Corporate responsibility has recently garnered much interest amongst consumers. Of particular interest are strategies that focus on the environment and sustainability aiming at reductions in the environmental footprint of the corporation. As a result of this, the supply chain world has seen significant development of procurement strategies that support corresponding corporate goals.
However not all companies are focusing on sustainability and green buying. Does that matter? And what is the relevancy of non participation for those that work in those organizations supply chain teams.
Pressures behind corporate responsibility.
Firstly lets take a look at what drives corporate responsibility. It can be driven for a variety of reasons for example as a result of
• Philanthropy/Ethics
• Legislative
• Customer driven
• Shareholder driven
• Employee driven
Where there is not sufficient pressure in one of these (or other) areas to drive change or where there are more prominent pressures and priorities, focus on corporate responsibility or sustainability can be minimal (there may be a mission statement but little corresponding action). Where there is a lack of strategy there is likely to be minimal drive for change on the supply chain functions and in particular those of procurement.
But what are the key differences? For those companies that have adopted corporate responsibility strategies and sustainability targets they are likely to have developed
• Key targets to be achieved (i.e. CO2 reductions, recycling rates)
• Have key projects underway
• Have developed policies and processes
• Have measures in place to monitor success
• Have people in the organization who have responsibility for delivering the strategy
Buying is buying isn’t it?
Sustainability doesn’t necessarily turn procurement on its head. The key buying stages typically remain largely unchanged i.e.
• Identify the need
• Source a supplier
• Establish a contract/place an order
• Receive the goods
• Pay the supplier
However sustainability does bring with it changes on selection criteria at key stages. For example product specifications and supplier sourcing processes will place significant scrutiny and weighting on factors other than the typical Cost Quality and Delivery (QCD). Where sustainability targets exist commodity managers will need to place significant focus on
Total Life costs (as opposed to initial acquisition cost)
Establishing rules and policies?
Spotlighting suitable products (eg recyclable paper)?
Sourcing alternatives
Working closely with the end users to review requirements in line with sustainability criteria
Benefit measurement
Sustainable procurement requires closer attention to procuring against the corporate policy and rules rather than a particular focus on just cost and/or quality.
With greater significance being placed on green procurement there are understandably a greater number of roles becoming available that have an appreciation of the concept. It’s unlikely that an absence of sustainability on your resume will cause your career any detrimental effects but its probably a safe bet that it wouldn’t do it any harm to have them on it either.
Influencing your organization
Of course just because your company might not have a strategy doesn’t stop you from influencing your organization and suggesting it- there are many online tools you can use to get you started. Indeed of particular importance is the ability to use sustainability to facilitate cost reduction (check out how Indiana University saved money through CO2 reduction as an example).
Sustainability is hear to stay – sure some markets may be sheltered from this for a time but its likely that all markets will have to adopt sustainability practices to an extent at some stage in the future so now is as good a time as any to think about how your businesses will adapt.