Procurement support

Top tips for buying resource efficiency equipment

Energy EfficiencyBusiness Support

ContentsIntroduction 3

How this guide will help 5

Sustainable procurement 8

Are you using external funding? 10

Could you collaborate with neighbours? 11

A four-step process 12

We’re here to help 19

3

The good news is, there are lots of low- and

no-cost actions that can be taken to improve

your performance, reduce resource use and save

money. For example, getting your staff to switch

off lights and other energy-using equipment when

it’s not needed, recycling better, reporting leaks

and working with suppliers. And there are good

savings for your business to enjoy by doing this.

Free support from our advisers has helped Scottish businesses identify over £140 million worth of savings opportunities to date, with a massive 24% average energy saving per business.

But, inevitably, many of the projects that can

deliver the biggest savings in the long term are

likely to involve purchasing new equipment or

investing in building upgrades – from simple

heating and lighting controls to the complete

upgrade of heating and lighting systems or

investment in renewable energy technologies.

Types of products that can be purchased to help

you become more resource efficient – cutting your

bills and environmental impact – are listed in Table

1.

Introduction

Rising energy, water and raw material costs, and increasing customer pressure on businesses to be ‘green’ continue to challenge the way that businesses across Scotland manage their resource use and environmental performance.

4

Heating, ventilation and air conditioning products

• Boilers.

• Warm air units.

• Radiant heating units.

• Combined heat and power

(CHP).

• Underfloor heating.

• Air curtains.

• Cooling system

replacement/upgrade.

• Heating and cooling

controls.

• Building management

systems.

• Heat recovery units.

• Commercial hot water

systems.

• Electric storage heaters.

Renewable energy technologies

• Solar photovoltaic (PV).

• Wind turbine.

• Micro-hydroelectric

system.

• Solar thermal.

• Biomass boiler.

• Biomass room heaters

(with radiators).

• Heat pumps – air source,

water source and ground

source.

• CHP with biomass.

• Anaerobic digestion plant.

• Wood burning stoves.

Building fabric products

• Insulation and

draught-proofing.

• Double/triple glazing.

• Secondary glazing.

Waste and water efficiency products and systems

• Water efficient taps,

showers and toilets.

• Rainwater harvesting.

• Grey-water systems.

• Water-recycling systems.

• Cleaning-in-place systems.

• Computer numerically

controlled (CNC) equipment.

• Composting systems.

Other products to reduce energy and water use, and prevent waste

• Measuring, monitoring

and control equipment.

• Lighting systems, fitting

and controls.

• Voltage optimisation.

• Variable speed drives.

• Energy efficient motors

and controls.

• Air compressors.

• Commercial cooking and

baking equipment.

• Commercial cleaning

equipment (e.g. washing

machines, dryers and

dishwashers).

• Commercial fridge and

freezer units.

• Multi-glazed refrigeration

doors/covers.

• High efficiency hand dryers.

• IT equipment.

• Swimming pool covers.

Table 1. Types of products to help your business become more resource efficient

5

How this guide will help

There aren’t many people working in Scottish businesses that have lots of experience of buying resource efficiency equipment. And, because buying long-lasting equipment (e.g. boilers, bathroom fittings and insulation) isn’t something that needs to be done frequently, not many people are likely to become experts and command a full knowledge of suppliers, product specifications and pricing.

This lack of knowledge can very often lead

to resource efficiency improvements stalling

before final implementation, which means

many businesses miss out on the financial and

environmental benefits that could be achieved. This

is particularly true in smaller businesses where the

pressures of day-to-day operations mean there is

very little time to undertake improvement projects.

For other businesses, this lack of time and expertise

can lead to purchases going ahead without the

right amount of planning – delivering disappointing

results. Unfortunately, such situations can lead to

future resource efficiency projects being viewed less

favourably and getting sidelined.

Making the right choices when buying new resource

efficiency equipment not only ensures that you

enjoy maximum benefits from the project, but it

also helps bolster support for future projects.

Different purchasing decisions will, of course, carry

different risks. Buying energy efficient lighting

for a storage area is likely to be much less risky

than getting a new heating, ventilation and air-

conditioning (HVAC) system that will have to keep

everyone in your workplace warm in the winter

and stop them getting hot under the collar in the

summer.

However, the purchase process is just the same for

both products. The only difference being the time

and effort you feel the task warrants at each point.

This guide sets out that process.

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Getting it wrong • Poorerqualityproductpurchased(e.g.

poor lighting or heating impacts working

environment).

• Higherpricepaid.

• Missedsavings/longerpayback.

• Projectdelays.

• Resistancetofutureprojects.

• Missoutongrants/funding.

Getting it right• Therightqualityproductpurchased(e.g.

improved heating and lighting increase

productivity).

• Costsminimised.

• Maximiseongoingresourcesavings.

• Increasedprofits.

• Greencredentials.

• Impressdiscerningcustomers.

Due to the hectic nature of roles in small businesses,

and the time and expertise required to complete

a procurement initiative successfully, you could

consider outsourcing the work to specialists – which

may, ultimately, save your company money. But if

you don’t want to do this, the simple process outlined

in this guide will help you.

While this guide doesn’t provide in-depth technical

details about heating, lighting, water efficient fittings,

etc, it will help you to make successful purchasing

decisions and avoid common pitfalls. It will also help

you manage your project and achieve the expected

benefits, while maintaining adequate quality.

Table 2. The pros and cons of buying resource efficiency equipment

Buying resource efficiency equipment

7

Are you making the right purchases?

We provide free advice and support to Scottish small and medium-sized enterprises (SMEs). If you haven’t done so already, book yourself a free energy opportunity assessment and let our technical specialists identify and prioritise your best energy efficiency opportunities that will reduce your energy use and save you money.

Arrange your free one-to-one support here or by calling 0808 808 2268.

8

Sustainable procurement

While most resource efficiency products are likely to be a one-off purchase that will last many years, they should still be part of an overall sustainable procurement system in your organisation.

Sustainable procurement is about:

• Ensuring the environment for the supply of raw

materials remains secure for current and future

generations.

• Purchasing products and services that cause

minimal, adverse environmental impacts.

• Incorporating human health and resource

scarcity concerns.

Sustainable procurement considers the life-cycle

of a product from extracting the raw material to

disposing of the product at the end of its useful

life. Products are assessed not just on their price

and performance, but also on their environmental

impact.

Sustainable products and services are those that:

• Minimise resource use.

• Optimise energy and water efficiency.

• Prevent waste arising in the first place.

• Use renewable materials.

• Use materials with a high recycled content.

• Have a low impact on the wider environment.

• Are not hazardous or toxic.

• Minimise transport and fuel use.

• Minimise packaging waste.

When speaking to potential suppliers, you should

make it clear to them that you will be assessing

their goods and services on the basis of sustainable

requirements as well as value for money. For

example, you could ask them to:

• Minimise the use of materials that may become

waste, such as packaging.

• Reduce the amount of hazardous material in

products.

• Increase the use of recycled materials.

This means you can give preferences to suppliers

who can then reduce total material use, reduce

the number of components, minimise the use of

harmful materials, extend product life, enable

servicing, extend materials life and minimise waste

generation.

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Some businesses find it useful to formalise their assessment of a potential supplier’s sustainability performance by using a simple supplier assessment questionnaire (see Figure 1).

Figure 1. Example supplier assessment questionnaire

1 Does your organisation have a policy on

environmental issues?

(e.g. climate change, carbon emissions,

transport, waste/recycling, resources – energy,

water, materials, consumables, biodiversity)

YES / NO

If YES, please provide a copy.

2 Does your organisation have an environmental

procurement/purchasing policy?

YES / NO

If YES, please provide a copy.

3 Does your organisation have an

environmental management system?

YES / NO

If YES, is it a recognised accredited system

(e.g. EMAS, ISO14001, BS8555)?

Please specify.

4 Has your organisation identified the specific

environmental impacts associated with the

products, services or works it provides and

has it taken steps to minimise them?

YES / NO

If YES, please outline here.

5 Does your organisation observe legislation

and industry best practice standards with

regard to environmental issues?

YES / NO

6 Does your organisation communicate its

environmental policy to its suppliers?

YES / NO

If YES, please outline here.

7 Does your organisation check the

environmental policy and performance

of its supply chain?

YES / NO

If YES, please outline here.

8 Does your organisation communicate its

environmental policy and activities to staff?

YES / NO

9 Who is responsible for dealing with

environmental matters in your organisation?

Please provide details if different to the

main contact.

Name:

Telephone number:

Position:

Email address:

Are you using external funding?

10

Some resource efficiency projects, such as installing

biomass boilers or upgrading lighting, can require

a significant financial investment. And, while some

organisations have available funds that can be

used to finance these projects, external sources of

funding, such as loans and grants, often present an

attractive option for many smaller businesses.

Fortunately, a vast array of different sources of

finance is available to organisations in Scotland,

including Scottish Government loans and grant

funding. For more information on the funding that is

available, visit our website or contact our team on

0808 808 2268 where one of our friendly advisers

would be happy to discuss this with you.

If you intend to use an external source of finance,

it’s important to check to see if there are any

procurement criteria that you need to follow to be

able to access the funding. This will help inform your

procurement process.

For example, you may be required to get a minimum

number of estimates from different suppliers.

Alternatively, you may be restricted to using

suppliers from a defined list or that have specific

accreditation. The speed and timing of the funding

you’ll receive may also affect which supplier’s

payment options are most suitable.

Could you collaborate with neighbours?

11

As a smaller business, it’s unlikely that you are

going to have the same buying power as larger

organisations that can place volume orders and

command lower prices.

But, by working in partnership with other

businesses like your own, it may be possible to put

the benefits of economies of scale into effect and

negotiate better prices for you and your partners.

Possible partnerships and group buying

opportunities you might like to explore before

going it alone could include:

• Your sector’s trade association.

• Your local chamber of commerce.

• Neighbouring businesses in your community.

• Other businesses in your building or industrial

estate.

• Members of your business improvement

district.

It’s worth taking time upfront to establish if there

are group procurement deals already in place or if

there is an appetite to establish one.

Our guide, ‘Improving Waste Management:

A How-to Guide for Business Groups’ and its

accompanying tools and templates have been

developed to help business support groups engage

with the businesses they represent to identify

and implement collaborative waste management

improvement opportunities. The guide is suitable

for:

• Business improvement districts.

• Chambers of commerce.

• Trade associations.

• Industry associations.

• Other local business support groups.

A four-step process

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For more complex purchases, such as a biomass

boiler, and depending on your starting knowledge

level, you may find that this process is iterative and

that you will return to some steps more than once.

As you start to speak to suppliers and understand

their offerings, you may find that you go through

steps one to three more than once as you develop

a better understanding of your requirements and

identify the suppliers capable of matching them.

Use all the help you can get from colleagues as you

go through this process, including:

• Support from members of your Green Team.

• Staff who have existing procurement skills and

knowledge.

• Anyone who will be affected by the changes that

will result from the investment (a good way to

get buy-in and keep your colleagues on board

with the change, particularly in areas like new

heating, lighting and recycling systems).

As always, our advisers are here to help you too.

The process should be followed once you have built

a business case for investment in new resource

efficiency equipment. Our free guide ‘Accessing

finance – Developing a business case for your

energy efficiency projects’ will show you how

to prepare a robust business case to support

your proposed investment decision and how to

present a strong case for investment to your senior

management or external lenders.

The process we recommend follows four

key steps:

1) Understand your requirements.

2) Find and short-list suitable suppliers.

3) Review estimates and supplier

capabilities.

4) Select the most suitable supplier.

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1. Understand your requirements

Developing a detailed understanding of your specific

requirements will mean you are well positioned to

ensure that your final purchase will satisfy all your

business’s needs.

Your needs should be clearly outlined in the specification

that you will provide to suppliers. The specification

should cover your technical, financial, and after sales

requirements, along with any expectations you have

around your intended delivery timescale.

Technical

The fact that you are reading this guide and are looking

to buy new equipment for your business should mean

that you will have some understanding of the technical

features you are looking for in the products and services

you will be buying. Now it’s time to fully consider and

make a record of these technical features in your

specification.

When doing so, make sure your business’s wider plans

such as changing opening hours and new staffing levels

are considered. For example, while you don’t want to buy

a new heating system that is larger and more expensive

than required, it is important that it can meet your

business’s needs over the lifetime of the system, even if

that means your business is expanding.

For some purchases, such as new biomass boilers and

renewables, you may need to consider contacting your

local council’s planning department to find out if there

are any sensitivities you need to consider about your

proposed investments (such as noise emissions and

visual intrusion).

Heating and lighting systems are two of the most

common purchases that Scottish businesses will make

to become more resource efficient.

If you are looking to buy a new heating system, it’s

important to consider how your business uses heat. For

example, do you need a solution that heats premises

(space heating), provides hot water or is for process

heating? It’s also important to know how much heat you

use. If you have half-hourly data relating to your fuel use

(electricity and gas), then this can be used to determine

the total amount of heat, the peak heat load and the

way your use of heat varies throughout the day. This can

be very valuable in accurately matching a new heating

system to your needs.

If you’re looking to buy a biomass heating system,

our guide ‘How to carry out a successful biomass

heating project’ provides specific guidance with clear

step-by-step help and all the information you need to

have informed conversations with potential suppliers.

This will help you avoid common pitfalls and procure

a biomass system that best fits your organisation’s

needs.

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Lighting is an area where technology is moving rapidly

and there are lots of savings to be made by upgrading to

modern, energy efficient products. However, if you are

carrying out a lighting replacement project, purchase

decisions should not be based on energy and cost savings

alone.

Lighting has a big impact on the comfort and productivity

of your staff, so it’s important that you consider the

technical requirements and design of your lighting system

to ensure that it will be suited to the tasks performed by

your staff. Our guide ‘How to carry out a successful

lighting replacement project’ has been specifically to

help you successfully carry out a lighting replacement

project and avoid common pitfalls. It will help you

manage your project and achieve the expected savings,

while maintaining adequate quality of lighting. As an

alternative to purchasing, you might like to consider

leasing your lighting, particularly if you are a tenant.

With changing waste regulation in recent years, many

businesses have also been procuring new waste

management contracts. Therefore, our advisers have

written the guide ‘How to get the best waste

management solution for your organisation’ to help

you buy the best waste management solution for your

business. If you’re buying new waste management

solutions, the guide will help you understand your

business’s waste streams so that when you go to the

market for your waste and recycling services, you get a

service that is right for you.

Financial

You should also consider your financial requirements. How

much can your organisation spend, including any limits on

borrowing? Also, what financial return do you require? This

could be a maximum payback period or an internal rate of

return (IRR).

At this point you might want to consider breaking down

your technical requirements and supplier requests into

‘nice to haves’ and ‘need to haves’. This will make it easier

for you to prioritise estimates if some are higher than your

available budget.

You should consider ongoing financial requirements

too (e.g. maintenance and servicing costs for heating

systems, and replacement lamps for lighting).

After-sales support

Products like cavity wall or loft insulation don’t need

much in the way of after-sales support. However,

when purchasing new IT equipment, HVAC systems or

measuring and monitoring equipment for example, it’s

very likely that you will need some form of after-sales

support, even if it’s only in the form of regular servicing.

When you begin speaking to suppliers and start to

understand what after-sales support is available, you

should consider the level of support that your business

needs and ensure this is specified in your requests to

suppliers.

Delivery timescale

It’s no good finding a supplier that can meet your

financial, technical and after-sales needs perfectly, if it

can’t deliver to your business at the right time. So, the

final requirement to think about is your delivery timescale.

Do you need to have the new equipment installed during

a shutdown, at night or weekends, or before a particular

deadline? Do you have strict project start and completion

dates that a supplier will need to adhere to? If so, now is

the time to establish these dates and add them to your

specification.

At the same time, you should also detail site-specific

issues, such as restrictions on working at height, asbestos

risks or other health and safety considerations.

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2. Find and short-list suitable suppliers

Finding a good supplier who can match all your needs

is a critical step in ensuring that your resource efficiency

projects proceed quickly and that you’re able to

maximise the value of your investment.

To help you find a supplier that matches your needs,

We have a list of trade bodies and other organisations

that can help you find suppliers of the products you are

looking for.

Seeking out recommendations from other businesses

is another very good way that you can find a supplier

that will match your needs. If you know someone who

has recently undertaken a similar project, it’s worth

asking them if they would recommend the supplier or

contractor they used.

If you don’t know anyone who has undertaken a similar

project or want to do more research, you can use

Zero Waste Scotland’s Green Network for Businesses

directory.

The directory has information on a range of

organisations from across Scotland that have already

carried out projects to reduce their energy, water,

waste and raw material costs. You can learn about

these projects and arrange to visit organisations

near you to see and discuss what they did first hand.

The website is also a very handy way of finding new

suppliers and hearing about their performance.

Once you have identified a number of suppliers that

could provide the products and services you require,

you should send each one a clear outline of your

requirements and ask them to provide an estimate.

You may want to ask suppliers to visit your premises so

that they can ensure they have a full understanding of

your needs and that the solution they propose matches

them accordingly. This is particularly important when

procuring lighting and heating systems.

Make it clear that each supplier will be scored against

its ability to deliver against your requirements – and not

just on being the cheapest.

Green Network for Businesses

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3. Review estimates and supplier capabilities

Once you receive estimates from suppliers, you can

compare them against the requirements you have set

including all your technical, financial, after-sales and

delivery needs.

You should then compare costs, ensuring that you are

comparing like-for-like prices including any additional

fees, such as those for consultancy, delivery and set-up.

At this point, it’s likely you will want to go back to some

or all of the potential suppliers to discuss their estimates

and ensure you understand specific features that you

are being offered. This also gives you an opportunity to

negotiate better prices and/or a higher value offering,

and gives the suppliers a chance to finalise their

proposals before you make your final purchase decision.

Scoring your potential suppliers

It can be very useful to use a formal scoring process to

assess and compare the various estimates you have

received so that your decision-making is clear and

robust. You could set up a scoring matrix to score each

supplier accordingly (see Figure 2).

Figure 2. Example scoring matrix

Feature Supplier’s score Importance Points awarded (1-10) weighting (Supplier’s score (0 least important x Importance – 50 most important) weighting)

How well does the solution match my technical requirements? 6 30 180Can they deliver when needed? 3 20 60How competitive is their price? 5 25 125How good are payment terms? 8 15 120Have they demonstrated their track record with similar projects? 8 10 80

How good is their warranty/guarantee? 4 10 40How good is their after-sales support? 4 10 40 Supplier total point: 645

Supplier’s name: Highland Heating and Insulation Ltd

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4. Select the most suitable supplier

If you have followed steps 1 to 3, you will have

identified a number of suppliers capable of matching

your needs. You will also have estimates from

each of these suppliers, detailing how well they

understand your requirements and how successfully

they can deliver against them, including the price

they will charge.

And, if you have used a scoring matrix, such as the

one shown in Figure 2, you will also have these

suppliers ranked from first to last. This will inform

your final decision, ensuring you select the best

supplier based on all the evidence available to you.

It is now a simple case of placing the order with the

supplier that is ranked first.

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Add your project to the Green Network for Businesses directory

Once your project is complete, don’t forget to add it to the Green Network for Businesses directory. Not only is this a good way of demonstrating your green credentials to your customers and stakeholders, but it will also help inspire and inform other businesses.

To add your project to the Green Network for Businesses directory, email GNFB@zerowastescotland.org.uk or call our team on 0808 808 2268.

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We understand that buying new equipment can often seem to be like a barrier to the successful implementation of energy efficiency projects - but help is at hand.

Zero Waste Scotland’s Energy Efficiency Business Support Service helps Scottish businesses to cut their energy costs by an average of 24%. Each year over 34,000 individuals from a range of organisations get in touch with us for impartial advice and free, specialist consultancy support. Supporting Scottish organisations to be more energy efficient and reduce their carbon footprint will make a significant contribution to addressing the climate emergency and helping achieve the Scottish Government’s strategic economic objectives as well as climate change and energy efficiency targets. Funded by the Scottish Government and the European Regional Development Fund, the service offers free advice and technical support as well as sharing best practices and new technologies.

We’re here to help.Call us on 0808 808 2268Email: EnergyEfficiency@zerowastescotland.org.ukVisit: www.energy.zerowastescotland.org.uk

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