We’ve discussed supply chain transparency in a recent blog post and the importance of knowing how and where your goods are produced. In this post, we’re going to talk about making procurement more sustainable. Transparency is part of the way forward in terms of sustainability, but the project encompasses a complex of institutional moves to make it possible.
The 2013 Global Corporate Sustainability Report from the UN reveals that while businesses are making strides when it comes to setting expectations, implementation continues to lag. Without taking direct action, procurement’s expectations of suppliers have no teeth and that’s a problem when it comes to sustainability.
While building sustainability into the supply chain is a complicated undertaking, failing to attend to it may prove much costlier to companies in the long run. Let’s examine some of the building blocks of making procurement more sustainable.
Understanding the journey of goods and services is a key building block in assuring sustainability. Once all links in the chain have been identified, it’s down to procurement to ascertain exposures at every point along that journey.
Identifying problems can then inform how to proceed. Specifically, supply chains may need to be abbreviated for greater control. With fewer links in the chain, procurement will find that the job of monitoring becomes less arduous.
Your expectations in terms of supplier sustainability should be clearly communicated through instruments like codes of conduct.
The UN has published a guide for improving sustainability through supply chains, entitled “Supply Chain Sustainability – a Practical Guide for Continuous Improvement”, providing advice about crafting an effective supplier code of conduct.
Many companies have set up a simple way to collect information toward evaluating supplier compliance, in the form of questionnaires and/or surveys.
Self-assessment by suppliers provides a nexus for communication between procurement and suppliers as to where they are in the sustainability spectrum and how they’re improving. This also supports the quest for information about points on the supply chain which require active reform.
Questionnaires should include evaluations of environmental factors like energy and water usage. This allows for collaborative efforts to improve sustainability, by making areas of concern clearer.
Constructive evaluations allow for open communication between procurement and suppliers and make it much more likely that sustainability will be improved through each link of your supply chain. These evaluations can be supported with targeted campaigns which draw on the knowledge of top tier links and training programs which provide education about sustainability through all tiers.
Making procurement more sustainable is a key imperative in today’s market. Demands for sustainability are growing, encompassing environmental, labour and safety factors. Managing sustainability in an intentional way not only advances the project of global sustainability, it protects companies from public relations exposures which can heavily impact their ability to do business.
CenterPoint Group is a member-based procurement advisor which leverages the pooled resources of members to reduce the cost of everything from cell phones to janitorial and office supplies.