In the second part of this two-part blog, we outline the challenges faced by organisations when integrating sustainability in to procurement and how to overcome them.
Greenstone and Ardea International were recently invited to run a workshop on sustainable procurement at the eWorld Procurement & Supply conference in London. The eWorld conference is a key event for senior procurement and supply chain professionals providing insight into the latest innovations and technologies.
What are the challenges that you have faced, or believe you would face, when trying to integrate sustainability in to procurement?
When participants were asked what the barriers to implementing sustainable procurement within their organisation were, there were a variety of different answers. Below we have identified 4 key areas from the extensive discussions, and matched them with some of the solutions which we were provided in the final part of the workshop.
1. Senior or stakeholder buy-in
As with any programme of change, a lack of senior sponsorship increases the difficulty of getting people to come on the journey with you. Some participants suggested that if you did not have this sponsorship then it was virtually impossible to drive sustainability throughout the businesses. However, an alternative view put forward was that the C-Suite actually have very little idea of where changes can be made and the benefits of sustainability realised in day to day operations.
Depending on your standpoint, the solutions may be slightly different. However, it is clear that some degree of education needs to take place to make sure relevant stakeholders understand that this should not be a cost to the business but instead represents long term benefits. How this education takes place will vary from organisation to organisation. Sustainability having a place at the decision making table provides a constant presence, and a review of the competitor set and their approach to this area can provide the confidence to act.
2. Limited understanding of sustainability issues
As with senior buy in, a lack of understanding of sustainability issues and more importantly how to address them can seriously hamper an organisation. This lack of understanding can be one of two things, either there is no understanding within procurement of sustainability and how to evaluate or include metrics in current process. Or it could be that the organisations as a whole does not contain the relevant knowledge and experience.
The solutions discussed for this were once again training and education. However, in this case training could take the form of the utilising third party training programmes and workshops to empower current employees. This is something that appealed to people in the room, as with the increased public awareness of the wider issues, individuals are keen to add to their job functions.
In addition to training, there was the idea that sustainability needs to be made relevant to both buyers and suppliers, so that it is something that is both simple to implement and part of business as usual.
3. Time and resource
Time and resource is something that comes up as an issue whenever an organisation changes systems or processes. Naturally there is a degree of time invested in changing processes, and as we have mentioned training.
However, the essence of sustainability is about making your organisation more efficient. The solution to time and resource is often a mind-set. If you are investing in longer term supplier relationships and the long term future of your organisations, then you are less constrained by time and resource right now. You are also investing in a more joined up approach in how you operate. If sustainability and procurement are currently siloed, then they need to be integrated and communicating more efficiently and effectively. If different supplier reviews and audits take place then these should be consolidated and if appropriate shared.
The overwhelming consensus was that time and resource constraints were related to how you work and understanding of sustainability, and that resources that are retrained, reallocated and collaborative can achieve more.
4. Structure of the organisation
One of the biggest barriers that participants raised was the structure of the organisation. When it comes to adopting a sustainable approach to managing suppliers, it is the procurement team that are automatically assumed to be best placed to implement these changes.
There are two issues with this that are particularly worth focussing on. Firstly, procurement is traditionally focussed on value and delivery of service. In order for individuals and teams to integrate sustainability into this process they need to be provided with the metrics for judging suppliers performance and the questions to ask suppliers. They also need to have sustainability built into their own individual KPIs.
Secondly, the information that is increasingly being required from suppliers is driven by many different areas of the buying organisation, and these are business functions that are not necessarily very well connected with procurement. We are talking about legal teams, risk and compliance teams, sustainability teams, marketing teams, and so on. Therefore procurement cannot be siloed, but instead needs to be integrated with the expertise from across the business both in terms of defining supplier metrics, but also evaluating suppliers against these metrics.
Sustainable Procurement Resources
Greenstone provides software and services that enable sustainable procurement and responsible supply chains. Greenstone’s SupplierPortal Software as a Service (SaaS) solution provides your business with a single point of transparency across your supplier network, ensuring that compliance, performance, and risk can be managed seamlessly.
Greenstone has released a free Sustainable Procurement Guide to help procurement and sustainability professionals understand what sustainable procurement is, how their organisation is performing in this area and how they can begin to integrate sustainability into their procurement function.
Ardea International provides advice and support to organisations on how to integrate modern slavery risk into their procurement framework and to develop sustainable procurement policies and due diligence processes.
Ardea International is running a workshop in London on 7 November on how to integrate modern slavery risk into sustainable procurement.
Colleen Thereon, Ardea International, has written a book on ‘Strategic Sustainable Procurement: law and best practice for public and private sectors’.