moving sustainability to the core of strategic sourcing
TRANSCRIPT
MOVING SUSTAINABILITY TO THE CORE OF STRATEGIC SOURCING
The Mission of UC Procurement is the Mission of the UC
Expand opportunities for teaching, research and public service by delivering savings and efficient procurement services across the University of California
Our Mission
05/01/2023 2
1,993.1
953.7
324.8 287.2 236.0 228.6 209.0368.0 419.0
68.2 82.9278.1
411.3563.2 634.7
Significant Opportunities in All Areas of Spend
05/01/2023 3Source: Spend Radar campus and US Bank PCard data Apr 2012 – Mar 2013
Health & Welfare
Building & Construction
Services
Financial &Insurance Services
Travel HealthcareServices
EngineeringServices
Utilities Other (<$200M
each)
Unclassified Food & Dining
Services
Office Supplies, Express
Package & Environments
MRO/Facilities
IT & Telecom
Professional Services
Life Sciences
Total $5B Annual Spend Total $2B Annual Spend“Non-Traditional” Categories “Traditional” Categories
Actively managed by UC Procurement Services
~230 professionals atUCOP and 10 campuses
UC Annualized Spend in Millions(Apr 2012 - Mar 2013)
$7+ billion in addressable annual spend supporting all aspects of University operations, academia and research
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The story of strategic sourcing begins with a single item…
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Strategic Sourcing at the UC…
Long before Critical Mass rides started in the early 1990s, an earlier wave of ecology-minded folks cycled en masse through the streets of Berkeley in an annual "Smog-Free Locomotion Day, this one held February 28, 1971. – Source: FoundSF.org
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Berkeley: 35+Davis: 34Irvine: 16LA: 20Merced: 6Riverside: 5San Diego: 30+Santa Barbara: 35Santa Cruz: 22San Francisco: 1Total: 204
The UC is home to over 200 Student SustainabilityOrganizations…
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After Policy (2015)METRICS• 0.1 MW Renewable Energy• 1 LEED certification• Beg for $$ for energy
efficiency
Institutional Change• No discussion of GHGs• 1 sustainability FTE • No sustainability language in
purchasing contracts
METRICS• 17 MW Renewable Energy• 191 LEED certifications• Regents approved $240 million
energy efficiency program; saved $140 million
Institutional Change• ACUPCC Founding Signatories• 39 sustainability FTEs• Sustainability language/metrics in all
RFPs/Contracts/Quarterly Reviews
Before Policy (2004)
Sustainability at the UC…
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“Environmentally preferable purchasing underlies and enables all other areas of sustainable practice in this policy.”
-University of California Policy onSustainable Practices
Green Building DesignClean Energy
Climate ProtectionSustainable Transportation
Sustainable Building OperationsRecycling and Waste Management
Sustainable FoodsevicesSustainable Water Systems
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• Sustainability Purchasing Working Group– Created by the Sustainability Steering Committee– Proposes amendments to policy– Coordinates implementation of policy– Shares best practices and creates economies of scale for system-wide
initiatives.• Global Climate Leadership Council
– Created in 2014 to support Carbon Neutrality Initiative– Supports UC goal of achieving carbon neutrality by 2025
• Sustainable and Nutritious Food Procurement– Part of the operations committee of the Global Food Initiative– Supports the achievement of UC Sustainability goals for food services.– Promotes best practices across the UC and Higher Education.
Procurement and Sustainability are Natural Partners…
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Ideas often come to us as independent project ideas…
These Stirling freezers use a lot less energy, can we
get a system-wide agreement?
What if we ONLY bought refillable pens?
The heat pumps that we put on our modular
buildings have gotten a lot more efficient – could we
replace them?
What if every vehicle we bought was alternative fuel?
Hybrid? Electric? What if every employee could by a
hybrid or electric at a discounted price?
• How do we estimate the impact?• How do these align with our goals?
• I’m working on all of these other projects and now you want me to work on this too?
Aquaponics!
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Process StandardsISO
International Organization for Standardization
Leveraging processes and product standards allows high impact SCALABLE sustainable practice…
• Sustainability in Building Construction
• Earth Moving Machinery• Sustainability in Buildings and Civil
Engineering Works• Event Sustainability and
Management Systems• Social Responsibility
• Information Technology
Product StandardsAccepted under the UC Sustainability Policy
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1. Be supplied by 100% Renewable Energy
2. Create Zero Waste3. Sell products that sustain
people and the environment
Wal-Mart has moved environmental sustainability to the core of it’s business…
Source: corporate.Walmart.com
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How can the UC Procurement put sustainability at the core of what it does?
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1. Aligning with the 3 key Presidential Sustainability Initiatives:– Zero Waste by 2020– Carbon Neutrality by 2025– Global Food Initiative
2. Embed sustainability into the core of our business process
3. Deliver results that allow us to purchase more sustainable products and services more sustainably
UC Procurement can put Sustainability at its core by…
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1. Align with 3 key Presidential Sustainability Initiatives…Zero Waste by 2020Divert 95% of municipal solid waste from landfill by 2020
• Reduce consumption of goods.• Reduce packaging• Convert packaging to recyclable and
reusable materials.• Reduce the cost of procuring recyclable
and compostable products
Carbon Neutrality by 2025Make the UC the first major research University to achieve carbon neutrality.
• Reduce the cost of renewable energy• Introduce products that reduce energy
consumption and carbon emissions• Introduce supply chain practices that
reduce the number vehicles traveling to and from our campuses.
Global Food InitiativeImprove food security, health and sustainability at UC – our campuses, medical centers and national labs – and through California, the U.S. and the world
• Reduce the cost of sustainable food• Increase the transparency of our food
supply chain• Share best practices within Higher
Education and Industry
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2. Embed Sustainability Into Our Core Business ProcessThe 7-step Strategic Sourcing Methodology consistently and efficiently guides high value procurement outcomes.
•Supplier Evaluation Criteria Matrix
•RFI (optional)
•Fact Based Negotiation Package
•Sourcing Award Recommendation
•Updated Business Case
7.0 Implement New Agreement
6.0 Negotiate & Develop Strategic Sourcing
Recommen-dation
5.0 Conduct Competitive
Exercise
4.0 Identify Minimum
Requirements & Evaluation
Criteria
3.0 Develop Category/Sub-
Category Strategy
2.0 Develop Category/Sub-
Category Profile
1.0 Develop Strategic Sourcing Project Work Plan
1.1 Mobilize Project Team
1.2 Conduct Project Kick-
Off
1.3 Finalize Project Plan
2.1 Conduct Internal Analysis
2.2 Conduct Industry Analysis
3.1 Develop Sub-Category Opportunity
Baseline
3.2 Develop To-Be Process
Flow
3.3 Develop & Summarize Category Strategy
2.3 Build TCO Model
4.1 Finalize Supplier
Evaluation Criteria
4.2 Develop Scoring
Document
4.3 Conduct Supplier Analysis
5.1 Develop Tender
Document
5.2 Distribute Tender
Document
6.1 Finalize Fact-Based Negotiation
6.2 Plan and Conduct Fact-
Based Negotiation
6.3 Develop & Recommend
Sourcing Decision
5.3 Evaluate & Score Tender
Document
7.1 Develop Category Savings
Summary
7.2 Develop Implementatio
n Plan
7.3 Deploy Contract
Campus-Wide
• Internal Profile•TCO Model•Baseline TCO•As-Is Process Flow •External Profile•Cost Reduction Ideas
•Preliminary Business Case
•Sourcing Project Work Plan
•Kick-Off Meeting & Presentation
•Category/Sub-Category Strategy
•Business Case
•Market Solicitation Documents
•Evaluated Responses
•Short List of Top Suppliers
• Implementation Plan
•Communication Plan
•Supplier Performance Management Approach
Key
Out
puts
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2. Embed Sustainability Into Our Core Business ProcessThe 7-step Strategic Sourcing Methodology consistently and efficiently guides high value procurement outcomes.
•Supplier Evaluation Criteria Matrix
•RFI (optional)
•Fact Based Negotiation Package
•Sourcing Award Recommendation
•Updated Business Case
7.0 Implement New Agreement
6.0 Negotiate & Develop Strategic Sourcing
Recommen-dation
5.0 Conduct Competitive
Exercise
4.0 Identify Minimum
Requirements & Evaluation
Criteria
3.0 Develop Category/Sub-
Category Strategy
2.0 Develop Category/Sub-
Category Profile
1.0 Develop Strategic Sourcing Project Work Plan
1.1 Mobilize Project Team
1.2 Conduct Project Kick-
Off
1.3 Finalize Project Plan
2.1 Conduct Internal Analysis
2.2 Conduct Industry Analysis
3.1 Develop Sub-Category Opportunity
Baseline
3.2 Develop To-Be Process
Flow
3.3 Develop & Summarize Category Strategy
2.3 Build TCO Model
4.1 Finalize Supplier
Evaluation Criteria
4.2 Develop Scoring
Document
4.3 Conduct Supplier Analysis
5.1 Develop Tender
Document
5.2 Distribute Tender
Document
6.1 Finalize Fact-Based Negotiation
6.2 Plan and Conduct Fact-
Based Negotiation
6.3 Develop & Recommend
Sourcing Decision
5.3 Evaluate & Score Tender
Document
7.1 Develop Category Savings
Summary
7.2 Develop Implementatio
n Plan
7.3 Deploy Contract
Campus-Wide
• Internal Profile•TCO Model•Baseline TCO•As-Is Process Flow •External Profile•Cost Reduction Ideas
•Preliminary Business Case
•Sourcing Project Work Plan
•Kick-Off Meeting & Presentation
•Category/Sub-Category Strategy
•Business Case
•Market Solicitation Documents
•Evaluated Responses
•Short List of Top Suppliers
• Implementation Plan
•Communication Plan
•Supplier Performance Management Approach
Key
Out
puts
Items in red require PLC approval
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2. Embed Sustainability Into Our Core Business ProcessThe 7-step Strategic Sourcing Methodology consistently and efficiently guides high value procurement outcomes.
•Supplier Evaluation Criteria Matrix
•RFI (optional)
•Fact Based Negotiation Package
•Sourcing Award Recommendation
•Updated Business Case
7.0 Implement New Agreement
6.0 Negotiate & Develop Strategic Sourcing
Recommen-dation
5.0 Conduct Competitive
Exercise
4.0 Identify Minimum
Requirements & Evaluation
Criteria
3.0 Develop Category/Sub-
Category Strategy
2.0 Develop Category/Sub-
Category Profile
1.0 Develop Strategic Sourcing Project Work Plan
1.1 Mobilize Project Team
1.2 Conduct Project Kick-
Off
1.3 Finalize Project Plan
2.1 Conduct Internal Analysis
2.2 Conduct Industry Analysis
3.1 Develop Sub-Category Opportunity
Baseline
3.2 Develop To-Be Process
Flow
3.3 Develop & Summarize Category Strategy
2.3 Build TCO Model
4.1 Finalize Supplier
Evaluation Criteria
4.2 Develop Scoring
Document
4.3 Conduct Supplier Analysis
5.1 Develop Tender
Document
5.2 Distribute Tender
Document
6.1 Finalize Fact-Based Negotiation
6.2 Plan and Conduct Fact-
Based Negotiation
6.3 Develop & Recommend
Sourcing Decision
5.3 Evaluate & Score Tender
Document
7.1 Develop Category Savings
Summary
7.2 Develop Implementatio
n Plan
7.3 Deploy Contract
Campus-Wide
• Internal Profile•TCO Model•Baseline TCO•As-Is Process Flow •External Profile•Cost Reduction Ideas
•Preliminary Business Case
•Sourcing Project Work Plan
•Kick-Off Meeting & Presentation
•Category/Sub-Category Strategy
•Business Case
•Market Solicitation Documents
•Evaluated Responses
•Short List of Top Suppliers
• Implementation Plan
•Communication Plan
•Supplier Performance Management Approach
Key
Out
puts
Items in red require PLC approval
Working with campus procurement and sustainability experts to create a roster of sustainability subject matter experts for specific categories.
Outcomes: • Ensures that sustainable expertise is available and
incorporated into every initiative from the start. • Helps to identify sustainable products, and sustainable
practices and how to evaluate them.
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2. Embed Sustainability Into Our Core Business ProcessThe 7-step Strategic Sourcing Methodology consistently and efficiently guides high value procurement outcomes.
•Supplier Evaluation Criteria Matrix
•RFI (optional)
•Fact Based Negotiation Package
•Sourcing Award Recommendation
•Updated Business Case
7.0 Implement New Agreement
6.0 Negotiate & Develop Strategic Sourcing
Recommen-dation
5.0 Conduct Competitive
Exercise
4.0 Identify Minimum
Requirements & Evaluation
Criteria
3.0 Develop Category/Sub-
Category Strategy
2.0 Develop Category/Sub-
Category Profile
1.0 Develop Strategic Sourcing Project Work Plan
1.1 Mobilize Project Team
1.2 Conduct Project Kick-
Off
1.3 Finalize Project Plan
2.1 Conduct Internal Analysis
2.2 Conduct Industry Analysis
3.1 Develop Sub-Category Opportunity
Baseline
3.2 Develop To-Be Process
Flow
3.3 Develop & Summarize Category Strategy
2.3 Build TCO Model
4.1 Finalize Supplier
Evaluation Criteria
4.2 Develop Scoring
Document
4.3 Conduct Supplier Analysis
5.1 Develop Tender
Document
5.2 Distribute Tender
Document
6.1 Finalize Fact-Based Negotiation
6.2 Plan and Conduct Fact-
Based Negotiation
6.3 Develop & Recommend
Sourcing Decision
5.3 Evaluate & Score Tender
Document
7.1 Develop Category Savings
Summary
7.2 Develop Implementatio
n Plan
7.3 Deploy Contract
Campus-Wide
• Internal Profile•TCO Model•Baseline TCO•As-Is Process Flow •External Profile•Cost Reduction Ideas
•Preliminary Business Case
•Sourcing Project Work Plan
•Kick-Off Meeting & Presentation
•Category/Sub-Category Strategy
•Business Case
•Market Solicitation Documents
•Evaluated Responses
•Short List of Top Suppliers
• Implementation Plan
•Communication Plan
•Supplier Performance Management Approach
Key
Out
puts
Address sustainability strategies in Business Decision documentation.
Outcomes: • Ensures that we have explicitly considered, documented
and discussed sustainability impacts in system-wide source decisions.
• Allows us to consider multiple sustainability attributes beyond the selection of the specific product and its pricing.
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2. Embed Sustainability Into Our Core Business ProcessThe 7-step Strategic Sourcing Methodology consistently and efficiently guides high value procurement outcomes.
•Supplier Evaluation Criteria Matrix
•RFI (optional)
•Fact Based Negotiation Package
•Sourcing Award Recommendation
•Updated Business Case
7.0 Implement New Agreement
6.0 Negotiate & Develop Strategic Sourcing
Recommen-dation
5.0 Conduct Competitive
Exercise
4.0 Identify Minimum
Requirements & Evaluation
Criteria
3.0 Develop Category/Sub-
Category Strategy
2.0 Develop Category/Sub-
Category Profile
1.0 Develop Strategic Sourcing Project Work Plan
1.1 Mobilize Project Team
1.2 Conduct Project Kick-
Off
1.3 Finalize Project Plan
2.1 Conduct Internal Analysis
2.2 Conduct Industry Analysis
3.1 Develop Sub-Category Opportunity
Baseline
3.2 Develop To-Be Process
Flow
3.3 Develop & Summarize Category Strategy
2.3 Build TCO Model
4.1 Finalize Supplier
Evaluation Criteria
4.2 Develop Scoring
Document
4.3 Conduct Supplier Analysis
5.1 Develop Tender
Document
5.2 Distribute Tender
Document
6.1 Finalize Fact-Based Negotiation
6.2 Plan and Conduct Fact-
Based Negotiation
6.3 Develop & Recommend
Sourcing Decision
5.3 Evaluate & Score Tender
Document
7.1 Develop Category Savings
Summary
7.2 Develop Implementatio
n Plan
7.3 Deploy Contract
Campus-Wide
• Internal Profile•TCO Model•Baseline TCO•As-Is Process Flow •External Profile•Cost Reduction Ideas
•Preliminary Business Case
•Sourcing Project Work Plan
•Kick-Off Meeting & Presentation
•Category/Sub-Category Strategy
•Business Case
•Market Solicitation Documents
•Evaluated Responses
•Short List of Top Suppliers
• Implementation Plan
•Communication Plan
•Supplier Performance Management Approach
Key
Out
puts
Regularly consider sustainability in the supplier relationship by evaluating product offerings and business practices.
Outcomes: • Create an environment where it easy to identify and
purchase sustainable products.• Collaboration with suppliers and the stakeholders to
continuously evaluate new sustainable products and practices for implementation.
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1. Carbon Neutrality by 2025 Jeremy MeadowsAssociate Director Strategic
SourcingFacilities & MRO
2. Global Food Initiative Eric PollackCommodity Manager, Food
Services
3. Deliver results that support more sustainable purchase more sustainably
CARBON NEUTRALITY:SOLAR ELECTRICAL GENERATION
Jeremy Meadows, Associate Director Strategic SourcingUC Procurement Case Study
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University of California Power Program Overview
– System-wide Solution for Direct Access Campuses
– Energy Service Provider
– Program complies with California Renewable Portfolio Standards (RPS)
– Created to address UC’s system-wide climate neutral energy policy objectives
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The Objective and Acquisition Profile• UCPP’s power supply portfolio and contribute to UC’s RPS obligations.
– UCPP’s annual direct access energy use is in the range of 260,000 MW/h– Contract Length: 25 years– Approximate Contract Value: $350,000,000 (25 years x 14MM)– Projects located in CA– Project with 20MW or greater nameplate capacity– Minimum of 33% of our annual need
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RFP Development/Timeline• RFP Timeline
- RFP Open: July 18, 2014 4 PM- Pre-bid Conference: July 22, 2014 2 PM- Deadline to submit questions: July 24, 2014 2 PM- RFP Closing: July 31, 2014 4 PM - RFP Evaluation: July 31-Aug 9- Apparent Awardee(s) Notification: August 13, 2014
• Contract – UC PPA (Based on PG&E RAM 5 PPA)– Industry recognized standard– Buyer friendly
• Technology - Supplier Registration and Sourcing
Project OverviewFive Points Solar Park
Site Summary
Size: 60 MWAC
Location: Five Points, Fresno County, CA
Solar Irradiance: 2,105 kWh/kW/year (3Tier)
Point of Interconnection: On-Site/NP-15
Location Site Map
Future Site of the 60MW Five Points Solar Park Five Points, CA
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Project OverviewGiffen Solar Park
Site Summary Location Site Map
Future Site of the 20MW Giffen Solar Park Cantua Creek, CA
Size: 20 MWAC
Location: Cantua Creek Fresno County, CA
Solar Irradiance: 2,097 kWh/kW/year (3Tier)
Point of Interconnection: Giffen Substation On-Site/NP-15
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GLOBAL FOOD INITIATIVE:BUYING SUSTAINABLE AND NUTRITIOUS FOOD
Eric Pollack, Commodity Manager for FoodUC Procurement Case Study
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Food Sustainability Is Expensive
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Definitions of Sustainable Food & Non- Food Products
• Organic Produce
• Locally Grown Produce
• Locally Farmed and Organic Dairy
• Beef – Grass Fed and Locally Raised
• Poultry & Eggs – Cage Free – Range Free- Antibiotic Free
• All Natural - Groceries, Retail
• Compostable- Utensils , Cups , Napkins, Plates
• Recyclable Packaging
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Past UC Dining Purchasing Practices
• No collaboration between campuses
• Each campus contract independently
• Did not leverage their volumes
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Current Purchasing Practices• Campus Dining Organization on 6 campuses participate in system-wide food
procurement programs.
• Consolidated and leveraging the UC & CSU purchasing volume of $75,000 million annually.
• Awarded produce and master food distribution to a single regional vendor West Central Produce – S. Cal Trinity Produce – N. Cal Sysco -S. Cal PFG – N. Cal Elimination of additional trucks on campuses
• More transparency to farmers and manufacturers
• We now have the ability to negotiate and contract directly with local farmers, processors and national manufacturers for organic and all natural food and non-food products at lower costs
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Supplier Transparency and Reporting
• UC has total transparency & traceability to all growers
• In the UC agreement we require monthly sustainability impact reports from our produce vendors.
• We are working toward obtaining the same reports from our master distribution partners ( Sysco & Performance Food Group)
• Reports are based on each campus definition of sustainable local and organic offering
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Defining Locally Grown Produce Across the UC
• University of California defines locally grown – 500 mile radius from farm to campus
• UCSD – 250 miles radius - farm to campus
• UCR – 500 mile radius - farm to campus
• UCSB – 150 mile radius - farm to campus
• UCSC – 250 mile radius
• UC Merced – 250 mile radius
• UC Berkeley – 250 mile radius – farm to distributor to campus
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University of California Locally and Organically Grown CAMPUS Purchases of Locally & Organically Grown Produce
UC San Diego 55.25%
UC Riverside 38.85%
UC Santa Cruz 40%
UC Berkeley 35%
UC Merced 39%
UC Santa Barbra 54.8%
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Annual Savings Due to UC & CSU Campuses Collaboration
Programs Annual Savings
S. California Produce $985,000
N. California Produce $400,000
Master Distribution ( Sysco & PFG) $700,000
Total Annual Savings $2,085,000
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Additional Food Sustainability Projects
• Dairy – Local dairy farms and processing
• Local sustainable poultry - Mary’s
• Other locally raised poultry
• Fresh sustainable seafood – Sea to Table
• Aquaponiclly grown produce – Viridis Aquaponics
• Sustainable proteins – Beef & Pork
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What’s in a Can of Pineapple Tidbits?
DW 6# Brix 15 MalaysiaDW 6.25# Brix 15 Indonesia 1 ½ # More per case
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More food in can = fewer cans bought and disposed of…
Annual Canned (6/#10) Products
Purchases of 2,000 cases
Additional Can Wt. Benefit of Additional Wt.
Avoided in Disposing of
12,000 cans .25 # 750 # 125 cans20+ cases
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Summary
• Defining what foods are under sustainable category
• Get your campuses to collaborate
• Leverage your volume
• Transparency
• What’s in the can? Make sure that you get value
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1. Sustainability is at the core of UC Procurement’s Mission
2. UC Procurement is a vital partner in advancing the sustainability agenda and is an underlying component of any sustainability project.
3. The Strategic Sourcing Process provides a platform for participation and collaboration to help the UC achieve its mission and program goals.
In Conclusion…
“UC, like California, simply cannot afford to stand still. If you’re standing still in California, you’re falling behind. This is a dynamic institution, and a dynamic state, living together in a dynamic time.”
Janet NapolitanoUniversity of California President
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