Business Management Systems and Capacity Building
Proper business management systems are critical to successfully implementing a carbon-financed cookstove project. Carbon crediting is a data-driven process, and the quality of the emission reductions and ease of accreditation are only as good as the quality of the information that is recorded. Below is a step-by-step guide for setting up optimal information systems:
The Project Design Document (PDD) should be carefully reviewed, paying specific attention to the validated monitoring plan. An Operations Manual must then be created that maps to these sections, ensuring each specified parameter is accounted for. In this manual, the process by which partners will run stove sales activities, track pertinent data and train their staff in procedures should be described, including Quality Assurance Quality Control (QAQC).
Creating a System for Information Flow
It should be determined how sales data and end user information will be captured, as well as how that information will be transferred back to the Project Coordination team responsible for compiling the Monitoring Reports for carbon auditing. End user data should be captured at the point of sale and transferred back to the project owner following a similar flow to the Carbon Rights Waiver (CRW) process.
Establishing sales recordkeeping systems:
A checklist should be created to establish what tools are needed to achieve the level of information flow outlined in the Operations Manual. Tools will be for each component should then be determined – in some cases, such as providing sales receipts, it may be possible to rely on paper systems. In other cases, such as data aggregation, it may be preferable to use electronic software solutions such as QuickBooks or Excel. Key sales systems include:
- Sales receipts: These should record key information such as Customer Name, Date of Sale, Contact Information, Product(s) Sold, Serial Number(s). This should be collected for both bulk and individual sales. If using paper, carbon copies are strongly recommended.
- Carbon rights waivers (CRWs): It is critical to establish process through which carbon rights will be transferred. This is a statement informing end users that by purchasing the unit, their rights to carbon emissions will be waived. Carbon rights language should be agreed upon and set, ensuring that following objectives are achieved:
- End user informed of his or her participation on the carbon program.
- Transfer of these rights indicated.
- The chain through which Emission Reductions are waived for crediting is identified.
Oftentimes this will be combined with the warranty card or sales receipt; as a result it may also be helpful to include space to collect end user contact information and/or register the stove for the warranty. The CRW may also be placed in or on a visible part of the technology such as a sticker on the packaging or unit itself, a flyer in the packaging, or wording directly on the packaging. In the case where the above is not possible, individual carbon waivers will be distributed by partners and signed by end users following the process below:
- Detailed End User Information: Detailed information such as Customer Name and Contact Information should be collected. This can be difficult to collect, especially if selling through vendors. It is key to conduct vendor training to communicate the importance of information collection. If budget is available, it may be useful to provide bonuses or financial incentives for warranty card completion (though in this case, it is recommended to spot check the customer contact information to ensure that the details are valid.) It is common to do this at the same time as registering the product for warranty.
* Note: Many practitioners prefer to consolidate data collection to save time, using one piece of paper to function as a sales receipt, communicate the CRW requirement, and collect detailed end user information. In this case, it is important to ensure that this tool will work for vendors as well; if not, a separate tool for vendors should be created. In the case of detailed end user information collection and product registration, more and more project implementers are experimenting with mobile-based registration.
Establishing production recordkeeping systems:
It is important to create a checklist to establish what tools are needed to achieve the level of information flow established in the Operations Manual. Similar to sales recordkeeping, the tools for each component should be established – in some cases, such as taking inventory, paper systems may be viable. In other cases, such as labour records, use electronic software solutions such as QuickBooks or Excel may be preferable. Key production systems include:
- Product tracking:
- Stove production: volumes, serial numbers (including numbering identification system and proper application).
- Inventory management.
- Sales: Purchase orders, delivery notes, sales receipts.
- Sustainable development indicators and capacity building endeavors: This includes employment records and any trainings conducted.
Once systems are established, templates should be created and staff trained on how to use them. Here are some tips for success:
- Ensuring a point person is assigned to maintain each piece of recordkeeping; ownership is important
- Determining what sorts of training will be offered, and how often. Examples of useful training include:
- Sales training (communications, sales techniques, collecting sales and end-user information). Examples of effective sales techniques are included here.
- Production training (assembly, application of serial numbers, inventory management)
- Administrative training (warehouse data entry, stove database, sales database, detailed customer information, general recordkeeping and filing)
- Environmental health and awareness
- Expectations and indicators of success should be established for staff to ensure they have the tools they need to be successful. It is also valuable to provide incentives and opportunities for growth, then identify top performing employees and train them to lead others, giving them increased ownership.
- Prioritizing integrated Quality Assurance/Quality Control (QAQC) throughout the data collection process.
- Building internal ongoing QAQC measures: It is important to set a protocol and schedule for checks (internal checks should be performed at least monthly if not more often), being sure to select a point person. Regular sales record checks should be undertaken to check for data entry errors, in addition to warehouse and sales database checks. A clear protocol should be established: for example, checking 10% of entries, and if greater than 3% error is found, checking 100% of entries.
- Introducing regular external QAQC: It is worthwhile to consider contracting a 3rd party auditing firm on a regular basis (i.e. quarterly) to check key data points as have been outlined in your PDD. The most important of these is usually the sales record.
- It is important to ensure that all training is documented as evidence of capacity building efforts.