran-Owned (VOB) and Service Disabled Veteran-Owned Businesses (SDVOB) are some of the most prominent groups on the American entrepreneurial landscape, and being sought after by corporate supplier diversity directors. There are over 25 million veterans in this country; roughly 1 in 5 adult males. 1 in 7 small businesses are owned by a veteran.

Many companies provide incentives for minority – and women-owned operations to do business with them. Many managers are accountable for ensuring that each area of the value chain—from suppliers and vendors to customers —is fully represented by companies with effective diversity initiatives of their own.

Contrary to misconceptions, supplier diversity does not have to cost more and may provide tangible benefits to the bottom line. According to recent research from the Hackett Group, there is no evidence that companies that pursued supplier diversity programs had less effective operations. This finding was based on a study of 50 companies from both the service and manufacturing sectors.

Companies that have supplier diversification programs generated 133% greater returns in the cost of procurement than the average company, which resulted in an additional $3.6 million to the bottom line.

Companies that focus on supplier diversity, driven by a sense of social responsibility, government mandates, or a range of other factors, are just as able to run effective procurement operations as their peers that ignore supplier diversity,” said Hackett Senior Business Advisor Kurt Albertson.

The government also plays a role. I was recently watching a speech by President Obama to a veterans group announcing that the US was going to implement a policy where companies that hire wounded vets, particularly from Iraq and Afghanistan, would receive tax credits.

One company that is a good example of this is Wyndham Worldwide. Wyndham Worldwide, one of the world’s largest hospitality companies, achieved significant growth in its spending with diverse suppliers in 2010. Wyndham Worldwide spent 10.3% of its total purchases with diverse suppliers, a 51% increase over the previous year. The program focuses on nine groups: African-American; Hispanic-American; Asian-American; Native-American; gay, lesbian, bi-sexual and transgendered; women; veteran and disabled-veteran; and disabled-owned businesses.

“Internationally, developing relationships with diverse business owners and organizations also supports our growth in emerging markets, generating new ideas and opportunities for business in local communities, and supports the overall strength of the global travel and tourism economy.” – Paul Davis, Senior VP, Strategic Sourcing at Wyndham Worldwide

Implementing a supplier diversity program is also good PR. In 2000, total purchasing power in the United States was over $6.5 billion, with white non-Hispanics accounting for nearly 80% of that purchasing power. This number will drop significantly as minority purchasing power rises from approximately 20% in 2000 to over 45% by the year 2045. In fact, between 1990 and 1997, buying power in African-American, Hispanic, and Asian communities rose by 54%, 58%, and 72%, respectively. This trend is expected to continue with minority purchasing power surpassing $2 trillion by 2015 and $3 trillion by 2030. In the Wyndham Worldwide case, the supplier diversity initiative has received numerous accolades, including awards from the U.S. Minority Business Development Agency, Florida Minority Supplier Diversity Council, the Kissimmee/Osceola County Chamber of Commerce, and the Morris County Hispanic-American Chamber of Commerce in New Jersey.

Diverse communities pay attention to these types of programs and will reward companies that implement supplier diversity programs. The GSC supports initiatives that provide opportunities for businesses that might otherwise be marginalized in the corporate world. Experience has shown that these diverse suppliers allow corporations to maintain or increase profits while demonstrating socially responsible attitudes towards sourcing.