If you care about the number of miles your fruit and veg have travelled, you recycle, reuse and reduce the waste you produce, and care where your jeans come from; then you’re already part of the one of the major issues the procurement profession is focusing on.
As organisations tighten belts, and boardrooms face strategic objectives to build a sustainable agenda, the profession’s time is now. Calls for efficiency and demonstrating your company as the ‘company of choice’, and saving money – are all key procurement issues. These are all critical aspects for a business, but none are more important than incorporating sustainability, ethical practice and awareness of risk.
Purchasing’s key role is often seen as just cost cutting, but it’s much more far-reaching than that – both internally and externally, whether managing relationships with colleagues, to working in the global arena. The world has become a small place and we have to think and act in a global way and, understand the impact of our choices and actions. Procurement professionals are now being asked to solve complex problems in responsible, yet innovative ways, each day.
Recycling and reducing waste is not a new idea. The Greater London Authority (GLA) purchasing team already cares about where their waste goes. Not only because it is the responsible thing to do, or because it’s driven by customer demand, there are actual monetary savings to be made by reducing the amount of waste to landfill.
The GLA came up with a creative way of reusing old fire hoses last year. Instead of dumping them, the fire hoses avoided their landfill fate and instead, were used to make hammocks for monkeys in zoos. What the monkeys didn’t use, were woven into belts and handbags.
That was obviously a fun way to reduce landfill, but there are sensible ways to make reductions that will have people scratching their heads and wondering why no one had thought of it before. The purchasing team at Adnams, a Suffolk brewery, recently reduced the thickness of their glass beer bottles to save on production costs. Not only did this save them money because they bought less glass for manufacture, but the refrigeration costs were also reduced. Because the bottle was thinner and lighter, their fuel bills also went down as the lorries carried lighter loads. One decision that had quite an impact.
Adnams saved tens of thousands of pounds, year on year, and improved their green credentials by reducing their carbon emissions by 415 tonnes annually. This made them a more attractive company to buy from. They even launched a carbon neutral beer on the back of their success. They were on a roll.
There are numerous ways of reducing waste and carbon footprints, but ethics has a role to play in the sustainability angle too. The clothing and household goods chain, Marks and Spencer (M&S) have worked on a number of issues to become more ethical in their practices.
The M&S purchasing team decided to review the reality of factory life for their workers in developing countries and worked towards making it more efficient, greener, and the factory a nicer place to work. As a result of the review, in April 2008 opened its first 100% carbon neutral, green and ethical factory in Sri Lanka.
As well as installing solar panels and harvesting rainwater, the team implemented wider workforce issues such as work rotation, wages 35% above the local minimum, benefits such as free breakfast, healthcare, and transportation allowances plus only employing workers aged 16 and over. This was an important move. Not only were the working lives of factory workers enriched, but production became more efficient and the quality of work improved. As a by-product of quality improvement, the company also found that the factory generated far less waste. Staff retention rates went up and absenteeism went down as people began to feel part of an organisation that cared for them.
Not all companies will have their own factories and control their own manufacture to maintain standards, as most will rely on suppliers acting as ethically as they do. Being remote from critical aspects of the supply chain poses many risks. Purchasing professionals not only create value for their organisations, they are also there to protect it. One supplier’s unethical methods can damage the reputation of the buyer.
A job in purchasing can really make a difference.