Oct 252011
 

by Eric Flamer (MBA ’13)

The US Green Building Council reports that as of March 3, 2011, 91 hotel properties have achieved LEED certification, with an additional 1100 projects registering with LEED and working towards certification. From my employment experience in the Washington, DC convention hotel market, the truth is that most of the buildings dedicated to hospitality were constructed in the era preceding the green revolution, and are sorely lacking in any type of green efficiency.  What are some ways the industry can align guest satisfaction, bottom-line reduction, and green values successfully?

Recently I came across a LEED gold-certified property during some volunteer work in East Baltimore, MD: Marriot’s Fairfield Inn and Suites takes pride in being ‘Baltimore’s first green hotel’. After examining the Fairfield’s greening strategies, there are some points to consider in examining the overall trend towards a greener hospitality industry:

a. A zero-carbon footprint, achieved by purchasing wind-sourced, renewable energy credits – a more apparent greening effort, this fits with a smaller property’s reduced electricity usage compared to a larger property.

b.      Fragrance-free, all-natural, biodegradable cleaning products and laundering – while there is no direct correlation between this initiative and guest satisfaction, many travelers are sensitive to industrial cleaners, and in some cases, may be allergic.  Eco-friendly cleaning products, though, are more expensive.

c. Recycling bins in every guest room – a simple procedure that seems like a no-brainer for any hotel, regardless of size, since many of us already commit to recycle.

d. Alternative transportation for both guests and associates by having bike racks and supplying bicycles – a wonderful way to improve guest satisfaction by increasing accessibility through an in-house initiative.  It goes well with the city’s commitment to bicycles.

e. Appliances and fixtures that reduce energy, waste and water usage, resulting in an operation that is 24% more energy-efficient than required by code – there’s no doubt this impacts the bottom line in a big way.  In older properties, the commitment to replace old fixtures  may dampen revenue in the short run by reducing available room inventory.

I had a chance to speak to Roberta Wittes, the General Manager of the Fairfield Inn.  When I asked about the meaning of the LEED certification, she explained that the commitment to green values began with the vision set forth by the property’s ownership during the hotel’s construction.  While it hasn’t necessarily translated into more revenue or a greater marketing presence, the starting objective to save materials from ending up in landfills and invite guests into a clean and eco-friendly experience has established a recognizable long-term vision.  Take for example the Pur-Water Technology that operates in the hotel’s lobby.

“We’re encouraging guests to refill their water bottles to avoid purchasing bottled water,” Wittes explains.  The property’s staff may lose out on gift shop revenues, but comes away knowing that Fairfield is making a difference in its daily operations.

Eric Flamer is a first year MBA at the Robert H. Smith School of Business.

Oct 102011
 

By Stephen Huie (MBA ’12)

In recent years, organizations have developed increasingly creative and large scale supply chain initiatives to deal with increasing energy costs, a recessionary environment, and consumer demand for sustainable processes.

To capitalize on this evolution in practice, academic institutions must also make a conscious effort to train the next generation of supply chain managers to build upon these best practices and identify further opportunities to improve.

Progress

Large organizations have not only become increasingly conscious of the benefits of greening their supply chains, they have begun to actually implement solutions to minimize their environmental footprint and enhance their bottom line.

For example, Unilever recently opened its aerosol manufacturing plant in Jiutepec, Morelos with smart manufacturing equipment that runs on energy-efficient variable speed engines and automatically shuts down when idle.  At the string cheese manufacturing plant in Campbell, New York, Kraft Foods converts whey byproduct from the manufacturing process into a biogas to power the plant and improve the cleanliness of wastewater discharge into the area.  The General Services Administration has targeted a 28% reduction in greenhouse gas emissions by 2030 through fleet transformation, LEED design, and contractor incentives.

Greenstorming the Supply Chain

Students training to become managers or supply chain specialists have a lot to learn from such current practice and how organizations grapple with integrating a green supply chain.  At the Robert H. Smith School of Business, MBA and MS Supply Chain students recently participated in a case workshop guided by supply chain practitioners from Constellation Energy, Deloitte’s Federal Consulting Practice, LMI, and the Red Cross.  Teams of students and their practitioner advisers dealt with the dilemma of how to reduce the emissions and cost of shipping excess apparel inventory to secondary retail markets around the globe.  The teams identified factors driving excess supply and mis-forecasted demand and devised actions and mechanisms for intervention.  After presenting their ideas and discussing as a large group, advisers spoke about situations in their own career experience that shed additional light on the issue.

Such learning derived from industry experience and other opportunities to participate in structured engagements for real clients will disseminate best practice and allow future  practitioners to avoid reinventing the wheel.

Some programs, such as the Presidio MBA in Sustainable Management, even specialize in sustainable management practice and regularly train on cases involving waste management and water conservation.  At the Smith School, students involve themselves in such consulting engagements involving supply chain, marketing, and finance through the school’s Center for Social Value Creation.

This week at the Smith School, Mars, the food and health science maker of M&Ms, will be visiting for an informal “Cases & Beer” session to discuss their sustainable sourcing efforts.  Last year, Dennis Wrasse, the former Chairman and CEO of Pepco, came for Cases & Beer to talk about the future of alternative energy.

Cases & Beer is a series of ongoing discussion sessions organized by Smith’s Net Impact chapter to bring high-profile guest speakers and faculty to lead discussions on current business issues.

Stephen Huie is a 2nd Year MBA at the Robert H. Smith School of Business.  You can also read his blog about MBA education.