Business and Government

Major Assignment
[Essay]

Students Full Name Student ID number Class, Module, Year Teachers Name Assignment Title Himmie E. Langford U3072047 Economics for Managers, 8425, 2011 Dr. Ron McLaren The Procurement of Office Furniture A Sustainable Approach Word Count Due Date 2,000 October 5, 2011

You must keep a photocopy or electronic copy of your assignment

Student declaration I certify that the attached is my own work. Material drawn from other sources has been acknowledged according to unit-specific requirements for referencing. Signature of student: Himmie E. Langford Date: October 5, 2011

SUSTAINABLE PROCUREMENT ASSIGNMENT 1 Select an example of a product sourced in a procurement supply chain of your choice. Identify the major pollution and resource extraction impacts (on ecological assets) over the life cycle of that product. Select a major impact (for example CO2 pollution) and use economic concepts (for example externalities or common property) to justify the use of a sustainable procurement policy (such as environmental pricing, labelling or licensing). Clarity in your analysis _ Coverage of the scope of the question (see above) _ Convincing arguments, based on conceptual understanding, evidence and wider reading _ Clear style of writing and a good flow of argument _ Clear, well-structured presentation on the essay to the class

As a procurement practitioner and a student of Strategic Procurement, it is important to recognise or identify and understand the danger of major pollution, disposal difficulty and the resource extraction impacts that items (goods, works, and services) pose on our environment and how we can, by the use of sustainable procurement practices and guidelines to minimise or eliminate those negative impacts, thus improving the overall benefits of each procurement contract package over its life cycle. Organisations practicing sustainable procurement meet their needs for goods, services, utilities and works not on a private cost-benefit analysis, but with a vision to increasing to the greatest possible amount net benefits for their institutions and the world at large. Using the procurement of Office furniture as an example in the supply chain of numerous other acquisitions, we will provide major examples and effects of some of the various kinds of pollutants and emissions derived from the extraction, manufacturing, and use of certain material inputs in this industry. We will also justify the use of Sustainability Policies such as,

environmental pricing, labelling, licensing and the assessment of product input and sourcing as measures to establish a more sustainable environment and a national and international development agenda, as we attempt as individuals and organisations to obtain the value for money with desires to secure a sustainable future in our approach to the way we acquire goods, works, and services. When purchasing office furniture (chairs, bookcase, tables, desk, filing cabinets, etc) it suggested that these must be considered: the item(s) must be fit for the intended purpose for which it was made, it must be accompanied by warranty, and assumed to be certified by Australian Standards or approved by a recognise overseas authority. These steps are necessary to ensure that consumers are protected, that environmental issues are addresses, and that regulations are adhered to (APCC, 2009). If the procuring entity is considering purchasing wooden or partly wooden furniture, for sustainability and ecological purposes, it is recommended the procurement unit considers the origin of the lumber to determine whether it was legally sourced. It is also important to investigate whether the furniture you are about to buy has been produced with recycled resources or renewable ones. Procurement unit practitioners must also consider whether furniture sales persons are able to show evident to proof that dangerous by-products from production of said products were ably eliminated and/or properly deposed of and declare whether inputs which form parts of the finished goods, in this case furniture, are in the appropriate quantities approved by regulators. Emphasis must also be shown toward employment practices by the potential suppliers of furniture to ensure that other social policies are being upheld. And also important, procurement agents should not consider a supplying company who does not have an appropriate structure in place for environment management during the production of said products, taking into account pollution and deposal management.

In the production and distribution stages of office furniture, a major pollution impact experienced results from the emission greenhouse gases to the environment. Greenhouse gases are gaseous elements of the atmosphere that absorb and emit radiation. They exist naturally in the Earth's atmosphere and are part of what keeps the Earth warm and habitable (Ecomii, 2008 2011). Although they natural existence of Greenhouse Gases makes the earths atmosphere more habitable for living, the effects of too much emission of greenhouse gases (example: carbon dioxide, methane, and nitrous oxide) by mans consumption

activities, give rise to Global Warming and Climatic Change. Since steel and aluminium are key components in the manufacturing of furniture (examples: desks, chairs, tables), they require excessive energy in their production, thus, suppliers who do not use green or renewable energy sources do much harm to existing water, air, and land supplies by wasteful use of energy and their subsequent greenhouse emission(APCC, 2009). Another area of concern in the manufacturing of furniture is the inclusion of banned or over regulated amounts of hazardous substances in the treatment and textile of wood products;

these processes pose environmental and health impacts to producers and end users. Some dangerous timber preservative are carcinogenic (R40, R45, R49), harmful to the reproductive system; others are mutagenic ((R46, R68), causes cancer or alters the DNA of living organisms; there are also other harmful ones that are allergenic when inhaled (R42), causes an allergy. These wood preservative are only the chip of the iceberg when it comes to harmful materials inclusion in furniture product; when tables, chairs, desks, cupboards, etc are being made.

Glazing office furniture with spray paint is another area of concern in the production phase of furniture. The contents of paint used in most cases to smoothened furniture surfaces are of major concern. Depending on the kind of paint use, the production and life time use of the

product could be hazardous as most oil based paint are known to possess some quantity of lead, mineral spirits, and petrochemicals. The production, use, and disposal of such furniture that contain components of these inputs possess far reaching externalities. Lead poisoning, which is the most dangerous, is potentially lethal to adults, children, and animals. Studies show that blood contamination by lead may lead to but not limited to the following diseases and illnesses: dizziness, cerebral palsy, weight loss, irritability, hearing impairment, retinal degeneration, paralysis, vomiting, diarrhoea, Queensland nephritis, anaemia, miscarriage, erectile dysfunction, low sperm count, cardio-toxic effects, fatigue, appetite loss; these are but a few of the problems associated with lead as an input in finished products such as furniture (Vella V., OBrien E., and Idris E., 2011).

Another place of concern is the extraction of timbers sourced from non sustainable or illegal forest creates negative ecological effects and the social impacts include the loss of biodiversity, soil erosion and land degeneration (APCC, 2009). Loss to biodiversity results when reforestation is lacking and conservation is not practised. Desertification is at times the by-product of the loss of biodiversity derived from the improper extraction of forest produce such as illegal logging brings. These climatic changes causes famine, flood, and other externality issues not considered over the life cycle of the extraction and production of these wooden materials serving as inputs for the production of office furniture. With the provision of these information of possible negative effects of unguided resource attraction and pollution caused by unsustainable sourcing, processing, acquisition, and use of office furniture or any other procurement package for that matter; the possibility exist that we would gradually find ourselves in a worse situation, overtime, if nothing is done to create a more sustainably developed world. It is with this notion that we recommend fully the use of sustainable procurement policy in correcting these current mistakes in how mankind acquired

resources for production and consumption. The effects of supporting the systems of suppliers who are not willing or who are not doing enough to reduce these emissions during their resource extraction, production and distribution processes include the destruction of vegetation, animal spices, and existence of life as we know it (GECA, 2011). The externality factor would include these negative effects harming directly those people, animals and environments that do not directly or even indirectly profit from economic use of these products. The Australian Government has also targeted, through the Climate Change Bill, to cut emission by 80% by 2050 and 26 32% by 2020, against a 1990 baseline (CIPS, 2009); by meeting this goal, the support of all stakeholders within the supply chain, for this case the extraction of raw material for furniture production, its use, and reuse and disposal, is paramount as improvement to global wellbeing means better health to current and future generations (CIPS, 2009). Secondly, when a nation produces for consumption, one may have to destroy some resources to achieve Pareto efficient allocations, thus leaving your environment more different or less productive then when you meet it (Liyan, 2009). Procurement policy are therefore put in place as a deterrent, guide, or a measurement for assessing how compliant entities are with desirable national and international goals in relations to sustainability and the value for money over the life cycle of economic goods and services. Few of such measures are environmental pricing, labelling or licensing.

Environmental pricing is define as a cost incurred for the replenishment of one additional production, distribution, and consumption of an economic good or service with priority focused on environmental sustainability and externality. This concept explains indirectly why and how environmental pricing may influence producers and consumers to consider greener

products and processes as a means of achieving sustainable development. Estimating the value of furniture inputs (logs, iron ore,) and external effects on animals and vegetation forgone because of ecological destruction, the significance of earnings lost through health difficulties linked with air and water pollution, health-care costs because of pollution, and the value of declined development and the pull down worth of vegetation because of soil deprivation are important factors to considered determining the cost placed on the environment. Another useful tool use as an instrument for sustained ecological stability is environmental licensing. When governments give out environmental licenses to resource extractors, producers, retailers, and wholesalers; also to some extent, consumers, this implies that they have met up with the minimum requirements to operate/exist as authorised dealers, operators, distributors, manufacturers, consumers of given goods, services, and works. Licenses are issued with the interest of the environment, humanity, and animals wellbeing and sustainability concepts being considered as key focuses of vital importance, ensuring that the best practitioners, businesses, and individuals are selected, approved, and licensed based on their compliance with basic regulations. In conclusion, when purchasing furniture (chairs, bookcase, tables, desk, filing cabinets, etc) it most advisable to apply the use of Sustainable Procurement Policy that guarantee the provision of achieving value for money in achieving the goals of the organisation with the least externalities to the society and environment. The item(s) must be fit for the intended purpose for which it was made, it must be accompanied by warranty, and assumed to be certified by Australian Standards or approved by a recognise overseas authority. If the procuring entity is considering purchasing wooden or partly wooden furniture, for sustainability and ecological purposes, it is recommended the procurement unit considers the

origin of the lumber to determine whether it was legally sourced. It is also important to investigate whether the furniture you are about to buy has been produced with recycled resources or renewable ones. Procurement unit practitioners must also consider whether furniture sales persons are able to show evident to proof that dangerous by-products from production of said products were ably eliminated and/or properly deposed of. Emphasis must also be shown toward employment practices by the potential suppliers of furniture. Also, procurement agents should not consider a supplying company who does not have an appropriate structure in place for environment management during the production of said products, taking into account pollution and deposal management (APCC, 2009). In conclusion, Companies and consumers who use furniture and raw materials inputs from forest, mines, and oil wells, along with many manufacturers, merchandising and service businesses, construction companies, consumers, and suppliers, are generally concern about profit maximisation and the direct consumption benefits of goods and services; however, these entities and individuals, left alone to practise corporate social responsibility, would refer profit over quality and environmental correctness and direct benefit to owners over direct externality cost to others and the environment. Thus, regulatory interventions by governments, national and international regulatory bodies are necessary to ensure that the triple bottom line (people, planet, and profit) interests are being meeting in consideration of the Pareto Efficiency Concept.

Reference List

Ecomii, 2008 2011. Global Warming, Retrieved from http://www.ecomii.com. Vella V., OBrien E., and Idris E., 2011, Health Impacts of Lead Poisoning: A preliminary listing of the health effects & symptoms of lead poisoning, Retrieved from
http://www.lead.org.au/fs/fst7.html.

Tian, G. and L. Yang, 2006, Theory of Negative Consumption Externalities with Applications to Economics of Happiness, retrieved from http://econ.tamu.edu/tian/paper.htm. APCC, 2009, Sustainable Procurement Product Guide: Office Furniture, retrieved from http://www.apcc.gov.au CIPS, 2009, Sustainable Procurement, Retrieved from http://www.cips.org Good Environmental Choice, 2011, finding out about product certification, retrieved from http:www.geca.org.au