SPLC 2018 Summit: Benchmark in Practice: Insights from State of California's Experience

Editor's Notes

1. Charleen: Thank you all for coming. The state of California is proud to have a long history of leadership in sustainable purchasing. Core to sustainable purchasing, is California’s Environmentally Preferable Purchasing (EPP) program that began in 2003. Since this time DGS has forged its way to leverage industry to green their products. DGS has created standards and specifications to address toxics, and air pollution and the conservation of energy, water and natural resources. We are adding to that legacy all the time. In 2016 we rolled out a new state-wide enterprise resource planning system with EPP tracking built into it, joined the CDP Supply Chain program, and analyzed the environmental impacts of our $45 billion in annual spending. In 2017 at the SPLC Summit in Denver, CO. DGS spoke of SPLC BENCHMARKSM platform and how California envisioned its use. We are here today to share with you how we meet our commitment and answer to how our work with SPLC and the National Association of State Procurement Officers (NASPO) has helped state governments use the tool to benchmark their programs against each other and met our expectations to:. Assess our own sustainable purchasing program against SPLC’s principles and guidance. Encourage and support all California agencies to do the same so that we can share and compare our programs within the state. Learn from benchmarking ourselves against users of the platform from other sectors and regions of the economy.   Before we hear the outcome of California efforts, Kris Spriano, SPLC BENCHMARKSM Program Manager, will speak on the benchmark tool.
2. The state of CA for leading the world in its advocacy for measuring and benchmarking their sustainable purchasing program, and extend mine and SPLC’s great appreciation for their partnership in the development and launch of the approach. tart out today by…
3. From a programmatic standpoint, SPLC BENCHMARK sits towards the top of our shared solution pyramid and seeks to enable organizations to both assess and benchmark their current sustainable purchasing programs (also known as your supply chain sustainability program).
4. Benchmark helps to answer the questions of <build slide>. Ultimately, Benchmark provides an organized framework by which to identify and choose strategic next steps that increase leadership maturity in sustainable purchasing over time.
5. The Benchmark Maturity Model is the basis for SPLC BENCHMARK and its assessment approach. The model evaluates an organization against 38 unique “best practices” in sustainable purchasing, analyzing maturity at four different levels <read Initiating, Developing, Improving or Leading>.
6. It should also be noted here that Leadership in SPLC’s Maturity Model sets a VERY HIGH BAR. This is because our goal in doing sustainable purchasing is to transform our global economy into one that is genuinely sustainable, from an environmental, social, and economic perspective. Therefore, the “Leading” maturity level describes how purchasing organizations will be operating when we have achieved a genuinely sustainable global economy. This makes SPLC BENCHMARK a highly useful tool for measuring how well we are doing on achieving that goal.
7. Okay, before we hear from Devika and Jennifer about their experiences with Benchmark, we wanted to give everyone a feel for the types of conversations generated by the Benchmark approach. One of the first exercises in the assessment process is being able to “inventory” the great work that you might already be doing in sustainable purchasing. We have posted a list of environmental, economic and social priorities for your purchasing department on the walls. If you haven’t already, please find your sector and place dots on each of your priorities as follows <read the green and blue instructions>.
8. FACILITATOR:Wow! Look at all the great stuff this room is already working on! Note common priorities within and between sectors -> ASST. (Time permitting…) write common priorities on easels. These might be good areas to work on together, right? Note varying maturities within a given sector and priority. SAVE FOR ANOTHER TIME…Note that many of these priorities are more relevant to some areas of purchasing than others (ex. transportation vs. office products), so the most appropriate way to deliver on leadership’s priorities would be by developing great strategies for addressing those priorities within key categories (not by making them a priority in every purchase/contract).
9. <Should have already covered these in the discussion, but doublecheck and explain if necessary.>
10. To take this one step further, adding the collective actions that your organization is taking to address each one of these identified areas defines an organization’s sustainable purchasing program in Benchmark. It is THIS sustainable purchasing program that is then measured against the 38 best practices of the Maturity Model, and then compared to other organizations. So, let’s now hear more about California’s experiences with this approach.
11. I’d like to turn it over now to Devika Singh, Research Program Specialist for the state of California’s Department of General Services. Cohort Accomplishments Key Takeaways
12. The state of California participated in the NASPO lead SPLC BENCHMARKSM Cohort and lead a second similar Cohort to measure and compare the maturity of state and department sustainable purchasing programs. Each Cohort was lead by SPLC over a six month period, teaching participants SPLC guiding principles in running a sustainable purchasing program. First, Devika to speak to state to state led cohort and inform attendees that Jennifer will speak to the Ca DGS lead cohort. Next. BENCHMARK NASPO Brief Background NASPO Investments in BENCHMARK - $27, 000. Cohort Accomplishments Key Takeaways
13. Here you see a more detailed breakdown of how the state of California cohort participants measured up to that comprehensive definition of sustainable purchasing leadership. <<WALK THRU CHART>> The California agencies that participated in the cohort now sit on the forefront of being able to use the organized framework of required steps to move forward (ahead) in maturity to all other organizations. In short, California sits at the forefront of leading a sustainable purchasing revolution! Sustainable purchasing maturity varies across states and even internally within agencies and SPLC Principles.
14. Sustainable purchasing maturity varies across states and even internally within those states. However, what was clear throughout the process and demonstrated in the teams’ Benchmark results was two groups with varying needs: Emerging Leaders: Those organizations that recognize what sustainable purchasing is, and have invested in developing very specific practices within our defined maturity model. Interestingly, these emerging leaders often lead in areas complementary to one another. In other words, together, their experience in leading best practices is much more mature than an individual organization’s leadership across the 38 measured areas. Therefore, they have a lot to gain by further sharing what they are doing with one another. Just Starting: These organizations are either just starting to learn the strategic definition of a sustainable purchasing program, requiring a more basic understanding of its components. SIDE NOTE: Only two (of 14) organizations fell somewhere “in between” these two major groups.
15. Caltrans had 6 areas leading, 6 areas improving Califire showed 1 area of improving DGS-OBAS showed 3 areas of improving CalRecycle showed 1 area of leading Agencies that recognize what sustainable purchasing is, and have invested in developing very specific practices within SPLC’s defined maturity model show as emerging leaders. Some agencies are starting to learn the strategic definition of a sustainable purchasing program and require a more basic understanding of its components before progressing in the maturity model. Department of Finance Budget Report – Salary and Wages Supplement Fiscal Budget Report http://dof.ca.gov/budget/Salaries_Wages_Supplement/ SCPRS Data - STATE CONTRACT PURCHASING REPORTING SYSTEM https://suppliers.fiscal.ca.gov/psc/psfpd1/SUPPLIER/ERP/c/ZZ_PO.ZZ_SCPRS1_CMP.GBL?& Census data https://www.census.gov/data/tables/2016/econ/state/historical-tables.html
16. ADDITIONAL NOTES: 14 total entities finished entire question set. However, more than that completed SOME (not all) of the question set/exploratory work. Only benchmarked 8 agencies.
17. California is the 6th largest economy in the world! We are responsible for supporting a transportation system that is used by a California population of almost 40 million inhabitants – not to mention all the visitors! Caltrans will accomplish this amazing feat with a budget of about $14 Billion and almost 20,000 employees statewide. Our largest effort is, by far, the maintenance of over 51,000 lane miles which costs taxpayers almost $2 billion a year. The work we do is complex – we have our hand in establishing and maintaining many different transportation methods – including things like bridges and tunnels, ferrys, trains, and airports. The scope of our work is ripe for affecting change in sustainable purchasing. Let’s take a quick look at how Caltrans purchases.
18. Last fiscal year, Caltrans spent about $4.8 Billion on goods and services. This graphic depicts the types of things we spend our money on. Notice on the left the largest piece of the pie is construction activities. The spend related to construction and utilities is greyed out here because, while these areas do amazing and innovative work infusing sustainable purchasing practices into these activities, theirs is not under my purview. The scope of my Sustainable Purchasing Program is currently limited to the blown out graphic on the right. Notice that our top spend categories are Architectural & Engineering services, Railway Transport, and Transportation/Vehicle Maintenance & Repair Services. This high level spend data is important for us to consider as we work to develop our Sustainable Purchasing Program Plan, Action Items, and Strategies. As I mentioned, a lot of great work has already been accomplished in the environmental, social, and economic categories at Caltrans….
19. Caltrans’ has kept sustainability in the forefront of its guiding principles for many years! Here you can see the organizational alignment of sustainability efforts. Caltrans Strategic Management Plan 2015-2020 includes Sustainability, Livability and Economy as strategic goal #3 and specifies objectives, measures and targets to frame successful activities. Primary focus has been Caltrans’ linear assets (lane miles) and GHGe reduction efforts – with great success! SUCCESSES: Our fleet now includes 226 Zero Emissions Vehicles and that number continues to grow each year as we replaced aged vehicles with more environmentally sustainable models. Caltrans’ “Vehicle Fuels” has decreased substantially because Caltrans replaced the majority of diesel fuel with renewable diesel fuel. We also use other alternative fuels like E-85, compressed natural gas, and liquefied petroleum gas. It’s in the foundation of our organization – our guiding principles – it’s there. Opportunity exists to infuse greater sustainable purchasing practices into our acquisitions of all types. Caltrans is committed to sustainability by evaluating, piloting, and implementing a Sustainable Purchasing Program. That’s why we were so motivated to engage in SPLC’s Benchmark Cohort for California departments. Let me tell you a bit about our experience.
20. The SPLC Benchmark tool itself is quite detailed – 38 thought-provoking questions that measure your organizations sustainable purchasing program over the 5 principle areas – it’s a lot! Participating in the cohort was so beneficial! The cohort is led by an expert in the tool and the process is paced in a way that allows you to tackle the questions with plenty of time to confer with the right people internally before responding. I found that the process itself really provided me an avenue to connect with people in our complex organization that “do the work”. Not only did I have this process as a springboard for making those connections, but I also leveraged those conversations to educate them on sustainable purchasing and its alignment to Caltrans’ mission, vision, objectives, and goals. There are so many sustainability efforts happening in Caltrans statewide! Most I wasn’t even aware of until I probed my way through the SPLC Benchmark Cohort process. Since our cohort was made up of other California departments, it was so beneficial to work in partnership through this process too. We identified many opportunities to work together now and in the future, leveraging our knowledge and resources, to establish Sustainable Purchasing Programs that present a consistent and united State of California. In the end, the results showed that our peers High Speed Rail and Fish & Wildlife were leading in areas that Caltrans has great opportunity – we’ll be looking to partner with them very closely and learn from their best practices! There were certainly some challenges that we faced along the way as well. First and foremost was the time it takes to complete the process with the level of thoroughness it deserves. Then there is the complex task of interpreting the results once the reports are received. There is a lot of great information contained in the reports and it is incredibly helpful to framing a Sustainable Purchasing Program Plan. For us, interpreting the results through a governmental lens can be a bit more challenging since our authority to purchase is structured by governing statutes and regulations that can sometimes be tough to navigate and certainly hard to change. The results we received provided both a high level view of Caltrans’ maturity with sustainable purchasing and some detailed next steps. Let’s take a quick look at those high level results first.
21. This depicts the high level results of Caltrans’ Maturity Assessment Report. Overall, Caltrans is solid in the “developing” stage. We did have a mix in the range of maturity for items within each of these high level Principle categories. For example, Caltrans was validated as “leading” in things like Leadership’s Understanding, Multi-Stakeholder Collaboration, and Supplier Diversity. But then we saw “not started” ratings in areas like Supplier Development and Supplier Sustainability Disclosure. Let’s talk a moment about the star shown in the Transparency portion of this graph – in this category, there are 7 items of assessment and, due to the scoring methodology, Caltrans received a score that we feel doesn’t reflect the work we’re really doing. Example…..…….. Feel free to toss to Kris for comment  We will be considering the SPLC Benchmark results when we identify action items and develop our Sustainable Purchasing Program Plan.
22. Caltrans’ Sustainable Purchasing Program Plan will consider all of these components and ensure the efforts are aligned and complementary. SPP Use of Cohort Results Convened cross functional team (May 1) - SWOT Analysis Consider Benchmark Results Consider Spend Analysis data Alignment with CA Green Operations Roadmap action items Alignment with Caltrans’ existing strategic plan objective and strategies Since the CA Cohort’s conclusion, Caltrans has convened an internal stakeholder group in its first planning session – we spent our time together becoming oriented to all of these components and conducted a SWOT analysis. Our next session will be held in a couple of week and will focus on identifying action items to get our Program Plan underway! In addition to the high level maturity results contained in the Benchmark report, it also provides very detailed potential next steps that the organization can do to move the needle on the maturity and effectiveness of its Sustainable Purchasing Program. I’d like to now share with you just a few so you can get an idea of the usefulness.
23. Now this draft list of action items were pulled straight from Caltrans’ report results. I realize it’s word-heavy and I won’t be reading it to you  but I want you to see the incredible immediate value the results provide. The resources were identified through the Cohort process and are critical to successful implementation. Each of these recommended action items were identified because it is the “next logical step” in us improving sustainable purchasing at Caltrans. These have been short listed – out of the 38 that were recommended in the report – due to their strong alignment with the factors I shared before: Caltrans’ strategic plan, California’s green operations roadmap, and our top spend categories. Overall, we found the SPLC Benchmark Cohort process and the tool reports to be incredibly valuable to us today – and relevant to the future – of Caltrans developing an effective Sustainable Purchasing Program!
24. In 2017 at the SPLC Summit in Denver, CO. I spoke of SPLC BENCHMARKSM platform and how California envisioned its use.  Assess our own sustainable purchasing program against SPLC’s principles and guidance. Encourage and support all California agencies to do the same so that we can share and compare our programs within the state. work with SPLC and the National Association of State Procurement Officers (NASPO) to help state governments use the tool to benchmark their programs against each other. learn from benchmarking ourselves against users of the platform from other sectors and regions of the economy.   We believe that what we learn from SPLC BENCHMARK enables us to communicate more clearly ­– internally and externally – about the full scope of our sustainable purchasing program. Here is a little about the future of Sustainable Purchasing in California government. What are we currently doing and where do we envision in the horizon?  
25. Spend analysis to benchmarking strategy. The cohort was a strategy to improve sustainable purchasing in the largest departments exempt from DGS oversight – public work projects in the construction industry. The key is to form a shared understanding of what it means to buy sustainable goods and services. Each strategy cycle is a method to prioritize and identify new actions for improvement. Speak to challenges is oversight of sustainable purchasing in exempt departments and decentralized procurement operations.
26. From Initiating a program to building, each step is a step further to a sustainable economy. The spend analysis DGS conducted in 2016 lead to the discovery of several new strategies, where priorities are data driven. DGS can address reduction in GHG emissions through supply chain management. Over 65 percent spend is attributed to services. Construction services are one of the highest. SPLC Benchmark strategy was to create a shared understanding amongst state agencies given some of the largest spend was through spend exempt from DGS oversight. Exemption is attributed to public work projects. AB 262 Buy California Clean Act paired with the Cohort to pilot SPLC BENCHMARKSM has brought forth a tremendous opportunity for change through collaboration and shared understanding. The drive to improve California sustainable purchasing initiatives grows stronger. AB 262 is igniting collaboration between government agencies, suppliers and advocates. Collaboration is underway with California State Universities Chancellors Office, UC Office of the President, California Association of Public Procurement Officials, US EPA, other state governments and the steel, concrete steel rebar, glass and insulation board industries. These industries supply materials to the construction industries, an identified high spend category for state government.
27. Thank you all for coming!
28. FACILITATOR:Wow! Look at all the great stuff this room is already working on! Note common priorities within and between sectors -> ASST. (Time permitting…) write common priorities on easels. These might be good areas to work on together, right? Note varying maturities within a given sector and priority. SAVE FOR ANOTHER TIME…Note that many of these priorities are more relevant to some areas of purchasing than others (ex. transportation vs. office products), so the most appropriate way to deliver on leadership’s priorities would be by developing great strategies for addressing those priorities within key categories (not by making them a priority in every purchase/contract).