How to Create a Sustainable Closed Loop Procurement Strategy

Procurement is defined as the purchasing or sourcing of different goods and services for commercial purpose. There are many business owners who outsource their products without following any proper procurement strategy and it eventually affects our environment. Procurement is typically addressed through a specific department of business persons where goods and business related services are being bought or outsourced. However, proper procurement strategies are extremely important because they can help any business unit in achieving its goals and objectives. Planning a closed loop procurement strategy for your business, while also minimizing your impact on the environment, is not only possible, but better for business.

A closed loop procurement strategy can strengthen your relationship with your suppliers and clients and help you to minimize your maverick spend more efficiently. Below listed are a few important guidelines that you can follow in order to make your purchase to pay plan a sustainable, long-term procurement strategy.

1. Collaboration among you and your suppliers is an essential component to your success. You can involve your suppliers and make some strategic decisions because it will eventually reduce the potential fall out of your corporate unit. You can add more suppliers to your business and form a team. Make sure that your team of suppliers is implementing different designs as per the initiatives you lay out for our environment. They will also help your business to collaborate well at different levels.
2. If you are a small to medium business you may think you don’t have a significant impact on environmental concerns or you may think you don’t have the resources necessary to address these concerns through a procurement strategy, but you would be mistaken on both accounts. One option to consider is joining one or more buying collectives that are benefitting your business unit and help you increase profits while also collectively working to help meet sustainability goals.
3. Purchasing raw materials that can be recycled will help you to go green. You can also consider using recycled materials and waste products as a resource. Many researches and survey reports also say that about 10 to 15 jobs can be created for individuals from every 1000 tons of waste. Even small businesses would be amazed at the amount of waste generated annually.
4. Utilizing a cloud-based purchasing system is affordable to even small businesses. They don’t require huge capital investments, equipment upgrades or new IT personnel. Everything is done online and is sustainable.

This is not an exhaustive list, but these tips will help get you moving in the right direction to eventually help you in planning out a proper, eco-friendly procurement strategy for your business unit.