This blog comes to us from Megan Ray Nichols of Schooled by Science.
When it comes to improving sustainability and optimizing operations, procurement channels are some of the first places to focus on. After all, the supply chain not only accounts for most costs and sources of inefficiency, but produces more emissions than internal operations typically do.
It’s not just about external parties and processes, however. Inefficiencies can come from within, too. Achieving a transformational change, for the better, means maintaining proper operations across the board, from fostering supplier-buyer relationships to cultivating employee compliance.
But in practice, sustainability is not easy to do. After all, monitoring, communicating and collaborating with hundreds or thousands of suppliers at a time is no small feat. Luckily, there are some things that leaders and managers can do to keep their procurement operations on the right track.
Here are some actionable, effective practices for implementing a more sustainable procurement process.
1. Evaluate Your Existing Setup
More than likely, your business has been involved with its suppliers and partners for many years. Before jumping ship for more efficient and eco-friendly partners, evaluate your existing setup. It may be better to swap merely one or two suppliers at a time, starting small. Besides, the teams you already work with may have green initiatives in place or programs that are actively developing. It’s always a good idea to communicate your plans for improved sustainability, even just to see if anyone else is on board.
Establish a decision framework for choosing new suppliers to work with. When issuing RFPs, be sure to negotiate environmentally sound and resource-efficient practices with potential suppliers. Also, it’s important to secure the most energy-efficient and green products available at the same or lower price than alternatives — something that should always be included in agreements.
2. Define a Code of Conduct and Collaboration Requirements
Collaborating with eco-friendly suppliers and partners is always a plus, but what does that mean? What does it look like for your business, products and practices?
Before diving down the rabbit hole, it’s important to establish a code of conduct and series of requirements that can apply to all potential and existing suppliers. Make it clear about what you’re looking for and what their responsibilities will be. What behaviors do you expect to see, how do you want waste handled and what about emissions? Are there limits or boundaries to said restrictions?
A good idea to honor this is by incorporating ISO standards and becoming certified. The new ISO 20400 explicitly deals with sustainable procurement practices, making it an ideal match for most businesses.
3. Educate and Build Awareness
Establish a team dedicated to corporate social responsibility and sustainability, and employ their help with optimizing the business. More importantly, that team should also invest time educating and spreading awareness about eco-friendly initiatives with suppliers, for both existing and potential prospects.
An alternative for small to medium-sized businesses that don’t have the manpower to create a dedicated team, would be to sponsor online training programs and seminars. By sharing these programs with suppliers, managers can better communicate what they are looking for and what that means for the relationship.
4. Reward and Respond
As you do with employees for conventional operations, it’s important to evaluate and respond accordingly to your supplier’s progress and achievements. Establish a series of audit mechanisms to grade their commitment to sustainability and reward good behavior. Offer incentives to help encourage greater levels of commitment. Those incentives don’t necessarily have to be monetary, but they should value your partner(s) time.
5. Optimize Communication
All this talk about evaluating suppliers and prospects isn’t going to do any good if there are no open channels of communication and collaboration. It’s important to implement a streamlined method of communication across all involved parties, not just internally.
Are there ways to highlight an active process and suggest improvements? What real-time and maintenance opportunities are available to your management team? If something goes wrong, how long until the appropriate contacts are notified?
Once that line of communication is open, it’s just as important to keep it consistent and effective. You and your team must be able to communicate with any partners — not just to evaluate but to help improve collaborative processes, too.
6. Align Core Business Strategies
The adage says to practice what you preach, and that’s true here. Ensure your employees and your operations adhere to sustainable and eco-friendly requirements. If it’s not a priority for your team, then any suppliers and partners you work with are going to follow that example.
That’s why you want to lead by example. Send a strong message to your partners that sustainability is ingrained in your core business practices. It’s not just a movement or an afterthought. It’s a way of life. When they see just how serious you and your constituents are, they’ll make it a priority for doing business with you, as they should.
Sustainable Procurement Starts From Within
While it’s certainly true that suppliers can cause real problems when it comes to sustainability and corporate social responsibility, they are not the sole reason why things go wrong. Green initiatives and improved sustainability start from within, as part of a core business strategy.
These best practices send a clear message that it’s important to establish relevant practices at a foundational level. The best place to start is by educating and training employees, managers and partners as to what they can do to contribute and maintain sustainability. Then it’s on to more actionable strategies, such as incorporating green initiatives internally, collaborating with eco-friendly suppliers and continuing to evaluate the total footprint of your business.
Author: Tom Rogers
Job Title: CEO
Organization: Vendor Centric