Tag Archives: supply chain sustainability

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!

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…

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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.

Taking Control Of Your Supply Chain With Blockchain

Organisations are increasingly striving to develop a supply chain that adheres to their brand’s sustainability and ethical standards. Here’s how blockchain can enable this…

By Demkat / Shutterstock

As our global supply chains become more and more complex, ensuring that contractual commitments around sustainability and ethical practices are met at each stage of the supply chain has become extremely challenging.

Along with this increased complexity, the economic and reputational cost of a lapse in compliance is increasing as well. Organisations want to be part of the solution, not generating bad headlines and being seen as part of the problem.

As such, organisations are increasingly striving to develop a supply chain that adheres to their brand’s sustainability and ethical standards. Starbucks, to name one example, has set a 2020 goal of ensuring all tea and cocoa is ethically sourced. Johnson & Johnson has publicly stated its commitment to determining the use, country of origin and source of 3TG minerals (Tin, Tungsten, Tantalum and Gold) used in its global product portfolio. Such commitments require extreme and committed due diligence in supply chain management.

One way that forward-looking businesses are achieving such diligence is with enterprise contract management. For the first time in the history of commerce, contracts are being completely digitised. This enables procurement organisations to identify, assess and automatically mitigate risk through advanced capabilities like automated supplier checks and region-based regulatory compliance. And emerging technologies like blockchain and artificial intelligence (AI) are poised to dramatically increase the benefits of an enterprise contract management platform.

Today, we at Icertis are working with customers on solutions that will allow them to utilise smart contracts that use a consortium blockchain to create an immutable ledger of transactions. Under such a system, a customer and its suppliers will place their contracts on the blockchain, thus ensuring that the required terms are present in all the related contracts. Once on the blockchain, AI will verify that all necessary contractual obligations are present in the documents. This will ensure the tracking of commitments across a consortium of suppliers, enabling a new level of commercial collaboration, visibility and accountability.  And to ensure sensitive information is not exposed, visibility of contracts in the chain will be restricted based on privileges that allow only contracting parties to see their contract, preserving the sanctity of the supply chain.

This technology turns contracts into living business assets to achieve once-divergent goals.

Manufacturers can ensure their suppliers comply to standards and contractual commitments around privacy, sustainability and labour laws. Suppliers, meanwhile, can prove that they comply, while not exposing the details of their subcontracts within the supply chain.

And it’s not just about tea, cocoa or conflict minerals. This technology can also enforce compliance requirements like data privacy (including GDPR), information security, ITAR (International Trade in Arms Regulation) and other regulations.

We are entering a new era of commerce, when contracts stop being static documents forgotten about after execution and actively start reducing risk and creating value for enterprises throughout their lifecycle. Smart contracts powered by AI and blockchain can protect and optimize businesses in ways never before possible, including in their supply chain.

Icertis is 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.  

Making Sustainable Procurement Work

Now, more than ever, it’s important for the profession to put sustainable procurement at the front and center of business.

AYA images/ Shutterstock

Daniel Perry, Global Alliances Director – Ecovadis believes that the role of procurement is evolving. Evolving from being “primarily focused on cost savings and operational efficiency, to a more strategic and central player in risk management and value creation.”

Now, more than ever, it’s important for the profession to put sustainable procurement at the front and center of business.

“Stakeholders, including end consumers, B2B customers, shareholders etc. are demanding that businesses take responsibility for practices all the way into their value chain. They’re driving transparency and, ultimately, a positive impact by working with high-integrity partners. And it’s procurement teams that are in the ideal place to meet these higher stakeholder demands.”

“The power of the spend that procurement controls (often between 50-70 per cent of turnover) puts procurement at the crossroads of not only risk management and brand protection, but also as internal partners for driving value creation. Of course they want the value chain to be resilient – to avoid interruptions or damage to their company’s reputation – but they also want to provide supplier-driven innovation and support for transformative business models and offerings. –

“Procurement teams focused on sustainability do this by selecting and working with the best suppliers in a way that goes far beyond price, quality and delivery, to include performance around environmental, social and labor and ethics practices.”

The value-add of sustainability programs

It’s all too common to hear an organisation defend their lack of commitment and lack effort in this space. “It’s too expensive”, “it’s too difficult”, “it’s too time consuming” or “we’re just not ready” are typical refrains.

The benefits and ROI of sustainability include not only operational savings, but strategic outcomes. A well-developed Sustainability and Corporate Social Responsibility (CSR) program that is integrated into the company values, and is driven with executive support, can drive key business performance metrics such as:

  • Sales and reputation: A burgeoning wave of consumer sentiment is cresting. More and more customers are comparing the sustainability details of products and services, and it is changing their purchase decisions. Companies making the right sustainability investments can realise a possible increase in revenue of up to 20 per cent.
  • Employee morale and productivity: Sustainability programs can do wonders to improve employee satisfaction, reducing a company’s staff turnover rate by up to 50 per cent and increasing employee productivity by up to 13 per cent. Integrating CSR practices in your company and brand also has a hugely positive impact on recruiting.  If your company has a better sustainability reputation, it often generates more interest from applicants, allowing you to be more selective and choose higher quality candidates.
  • Increased market value: Sustainability programs can increase a company’s market value by up to 6 per cent.
  • Innovation: With more power comes more responsibility…and more options. Many companies are pursuing sustainable procurement strategies in order to find innovative suppliers that will help them differentiate their product or service offering.

Dupont, for example, changed its innovation strategy to embrace a “sustainable growth” mission, saying “If we bring the solutions to the market sooner than our competitors do, we will be more successful in continuing to grow the company.”

Making sustainable procurement work

“One of the biggest challenges companies face in sustainable procurement is measuring and understanding current performance within their supply base, in the context of global standards and benchmarks. It can also be challenging to engage suppliers as collaborators in their mission. And to get there requires a mix of expertise, the right technology, change management and process integration backed by executive commitment.

“First, the organisation needs a clear mandate from the executive team, which makes the sustainable procurement program an integral part of the function’s mission and values. This is embodied by investing in change management and communication programs and taking steps towards implementation and company-wide adoption.

“Success also requires reliable, agreed-upon indicators for sustainability performance that both buyers and suppliers can understand, and that are actionable. Many companies collect lots of unvalidated data, but buyers rarely have the CSR expertise or time to validate or interpret it – and this is where a standardised, evidence-based, and analyst-generated rating – like EcoVadis provides – comes into play.

“Additionally, CSR criteria and performance indicators must be integrated across the procurement function and include the use of clear and enforceable codes of conduct, contract clauses and tender criteria. Buyers need to believe in and leverage these criteria in their supplier development and sourcing activities.,  And, procurement groups should agree on, measure and reward on the critical CSR / sustainability KPIs in the same way they track cost savings or other key metrics. These all drive adoption in the organisation and make sustainability inherent to the procurement role.

“Increasing the benefits to a single company, a mutualised platform can make it much easier for suppliers to share the same scorecard results with all their customers, enhancing transparency and collaboration to drive network effects for maximum improvement and impact.”

Daniel Perry will be speaking at Big Ideas Chicago on 27th September. To  hear more from him and to follow the action LIVE from wherever you are in the world, register as a digital delegate (it’s free!)

Read more on this subject from EcoVadis in  Beyond Compliance – The 5 Pillars of sustainable procurement value creation

5 Organisations That Are Fighting Plastic

The war against plastic is not all doom and gloom. Thankfully, the world’s biggest corporations are waking up to the reality that big change has to happen… and soon!

In last week’s Procurious blog we explored the threats currently facing The Great Barrier Reef – reporting on the eight million tons of plastic that enters our oceans every year and the prediction that by 2050 there will more plastic in the ocean than fish.

It’s hard not to be horrified by some of the images emerging that demonstrate the impact of plastics on our oceans, our beaches and  our wildlife. No one could forget, for example, Justin Hofman’s photograph of a seahorse clinging to a discarded cotton bud – a  painfully stark image.

Last month National Geographic launched their new initiative, Planet or Plastic – the focus of their June publication and a multiyear effort to raise awareness about the global plastic waste crisis and encourage readers to take the pledge to help reduce single-use plastics.

“More than 5 trillion pieces of plastic are already floating in our oceans.”

National Geographic, Planet or Plastic 

It can seem like a hopeless situation. But, as their campaign highlights, there is so much you can do both as an individual and as part of your organisation to impart real change.

And the situation is looking hopeful. Across the globe, the biggest corporations are waking up to the reality that big change has to happen with regard to their use of plastics. More and more of our restaurants, bars, theatres and cinemas are removing plastic straws from the offering and a number of big supermarkets have promised to make all plastic packaging reusable, recyclable or compostable by 2025. 

Today, as we approach World Ocean’s Day on 8th June,  we’ve highlighted a handful of corporations who are doing some inspiring work to tackle plastic pollution.

Their inspiring campaigns prove that solving the plastics problem is both a challenge and an opportunity for organisations to lead the way in finding innovative solutions.

1. Pret a Manger

Pret a Manger is consistently recognised for its efforts towards sustainable, socially conscious. The organisation is well known for offering all of its unsold produce to homeless people and recently introduced a 50p discount for customers bringing in there own reusable cups.

In October 2017 Pret a Manger’s CEO, Clive Schlee, penned a blog for the sandwich shop’s website entitled “What if Pret stopped selling plastic water bottles?”

Schlee explains that Pret a Manger are striving to make it as easy as possible for customers to use fewer plastic bottles “All of our Veggie Pret and Manchester shops will now be encouraging customers to fill up their bottles for free using new filtered water stations. These shops will also start selling reusable plastic bottles alongside our regular water bottles, so the choice is clear.”

In February 2018 Pret a Manger announced they would be trialling a 10p cash back scheme for plastic bottles.

The company will add 10p to the cost of its plastic bottles which will be refunded to customers when they bring the bottle back. Any unclaimed deposits will be invested in their sustainability work.

Pret a Manger have also pledged to make all their plastic packaging use by 2025 100 per cent recyclable, reusable or compostable.

2. Whole Foods

Supermarket chain Whole Foods has been backing the no-plastics horse for some time.

In 2008 they made the switch from plastic to paper bags in all of their stores and they have consistently committed to reducing plastics by offering biodegradable alternatives for plates, cutlery and other food takeout items.

At some or all of their stores, Whole Foods are doing the following:

  • Using reusable dishes and flatware in dining areas
  • Reclaimed wood, bricks and other materials in construction
  • Printing and packaging using recycled paper and water- or vegetable-based
  • Collection bins for batteries, printer cartridges, cell phones, corks, plastic bags and toothbrushes
  • Composting to decrease landfill waste

3. Timberland

Last year, Timberland unveiled a line of products developed with Thread’s Ground to Good™ fabric, harvested from plastic bottles littering the streets and landfills of Haiti.

To date, over 1300 Haitians have collected and recycled 765, 280 plastic bottles.

“At Timberland, we’re constantly seeking innovative ways to create both social and environmental value, and are excited to continue making a difference in Haiti and in all the communities where we live, work and explore,” said Colleen Vien, sustainability director for Timberland. “Our collaboration with Thread has proven to be a meaningful way for us to grow our work in Haiti and generate social value for the people behind our products. We’ve embraced the opportunity to share their unique stories with our consumers, because this collection is about so much more than a boot. A Timberland X Thread boot represents real change – it helps create jobs, restore communities and build futures.”

4. Sky

Sky launched Sky Ocean Rescue in 2017 to shine a spotlight on the issues affecting ocean health, find innovative solutions to the problem of ocean plastics, and inspire people to make small everyday changes that collectively make a huge difference.

Partnering with WWF, Sky have committed £25 million to help find innovative solutions to reduce plastics and pledged to eliminate all single-use plastics from their operations, products and supply chain by 2020.

They’re also running a successful online campaign to encourage consumers to #PassonPlastic

5. Dell

In December 2017 Dell announced that it would be launching the world’s first commercial-scale, ocean-bound plastics supply chain, which takes ocean-bound plastics and repurposes it for their packaging.

“When Dell uses plastics from the beach, shorelines, waterways and coastal areas, we bring them back into the economy and stop them from breaking down and becoming part of a bigger problem.

It gives us an affordable resource, creates jobs for the recyclers, provides a template for others to follow and helps put a dent in the vast problem of plastics entering the ocean.”

In partnership with The Lonely Whale Foundation, Dell have helped convene Next Wave, an open-source initiative that brings leading technology and consumer-focused companies together to develop a commercial-scale ocean-bound plastics and nylon supply chain.

The group anticipates that they will divert more than 3 million pounds of plastic and nylon-based fishing gear from entering the ocean within 5 years – the equivalent of keeping 66 million water bottles from washing out to sea.

We’d love to know what your organisation is doing to reduce the use of plastics. Tell us in the comments below!

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.  

Sorry Kids: Easter Chocolate To Be Cancelled After 2050

The world is running out of chocolate… And if procurement pros can’t find a way to save the day, no one can! 

Most of us like to indulge in a little (or a lot of!) chocolate over Easter.

In Britain alone, the projected Easter spend for 2018 is $892.6 million.

And in the US, 2018 Easter spending is expected to total a whopping $18.2 billion.

But, depending on how attached you are to your Creme Eggs, Lindt Gold Bunnies or your Waitrose chocolate avocados , you might need to stockpiling now; in preparation for a very uncertain future!

Why climate change is claiming our chocolate?

More than 50 per cent of the world’s cocoa comes from West African countries, primarily Côte d’Ivoire and Ghana, whose climates have traditionally best-accommodated the cacao tree.

But,  in recent years, drying conditions, long draughts and rising temperatures, are making it harder to grow cocoa beans.

Warmer, dryer climates “will suck moisture from the soil and make it impossible to produce a good crop in many regions around the world.”

In short, climate change could destroy the chocolate industry within 30- 50 years.

What can procurement professionals do?

All is not lost! Procurement teams around the world are already investing in alternative, and more sustainable options, for their cocoa sourcing.

  • Developing a sturdier cacao plant

Last year, Mars unveiled their Sustainable in Generation Plan stating:

“We’ll invest $1 billion over the next few years to tackle urgent threats facing our business and the society we operate in – threats like climate change, poverty in our value chain and a scarcity of resources.”

Part of that investment will go towards “recruiting University of California researchers to develop a sturdier cacao plant that won’t wilt in drier climates.”

  • Changing farming approach

The majority of farms in Côte d’Ivoire and Ghana are run by poorer families who cannot afford fertilisers and pesticides. If modern farming techniques were made available to the farmers in Western Africa; cocoa production might be easier.

The Rainforest Alliance is working with smallholder cocoa farmers to manage climate change and protect their livelihoods and way of life.

  • Relocating suppliers

Farmers in Western Africa have the option to move their crops to higher ground; but there is limited space and many upland areas are protected for wildlife.

Organisations could look to source their cocoa beans from a different region entirely.

Dr Barry  Kitchen, executive chairman of Daintree Estates, told the New Daily that “Cairns generally had ‘ideal’ conditions for cocoa trees, which need consistent rain, warm temperatures, and shade with dappled light.”

“You’ve got to be continually innovative and continually looking at ways that you’re preparing yourself for the future.” he said.

But, given the much higher labour costs in Australia, it’s unlikely that the industry could ever migrate to Australia.

  • Changing the nature of chocolate

Research by The Conversation suggests wild mango butter, made from the fruit’s stone, has a very similar chemical, physical and thermal profile to cocoa butter.

If procurement teams decide to invest in the science behind it,  it mightn’t be too long before we’re eating mango butter Easter eggs.

Personally, Procurious thinks it’s an egg-cellent idea!

In other procurement news this week…

Starbucks Testing Blockchain

  • Starbucks is piloting the use of data technology, including blockchain, to make its coffee supply chains more transparent
  • The firm hopes the technology will provide real time information about the beans within the supply chain and help financially empower rural farmers
  • Kevin Johnson, chief executive officer at Starbucks, said: “Over the next two years, we will look to demonstrate how technology and innovative data platforms can give coffee farmers even more financial empowerment

Read more on Supply Management 

Amazon’s Latest Drone Patent

  • Amazon’s latest patent is a delivery drone that understands when you shout at it
  • The drone is designed to recognise human gestures, and then respond accordingly. Gestures the drone would recognise include, for example, waving arms, pointing, the flashing of lights, and speech
  • An illustration demonstrating the drone’s functionality shows a man wildly waving his arms and with a speech bubble next to his mouth

Read more on The Verge 

Buying Social, Expressing Yourself Online and Other Procurement Challenges…

Does it pay to buy social? Can I build greater trust online? And how do I prepare my team for AI developments? We answer some of the questions and challenges on the minds of procurement leaders…

Olga Savina/Shutterstock.com

The Procurious London CPO Roundtable was sponsored by Basware

How do you evolve your organisation from the mindset of  “we’re not doing anything bad” to actually “doing something good” ?

What happens when people who don’t know what they’re talking about start talking online, what does that mean for society’s leaders?

With the development of RPA and AI, are we all out of a job, and when?!

How should organisations go about developing existing talent to prepare them for leadership roles?

These are just some the questions we answered at last week’s  Procurious CPO London Roundtable, sponsored by BaswareWant to know the answers? Look no further…

The Buy Social Corporate Challenge

Charlie Wigglesworth, Deputy CEO – Social Enterprise UK (SEUK) gave a fascinating insight to the great work social enterprises are doing across the UK.

SEUK was established in 2002 as the national body for social enterprise. Now, with over 1200 members they strive to support social enterprises and develop the evidence base to showcase their benefits, as well as influencing policy and political agendas within UK government.

Social enterprises sit comfortably in between a charity and a private sector company. They have a clear social mission and  look to make profits to further that social mission – they are “businesses which trade for a social purpose.” 

“Businesses and governments can support social enterprise in lots of ways but the best way to do good is to buy from them,” explains Charlie.

They are much more likely to be better represented or minority led or based in the most deprived areas. They are more likely to employ people that wouldn’t have work otherwise had work or give money where people wouldn’t otherwise have had it.

Supporting these companies is good for your business because they are likely to be cheaper, more innovative and doing so gives corporations the opportunity to overlap and integrate CSR with normal business, rather than have it exist as a separate entity.

Buying social doesn’t cost more money or change the procurement process  but it has significant strategic and ongoing value for communities and your business.

Of course, as Charlie admits, it can seem hard to make changes and switch your mentality from “not doing anything bad” to “doing something good”. Charlie’s advice is to “find opportunities locally- they may seem tiny but there can be significant opportunities. Look at where you can do things directly.”

SEUK is working with a number of businesses for The Buy Social Corporate Challenge with the challenge to achieve $1 billion of procurement spend with social enterprises by 2020. Follow their progress here.   

The Conversation Century

Elizabeth Linder, Founder and CEO of The Conversational Century joined Youtube in 2007 and often thinks back to that year, a significant time for Youtube, in order to understand the social media space.

It was an exciting and life-changing time for skilled amateurs. A time that had millions of people singing in their bedrooms or racking  up millions of video views for a commentary on something they would never otherwise have been considered an expert in. Youtube ultimately offered them the opportunity to be heard.

Elizabeth is a strong believer that the internet is the best place to build trust. “The people” ( i.e. you and me) have already got this all figured out. But the reason so many people still believe the internet is destroying trust is that our leaders are still so far from getting it right! We simply don’t have leaders at a political level that have invested in a voice on social media.

Some key things to remember when trying to start conversations online:

  • Most leaders fear that they have to move at an increased pace because of today’s internet culture. You don’t. Go at your own pace but keep people informed as you do it. It’s ok to communicate to people that “the discussions are still in progress” or “we don’t have information on this yet” so long as you’re communicating something!
  • Believe in the power of primary sources because the public certainly do. Hearing directly from the source rather than a paper adds a lot of value to your communication. If you’ve ever been quoted in an article, blog or feature you’ll know the producer of that piece never quite gets to the meat of what you were trying to say because you don’t own the conversation or drive the discussion – they do!
  • Embracing in the hacker culture, i.e. making it up as you go along, is key. EU politicians, for example, only see social media as a tool for outbound communications and not for their inbound policy making. Hacker culture dictates that they need to consider the latter.

Elizabeth’s take away advice on owning the social media space? “Be yourself online and talk to people in a way that lets them in but not in a way so casual that you’re treating them like family.”

RPA and AI – Are We All Out of A Job?

Where are we at in terms of Robotic Process Automation (RPA) and Artificial Intelligence (AI) ?  Paul Clayton, Head of New Service Development, Basware outlined the current threats and challenges.

RPA essentially replicates things that aren’t easily automated; the things a human would do. Its skills lie in coding systems and inserting data. The downside to RPA is that there is no intelligence or decision making process, which means it can go very wrong!

There are four levels to AI:

  • Level 1:  This is the simplest form of AI and is quite prevalent today.  It’s reactive and rule-based with no memory or recollection and decides what to do based on a set of rules.
  • Level 2:  Limited, but not long-term, memory with decisions based on recent experience. It will react to data from the things it sees.
  • Level 3:  These are computers that learn and have memory. They  can re-formulate their view on the world so they can make decisions and remember actions. Whilst there are Level 3 computers out there, other than C3P0 (!),  it hasn’t been applied in procurement except in the areas of fraud and risk management.
  • Level 4:  This, fortunately, does not exist…yet! These are machines that are self aware and can form their own view on anything, redevelop their own software and change their behaviour entirely.

Levels 1 and 2 cover most of the repetitive tasks in procurement and finance. Not before long, 90 per cent of the people in this sphere wont be required.

So yes, as Paul admits, the jobs we have today won’t be here tomorrow and people won’t have careers in the way that we currently define “a career”. But the workforce coming in today is used to their environment changing every 30 seconds,  they already expect instantaneous change and they’re able to adapt quickly to something different.

Barclays’ leadership development process

Jonathan Harvey – Global Head of Talent & Culture, Barclays PLC, gave us a high level overview of Barclays leadership development framework and how it compares or contrasts with other leading companies.

When Jonathan joined Barclays two years ago he was tasked with assessing whether Barclays were doing enough to embed a common set of values and to measure their progress in embedding them.

He evaluated how they were developing existing talent in preparation for leadership roles and eventually established a set of criteria for potential leaders at Barclays. This criteria demands they live by Barclays’ values and inspire others to live by them and that they have leadership critical experience such as experience managing more than 1000 people, across different geographies and through different business cycles.

The most successful leaders of organisations will be those who can think the most adaptively and creatively, and that comes down to experience!

Procurious are hosting CPO roundtables on 30th May, 19th September and 14th November. If you’re a CPO and would like to attend one of our roundtables in person please contact Olga Luscombe via [email protected] to request an invitation.

Procurement with Purpose: Beyond the Bottom Line

How can you embrace the notion of procurement with purpose authentically and in ways that are consistent with your core beliefs and ideals?

Sustainability improves the bottom line, and companies can do good while doing well.

In fact, research shows that purpose-driven companies with strong performance in environmental, social, and governance outperform the market by 4.8 per cent. But this is not “new” news.

So what is different now that makes purpose more vitally important? It comes down to transparency and trust.

In many segments of life, trust is at an all-time low. The swarm of misinformation, slanted stories and editorials, and paid reviews have continued to foster these low levels of trust. This presents a unique challenge to companies.

How do companies and we as leaders embrace the notion of purpose authentically?

How do we do so in ways that are consistent with our core beliefs and ideals?

How do we “walk the walk” and not just talk the talk?

In the past, business leaders might have defined their goals as “increasing profits for shareholders and owners.” Now leading companies are beginning to recognise that this is only part of the equation. They see the bigger picture and are taking on a higher mission to make the world a better place to live and work. They are finding new ways to solve the world’s most pressing challenges. Gaining (or regaining) trust will happen through transparent action that demonstrates a commitment to creating a more purpose driven business environment.

Purchasing with Purpose

Those of us in procurement have a unique opportunity to lead the way. With increasing frequency, companies are redefining their supply chains and buying from suppliers who support, for example, people with disabilities or are female led. Companies want to know that no forced labor is being used by their suppliers, and their supplier’s suppliers, and all the way back up the value stream. Procurement is in the unique position to address these issues and have an incredible impact.

Collectively, the Global 2000 spend $12 trillion on goods and services annually. By tying their purchases to purposes, these companies can take a stand and drive ethical behavior across the supply chain. And technology exists to make this possible. The key is to get started. Business networks, for instance, provide transparency and insights into supply chains that enable companies to ensure they are acting in responsible ways.

Take SAP Ariba, the world’s largest business network. Leveraging historical and real-time purchasing data, supplier intelligence, and network insights, along with data and services from third parties like Made in a Free World, procurement can shine a light on materials, regions, and suppliers to ensure they are meeting the organisation’s standards.

Through a link between SAP Ariba Discovery, a global business matching service, and the ConnXus Database, buyers can tap a wider pool of minority, woman, LGBT and veteran-owned businesses and enable global supply chains that are more responsible, sustainable and inclusive. Extending our network even more, we’ve partnered with Nicole Verkindt, founder of OMX, to help our customers analyse the economic impact of their spend in industries such as international defense, aerospace, oil & gas, mining, automotive and construction industries.

But it doesn’t stop there. SAP Ariba is a sponsor of the UN Global Compact’s Decent Work in Global Supply Chain Action Platform. The UN developed the Action Platforms to accelerate the achievement of the Sustainable Development Goals. Action Platforms offer a systematic solution to sustainable development challenges through new fostering innovation, developing new financial models, and identifying sustainable solutions across a range of issues. As a Platform Sponsor for the Decent Work and Global Supply Chain Action Platform, SAP Ariba has deepened our commitment to driving purpose across the global supply chain.

Procurement professionals will always be responsible for doing more with less and for delivering value to our organizations. And we can do even more than that.

There’s real power in purpose. It inspires us. It moves us. It enables us to reimagine and to reinvent what is possible and to achieve great things. It is also one of the greatest challenges issued to business leaders today. Join us in taking it up. Together, we can make a difference.

Sign up for #FeeltheLove on 14th February – the first Procurious and SAP Ariba Procure with Purpose webinar .

Sustainable Procurement: Reversing The Race To The Bottom

Don’t dismiss the importance of supply chain sustainability! Learn from the mistakes of others and count yourself out of the race to the bottom! 

A short-sighted focus on cutting costs and speeding products to market is resulting in a race to the bottom that will cost companies more in the long-run. Top performers in sustainable sourcing will emerge with stronger supply chains, higher margins, more trusted brands and happier customers.

Consumers are increasingly putting their money behind sustainability, with Nielsen reporting 66 percent of global consumers are willing to pay more for products from companies they perceive as sustainable. This is forcing every industry to innovate in a way that makes transparency and sustainability permeate throughout the entire supply chain. Companies are often stuck in a race to the bottom, focusing on offering the lowest possible prices to compete with retail giants like Amazon and Walmart. Manufacturers who sell through these giants are also competing with each other, facing immense pressure from their customers to have the lowest price each week. Although price may seem like the best factor to emphasize, quality and sustainability considerations are often sacrificed in favor of cutting costs and speeding time to market. Even companies that have made sustainability promises often retreat after the initial pressure wears off due to perceived higher costs, but the long-term impact of irresponsible sourcing will impact their bottom line even more in the end. In fact, a recent BCG study found that gross margins were 4.8 percent higher for companies that were top performers in sustainable sourcing compared to those who were median performers.

In the long-run, participating in the race to the bottom is bad for business as it results in cheaply made, low-quality products and services that undermine the viability of the companies they are sourced from. This will all eventually be discovered by consumers and other stakeholders, and will open companies up to varying kinds of risk, including economic and financial, reputational and quality control consequences. Because these risks can impact a company’s bottom line, it is crucial to consider how sustainability can mitigate risk before it happens.

Unfortunately, hesitation and fear around competition (antitrust) laws are deterring businesses from working together to promote sustainability. A new report from the Fairtrade Foundation found that businesses are wary of working with rivals to improve the quality and security of their supply chain, but with fluctuating trade fees and climate change they have no choice but to collaborate. Instead of competing with peers to be fastest and cheapest to market, companies should be working together to promote sustainable procurement. When companies within an industry work together, it sends a much clearer signal to suppliers about the importance of responsible practices. With the right indicators and tools, those buying organizations can help suppliers advance in maturity and improve their practices – not only in sustainably issues but across all business operations. Companies should be working with other industry players – instead of against them – to ensure efficient and effective sustainable practices.

Learn from the mistakes of others

Nike, Asics and Puma saw the consequences a lack of sustainable and ethical practices could bring when more than 500 workers in four factories were hospitalised after fainting on the job. Outsourcing factory jobs to Cambodia may have saved the company some money on labor and wages, but unethical work conditions including long days and soaring temperatures canceled out any small benefit the retailers may have seen. The reputational and operational consequences turn out much worse than the small cost reduction initially intended. Improving ventilation and adding air conditioning, although good intentions, only put a band aid on the problem – these retailers and other companies should be working together to implement ethical and sustainable procurement practices as part of a long-term solution.

Geopolitical considerations

The turbulent political and trade climate in recent months is also challenging. Companies in almost every industry in the U.K. are facing a difficult choice between joining the race to the bottom to secure post-Brexit deals in terms of purchasing cheaper products from other countries and promoting high-quality, ethical and sustainable practices. Unfortunately, lower standards mean lower quality products and services, which will not just limit the emphasis placed on tackling issues like climate change and modern slavery, but also impact business revenues in the long run. NAFTA is having a similar effect on North American companies, making the consequences of the race to the bottom a universal concern. Instead of panicking about the effects of eminent trade deals, companies should be focused on working together to pursue sustainable procurement and mitigate risk before it happens.

Fortunately, many local and global governments are encouraging businesses to get on board and combat modern slavery, environmental sustainability and other risks in the supply chain. California recently signed the “Buy Clean California” act, which will clamp down on imported carbon emissions by creating rules for the procurement of infrastructure materials purchased with state funds. The U.K. just pledged $53 million to combat modern slavery with a focus on improving the apparel supply chain, joining the U.K. Modern Slavery Act in attempting to ensure business compliance. Australia may follow suit and introduce its own laws designed to root out forced labor and compensate potential victims.

At this point, we shouldn’t be thinking of it as “sustainability for sustainability’s sake,” but sustainability for risk mitigation and improved business operations. Technology is evolving to help companies better trace suppliers and other parties and improve transparency throughout the supply chain. Regulations around the world are banning or limiting unethical practices. The movement towards sustainability has changed in the last decade, placing the burden directly on companies to ensure responsible practices – both within their own operations and those of their partners. It may seem daunting to invest in sustainability while competitors are continuing to race to the bottom in pursuit of producing the cheapest products fastest, but companies that go above the standard will find it truly improves their bottom line and creates more value throughout their supply chain.

Pierre-Francois Thaler is co-founder and co-CEO of EcoVadis, a supplier rating company that helps organisations institute corporate social responsibility (CSR) and various sustainability programs. Pierre brings 15 years of experience in procurement and developing innovative sourcing solutions. Prior to starting EcoVadis, Pierre was CEO of B2Build SA, the first B2B marketplace for the European construction industry, and also served as a director of Ariba’s Procurement BPO business.

‘Tis The Season To Waste Lots Of Food….

An estimated 1/3 of the world’s food is wasted along the supply and consumption chain from farm to kitchen. What can you do to help this Christmas?

NaturalBox/Shutterstock.com

This morning you may have discovered your milk was spoiled and tossed it in the garbage before trying to find something else to eat. Maybe you didn’t finish your whole breakfast and that went in the trash, too.

You’re not alone. An estimated 1/3 of the world’s food is wasted along the supply and consumption chain from farm to kitchen. How much does that add up to? A lot!

And with Christmas just around the corner and an estimated  £64 million’s worth of food set to be wasted in the UK alone, it’s the perfect time to start reducing some of that waste!

There are a lot of programs helping to combat food waste this Christmas. Some supermarkets have started to offer items past its best before date at a reduced rate and are providing food for those most in need. There are also a number of  steps you can take to help in your home as well.

How Much Food Do Humans Waste?

Via: InvestmentZen.com

Read more on food waste and sustainability in our articles on Earth Day and supply chain regulations.