CSR Initiatives in Supply Chain and Procurement: Tool Prioritization Trending
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This series of posts is based on research conducted by EcoVadis and A.T. Kearney. EcoVadis’s Wim Peeters shared findings from this research during a presentation at the Dutch Sourcing Awards earlier this month.
When it comes to compliance tools and approaches to driving sustainable procurement initiatives, the relatively simple act of introducing and monitoring supplier codes of conduct tops the list. But other areas are gaining ground as well. Since 2009, the use of supplier self assessment tools has jumped from 40 percent to 62 percent (in 2013). Category/country risk evaluation model use has also increased, from 38 percent to 57 percent. And “specific supplier audit programs” have increased from 30 percent to 55 percent.
In part because they did not exist in 2009 (outside of consortia approaches by Achilles), the use of “supplier sustainability databases provided by third parties increased from near zero to 44 percent. And it has increased significantly from 2011 as well, when it stood at only 26 percent. We think it is likely that in the next decade, the use of third party databases for sustainability and broader supplier and supply chain risk management initiatives will be become as prevalent as the use of supplier diversity data in the U.S. today.
EcoVadis research suggests that the largest area for improvement among sustainability tool usage remains the area of advanced tools, including total cost models incorporating sustainability criteria. Their use stood at 20 percent in 2009 but actually dropped to 16 percent in 2013. To drive this metric, we believe it will be important for companies to embed data from providers such as EcoVadis deep into e-sourcing tools, including manufacturing centric e-sourcing platforms that feature total cost modeling capability such as Directworks, Pool4Tool, MFG.com LiveSource, Allocation Network, and Fullstep, before adoption becomes the norm rather than the exception.
Stay tuned as our coverage of the EcoVadis research continues.