Tag Archives: sustainable procurement

2016 Rewind – Best of eLearning – The True Cost of Supply Chains

For our final 2016 rewind, we’re looking at the year’s top eLearning modules. How can sustainability help limit the true cost of supply chains?

Fast fashion is the embodiment of unsustainable supply chains and consumerism. Why then does it still have such a following? And what can we as consumers do to change this.

Well, we could all start by watching ‘The True Cost‘ – a film documentary that highlights the very worst aspects of fast fashion. It’s an eye-opening, and at times harrowing, look at how consumer trends are impacting the lives of workers in developing countries.

Procurious were delighted to be able to host one of the film’s team, Lucy Siegle, to the Big Ideas Summit this year.

True Cost of Supply Chains

When it comes to Fast Fashion, Lucy is one of the UK’s primary experts. At the Big Ideas Summit, she delivered a message to the assembled procurement leaders – you are in a position to change this.

She believes that there needs to be a more holistic view of the supply chain. This can start with procurement, but needs to include consumers too.

Consumers can help develop sustainable clothing and fashion brands by investing in them. Instead of buying attractively cheap clothing, we need to consider the true cost of the garment. Your cheap t-shirt could be driving poor working conditions in another part of the world.

So what’s procurement’s role in this? Well, as the key stakeholder in ensuring supply chain transparency, procurement can ensure suppliers are adhering to proper procedure. The profession also has the chance to change fast fashion trends by supporting truly ethical suppliers. Only then can we break the cycle.

You can read more about Lucy’s work on the Procurious Blog. You can also catch up with all the thought leadership from the Big Ideas Summit 2016 on the eLearning Hub. And there’s a whole lot more there to keep you interested too! Happy viewing!

How Sustainability Can Help Procurement Avoid Black Swans

Swans, procurement and sustainability – what’s the link? It’s all to do with procurement taking account for its impact on the wider world.

Seven Swans Swimming

The traditional 12 days of Christmas might not start until the 26th of December. But this festive season, we’ll be bringing you the 12 days of procurement Christmas in the run up to the big day. Catch up with the story so far on the Procurious Blog.

“On the seventh day of Christmas, my true love gave to me…seven swans-a-swimming.”

Black swans are always unexpected, and defy explanation. Seeing two black swans together is highly unlikely. However, seeing seven together all at once? Well, you better hope that you don’t.

Of course, I’m not talking about the bird that you might see in your local park. The Black Swan I’m thinking of is a term coined by Nassim Nicholas Taleb for an event that is both surprising, and has a major impact.

So, if we can’t predict when these events will happen, how can we stop them? This is where sustainability, social value, and procurement come in.

Thinking the Unthinkable

Earlier this year, Nik Gowing spoke extensively about the concept of ‘Thinking the Unthinkable‘ at the Big Ideas Summit. The idea behind this was that current leaders weren’t able to deal with cataclysmic events – either through a lack of skills, or outright denial.

Little did Nik know that when he used President Trump as an example of an unpredictable event, he was actually predicting the future! Nor could he have known that 2016 could provide even greater volatility than 2014, the year Nik and his co-author looked at for these so-called Black Swans.

It’s easy to argue that, without the right skills, these events are impossible to handle. If you then add in the fact that we can’t predict them, even with all the technology available to us, then what can we do?

Swimming with the Swans

Given that Black Swan events can be just about anything, procurement needs to look at its impact on everything to do its bit. And one way to do this, is to be conscious of its impact on the wider society.

Sustainability and sustainable procurement are concepts that are getting increasing focus in the global profession. Organisations have begun to realise that sustainability can build supply chain competitive advantage. Employee engagement is key, but the vast majority of people want to engage if it means a brighter future.

The environment is certainly a major consideration in potential future Black Swan events. And, from management of resources, to responsibility for global supply chains, procurement will play a major role.

Procurement Gets Social

Of course, sustainability is just one aspect of procurement’s future. The profession is taking increasing interest in social value, and working with social enterprises.

And why should procurement be working with these organisations? Well, they give back to the community, and have a positive impact on the community, and the environment. There are also social organisations working hard to ensure that people have proper access to good, healthy food.

And those of us looking to get more meaning in our procurement careers could do worse than looking to work with social enterprises. Career Coach Charlie Wigglesworth, Director of Business and Enterprise, Social Enterprise UK, discussed this at length earlier in the year.

If your conscience has been pricked, then there is plenty you can do to help. If we pull together as a profession, then we can ensure procurement is better equipped to deal with unexpected events.

Or, you never know, we might even be able to stop them happening in the first place. Then the only swans we need to think about would be the ones we see at the local pond. And that would be good for the future, wouldn’t it?

Negotiation – it’s just one of the key skills procurement professionals need to drive value. But do you go for milking your supplier? Or getting something from the wider herd? Get the lowdown on Day 8.

Not Worth The Money – Will Entrepreneurs Avoid Business in Britain?

The Great British Pound is in trouble again this week and it’s making budding entrepreneurs think twice about their business plans.

143467567

Talk of a Hard-Brexit Sparks Global Concern

The pound plummeted to a 31-year low last week sparking global concern. The crash followed Prime Minister Theresa May’s announcement on Sunday 2nd October, which revealed a firm timeline for triggering Article 50 and the beginning of Brexit. Extra fuel was added to the, already well-stoked, fire when the media reported that she would opt for a complete break from Europe- a “hard brexit”. Reports  already suggest that a “hard brexit” could result in a loss of 70,000 jobs and cost £10bn in tax receipts.

With the pound sitting at $1.27 against the US dollar, chancellor Philip Hammond scuttled to New York with the hope of reassuring America’s biggest banks about the consequences of Brexit. He will try to convince the Wall Street powerbrokers that London will maintain its position as the world’s leading financial centre once the break from the EU is complete.

The pound is also falling against the euro this week, hitting a five-year low and continuing to escalate concerns.

Weak Pound Triggers Rise in UK Services Sector Prices

The dropping value of the pound is already affecting the UK services sector as input prices rose to a three and a half year high in September 2016.

David Noble, group CEO, CIPS, said: “Firms raised their prices in response, to counteract increased costs for fuel, food and elevated wage bills and as the weaker pound had an effect.”

Companies demonstrated their concerns at the ongoing uncertainty over Brexit implications through their reluctance to forge ahead with confidence.

“It’s clear that the pace of expansion has cooled since the first half of the year, reflecting widespread concern about the potential future impact of Brexit”, David commented.

Is Brexit Scaring Off Entrepreneurs?

The aftermath of Britain’s Brexit referendum back in June 2016 saw a strong display of optimism from many entrepreneurs. Indeed, a survey conducted by the Financial Times confirmed that the majority of founders and investors had confidence in London retaining its status as Europe’s biggest center for start-ups. But, is there a change in the wind?

Diana Paredes, CEO & Co-founder at Suade Labs and passionate entrepreneur spoke with Business Insider last week about the effects Brexit will have on entrepreneurship.

She questions why anyone would opt to start a business in the UK given the current economic climate. Operating in London adds a premium in terms of housing and talent and people often see the many business opportunities on offer as a justifiable compromise for quality of life. However, with the future so uncertain, is it worth the risk and sacrifice?

Existing organisations might also be keen to relocate their bases to elsewhere in Europe where it is cheaper to operate, less isolated and they can continue to be regarded as a European company and not simply a British one. 

If you’re an entrepreneur, what are your thoughts? Is the dropping value of the pound enough to make you run a mile from UK business? Let us know in the comments below.

Find out what else has been happening in the world of procurement and supply this week…

Samsung in Trouble Again

  • It’s been a month since Samsung recalled its new flagship phone, the Galaxy Note 7, following several cases of it exploding and injuring customers.
  • The company have been issuing replacement devices to customers who bought Galaxy Note 7 phones.
  • However, a Samsung recently started smoking uncontrollably on a flight before takeoff, forcing the cabin crew to evacuate the plane. This could lead to a second recall and a disastrous outcome for Samsung.
  • Google announced its Pixel smartphone this week and could be well placed to steal a whole host of disappointed Samsung’s customers.

Read More at Business Insider

Uber’s Self-Driving Cars

  • Uber’s self-driving car pilot program may want to fasten its seat belts after the bumpy beginning it has reportedly gotten off to.
  • The cars have reportedly gotten into accidents and ignored traffic signs during testing in Pittsburgh, Pennsylvania.
  • Whilst it is still very early days for self-driving cars, it’s believed that they are, ultimately, inevitable given the overall, enticing end-game which should see the cars combatting road deaths.

Read more at Tech Radar

Supply Chain Leaders Pressured to Embrace Climate Change

  • Business for Social Responsibility (BSR) meets next month in New York with the current cri de Coeur being “bold climate action”.
  • Analysts have observed that multinationals must raise their ambitions by investing in climate finance, transition to renewable energy, and find more innovative was of ensuring resilient supply chains.
  • As well as encouraging change in organisational culture to embrace clean energy and other climate solutions, BSR insist that supply chain managers join Corporate Social Responsibility (CSR) managers in becoming .intrapreneurs.
  • Supply chain managers can – and must – play a major leadership role in addressing the alarming consequences of aberrant global weather conditions.

Read more at Supply Chain 24/7

Drones Tested for Emergency Cell Service

  • Verizon Communications is testing the deployment of large-scale drones to provide mobile connectivity in emergency situations when the land-based cellular network has been damaged.
  • The drone which is being flown by American Aerospace Technologies, is nothing like the small, quad copter devices flown by amateurs at home. With a 17-foot wingspan, Verizon’s drone more resembles the types of unmanned aircraft used in the military.
  • Data gathered in Thursday’s trial will be shared with the FAA in order to help craft future rules regarding drones, Verizon said.

Read more at Fortune

Is it Worth Fighting for Sustainable Procurement?

Why procurement professionals must drive supplier innovation in order to keep up the fight for a sustainable planet.

Sustainable Procurement Fight

As a procurement professional it can sometimes be a little bit challenging to keep up the motivation to pursue a more sustainable planet. News headlines and science reports reflect a world which is developing in the wrong direction.

Oceans are becoming more acidic, with devastating results on coral and connected ecosystems. The air in major cities is full of high levels of dangerous particulates. Crop-growing regions for key commodities are shifting. Sea levels are rising.

At the end of the day, is there still hope for you, me and the planet? In this article I will put focus on some of the positive signs we can see. Let me be clear – it is still worth fighting for sustainable procurement, the planet and the generations to come.

Greater Transparency

Transparency is growing. It’s harder and harder to hide malfeasance. Carbon emissions are disclosed. Everyone is online everywhere, and we have easy access to information, and the ability to pictures of something that we dislike at any given time of the day. And if you fail, even as a company, the public will collectively judge and give the verdict.

Even in procurement we are working with tools, like the Ecovadis sustainability rating system, where the performance of the suppliers is evaluated. Not only for the sake of performance, but also because we want companies to change. To create impact driven approaches.

Regulators and Heroes Show the Way

It is obvious that the more transparent we get, the more the regulators act. More and more companies and public actors disclose their behaviour, and this leads to actions amongst regulators who create climate treaties, introduce carbon taxation, or hand down regulations to markets.

Investors have even started incorporating sustainability and ESG risk into their calculations on where to invest their money.

Heroes are among us. Alongside the great minds in science, many individual policy-makers, business leaders, farmers and consumers are making millions of decisions and taking small steps, every day, to reduce their impact or improve the planet.

The vast majority of people want to take care of their world, and science and the media are providing the tools and knowledge to help them do so. Lights are being turned off. Public transport systems are being built and used. Less food is being wasted. Each of us wants to be a hero.

Fostering Innovation and Collaboration

Innovation matters. Enormous investments are being made. These efforts, many of which are being driven by the best minds in academic and business labs, will without a doubt deliver solutions to many of our environmental challenges. It’s a question of when, not if.

Collaboration is happening. Competitors are talking to each other and to policy-makers around how to share best practices to reduce costs and improve efficiencies. Solutions to global sustainability problems are too big for any one country or company to solve.

Integrating Sustainable Supplier Innovation

We should not forget that a company’s ability to build close partnerships with innovative suppliers is directly correlated with the firms successful innovation performance. Companies which include their suppliers in the innovation process seem to financially outperform their peers that do not.

It is a fact that 90 per cent of companies do not include their suppliers in their innovation processes. 69.9 per cent of corporate revenue is directed towards externalised, supplier driven cost. Suppliers should be viewed as an extension of the company and, as such, they should be incentivised, coached, sanctioned and rewarded to help achieve corporate objectives.

The message is clear: we need to keep fighting for sustainable procurement, the planet, and the generations to come. We can make a start by integrating suppliers closer to the innovation processes.

Buying a better future – Procurement’s sustainability leaders recognised

Once seen as a ‘niche’ part of the profession, sustainable purchasing is fast moving into the mainstream. The misbelief that sustainable solutions cost more is quickly giving way as businesses recognise that competitive advantage lies in developing innovative, sustainable supply chains.

Sustainable purchasing

Evidence of this came this week with the Sustainable Purchasing Leadership Council (SPLC) recognising 12 organisations and one individual who are using their purchasing power to advance the long term health and vitality of society, economies, and the planet.

Winners were recognised across a range of sustainable purchasing initiatives, including cooperative buying contracts for green cleaning products, a week-long zero waste initiative at the Phoenix PGA Open and supplier incubator programs designed at improving environmental performance.

Background on some of the award winners includes:

Leadership Award for Overall Sustainable Purchasing Program (SPLC’s highest honour), presented to The District of Columbia for having put in place a comprehensive sustainable purchasing program that exemplifies the qualities defined in SPLC’s Principles for Leadership in Sustainable Purchasing. DC conducted extensive market research and stakeholder engagement to develop sustainable purchasing guidance and specifications for more than 100 priority products. Hundreds of employees have been trained on the guidance, which DC shares publicly.

Leadership Award for a Special Sustainable Purchasing Initiative, presented to The Commonwealth of Massachusetts and the Responsible Purchasing Network for leading the establishment of a cooperative contract through which agencies in multiple states can now buy independently certified green cleaning products at favourable pricing and with specialised training and outreach.

Leadership Award for Public Interest Advocacy, presented jointly to International Campaign for Responsible Technology and the GoodElectronics Network for organizing the “The Challenge to the Global Electronics Industry”, which has been endorsed by more than 200 organizations and individuals in 40 countries. The Challenge calls on the global electronics industry to respect human rights, workers’ rights, and community rights, including the right to a safe and healthy workplace, and to healthy communities and a safe environment.

This award was also presented to the Initiative for Responsible Mining Assurance for bringing together a coalition of businesses purchasing minerals and metals, mining companies, NGOs, affected communities, and trade unions in order to promote a world where the mining industry respects the human rights and aspirations of neighbouring communities, provides safe, healthy and supportive workplaces, minimises harm to the environment, and leaves positive legacies. Through the many years of collaboration, IRMA has developed the Standard for Responsible Mining, which is currently being piloted.

Leadership Award for Purchasing Innovation
Two organisations were recognised for leveraging sustainability to find and promote innovation: King County (Seattle, WA) for purchasing battery-electric busses for its Metro Transit fleet and documenting significant cost savings and environmental benefits associated with this new technology; and Philips Corporation for innovative procurements that have enabled the company to achieve carbon neutrality in its North American operations while saving money. The Philips’ Procurement and Sustainability groups have collaborated on energy efficiency, onsite renewables, renewable energy certificates, and long-term Power Purchase Agreements for wind power.

Sam Hummel, Director of Outreach and Operations for SPLC, says that the breadth of award categories demonstrates that sustainable procurement is about more than just buying green. “We are talking about human rights, ethical conduct and supplier diversity”, says Hummel. “Sustainable procurement is a holistic approach.”

In other news:

China mandates renewable energy procurement across 11 provinces

  • China’s National Development and Reform Commission has forced grid companies to buy enough renewable power to enable wind farms to operate at least 1800 hours per year, and solar farms to be utilised at least 1300 hours per year.
  • The mandatory procurement is applicable across 11 provinces, including Xianjing and Gansu.
  • Solar capability in China has increased seven-fold and wind has almost doubled since 2012, with China aiming to generate 15% of its power from renewable and nuclear energy by 2020.

Read more at http://www.bloomberg.com/news/articles/2016-06-01/china-s-order-for-green-power-purchases-lifts-wind-solar-shares

World’s longest – and deepest – rail tunnel opens in Switzerland promising to transform Supply & Logistics in the region

  • The Gotthard rail link has taken 20 years to build, cost more than $12bn (£8.2bn), and is tipped to revolutionise Europe’s freight transport.
  • At 57.1km in length, 4,00,000 cubic metres of concrete were used to create the tunnel, employing 2600 people.
  • Its maximum freight amount is 377,000 tonnes per day, the equivalent of 15,080 shipping containers.

Read more at http://www.bbc.co.uk/news/world-europe-36416506

Human Rights Watch calls for binding global convention on supply chains

  • HRW has released a report calling for governments to effectively regulate business activity to protect human rights in supply chains.
  • The report highlights abuses including child labour, labour rights, environmental damage, and lack of safety.
  • Juliane Kippenberg, Children’s Rights Director at HRW, said. “It’s clear that a binding standard on human rights in supply chains globally is needed to ensure that businesses live up to their human rights responsibilities.”

Read more: http://www.cips.org/en/supply-management/news/2016/may/binding-international-convention-is-required-to-protect-human-rights-in-supply-chains/

Autonomous taxi startup nuTonomy raises $16 million in funding to compete with Uber

  • Autonomous taxi startup nuTonomy hopes to bring self-driving taxis to the road by 2018.
  • The company counts the government of Singapore as one of its main partners. It runs a fleet of R&D vehicles in Singapore and is the first private company approved to test on public roads.
  • The startup is promising to develop the whole suite for driverless taxis, from autonomous navigation software (nuCore), fleet routing and management, remote vehicle teleoperation, and smartphone-based ride requesting.
  • The firm uses retrofitted Mitsubishi iMiev electric cars and is expected to add Renault Zoe EVs in its autonomous cab service later this year.

Read more: http://futurism.com/a-new-uber-competitor-just-raised-16-million-in-funding-for-complete-autonomous-taxis/

Reap the Benefits of a Structured Approach to Responsible Procurement

You are about to set out on the journey to make Responsible Procurement more integrated into your procurement processes.

Responsible Procurement

To reap the benefits – and win recognition – you will have to be well prepared, implement the right tools and processes, and communicate every achievement. But where to start? In this article, I share some things you should consider.

Define your commitment

Corporate Social Responsibility (CSR) is a major item on a CEO’s agenda. No annual report is complete without making reference to CSR performance, including the performance of an organisation’s suppliers. CSR is set to be the most influential mega-trend affecting the procurement function by 2020.

Many companies have worked towards Responsible Procurement for a while through a Code of Conduct. A Procurement Leaders CSR Survey in 2012 highlighted the following reasons for pursuing a Responsible Procurement approach:

  • Reduce reputational risk: 71 per cent
  • Moral obligation: 49 per cent
  • Create business opportunities: 36 per cent
  • Legal obligation: 34 per cent
  • Respond to consumer demand: 34 per cent
  • Satisfy investors: 23 per cent
  • Reduce cost: 18 per cent
  • Satisfy the management: 8 per cent
  • Repair reputational damage: 3 per cent
  • Other: 7 per cent

However, in order to reach new heights with your approach to Responsible Procurement, it is time to become more specific. You need to be able to communicate your commitment. This includes your approach to Responsible Procurement, as well as all the achievement targets that you have set out.

Focus on What is Relevant to You

I know of a lot of companies who have copied what everybody else is doing, only to then realise that the massive amount of data that they had collected was a massive waste of time – for both the company and the suppliers – as they had no system or processes in place to handle it, or react to it.

End-users and consumers are demanding. They read your website before they buy from you, and they’ll likely do the same before applying for a job in your company. The mistake many companies make is continuing to focus on everything – environmental, social and economic aspects. Are they all relevant to your business?

Start by asking some of the following questions:

  • You want to take your approach to new heights. Which heights?
  • What is it exactly that you would like to achieve with your Responsible Procurement approach?
  • Where would you like to be in 3, 5 or 7 years time?

You could also:

Conduct a workshop – Gather your most important stakeholders and try to find out how you will combine your company’s CSR, Procurement and Business strategies in one vision. Make sure outcomes are measurable and actionable. Use your own words and your company’s DNA, and don’t be afraid to prioritise. A brand needs a stand. What is your stand?

Gather a fact pack – Understand your company’s drivers, which industry sector standards your company needs to comply with, and what ‘footprints’ you and your suppliers are leaving behind. Most importantly, do some benchmarking.

What kind of approach do your competitors have to Responsible Procurement Management? How does it fit into your current supplier base? I often see that companies forget to look at the supplier base and try to apply a ‘one size fits all’ approach. For example, if you are a bank you don’t want to answer questions on animal welfare.

Develop a strategy  In order to create a strategy, it is important to define your expectations towards your suppliers and procurement professionals. Turn it around and look at what expectations they could have of you as a company. How will you communicate your approach? How will you measure on your progress? What kind of training will you conduct (if any)? Which kind of processes and tools will have to be “reworked”?

Develop a Code of Practice – Right now you might have a Code of Conduct. A ‘Code of Practice’ is a document which not only indicates what your commitment is, but also a document where you indicate what you want suppliers to do in order to meet your requirements.

You need to be much more specific, because that is what consumers expect you to be. And understand that this will show on the bottom line, because the more you share your ‘best practice’ with your suppliers, the more return on investment you will see.

One Last Piece of Advice

Do not underestimate the change management part of implementing a Responsible Procurement approach. Make sure that the top management, not only from your company, but also from your procurement organisation, is involved. You are starting out on a journey which will change your company over time.

Autism Works for Johnson & Johnson

Big Ideas can help provide greater benefits than cost savings. Timo Worrall tells Procurious how Johnson & Johnson are working with organisations like Autism Works to help a wider community find work.

Timo Worall - Autism Works

For people with autism, finding a job can be a near-impossible task, with recruitment processes stacked against them from the very beginning.

However, Johnson & Johnson, one of the world’s leading consumer healthcare organisations, is supporting organisations like Autism Works, proving that thinking outside of the box to include the people farthest away from employment opportunities is achievable. 

This Big Idea is part of J&J’s ‘Social Impact through Procurement’ initiative, which has committed to spend £15 million with social enterprises, like Autism Works, by 2020.

Timo Worrall, Senior Category Manager (FM EMEA) at J&J, heads up the team responsible for driving this procurement-led initiative through the J&J business in the UK.

At the Big Ideas Summit, Timo will join a high-profile panel to discuss social and sustainable procurement and ethics, their impact on the procurement profession, and what procurement leaders could and should be doing to embed these practices.

Procurious caught up with Timo ahead of the Big Ideas Summit.

I am excited to meet with people who may already be or are open to working with Social Enterprises. I hope by the end of the meeting everyone feels the same.

Tell us a bit about Yourself

I am a father of two boys, and live with my family in Woking. We have just started to renovate our 1950’s bungalow, and are presently living on a building site. The kids seem to like it more than my wife and I do, but we are looking forward to the end result!

What are the main challenges that face social enterprises in the UK?

Making the connection to companies who don’t yet know the value of working with Social Enterprises. Once they find these opportunities, how they can meet our sometimes complex requirements, and then grow in a sustainable manner that works for us both.

Can you tell us a bit more about Johnson & Johnson’s work with social enterprises?

We have a program called Social Impact through Procurement. Our goal by 2020 is to spend £15 million with Social Enterprises and create 150 jobs for those people furthest from the jobs market. We are presently working with a wide range of Social Enterprises across many categories.

One of these companies is Autism Works, who we made a video with to show how this particular social enterprise helps those with autism and other autism spectrum conditions.

What should procurement leaders be doing to help drive the social and sustainable procurement agenda?

Firstly understand it and tell your business stakeholders the benefits of doing this. Give your teams a little extra time to look for good social enterprises, and work with them to build sustainable solutions. Then tell the good news stories and build on the success.

Timo Worrall will talk about these topics in more detail during one of our panel discussions at the Big Ideas Summit on April 21st.

If you’re interested in finding out more, visit www.bigideassummit.com, join our Procurious group, and Tweet your thoughts and Big Ideas to us using #BigIdeas2016.

Don’t miss out on this truly excellent event and the chance to participate in discussions that will shape the future of the procurement profession. Get Involved, register today.

Big Ideas 2016 – Meet Our Speakers: Peter Holbrook

The Big Ideas Summit is just a couple of weeks away! We caught up with Peter Holbrook, CEO of Social Enterprise UK, to discuss the rising prominence of the social enterprise agenda.

Peter Holbrook

Peter Holbrook is the Chief Executive of Social Enterprise UK, the UK’s national trade body for social enterprise. The organisation works with its members to raise awareness of social enterprise, generates political engagement for social enterprises, and works with private sector organisations to explore and connect with social enterprises, helping them integrate these businesses into their supply chains.

Peter is passionate about the potential of communities and non-profit organisations to be much more enterprising and involved in business, and is helping to drive the social enterprise agenda across all sectors and industries.

Peter was awarded a CBE in 2015 for his service to social enterprise.

At the Big Ideas Summit, Peter will join a high-profile panel to discuss social and sustainable procurement and ethics, their impact on the procurement profession, and what procurement leaders could and should be doing to embed these practices. Peter says:

Meeting pioneers and enlightened leaders is always a privilege. Procurement has huge impact, potential and possibility – I’m looking forward to meeting kindred spirits, and agreeing further progress.

Tell us a bit about yourself.

I’m a practitioner, networker and advocate for social business – the growth and innovation in this sector is astounding. I’ve been happy to be a part of it for over 20 years.

What are the main challenges that face social enterprises in the UK?

Public awareness of social enterprise still requires a great leap forwards, and many social enterprises still require greater scale.

What’s the biggest success story in the Social Enterprise industry you have come across?

There are plenty of examples but my current favourite is the FairPhone – a crowdfunded social enterprise that has brought to a much needed market the world’s first fair trade smart phone.

Fairphone is the world’s first modular smart phone. It has been designed to be easily repairable by users, to last years longer than other smart phones, and is free from any conflict materials or minerals in its supply chain.

You can find out all you need to know about the Fairphone here.

Many procurement professionals think that buying social or sustainable goods is more expensive – in your experience, is this true?

Our evidence shows that in over 50 per cent of cases social businesses are more competitively priced than their private sector competitors. It’s about creating added value not necessarily added costs.

What should procurement leaders be doing to help drive the social and sustainable procurement agenda?

Become champions for social procurement! Procurement can ensure your brand and company values are reflected within your supply chain. Be bold!

Peter Holbrook talk about these topics in more detail during a panel discussion on turning social enterprises into your ‘ideas suppliers’ at the Big Ideas Summit on April 21st.

If you’re interested in finding out more, visit www.bigideassummit.com, join our Procurious group, and Tweet your thoughts and Big Ideas to us using #BigIdeas2016.

Don’t miss out on this truly excellent event and the chance to participate in discussions that will shape the future of the procurement profession. Get Involved, register today.

The Value Companies See With Sustainability Standards

As societal responsibilities grow, many organisations are turning to sustainability standards in order to demonstrate their supply chain transparency.

sustainability standards

The discussions on Procurious reflect a number of questions procurement professionals face when trying to implement a sustainable procurement policy. Just what is sustainable procurement? Does it cost more to source sustainably? Have I got the time and resources to meet my own or my company’s targets? What value will sustainable sourcing bring to the business?

With the focus extending beyond environmental and sustainability issues to fair and ethical treatment of labourers and producers, the responsibility can be broad.

Increasingly, procurement managers are recommending sustainability standards as a way to ensure independent, transparent assurance of their supply chains. Partnering with a sustainability standard can help companies, which do not have the knowledge or capacity, to manage all aspects of responsible sourcing on their own.

Certification can work as a tool for managing the full range of issues. This is particularly the case for commodities, where environmental and social sustainability can be complex, and where the producer can be many links down the value chain.

Changing Procurement Process

However, making changes to well-established procurement processes is easier said than done. Businesses need to be clear on the value of choosing sustainability standards to meet their sustainable sourcing goals.

ISEAL Alliance interviewed existing users of sustainability standards – retailers, manufacturers, traders and others – on what they saw as the value of working with credible sustainability standards (certification systems), like those that are members of ISEAL.

It became evident that the value of certification was high, but it varied depending on the type of business, the sector, the geography, or other factors.  The interviews also showed that certification was not always valued in the way one might expect.

While market differentiation and increased sales were mentioned by a few companies, the potential value of a visible ‘ecolabel’ was never the primary reason for the partnership.  Instead it was often about supply chain challenges.

Companies revealed the value of sustainability standards to their business in five key areas:

  1. Making complex supply chains more understandable. This included providing better traceability, simplifying what is asked of suppliers by using agreed standards, and generating better relations with producers.
  2. Mitigating risk. Rigorous auditing, transparency of origin, and outsourcing assurance of responsible practices to local experts, helped companies mitigate risks of sourcing from complex supply chains.
  3. Ensuring sustainable supply for the whole industry. Several companies noted that by their investment in certification, they were strengthening the reputation and ensuring a sustainable future for the whole sector.
  4. Meeting consumer expectations. By communicating compliance with sustainability standards, companies said they were increasing consumer awareness of sustainable sourcing and creating market differentiation for their products.
  5. Reflecting a company’s values and heritage. As well as aligning companies’ goals with their values and maintaining trust, certification also provided a way to engage more deeply with employees.

Click here to read interviews with M&S, IKEA, Mars, Woolworths, Wilmar, De Beers, Domtar, Bumble Bee Seafoods and Tetra Pak.

Strengthening Commitment

ISEAL also recently created an online tool for companies to understand what good labels look like.  The site, called Challenge the Label, explores five universal truths of a credible claim or label. It aims to help procurement professionals have deeper conversations with their suppliers and partners, before choosing to develop or use a green claim on or off product.

Many companies also use their own codes of conduct or auditing programmes, and they see these as complementing their use of certification. While those interviewed agreed that the sustainability landscape is changing dramatically, they also said that their company’s commitment to certification will only deepen over time.

The goal for procurement professionals has to be to embed sustainability into everyday business. Using sustainability standards can help to deliver cost savings, address supply chain risks and ensure transparency. Making procurement decisions today in a manner which preserves resources for future generations as well as for future business makes good sense.

Is Procurement Serious About Sustainability?

When price is king, and procurement is often accused of “bullying” suppliers, can we really say procurement is serious about sustainability initiatives?

Procurement Sustainability

This article is by Gerard Chick, Chief Knowledge Officer, Optimum Procurement Group.

As we entered 2016, many of us will have made New Year’s Resolutions. It strikes me that this is as relevant to our professional lives as it is to our personal lives.

Eating or drinking too much is as unsustainable as exercising too little. The above all have outcomes that are bad. We know they are bad, and we also know that to change them is hard.

Last year, the newspapers and other media outlets were teeming with stories about procurement professionals using “bullying” tactics against suppliers, and with claims that big brands were using their power to squeeze suppliers. Inevitably a breakdown of trust (amongst other things) began to emerge, and this clearly needs to be resolved.

We read about farmers protesting against Morrisons’ terms of contracts. We read about Majestic Wine dropping their chief buyer after its pre-tax profits dropped by almost half, and supply chain relationships became tense after it asked suppliers to give them cash towards new warehousing. We also read about Carlsberg facing hostility from its suppliers after it extended its payment terms to 93 days.

Regrettably, such practices are all too common. The tactics used by big business towards suppliers have become a standard feature of today’s marketplace, where price is king and any means of reducing costs seems to be considered valid.

Contemplating Behaviours

And yet procurement frequently claims it is in the van when it comes to issues regarding sustainability. Some supply managers are, but many aren’t. A more sustainable supply chain is needed, but it will only emerge when the breakdown in trust between suppliers and procurement is resolved.

Let’s take a step back. The word frequently used in the media was ‘bullying’, but perhaps if we are to put this right we should contemplate ‘behaviours’. A better word, I feel, and one we can focus on in a more professional manner.

Perhaps these behaviours reflect that many of these people are simply unskilled and, even worse, unaware of it. The difficulty being that it is hard for them to recognise their incompetence, which in turn leads to inflated self-assessments of their skills and abilities.

Bad relationships are not just about negative publicity and brand damage, but also impact on the ambitious sustainability targets many businesses are now setting themselves.

Take climate change. Up to 90 per cent of the greenhouse emissions linked to a company are generated outside its immediate operations, with the lion’s share often occurring in its supply chain.

Collaboration Over Compliance

Moreover, business’ struggle for economic survival must not come at expense just about anything else! Big business characteristically operates in a top-down manner. Supply managers issue suppliers with codes of conduct and environmental targets, and oblige them to comply. The result is an exploitative game between suppliers and auditors sent out to verify farms, factories, working conditions and so forth.

Not only is compliance difficult to achieve, especially beyond the second tier, but it’s only half the story. A more effective solution would be for procurement professionals and suppliers to work together to develop innovative solutions to supply chain issues and to help ensure each others’ sustainability.

It strikes me too, that the smaller, more agile supply organisations (as well as procurement organisations) are more likely to be able to innovate than the behemoths of big business, stuck in their cycle of annularity and the need to satisfy shareholders at all costs.

Tapping Supply Base Creativity

So how can companies looking to become more sustainable tap the creativity of their supply base? The first and most obvious answer is to cut the double-messaging. Corporate procurement teams are frequently blindsided by a ‘cost-out’ mantra. The risk this poses is it frequently supersedes all other agendas and that is simply not sustainable.

The perennial issues of time, cost, quality and service will always feature in procurement decisions, but social and environmental considerations must be factored in as well. Alignment is key. For example, Marks & Spencer prohibits its procurement teams from purchasing any product that can’t meet at least one of the goals of its corporate sustainability plan.

This often leads suppliers to view such demands as a box to tick. To remedy this, suppliers need to be incentivised. New ways of working need time, resources and dedicated attention – all of which are at a premium for small suppliers.

Changing Behaviours

What is needed is a change in behaviours and the development of more trusting relationships. Ideally procurement organisations need to co-invest in the long-term research and development with their key suppliers.

As mentioned above, annularity dominates the mind-set and behaviours of many large companies. They simply focus on the short-term and would rather sit back and wait for proof of concept, than stump up the cash and experiment.

Ultimately, talk of sustainability-focused supply chain innovation will only ever begin to take effect when the breakdown in trust between suppliers and buyers is resolved. That requires a shift from a model based on adversarial brinkmanship, to one of mutual interest and transparency. The more open and honest a corporate customer is about its sustainability challenges, the higher the chance of generating innovative solutions.

Perhaps now is the time for procurement professionals to make a New Year’s resolution.