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Effective, Sustainable Procurement

Current trends across multiple industries are that of “going green”. When you hear this phrase what may come to mind are recycling programs, alternative energy sources such as solar power, clean water initiatives and more. Whether or not your company has begun to implement going green policies you should be aware it is something that could be impacting your suppliers and your supply chain and your cost of doing business.

Many companies are cognizant of the fact they need to project a current and relative image. Part of that is connecting with green initiatives. This requires some dialog and thought. Otherwise, jumping on board for the sole reason of being able to make the proclamation they are a “green’ company may in fact have a negative effect on the profitability of the company and to its stakeholders.

On the other hand ignoring the green trends and the possible long term ramifications of staying the course may bring a company to the same negative effects on the profitability of the company and to its stakeholders.

Perhaps the optimum path for a company would be a more middle of the road approach where they create or adapt more effective and sustainable procurement procedures that have a positive impact on the environment thereby giving them a more environmentally friendly image while minimizing the impact to the bottom line.

One possible consideration in the procurement process is becoming more strategic in the management or planning elements of procurement and less reactional. In other words, anticipate needs and pool vendor resources. Small niche suppliers working in concert with larger suppliers may benefit the small supplier through strategic alliances with the larger vendors and simplify the procurement process for the company’s buyers as they will only need to work through the single large supplier. Such alliances may reduce the cost in man hours and provide a more affordable means of delivery by pooling orders. This equates to less carbon emissions and an avenue that benefits all while contributing to a greener image. The company would play the role of “matchmaker” through the introduction of the smaller niche supplier to the large vendor.

Effective procurement processes that evolve into becoming more strategic can help achieve cost saving objectives across all the parts of a given business. The procurement team that works with all departments of the business can maximize the cost opportunities and elevate the best values. Continued use of cost-saving initiatives in line with “green” thinking over time will help reduce administrative costs and improve efficiencies.

Doing nothing is not really an option in building or managing a procurement system that is both effective and sustainable. It is important to have a sense of urgency to the transformation of a “greener” image yet not be hasty. Celebrate the successes of building vendor alliances that make your greener, reduce costs, and help all involved.

May 9, 2013
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BY Bellwether

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