Category Archives: Procure with Purpose

Swiping Right for Social Enterprise

Procurement should be swiping right for Social Enterprise to create broader outcomes. It’s not the easiest change to make, but it’s a vital one for the future.

Photo by Clark Tibbs on Unsplash

Doing things in new ways can be awkward. It’s like dating, there is nervous tension about expectations versus reality and how you will be perceived. Will you be able to “sell” your positive traits well? Will the other person measure up to your idea of success? Do you split the bill or pay for the whole thing? All of the rules from your last relationship have gone out the window – this is new territory.

In New Zealand, the Government has recently changed the procurement rules by shifting the focus towards ‘Broader Outcomes‘.

“Broader outcomes are the secondary benefits that are generated by the way a good, service or works is produced or delivered. These outcomes can be social, environmental, cultural or economic benefits, and will deliver long-term public value for New Zealand.

Broader outcomes require you to consider not only the whole-of-life cost of the procurement, but also the costs and benefits to society, the environment and the economy”

New Zealand Government Procurement Rules

There is no longer a focus on value for money, which is sometimes treated by some as getting the lowest price. The focus is on public value which is multifaceted.

What Else is New?

There have been other subtle changes to the Procurement Rules which have removed barriers whether they were real or perceived. The direction is set, the path has been cleared and now we must dust off our dating profiles and learn to do business in different ways.

We must actively seek commercial outcomes that derive social impact. This is not to say that was not in the consciousness before, but it was not quite as front of mind as it is now. 

Challenges of Putting Yourself Out There

This welcomed change brings about some challenges. There are varying degrees of experience and knowledge of working in a more agile or lean manner within procurement ecosystem. Applying new ways of working to the core machinery of Government can be even more challenging.

While the appetite is there, it can take some time to grease the entire wheel to move. There are many sectors and government agencies where these types of models and ways of approaching procurement have been around for eons.

It’s about bringing together the case studies of what has worked well and applying them more liberally to other opportunities.

Procurement functions can feel pulled, with one foot stuck in the traditional process driven tendering world and the other foot in the new procurement world. The new world focuses on early engagement and co-designing solutions more than ever before.

In the new world, procurement adds value at the beginning of the process and through effective contract and supplier relationship management. Procurement is not the process, in fact this will be largely automated in the not so distant future.

The new world suits the smaller businesses, the start up’s, the social enterprises as it makes Government more easily accessible.

Who are we Swiping Right for?

There has been a marked increase in interest in social enterprise or purpose driven businesses. This does not mean discriminating for these types of businesses but rather, deliberately bringing them on the journey or slicing up parts of projects that may be better delivered by these types of businesses.

It’s about giving them a voice at the concept stage or joining them up with other larger businesses who can bring in the big guns and who are sometimes better placed to take on larger risk.

The Awkward Social Enterprise Disco

Generically speaking the large buyer (particularly government) can look at start-up’s or small businesses with a high degree of risk and uncertainty.

  • Can they met all of our requirements?
  • Can they grow to meet the evolving capacity demands that successful projects often breed?

The smaller supply side of the fence often look at government as impossible to break in to, focused on lengthy tenders, slow to move and offer contracts that require extreme liability stances or loaded risk that shifts the balance towards the supplier. A small start up or social enterprise, for example, might not have the knowledge to begin to deal with our often seemingly fixed ways of working.

What’s Working?

The movement is happening, here is what I see:

  • Agencies working together
  • Buyer and supply side meeting and connecting
  • Different sectors of the supply side engaging to work together
  • More and more green lights everywhere: internal buyers, management, stakeholders, suppliers and the rules are more supportive
  • Procurement functions are helping to facilitate the gap by connecting supply markets and private sector with internal buyers
  • Procurement functions are working with the internal buyers by showing different ways of managing the process, e.g. co-design, agile, sprints, early supply market engagement.
  • Starting small, not tackling the significant contracts first.

Why Bother?

Because we should, because it’s the right thing to do and because spending the same dollar twice by making an impact and providing tangible social good with taxpayers’ money. Just. Makes. Sense. 

Raising Procurement’s Role in the Fight Against People Trafficking

Photo by lalesh aldarwish from Pexels

“On this World Day against Trafficking in Persons, let us reaffirm our commitment to stop criminals from ruthlessly exploiting people for profit and to help victims rebuild their lives.”

UN Secretary-General António Guterres

In 2013, UN member states officially adopted the 30th of July as the ‘World Day against Trafficking in Persons’. The aim of the day was to raise the profile of this critical issue, and “raise awareness of the situation of victims of human trafficking and for the promotion and protection of their rights.”

In September 2015, the same member states created new goals aligned with this agenda. The goals aimed to put in place measures to combat people trafficking, specifically to end trafficking of and violence against women and children.

A number of individual countries have laws in place against people trafficking. In the USA, this is the Trafficking Victims Protection Act (TVPA) 2000, most recently reauthorised in 2013. The UK’s Modern Slavery Act of 2015 was created to provide stronger protection for those being trafficked for the purposes of sexual slavery or forced labour.

In spite of these laws, and the fact that 173 UN Member States have implemented the UN Protocols, modern slavery and people trafficking still exists in huge numbers. According to the Global Slavery Index, an estimated 40.3 million people were in some form of slavery on any given day in 2016.

People Trafficking – Failure to Comply

In the simplest terms, it’s up to the individual organisations to take responsibility. Responsibility for their own operations. Responsibility for their suppliers. Even responsibility for the wider supply chains.

Modern Slavery and People Trafficking doesn’t stop with a tick-box exercise. Procurement needs to stand up and make a difference through its actions, rather than words. Under the Modern Slavery Act, any organisation with an annual turnover greater than £36 million must publish a statement on what they are doing to combat slavery in their supply chain.

Let’s look at public procurement in the first instance. (But don’t let that make you think private companies are off the hook. We’ll come back to this!)

Public procurement faces huge scrutiny and rightly so. According to reported figures, an estimated £220 billion worth of contracts were awarded in 2017 by the UK Government to private companies. (See, we did say this was coming.) However, in 2018 it was reported that 40 per cent of the Government’s top 100 suppliers by lifetime spend had failed to comply with Modern Slavery legislation on reporting.

Far from leading from the front, the UK Government was being criticised for continuing to award contracts to these organisations. Figures for the private sector are harder to come by, but we can assume that the same reporting issues exist there too.

Procurement’s Role in Reversing Fortunes

Compliance with legislation and reporting issues would be a good place to start. Beyond this it’s about creating a culture of responsibility throughout the supply chain. Openness, honesty and transparency are the hallmarks of a strong supply chain. This is what procurement must aim for as a minimum.

We have spoken before about the need for procurement to create a legacy for future generations. This not only covers sustainability, but also driving social responsibility through multiple supply chain levels.

Tools such as blockchain and other technological advancements can provide key assistance. From here, procurement can move to open up data and shine lights on the dark corners of supply chains. By doing this, it helps to expose poor practices, undermine slavery operations and start making a real difference to those in need.

The final thing to remember is not to do this in isolation. True, each organisation has individual responsibility. But as with many procurement progressions, collaboration and communication are key. The whole is greater than the sum of the parts. Organisations face common challenges, so they should be able to come up with common solutions.

Shared expertise is the way forward and the path to procuring with purpose. Let’s finally put an end to modern slavery and people trafficking. You can take the first steps now.

Procure with Purpose

Procurious have partnered with SAP Ariba to create a global online group – Procure with Purpose.

Through Procure with Purpose, we’re shining a light on the biggest issues – from Modern Slavery and People Trafficking to Minority Owned Business, and from Social Enterprises to Environmental Sustainability.

Click here to enroll and gain access to  all future Procure with Purpose events including exclusive content, online events and regular webinars.  

5 Ways To Achieve Marginal Gains In Procurement

By Eugene Onischenko / Shutterstock

At the Big Ideas Summit 2019, Justin Sadler-Smith, Head of UK & Ireland, Procurement & Supply Chain at SAP Ariba shared his view of procurement in an insightful and thought-provoking presentation.

Among the issues that Justin talked about was an ever-decreasing time for procurement to react to the changing market environment and put actionable strategies in place. Because if procurement isn’t fit for purpose, not delivering against stakeholder expectations, then there is the potential for huge, negative impact from a brand and shareholder perspective.

There is a whole mix of uncertainties which are causing people to reassess how they are doing business and then ultimately doing it in a different way. Organisations, and procurement as part of them, need to be looking at what we are doing tomorrow and reinvent ourselves to become more competitive than they have been in the past.

As part of this Justin talked about an issue that is fast becoming a key for procurement to take account of and account for in its day-to-day operations. And that is leaving behind a positive legacy. Here is Justin explaining it in his own words:

Faster Reactions, Greater Purpose

When it comes to procuring with purpose, procurement professionals around the world need to be able to react quicker to changes in order to set the foundation for the legacy we should all be leaving behind.

Justin argued during his presentation that it’s almost as if procurement is in a race. In simple terms, those who are fastest to react, fastest to respond to changing demands are those who will win. It might not even be procurement who are the ones triumphing in the race, and that could spell the end for procurement as we know it.

The issue here is that many procurement professionals just haven’t been trained to do this. Without adequate training, much like an Olympic athlete, or Tour de France rider, there is no chance of being able to meet these demands and deliver what is required.

How do procurement professionals get trained up then? There’s no use knowing that there is a need to change unless there is willingness to do so, as well as more support to implement it.

Help is at hand, however, from an unexpected source. When Sir David Brailsford became Performance Director at British Cycling, he came up with the idea of breaking down the individual aspects of a race and then improving them one by one. The notion of ‘marginal gains’, was that a number of small, 1 per cent, improvements would collectively add up to a major competitive advantage.

It was this thinking that helped British Cycling dominate on the track at successive Olympic Games between 2004 and 2012, and then Team Sky/Ineos win seven of the last either Tours de France (not to mention other events and Grand Tours).

How then do we take this concept and apply it to procurement? Justin has shared his thoughts on this, helpfully broken down into five key areas.

Marginal Gains in Procurement

  1. Data – Where is data stored within your organisation and how easy is it for you to get it? How is HR data incorporated in your function? You need to look after people – those who own the data – as this is the life-blood of the organisation and you need to make the breadth and depth of your data valuable and usable.
  2. Productivity – procurement can drive this in an organisation by looking at different areas of automation that probably haven’t been looked at before. For example, how many people are really looking at AI as a way to change their organisation, without worrying about the spectre of job losses?
  3. Innovation – this is the concept of co-innovation by working in collaboration with suppliers to building differentiation. For this you need to get closer to your supplier base and remove any barriers to working closely with the right suppliers.
  4. Purpose – what do we mean by purpose? It’s the idea of driving social responsibility through supply chains at multiple levels. This is well beyond a tick box exercise now – it’s a must for good business as well as for making a better world. The idea runs beyond risk mitigation and focuses more on building value through sustainability.
  5. Well-being – people are living in a much more stressful period globally. However, by driving these needs and having a purpose, it can change the game when it comes to how people operate and feel. For procurement, this means attracting, retaining and caring for their top talent and nurturing their people.

Procure with Purpose

Procurious have partnered with SAP Ariba to create a global online group – Procure with Purpose.

Through Procure with Purpose, we’re shining a light on the biggest issues – from Modern Slavery; to Minority Owned Business; and from Social Enterprises; to Environmental Sustainability.

Click here to enrol and gain access to  all future Procure with Purpose events including exclusive content, online events and regular webinars.

After Saving Costs, Now Is The Time To Save The World!

We, as procurement professionals and as citizens, have a responsibility to take action to tackle the challenge of working sustainably.

By Malchev/ Shutterstock

August 1, 2019: this could be when we reach the “Earth Overshoot Day” this year. For the rest of the year, we will be living on credit. When it comes to natural resources, that is.

“Earth Overshoot Day marks the date when humanity’s demand for ecological resources and services in a given year exceeds what Earth can regenerate in that year.” Source: OverShootDay.org

At the time of writing of this article, the actual date for Earth Overshoot Day is still unknown, but for several years in a row, we have reached the limit in early August. Based on this precedent, we can safely assume that it will be very similar this year. We may even reach it in July—a first! The situation also varies greatly by country. Some countries already reached it in February/March!

In short, this means that we would need 1.7 Earths to sustain our current level of consumption of natural resources.  Considering that we only have one Earth to go around, this is a very preoccupying statistic, and even more worrying is the trend and speed at which the day is arriving earlier and earlier each year:

This situation is clearly not sustainable and we, as procurement professionals and as citizens, have a responsibility to take action to tackle this challenge.

The end of the tragedy of the commons?

 “The tragedy of the commons is an economic theory of a situation within a shared-resource system where individual users acting independently according to their own self-interest behave contrary to the common good of all users by depleting that resource through their collective action.” Source: Wikipedia

To exit the tragedy of the commons, there is an urgent need for us to mobilise and act on a global scale. All economic actors have a role to play.

Governmental institutions can foster sustainability in two major ways. Firstly, by investing in businesses, research, and infrastructure and secondly, by creating regulations and policies to develop and promote socially- and environmentally-friendly practices. By adopting the right mix of carrot and stick, governments can steer behaviors and economic growth towards more favorable and sustainable outcomes.

Investors/shareholders also have an essential role to play, because by exercising their influence, they can push organizations to make sustainability a top priority. In fact, many green companies go beyond legal/governmental requirements and make sustainability the heart of their business model.

“[T]he next phase of business sustainability, what we call “market transformation,” is founded on a model of business transforming the market. Instead of waiting for a market shift to create incentives for sustainable practices, companies are creating those shifts to enable new forms of business sustainability.” The Next Phase of Business Sustainability in The Stanford Social Innovation Review (SSIR)

These companies and investors understand their obligations and interests, because the long-term survival of an organization depends on the health of its surrounding ecosystem. The concept of “Creating Shared Value” explains why a new type of investors is becoming more visible and active:

“Impact investing has become a broad umbrella that includes all investing with a focus on both financial return and social impact, but in its best form, impact investing prioritizes impact over returns and achieves outcomes that traditional investing cannot.”Jacqueline Novogratz, founder, and CEO of Acumen, a non-profit global venture capital fund whose goal is to use entrepreneurial approaches to address global poverty

Consumers represent another powerful force. Not only do they drive demand, their buying decisions also have the power to influence what products companies produce and, to some extent, how they produce them. The growth of the “business of sustainability” and of the “circular economy” are indicators of this shift.

So, when we ask ourselves who has the power to create a more sustainable future, the answer is really:  all of us. We can all exercise our influence as voters, investors, collaborators, and consumers to drive sustainable policies and practices forward.

And, when it comes to sustainability, procurement professionals have even more power than most!

Sustainable Procurement

Procurement plays a central role in transferring value from the upstream supply chain to the downstream of the chain. This means that, Procurement is the key player that enables a business to also “walk the walk” when it comes to sustainability by looking beyond prices and costs. Concepts like total cost/value of ownership (TC/VO) are not new, but they are still not commonly used, especially when integrating the impact on the ecosystem into TVO models.

For any sustainability efforts to be effective, businesses need to take a holistic approach. This is why truly “sustainable procurement” encompasses aspects related to the environment, labor & human rights, business ethics and, community development.

Many mature procurement organizations have already started to incorporate some of these aspects into their procurement approach, but the goal of these sustainability measures is often limited to “risk prevention.” Brand/reputation protection has long been a key motivating factor for organizations that have considered integrating sustainability into their approach.

And, as mentioned earlier, there is more to it than that. Sustainability can also be an engine for growth. So, to harness the full potential of sustainable procurement, procurement organizations must first understand and be aware of their role/duty, and then act accordingly to embed sustainability in all their activities. For example:

  • Sourcing decisions: Include sustainability in TVO models (e.g. CO2 footprint, use of best available techniques, supplier diversity, etc.)
  • Contract Management.: Incorporate sustainability clauses (e.g. reduction of waste/energy consumption, recycling, supporting disadvantaged or marginalized groups in the community, reporting on sustainability aspects, etc.)
  • Supplier evaluations: Integrate quantitative and qualitative criteria into scoring models and develop real-time scorecards that also leverage 3rd party data and public sources of information

“The obligation, and the self‑interest of every company is to build a robust society.” Tim O’Reilly

Sustainability is a challenge that requires the urgent attention of all of us. As Procurement professionals, our responsibility is even greater. Therefore, we should embed sustainability in everything we do and, as much as we are able, we should become the consciences of our organizations by ensuring that sustainability is not just an empty vision, but a practice. To do this successfully, we must ensure that suppliers

  • behave correctly in terms of Corporate Social Responsibility (CSR)
  • use performance indicators related to Environmental, Social and Governance criteria (ESG)

Only then can we play a role similar to an investor by following SRI (Sustainable, Responsible and Impact Investing) principles when making decisions and assessing options. This represents a much better purpose and meaning than just cost savings!

Will You Be Your Organisation’s First Chief Sustainability Officer?

For most organisations, there are far more risks and opportunities related to CSR and sustainability in their supply chain than there are within the “internal” business…

By Joshua Resnick/ Shutterstock

What’s the biggest change in terms of the focus and priorities for procurement teams and leaders over the last decade or so? There are a few potential answers to that question, but my feeling is that the whole area of corporate social responsibility and sustainability is a strong candidate for that award.

It’s just over a decade since I last held a full-time CPO (Chief Procurement Officer) role, but I don’t remember issues such as modern slavery, carbon reduction, global warming, plastics or human rights featuring too much in my thinking as a CPO through the nineties and noughties.

But now, it is right up there on the agenda for most organisations, in terms of both procurement priorities and indeed overall business focus.  That’s been driven by consumer demand and a more aware population, with younger people taking the lead on issues such as climate change, as we’ve seen in the UK with major protests and the visit of Greta Thunberg in recent weeks. Firms have become aware of the risks if they mess up on these issues, and that has spread through to shareholder action and sensitivity – a sign that firms really do need to get to grips with this agenda.  

We’ve even seen some CPOs morphing into “Chief Sustainability Officers” in their organisations, or combining the two roles. That’s not surprising when you think about it. The fact is, for most organisations, there are far more risks and opportunities related to CSR and sustainability in their supply chain than there are within the “internal” business.

Certainly, an organisation can look at its own energy and water use, how plastics fit into its packaging strategy, and make sure it is behaving properly with regard to the human rights of its own staff. But if we consider the wider issues once we look at our suppliers, the scope is far greater. For larger organisations in particular, the impact they can have on hundreds or thousands of suppliers, all around the world, almost certainly outweighs anything they could do purely internally.

We can see another sign of how these issues have risen up the agenda with the announcement of SAP Ariba’s “Sustainability Summit” in June. It takes place on Tuesday June 4th, from 9 am to 12 noon, just before the opening of the SAP Ariba Live event in Barcelona that afternoon. There will no doubt be a certain amount of discussion around how SAP Ariba products can help in this area, but the morning is primarily designed to be a very interactive session, with expert panel discussions and small group sessions as well, so participants can pick up ideas from each other as well as from the experts involved.

And this isn’t just about “saving the world”, although there is nothing wrong with believing that we should all do our bit to make the world a better place. There are selfish reasons too for procurement organisations and leaders to position themselves in the foreground for their organisations’ sustainability efforts. From a functional standpoint, the vast majority of us look for purpose in our work, but as we said earlier, younger people are particularly concerned about these issues. So, if you want to attract the brightest and best to your team, it makes sense to show that you are concerned about sustainability and similar issues and that procurement in your organisation is deeply involved in worthwhile initiatives.

It is also clear that because sustainability is high on the corporate agenda, procurement can gain in terms of internal profile and reputation if we are seen to be taking a lead and driving the agenda through our supply chain. I’ve heard a number of procurement executives talking about how topics such as carbon reduction or supporting social enterprises have got them onto the Board agenda, in a manner that day-to-day procurement frankly just didn’t.

Back to the Summit: SAP Ariba Live is the largest procurement event in Europe, we suspect, and numbers for the Summit are limited. So if you are interested, don’t delay and do register now – please contact Miriam Kuritzkes to express interest and for further details.

Procure with Purpose

Procurious have partnered with SAP Ariba to create a global online group – Procure with Purpose.

Through Procure with Purpose, we’re shining a light on the biggest issues – from Modern Slavery; to Minority Owned Business; and from Social Enterprises; to Environmental Sustainability.

Click here to enroll and gain access to  all future Procure with Purpose events including exclusive content, online events and regular webinars.  

Want to get your wheels turning towards a supply chain career one could only dream of? Then don’t miss our upcoming Career Boot Camp with IBM – a free 5-part podcast series with some of the very best of the best. Check it out here: https://www.procurious.com/career-boot-camp-2019

Sustain Me – 4 KPIs to Get Your Sustainability Project Over the Line

With your vision, drive and persistence with your corporate finance team, you will be able to define a quantifiable dollar value on your sustainability initiative…

By SkyPics Studio/ Shutterstock

Getting your organisation up to speed with sustainability is no easy task.  It’s an area of responsibility for procurement and supply chain that covers a multitude of minefields – environment, social and economic etc. But also, fortunately, some daisy fields –  stronger brands, employee value proposition and a major positive contribution to a better society.

I’m lucky to have been educated on most of the sustainability areas throughout my career and via my global network.  But if you’re early on in your career, or new to the area of sustainability, it’s a lot of ground to cover!  My best advice (and this won’t be a surprise!) is to use your extensive network to get educated and learn best practice.

When I speak with people around the world, the biggest problem they have is getting off first base. The need to get budget approval from their CFO for their sustainability project.

Many companies around the world have signed up to The United Nations 17 Sustainable Development Goals (SDGS), to all of which procurement and supply chain can make a positive contribution.  How your sustainability project is going to help your company achieve its SDGs is the first and most obvious link you need to make with your C-level and your project.

The case for purpose is just like any other corporate initiative, it has to be rooted in a strong financial return – a business case.  However, many of the important benefits that come from managing sustainability are seen to be unmeasurable. Organisations have been struggling to put a value on the impact of catastrophic supply chain events that permanently scare their corporate reputation.  The value of having positive relationships with employees and the community can also be difficult to quantify. But investors and the community are putting increasing demand on companies to validate their sustainability efforts. Reporting on sustainable communities and regional spend, by way of example. 

With the vision, drive and persistence within your corporate finance team, you will be able to define a quantifiable dollar value on your sustainability initiative.  Here’s four ideas for KPIs to get the thought processes flowing:-

1. Reduce total lifecycle cost

The early part of my career was spent extinguishing media fires set by consumers concerned about the environmental impacts of disposable nappies or aluminium cans. I quickly learnt that there are indeed three sides to every story.  Industries do so much to consider their impact on the environment and often go above and beyond what’s required, but rarely get appreciated in the mainstream media. In our “sound bite” media society, consumers rarely get to understand the concept of “total lifecycle cost”. It’s important we all build total lifecycle cost models, so we quantify and measure the total impact of the products and services we produce. This will allow us to measure whether we are increasing or reducing our total impact, that can be shared with others.

2. Increase employee engagement

Sustainability projects of every kind are a fantastic way to build your employees’ engagement with the purpose of your organisation.  In my personal life I got involved in the Great Barrier Reef Research Foundation and learnt about the impact of climate change and declining water quality on the health of our reef. Until that point, I had no idea what the impact of commercial farming, water and ocean freight passage lines had on our marine ecology. As a member of their Board of Governors, I was invited to swim the reef and was briefed first hand by the world’s leading marine scientists. Employees were also invited to take sabbaticals to the remote labs.  Nothing could better build employee engagement and understanding of climate change than these experiences. It had a huge impact on employees’ concerns and actions, but also lead to an increased respect for their company’s commitment to protecting the Reef.

I’ve also supported microfinance initiatives through an organization called Opportunity International, with a focus on small women-owned businesses in India. This gave me real insight into the plight of so many women in the world and the impact that breaking out of the poverty cycle can have on future generations.  This made the plight of small female-owned business in emerging economies very real to me, which has always helped crystallise situations such as Rana Plaza for me and the obligation we have to suppliers several layers down in the supply chain.

3. Construct a Net Promoter Score for your community

Does anyone measure this? In my mining days, this was referred to as a “license to operate.” That is, that the community trusted you to operate your business responsibly and ethically. Mining companies, probably more than any other industry, understand how important it is to ensure sustainability is at the front and centre for all their decisions. One program I worked on was a local sourcing program. We qualified and engaged suppliers from the local area to help underpin the social strength of the community in which their employees worked – a very different form of sustainability!

4. Commit a single digit percentage of your corporate spend to social enterprises

About ten years ago I began working with Social Traders, a company who was building capacity amongst social enterprises to enable them to win corporate contracts. Once again, I was reminded of the multiplier effects when marginalised members of our communities are engaged and employed.  For me it’s a no-brainer. There are definite areas of corporate spend that lend themselves well to social enterprises – (hint:  look first at any category that includes labour spend).  As one CEO said “we’re going to spend the money anyway, we may as well make sure it counts.”  It was difficult to get traction a decade ago, but I’m delighted to see now how much energy there is within the corporate sector to engage social enterprises. What’s great in these commercial relationship is that everyone wins – the suppliers, the companies, the shareholders and the employees.  It’s very powerful.

I’m bringing my years of experience and passion for procurement-with-purpose and sustainability to life by providing a global platform, Procurious, for people to share their learnings and experiences with each other.

For us it’s about demonstrating to our global network of procurement pros that purpose pays and that anyone can make a difference in their organisation, no matter how small.

Get up the learning curve as fast as you can by learning from your peer network.  Join Procurious.  Join the Procure with Purpose group, start sharing your knowledge, start asking questions and start shifting the dial on these sustainability outcomes.

Six Steps To Building A More Responsible, Resilient Supply Chain

The unfortunate truth, though, is that most organisations only have a limited amount of resources available to identify and monitor the kaleidoscope of risks that exist in their global supply chains.

By yuttana Contributor Studio /Shutterstock

This article was written by Sondra Scott, President – Verisk Maplecroft 

More often than not, creating a safe supply chain is thought of as being an expensive endeavor. But resilient supply chains and more sustainable procurement practices can help bolster the bottom line. Companies that really understand their supply chains will come out ahead in the long term. They incur fewer costs in reactive post-risk actions and they generate more revenue by optimising their procurement processes and enforcing positive perceptions of their brand with their consumers.

The unfortunate truth, though, is that most organisations only have a limited amount of resources available to identify and monitor the kaleidoscope of risks that exist in their global supply chains. This is where analytics becomes so important. By using quality risk analytics, we can quickly map and high-grade our operations and suppliers for risks, which enables us to focus spend on the areas that need the most attention. We can use analytics to not only identify where our risks sit today, but to anticipate where risks will emerge in the future.

So, how do you make the most of the range of analytics and tools available to you? Here’s my quick guide on the six steps to success.

Step 1: Think holistically

First and foremost, we advise our clients to think holistically. Look at risks as interconnected, not only along the supply chain but across your entire business. For instance, civil unrest doesn’t just happen; the drivers of such events can include anything from government corruption, to drought, to egregious breaches of human rights. Getting the full picture by tracking a wide spectrum of risks is imperative in understanding your potential vulnerabilities and identifying opportunities for your business.

Step 2: Create a common language of risk

You need to create a common language of risk and manage one central source of data rather than lots of disparate disconnected datasets. Using one source of data will enable you to draw on a consistent framework where everything is measured in the same way. This makes complex issues easily understandable across the whole business – up to the most senior level.

Step 3: Centralise your risk monitoring

This will save you time, resources and confusion. There are lots of specialised tools in the market which help you monitor your supply chain for different risk workflows. That’s great, but, put a wrapper around them and keep your data consistent within that framework. This means hosting your own facility data, your supplier data, plus all your third-party inherent risk data in one place.

Step 4: Remember the world doesn’t stand still

Life would be a lot simpler if risks were static. However, when your supply chain stretches across 50 different countries your suppliers are subject to a dynamic environment where the picture on the ground is always changing. Whether it’s erratic policy making, protests over labour rights, government instability or an upsurge in security risks, analytics can help you become nimble. By regularly monitoring these issues, you will know which of your suppliers are most exposed and you can adapt your strategy accordingly.

Step 5: Be targeted

Once you’ve identified the risks in your supply chain, it’s important to be both sensible and cutting edge in developing your mitigation strategies. ‘Sensible’ means implementing a strategy that is tailored to the specific risks in your supply chain. It should be a hammer-to-nail solution that is both appropriate and cost effective. ‘Cutting edge’ in that you should constantly be innovating both internally and jointly with your suppliers who are on the ground and likely have quality input into how to reduce these risks. Be wary of one-size-fits-all solutions.

Step 6: Communicate what you’re doing

Don’t overlook the fact that you can distinguish your brand by your risk avoidance actions. Consumers and investors alike want to know that companies are responsible to the environment and the communities in which they operate. Properly communicating what you are doing to tackle these risks head-on can be good for your brand and help create opportunities for top-line expansion. Analytics are a perfect tool for illustrating improvements in your performance.

Don’t get left behind

Using analytics to improve sourcing or mitigate risk in the supply chain is not new. But, advances in data science techniques mean the ground is moving fast and those who move quickest will be best positioned to take advantage of their benefits. Picking the right source of risk analytics is crucial though. It will make your life easier and ultimately change the way you do business.

This blog was originally published here

Procure with Purpose

Procurious have partnered with SAP Ariba to create a global online group – Procure with Purpose.

Through Procure with Purpose, we’re shining a light on the biggest issues – from Modern Slavery; to Minority Owned Business; and from Social Enterprises; to Environmental Sustainability.

Click here to enroll and gain access to  all future Procure with Purpose events including exclusive content, online events and regular webinars. 

Golfing for a Spectrum of Opportunity

We’re seeing people on the spectrum unleash their intellect, experience and creativity across the company and around the world.

By bbernard/ Shutterstock

Recently I was invited to participate in a golf tournament. Golf is more than a game to me: it’s social; it’s outdoors; and it’s competitive. I’m always up for some good competition! Unfortunately, I just don’t get out there as much as I’d like, but in this situation, it’s not just about competing in a beautiful setting with friends and colleagues.

This tournament has a purpose that is meaningful, powerful and valuable: Els for Autism Golf Challenge. Not only do I get to play golf and feel good about supporting a great cause, but this helps people, communities and businesses. It’s a trifecta!

In the software industry, the network effect occurs when new participants join a digital platform, and the entire collective reaps the benefits — the more inclusive the network, the richer the experience and the greater the value. The same can be said for inclusivity in the workplace. Both serve as opportunity multipliers enhancing the experience and value for all.

I aspire to create a corporate culture that is welcoming to and respectful of all. For me, this aspiration is modeled through SAP’s Autism at Work program, one of our many great diversity and inclusion programs at SAP.

We’re seeing people on the spectrum unleash their intellect, experience and creativity across the company and around the world. People with autism are realising more than gainful employment; they’re forging professional careers. Here’s an amazing feature highlighting the program:

Of course, in the procurement business, where matching supply with demand is our specialty, we know a mismatch when we see one. There is upwards of eighty-five per cent unemployment rates for adults on the spectrum — people with skills and ambitions and dreams — which indicates that our colleagues, customers and communities are missing out on a huge untapped pool of talent. It’s also an opportunity denied to people with a tremendous amount to offer.

When I think about these people with skills, ambitions and dreams, I think of Dennis, a quality assurance specialist at SAP Ariba. Dennis has muscular dystrophy and struggled to fit in. He always assumed it was because of his wheelchair.

A diagnosis of autism after college gave him better insight into why making friends was so challenging, but it didn’t change the fact he couldn’t land a job. Lucky for us, Dennis found his way to SAP through the Autism at Work program. He has said, “I’m sad to have lost the ability to walk, but I’m an optimist and don’t let it get me down. Now, I live life without thinking too much about my physical disabilities… Autism is neither a disability or an ability. It just makes a person like me different.”

Now that is the caliber of colleague that I want on my team — someone who spends more time thinking about what he can do than what he cannot. Not to mention that as a quality assurance specialist, Dennis is an expert at catching issues way before customers experience them!

Dennis, in foreground, with colleagues

At SAP, we hire people like Dennis because we’re better for it. We develop the best products because we hire the best people. It’s as simple as that.

Though I am looking forward to a great day of golf, it’s really not about the game. It’s about providing opportunities and presenting the realm of possibility. American writer and lecturer Dale Carnegie once said, “We all have possibilities we don’t know about. We can do things we don’t even dream we can do.” Dennis is doing his thing, and I’m doing mine. We can all do something. The Els for Autism Foundation is a valuable resource to educate ourselves on autism, to donate and to volunteer. Each of us can play a role in helping our communities and companies be better. The possibilities are simply waiting to be seized.

Procure with Purpose

Procurious have partnered with SAP Ariba to create a global online group – Procure with Purpose.

Through Procure with Purpose, we’re shining a light on the biggest issues – from Modern Slavery; to Minority Owned Business; and from Social Enterprises; to Environmental Sustainability.

Click here to enroll and gain access to  all future Procure with Purpose events including exclusive content, online events and regular webinars.  

Procurement Pros – What’s Your Legacy?

Procurement leaders are starting to use the phenomenal buying power of their organisations to address big social challenges. What legacy do you want to leave?

In the old days, procurement was focused on two things: minimising costs and risk.

Purpose should be a pivotal part of every organisation’s business strategy. Being purpose-focused is essential to engaging customers and employees and being perceived as relevant, admired, and innovative by investors, partners, communities, and public entities. Today, it’s all about sustainability and corporate social responsibility.

Why are organisations increasing their focus in this area? It is not purely out of the goodness of their hearts, rather, they understand that key stakeholder groups care about these issues.

Consumers increasingly gaining a conscience is helping to drive this change. According to the 2016 US National Survey on Corporate Social Responsibility, which surveyed some 1200 individuals, 39 per cent  of consumers are likely not to buy a company’s products or services if they believe they are not “responsible” and 25 per cent will actively advise friends and family to avoid the company. Additionally, the report reveals that 84 per cent of global consumers actively seek out responsible products whenever possible.

Everywhere you look, business is under scrutiny. Whether it is for environmental practices, labour conditions, tax or paying suppliers on time, individual citizens increasingly are expecting companies to behave in a socially responsible manner. Stock exchanges and Governments are also now issuing requirements for companies to report on CSR data in annual reports, and CSR is increasingly perceived by investors to be important for their understanding of a company’s risks and opportunities.

Many of these issues are embedded in supply chains, and the role of procurement and supply chain in addressing them is therefore clear. Concerned citizens will expect action from government and businesses, which will, in turn, encourage firms to take steps that will reverberate throughout complex supply chains. The world is becoming smaller, which means we have increased, and faster, access to information about what organisations are doing and how they behave. This is a great opportunity for procurement and supply chain executives to play a leading role in these “wider world” issues.

This issue is no longer just for idealists or activists. For example, globally there are 46 million people worldwide who are modern-day slaves and about 150 million child workers. Any company doing business needs to make sure that its supply chain is not tainted by this cruel practice, and in many countries now, it’s not just best practice – it’s the law.

Eliminating forced labour from your supply chain is just one example of what SAP Ariba calls “procurement with purpose”. This is an umbrella term that includes social, environmental and sustainability practices. Leveraging the power of business networks like SAP Ariba and the intelligent, cloud-based applications underlying it, companies can gain a whole new level of transparency into the capabilities, performance, and social and environmentally responsible practices of their suppliers – and their suppliers’ suppliers. They can map the bill of materials for products and services right down to their raw materials and cross-reference this information with hotspots where there is a high propensity for the use of forced and child labor to determine their risk.  And, more importantly, they can receive timely alerts, which can be used to drive actions and report on them in meaningful ways.

All business leaders need to be focused on these topics. Research suggests that companies that do so can significantly outperform their rivals over a 10-year period. Or look at it this way: can you afford the reputational risk of a photo in social media showing one of your suppliers using child labour?

To prosper over time, every company must not only deliver financial performance, but also show how it makes a positive contribution to society. Companies must benefit all of their stakeholders, including shareholders, employees, customers, and the communities in which they operate”. Larry Fink, CEO of BlackRock (the world’s largest investment company)

Procure with Purpose

Procurious have partnered with SAP Ariba to create a global online group – Procure with Purpose.

Through Procure with Purpose, we’ve been shining a light on the biggest issues – from Modern Slavery; to Minority Owned Business; and from Social Enterprises; to Diversity and Inclusion.

Click here to enroll and gain access to all future Procure with Purpose events including exclusive content, online events and regular webinars.  

SAP Ariba are sponsoring Big Ideas Summit London on March 14th. Sign up now as a digital delegate to follow the day’s action wherever you are in the world. 

Modern Slavery: Don’t Get Named & Shamed In 2019

How should procurement and supply chain professionals prevent and address modern slavery in their supply chains?

The first day of 2019 saw the implementation of the Modern Slavery Act in Australia, requiring organisations above a certain size – consolidated revenue of A$100 million – to report annually on the actions they are taking to address modern slavery.

The Walk Free Foundation’s Global Slavery Index 2018* estimates:

•  In excess of 40 million people globally are subject to some form of modern slavery and approximately US$150 billion per year is generated in the global private economy from forced labour alone

• 24,990,000 people in the Asia-Pacific Region are ‘enslaved’, which accounts for 62 per cent of all modern slavery victims

•  15,000 people are currently victims of modern slavery in Australia

As organisations in Australia begin turning their focus to understanding their risk profile, there could well be a significant rise in these figures. With the legislation ensuring access to a public register revealing all the details of the submitted company statements, we can expect more noise online about the state of the nation when it comes to modern slavery, as well as the organisations implicated.

Organisations might be named and shamed for their lack of reporting, incomplete reporting or lack of action. As a result of the public access, board directors will be acutely aware of the risks to their brand reputation and demand much greater visibility of their supply chains.

Enter the procurement and supply chain leaders who are increasingly becoming the custodians of social responsibility in their organisations. Many organisations will be ignorant as to the scale of modern slavery risks in their supply chains. Forcibly detained adults and enslaved children work in many industries including fashion, fishing, cocoa, cotton, clothing, cannabis, construction and prostitution.

Integrated, global supply chains make it hard to tell whether products, even those that are stamped “Made in Australia” have at some stage relied on slave labour or underage workers as part of the production and supply processes.

Boards of organisations will need to accurately report:

1.The extent of their exposure to risks of modern slavery in their operations and supply chains

2.The action they have taken to assess and address those risks, and importantly

3. The effectiveness of their response

Some organisations may even take the next step and act strongly and visibly to help address the issue and help reduce or eliminate the slavery issue

How should the procurement and supply chain professional prevent and address modern slavery

  • Policy and Process Frameworks

It’s important to have a policy of some description that covers all the relevant principles. Policy also needs to extend into action by embedding changes into processes that cover things like supplier due diligence and ongoing performance monitoring

  • Understanding forced labour and monitoring slavery red flags in your data

Understand the areas of your organisation’s supply chain that will be particularly vulnerable to slavery practices. Many procurement platforms have additional features that can connect you to suppliers with known issues. There is no doubt that procurement and supply chain professionals will need to conduct extensive research into high-risk areas; certain countries, regions, suppliers, suppliers to suppliers, high risk supply chains, certain industries and products. Ignorance to the issue is indefensible.

  • On-site inspections

Determining high-risk suppliers is important but it will also be necessary to conduct on-site inspections to investigate further. On-site audits are one of the key mechanisms for monitoring supplier performance against agreed standards.

  • Developing and implementing a corrective action plan

Where an audit or an on-site inspection has confirmed instances (or suspected instances) of modern slavery, it is critical that the supplier develops and implements a Corrective Action Plan (CAP). The purpose of the response should be to clearly define corrective and preventative actions for resolving any non-compliance identified during the audit or inspection.

  • Engaging Suppliers

A problem as large as modern slavery will never be effectively impacted by policies alone, setting standards for suppliers, developing action plans and monitoring their implementation. CAPs will only be effective in their remediation activities if they are combined with programs that build a supplier’s capability. The ideal is for the supplier to integrate and drive antislavery policies into their own business. Be prepared to be involved in this activity and in some cases sponsoring the necessary business changes.

  • Building supplier incentives

The key to effecting changes needed is to develop supplier incentives, which ensure that the supplier takes ownership of the process and ensures continuous improvement.  Improvements need to be measurable to support the reporting and prove that progress is being made.

Such incentives may involve publicly announcing a supplier preference, in cases when the correct steps have been taken to address slavery. An alternate incentive might be to automatically qualify suppliers that have implemented robust procedures into their second tier supply base

What is the bottom line for Procurement and Supply Chain professionals?

While these changes to the regulatory environment are disruptive there is a silver lining in that it will bring new opportunities for the CPO to ensure increased visibility into the supply chain. Larger organisations, that have invested heavily in leading supply chain practices, may find themselves better equipped for responding to these changes. For others, the legislation will mean additional investment in order to play catch up, resulting in higher capital and operational expenditure.

Ultimately, the most effective response is likely to be organisations joining forces and jointly managing the supply-side, thus building an over-whelming demand for suppliers to abolish these practices. A slavery-free catalogue or certification may become the ticket-to-play for suppliers. A co-operative response will have the hardest hitting message of all and now is the time to be working together.

Procure with Purpose

Procurious have partnered with SAP Ariba to create a global online group – Procure with Purpose.

Through Procure with Purpose, we’re shining a light on the biggest issues – from Modern Slavery; to Minority Owned Business; and from Social Enterprises; to Diversity and Inclusion.

Click here to enroll and gain access to  all future Procure with Purpose events including exclusive content, online events and regular webinars.