Sustainability in 2025 and Beyond, Part 6: Sustainability Strategies, Part III Demand

In our first installment we noted that while sustainability may have fallen out of favour in the current American political and regulatory environment to the point that we had to counter the Chief Sustainability Officer graphics going around earlier this year with a Chief Sustainability Officer: USA Edition, sustainability, at its core is becoming more and more important to corporate survival. In our second installment, we described how sustainability concerns permeate every department of the organization, and failing to adhere to them is not only unsustainable in the environmental sense, but also in the business sense. In our third instalment we dove into the stakeholder engagement that is required for true sustainability success.

Then, in our (forth) installment, we started outlining the key areas of focus to identify the key projects that will increase both environmental AND business sustainability, starting with energy. We followed this up in our fifth installment with (fresh)water reduction. In today’s, sixth, post we continue with key project identification in the areas of demand.

Non-Renewable Resource Reduction

Unlike the first two posts, where we could pinpoint specific situations where you had a lot of opportunity for sustainability improvements that would lead to significant cost reductions (which is the ultimate key to business sustainability), this depends on what you are buying, what options are at your disposal, and how much opportunity you have for substitution and/or re-design.

Let’s take a few examples to try and explain this:

  • Packaging: you can use new packaging made from freshly cut trees, or you can use packaging with a high concentration of recycled material
  • Fuel/Plastics: you can use petroleum-based fuel and plastics or you can use biofuel/bioplastics
  • Electronics: you can use rare earth magnets with ferrite magnites or continue your research into iron-nitride and magnesium-based alloys for permanent magnets and focus on developing alternatives to lithium batteries such as sodium-ion, zinc, or solid-state batteries

There’s no magic formula for identifying which non-renewable resource-based products can be replaced with products that are based mostly, or solely, on renewable resources beyond examining every product you are purchasing for alternatives. Fortunately, that’s not as hard as it was twenty years ago with modern technology that has extensive built-in catalogs, pre-defined SKU similarity groupings, and custom-designed AI for identifying similar products that could be potential replacements that can recommend potentially more sustainable alternatives for consideration on every product selection.

One-Time/Short-Term Use Demand Reduction

As with non-renewable resource reduction, it’s not easy to identify one-time use demands that can be eliminated without careful consideration of why the demand is there and what the alternative is. However, all one-time use products should be evaluated for reduction and elimination opportunities.

For example, you should analyze:

  • print catalogs, newsletters, (free) magazines and flyers: yes, there is still a generation that likes them, but that generation is shrinking fast as even that generation is hooked on the internet, which allows for faster, quicker, paper free delivery; if you have a small percentage of the customer base that wants paper, at least let them self-select into a subscription and then only print (on demand) what you need to; the per unit price may be a few cents more, but if you’re only printing 1/10th of the volume, big savings in cost and resources
  • printer paper similarly, how much do you really need to print — if your team needs reports on the go, consider supplying everyone with a large tablet (with a display optimized for reading) in addition to their laptop
  • plastic cutlery and cups in the break room use real ceramic and stainless steel

Basically, look at anything that has a short life-span and see if you can reduce or substitute the demand with something with a longer lifespan that will lead to savings in the long term.

Equipment Reduction

Basically, how much equipment are you buying vs. how much equipment do you need? Consider the following:

  • end-user electronics focus on selecting phones and tablets with long shelf-lives and extended warranties, and laptops that can be upgraded to extend their shelf-life
  • IT servers and storage how many do you need to support your secure internal operations vs. how much demand can you shift to the cloud for on-demand computation
  • fleet do you need as much as you have? is it hybrid/electric with a longer lifespan than traditional diesel?

Again, as per the past two situations, every organization is different, and it will take careful review of alternatives to determine where sustainability will bring savings and where it won’t. But, as per our section on non-renewable resources, modern technology can do a great job identifying when there are more sustainable cost-saving options to consider.

However, as with energy and water utilization, at the end of the day, there are many opportunities in a business to be truly sustainable …. and by that, we mean choose environmentally friendly options that save the business a considerable amount of money, especially in the mid-and-long term. That’s what sustainability is truly about.

Sustainability in 2025 and Beyond, Part 5: Sustainability Strategies, Part II (Fresh)Water

In our first installment we noted that while sustainability may have fallen out of favour in the current American political and regulatory environment to the point that we had to counter the Chief Sustainability Officer graphics going around earlier this year with a Chief Sustainability Officer: USA Edition, sustainability, at its core is becoming more and more important to corporate survival. In our second installment, we described how sustainability concerns permeate every department of the organization, and failing to adhere to them is not only unsustainable in the environmental sense, but also in the business sense. In our third instalment we dove into the stakeholder engagement that is required for true sustainability success.

Then, in our last (forth) installment, we started outlining the key areas of focus to identify the key projects that will increase both environmental AND business sustainability, starting with energy. In today’s, fifth, post we continue with key project identification in the areas of (fresh)water and resources.

(Fresh)Water Reduction

Water shortages and scarcity is becoming all too common. More than 50% of the USA — the richest country in the world which, theoretically, could have the best infrastructure — has suffered droughts and water scarcity issues, with scarcity often getting so bad in parts of California that even the US President says they need to open a very large faucet (which doesn’t exist, but it is needed).

It’s so bad in California that they had to serve Nestlé a cease-and-desist order to stop it from taking millions of gallons of water it wasn’t entitled to. (Source: The Guardian). Thus, unless you want your taps to run dry (either due to lack of water availability or the local government agency literally turning your taps off), you need to minimize your water usage.

The major uses of water in most businesses, depending on the business type, are:

  • Restrooms/Showers Old fashioned, high water usage toilets and urinals, and high-flow shower heads (instead of low-flow, high pressure) combined with poor maintenance with constant, unaddressed, slow leaks waste a considerable amount of water. Reductions of up to 50% water usage with proper equipment selection and installation are possible. (Proper selection is key, not all low-flow models actually meet the MaP test measure they advertise, and a high scoring model is key, because you don’t save water if you have to flush two or three times.)
  • Water Cooling This is especially critical in power plants (which can consume millions of gallons of water daily) and IT data centers (which can also consume hundreds of thousands of gallons of water daily). Because contaminates like minerals, scale, and bacteria build up over time and evaporation occurs, water cannot be reused indefinitely, but with proper treatment and filtering and cooling systems (passing through high efficiency refrigerated zones), the amount of freshwater required can be greatly reduced, especially if there is a renewable energy source to power the refrigerant based cooling in the closed-loop system (and extremely good high-efficiency reverse osmosis systems). With today’s technology, except for regular top-up to deal with evaporation, it is possible to recycle water for years, whereas a decade or two ago the systems might have needed to be flushed every few months.
  • Irrigation Many office buildings or facilities also include land with greenery that needs to be maintained, usually with fresh water, which, in peak heat periods, can consume thousands of gallons of water a day — if the facility installs a small wastewater filtration and management system, as well as an underground irrigation system, a lot of the wastewater that goes through its building sinks and showers can be automatically pumped through the irrigation system, minimizing the need for freshwater for irrigation

We’ll continue with the other areas in our next installment.

Sustainability in 2025 and Beyond, Part 4: Sustainability Strategies, Part I (Energy)

In our first installment we noted that while sustainability may have fallen out of favour in the current American political and regulatory environment to the point that we had to counter the Chief Sustainability Officer graphics going around earlier this year with a Chief Sustainability Officer: USA Edition, sustainability, at its core is becoming more and more important to corporate survival. In our second installment, we described how sustainability concerns permeate every department of the organization, and failing to adhere to them is not only unsustainable in the environmental sense, but also in the business sense. In our third instalment we dove into the stakeholder engagement that is required for true sustainability success.

In this, our forth installment, we are going to begin by outlining the key areas in which to focus to identify the key projects that will increase both environmental AND business sustainability.

If you review our second installment, the biggest lifts in sustainability come from:

  • (Non-Renewable) Energy Reduction
  • Freshwater Reduction
  • Non-Renewable Resource Reduction
  • Equipment Reduction
  • (One-Time Use) Demand Reduction

We’ll take each of these one-by-one and outline some of the major areas where there is a lot of waste. In future posts we may dive into the details on how to tackle them (where it’s not obvious).

(Non-Renewable) Energy Reduction

Energy is pricey. You want to reduce your energy needs across the board, and where you can’t reduce any further, you want to ensure that 100% of your energy is coming from renewable sources like Solar, Wind, and Hydro because, in the long term, that is the cheaper energy source.

Most operations have major energy inefficiencies in one or more of the following areas:

  • Lighting. Many office buildings have lights on over half the day, if not way longer, and are still running low efficiency flourescent vs. high efficiency LED, where the former will give off 40 to 80 lumens per watt and the latter will give off 75 to 150 lumens per watt, halving to quartering lighting energy requirements; it may not seem like a lot, but a 40 w T12 flurescent bulb running 12 hours a day for a year consumes 175 kWh; an LED equivalent bulb will consume about 15 watts, or 65 kWh over the course of the year for an almost 38% savings. Now consider that you will likely have at least 1500 of these lighting a 10,000 square meter office (10,000 m^2 x 400 lumens / 2,600 lumens), that’s a savings of 165,000 kwH or about $25,000 if you’re paying 15c/kwH. Now, rip and replace of all of your lighting isn’t cheap, but with a lifespan estimate of at least 50,000 hours for an LED outlet, that’s a 10 year plus lifespan. Estimate about $45/unit for a bulk purchase, or $67.5K plus $28.5K for electrical work, and for an upfront investment of $96K, you’re looking at a savings of at least 250K+ (since we aren’t factoring in WACC) for an ROI of at least 260% (while working towards a green building).
  • Heating: Whether you are heating with oil or off the grid, heating adds up quickly, especially if you are in a climate that drops below 0 for much of the winter. In northern climates, space and water heating can be quite significant since the US Energy and Information Agency estimates these costs make up over 2/3 of energy consumption for home and general office buildings. When it comes to heating, it’s not just the space, it’s the energy efficiency of the space. Poor insulation, leaky windows, poor use of natural light (and heat) can double or triple costs. While you can’t do much about this if you rent, if you are buying a commercial building, before you move in, do an energy efficiency analysis, and if it’s not in the top quartile, gut and redo it. If energy hungry lighting can eat up 200K/year in a large office building, heating (or cooling in hot climates) can eat up 2 Million, with a Million of that being unnecessary. Over decades, you will save 10X your up-front investment.
  • IT: After heating and cooling, the next biggest energy hog in most office buildings is the IT infrastructure and the internal server farm. Especially if the IT department is running older servers three or four generations behind, as older servers tend to be huge energy hogs for the relative computing power and output. It’s also critical to ensure that the IT infrastructure is appropriately sized and continually running at 80% utilization, with the ability to spin up and spin down computing resources as needed.

In addition, in manufacturing, you also have to consider:

  • Production/Assembly Lines: these are huge energy consumers; and energy efficiency all comes down to utilization; if you’re not using the line at 90% efficiency or more, you’re wasting energy; many operations who aren’t using a modern Manufacturing Planning / Execution System (MPS/MES) who think they are efficient will only be operating at 60% or 70% efficiency, at best; talk to the leaders in MPS/MES and even Semiconductor Chip Manufacturing and you’ll be shocked at the efficiency gains (and thus energy conservation) these companies find daily

Finally, in distribution, you also have to consider:

  • Fuel Efficiency, and especially if you are transporting over long distances; are you transporting by air when you could be using ocean; are you transporting by truck when you could be using rail; are you using ethanol or hybrid trucks instead of dirty diesel; are you maximizing for full containers/truckloads or sending half-empty trucks; and are you ensuring that return trips are utilized, or sending them back empty?

We’ll continue with the other areas in our next installment.

Why Big Analyst and Big X Consultancies SUCK …

In a post on LinkedIn a while back, THE REVELATOR indicated that the real reason Gartner sucks (and that their stock dove 30%) is because, at the end of the day, they aren’t very good at tying advice to outcomes (and likely don’t even attempt to do it at all most of the time in ProcureTech). But in all fairness, that holds true of all the Big Analyst firms and Big X Consultancies. Also look at Forrester and IDC reports — it’s always the same old vendors or the hype of the day, whether or not that hype is delivering any value whatsoever. (And the answer is “very little” for intake and orchestration — because you can’t orchestrate an empty pit and if you attempt to orchestrate an elementary music class, be prepared for the migraine of your life — and essentially none for Gen-AI, with MIT pointing out that only 5% of deployments are delivering any value whatsoever.)

But it’s not just the Big X analyst firms. It’s the Big X consultancies as well! Now, I know you are saying “but surely they do better, they are consultants, they do projects, they have best practices, and they’re paid for results” and while that is all true,

  1. they’re not all experienced consultants (and the number of juniors on many projects is scary — I’ve heard too many stories about a PE firm trotting in a McKinsey or Accenture* after a big acquisition (because it’s their standard acquisition playbook) to optimize and rightsize operations who come in with a team of 20, of which only two actually provide value beyond what the company already knew. One of the biggest companies in our space literally marched them all out at the end of the day and told them NEVER to come back because when it came to ProcureTech expertise, they identified one individual (the project lead, who they’d likely never see again) who was sharp and got it and would definitely be able to add value if entrenched in their operation, one (his right hand man) who was smart, hardworking, and capable of learning fast and who might be able to add value, and 18 juniors who didn’t know anything that wasn’t in the 7 year old playbook on Procurement handed to them when they started, a playbook this company had rewrote multiple times over the years)
  2. they don’t all have deep relevant project experience in Procurement (or whatever business function you’re bringing them in for) in your Industry
  3. their “best practices” are super generic so they can be applied across the board, which means they are not tailored for your industry and definitely NOT tailored for you (so they are not best)
  4. and they are paid on promises of results, which sometimes don’t materialize

Just like I keep saying it’s not the analyst firm, it’s the analyst, it’s not the consulting firm, it’s the consultant, and the sad reality is that the bigger the firm, the smaller the percentage of senior experienced talent in that talent pool, as the best talent who don’t make partner (and then have to focus more on managing and selling than project delivery) are constantly recruited by clients, consultancies, and even tech companies or the ones able to go out and join/build niche consultancies. There ends up not being enough senior, experienced, talent to go around and you’re essentially playing the lottery that one of these resources will end up full time on your project.

Since these consultancies want to be outcome focussed, in an effort to do that with more junior people, what ends up happening is they end up writing the advisory playbooks as metric focussed — what percentage of spend is on personnel in a best in class, what percentage of spend is on tech in a best in class, and what is the typical breakdown of headcount and tech spend by module or platform. Then, they tell you:

  • your headcount spend is too low, so you need to go out and hire X people in Y roles because, well, metrics and statistics and that will help because of scripted reasons (more sourcing pros mean more events mean more savings, more supplier managers mean better quality, etc.)
  • your headcount spend is too high, so you need to fire X people in Y groups because they must be tripping over each other and/or bringing your profit margin down
  • you aren’t spending enough on tech, so go spend 10 Million on Gen-AI and that will automagically fix everything
  • you are spending too much on tech, so go out to bid for a new ERP, S2P suite, orchestration platform, etc. because you obviously didn’t go to market right when you bought your current tech

Not realizing that

  • the headcount needs differ in every industry AND every company
  • the tech needs differ by industry, company, and process
  • it’s not spend, it’s ROI per spend

and this means

  • you might only need one supplier data manager in commodity indirect because there’s always three more suppliers waiting to supply you the same thing
  • but you might need ten supplier relationship managers in direct, each managing a different supplier (pool) producing a different, custom, component for your advanced engineering or biomedical device
  • you might not need best in class optimization backed sourcing for indirect because automated auctions will get you market price every time
  • but you might need best in class optimization, analytics, and market should-cost modelling platforms to get a grip on your direct sourced custom designs
  • and sometimes spending more on headcount and tech than across-the-board “average” yields a significantly better return because your quality stays high, stockouts only occur during global disruptions, your data processing is 95% automated freeing your staff to focus on strategic issues, etc.

But what can we expect from fresh grads with little mentorship (who are rushed into Gen-AI “training”) who get all of their insights from these Big Analyst firms that

  • publish quadrants and waves that are completely unrelated to reality for the majority of companies with the same 10 to 20 large vendors every year that only work for select large enterprises (and the other 40 to 80 vendors continue to be completely ignored),
  • constantly push and promote context-free (Gen-)AI, despite one of these firms publishing a now buried/deleted study a few years ago that stated 85% of AI projects fail and the recent MIT study that tells us, no, in fact, 95% of these projects fail to deliver any value, and
  • unless you get one of the few analysts who actually gets it, employ playbook-based responses to inquiries that don’t have any context (because the analysts don’t have any time to create tailored recommendations to context because they spend too much time doing basic data collection where 80% of it could be captured in a survey monkey tool [or 95% by a well trained SLM {or, better yet, classical semantic tech with provable accuracy rates} that could map free text to standard process needs and vendor solution categories for easy verification and correction by a true human expert]).

The reality is that until

  • big analyst firms and big consultancies admit their flaws,
  • start tying actual outcomes to the standard projects/recommendations they made, and
  • start analyzing and using these results to tailor recommendations to their clients that have a good chance at actually delivering value

these firms, and their standard recommendations, are going to continue to suck and your chances of success are going to remain at 12% for standard projects and 5% for Gen-AI projects.

Sad, but true.

* not realizing that the reason the company was such an attractive acquisition target in FinTech/ProcureTech was because they already knew all the best practices that the big firms have in their playbooks and were employing them effectively; these Big X tend to do well on average companies that are not best in class or deep in modern process or technology

ChatGPT is NOT Your Friend!

I’m still seeing too many posts out there on how ChatGPT is your friend and how it’s the biggest productivity hack ever and this has to stop.

It’s Not Your Friend. It doesn’t care if you live or die and will not only urge you to give into any and all suicidal thoughts, but provide how-to guides for you.

It’s not a productivity hack, because it’s, at best, a drunken plagiarist intern and you have to review everything it produces. Moreover, you have no clue if it’s mostly right, partially right, or a complete work of fiction. I was reminded of this the other day talking to a tech guru on a legal team that asked their LLM about what laws might impact a new contract with a new supply chain setup in the affected regions, and the LLM came back with three laws, complete with full text and author/site citations, that the team should review for relevance. Upon digging into each law, they found that none of the laws were real, and everything was completely fabricated — the laws, the citations, and sometimes even the bios/bodies who supposedly wrote them! It didn’t matter how much careful prompting they gave it, how specific the request was, and how much time went into building the request and allowing the LLM to do its thing, at the end of the day, it still made everything up and wasted a few days of the team’s time — forcing them to start from square one the old fashioned way and do it all over.

This is why, despite every consultant’s claim to the contrary, ChatGPT CAN NOT create a good draft of an RFP simply from a template and a product or service identification. In the best case, all it can do is just repeat the suckage found in the majority of RFPs in the data set it has been found on. If there weren’t enough RFPs to train its probabilistic predictors, it’s going to make stuff up that, unfortunately, sounds really good because the models, for the first time, capture the intricacies of putting words together to not only form proper linguistic utterances but do so in the common vernacular, which means it sounds human, smart, and right when its still a machine, dumb, and wrong. And no matter how good the “reasoning” seems to be, it won’t be based on logic and will be wrong and circular, but it will take more deftness and effort to catch the mistake than just write your own RFP from scratch. (Now, this doesn’t mean that SLMs can’t be trained to help you in RFP construction and reduce your workload 80% to 90% of the time, just that LLMs can’t be used and even with SLMs, a human will still need to be heavily involved in the process and review. However, to date, I’ve only seen ONE company get this right so far, and have only talked to two or three more that are on the right track.)

I tried to address this in my Best Practice Tech Selection reprise, my How to Write a Good RFP, and my Bells and Whistles Lead to Cells and Thistles series, but apparently I’m not clear enough as the LinkedIn influencers and the consultants and analysts they are influencing still aren’t getting it!

ChatGPT can’t do your work because it is NOT intelligent. All you are accomplishing is dirtying our atmosphere and denying our fellow humans clean water so that you can power queries (and keep the machines from overheating) that take 20 times (or more) the processing power of a Google Search and aren’t guaranteed to return any usable results (while allowing your cognitive abilities to atrophy through over-reliance on dumb tools). (We should not see stories about how I Can’t Drink the Water in the richest and most powerful nation in the world [because of a data centre]! It’s shameful! But we are now seeing these stories, along with “I don’t have water!” stories because data centers are now consuming over a trillion gallons of freshwater globally, a resource we are running dangerously low on in many countries. Half of the USA is already suffering from water scarcity issues! And you’re literally making it 20 times worse thanks to your ChatGPT addiction!)

For an RFP, it’s not a high level bill of materials, feature / function / support checklist, or detailed profiles of what you think you need — it’s processes you need to support, capability gaps you are missing, and skills that you need augmented. ChatGPT, or any LLM doesn’t know that! Only YOU know that. For many other tasks that require human intelligence to figure out, it’s the same story — ChatGPT doesn’t know, makes stuff up, and gives you suckage.

Moreover, you can’t trust it for deep data analysis. It has been demonstrated to get basic math wrong many times (or, when pushed to find savings, multiply a result by -1 and lie to you). It can usually compute directionally accurate results, but that’s it. But we’ve also seen many instances where the EXACT SAME QUERY was asked twice in a row on a data set that did not change, and it gave two different answers. Even the dumbest drunken plagiarist intern would say “I just told you the answer you nitwit. It’s this!” Moreover, right or wrong, the dumbest drunken plagiarist intern would repeat the same answer. (It’s so bad that even Gartner has projected that conversational analyticswill fall off of its hype cycle within 2 years!)

Furthermore, it is not intelligent, and has no brain, so it cannot brainstorm … the best it can do is serve up other people’s ideas you may not have heard about! There’s a reason you will not have thought of some of the ideas it brings back, and the reaason is the ideas it will bring back are so ridiculously stupid (and obviously wrong) that only a complete and utter moron would give them a second thought.

It’s a fun, planet destroying, toy that will always hallucinate, because that’s part of its core design, and that may or may not give you something useful on any given query. So if you have to manually verify everything it does, how can it be worth using?

And yes, it really does destroy the planet compared to classic Google Searches. This YouTuber does a great job of explaining, in plain English, How AI is Impacting the Planet for those of you who refuse to process the written word I keep presenting to you.

But if you don’t mind planet killing, or a technology tool that will expose your entire conversation history and confidential/trademarked/top-secret corporate data to the whole internet, then be my guest and use it. It’s your business. Feel free to flush it down the toilet if you like. Not my place to tell you not to.

I’m just here to remind you that ChatGPT is NOT your friend! (And neither is any open LLM!)