Can Procurement With Purpose Save the World? Pub Debate Arguments For the Motion

Hats off to our four speakers (and Chair, James Marland of SAP Ariba) at the Spend Matters pub debate last week – they were truly passionate, engaging and - rather noisy! But it all amounted to a great debate with lots of audience participation and questions – we’ll get onto those in a final post. For now, let’s take a look at the arguments for and against the motion: ‘This house believes that Procurement with Purpose can save the world.’

The key things to keep in mind, before you decide on your own vote, are the two words ‘with’ and ‘can.’  We are talking procurement with purpose – not traditional procurement. This means, in this context, that procurement professionals and procurement functions should consider issues of “purpose” and “responsibility” when working with their supply chains and suppliers above the traditional goals of meeting basic supply needs at the lowest possible cost.

Procurement functions and professionals should go beyond the basics and help elevate the function, delivering more business value by aligning with and driving the organisation’s higher purpose of social value. Decision making can affect individuals, the environment and society positively. So can procurement do this, if it has that purpose front of mind? Over the next two post we’ll present the arguments for and against – and then we’ll see …

First up, and proposing the motion, was Martine Booth, Head of Business Development EMEA for SAP Ariba with previous experience in Oracle and Procuri.

She set the scene for her argument by taking the human rights, working conditions and environmental stance. No-one wants more plastic in the sea than fish, she said - and highlighting how legislation and social media can come together to make a difference she cited the excellent recent BBC Blue Planet series.

She had a fair few stats up her sleeve too – like 168 million children around the world in slave labour, 60% of which in agriculture, that’s 11% of the global child population. She talked about the dreadful Rana Plaza factory collapse, and the amount of child labour in tobacco plantations in Indonesia, to name a few.

She then moved on to the progress made by legislation banning plastic carrier bags and the move by Starbucks (among other chains) in pushing their supply chains for recyclable cup innovation. And she gave an example of the re-harvesting of plastics (like in the Netherlands) to surface roads. Primark is an example of how supply chain abuses can be monitored and changed. So lots of good things can be done, was the point, and done by procurement because they are the decision makers and have the buying power.

Money talks, she said. We spend $12 trillion a year on goods and services, and procurement can influence the majority of that. It’s about how, what and where we buy. We have ability to buy responsibly and efficiently. And it’s not just about ceasing to trade with unethical suppliers – that achieves very little – it’s about re-educating and investing in behaviours.

She quoted Unilever as an example of an organisation that sends in its teams to investigate supply chain malpractice and understand the root cause, rather than taking away people’s livelihoods – that is also responsible action. So in summary, big businesses have made the mess, they must clean it up, and it is Procurement that can make the biggest difference through ethical, sustainable, and responsible actions in the first place.

Andy Davies, ex-Director of London Universities Purchasing Consortium, supporter of social value concepts and one of the driving forces behind the great initiative of Electronics Watch, and now working with the Mayor of London’s team on “procurement with purpose” issues, also stepped up to support the motion.

Andy’s premise was that procurement with purpose should not be seen as an add-on, it should already live at the core of what the procurement professional does. He illustrated this with a quick imagined scenario at Iceland Food – what if the CEO and founder asked the supply chain director how long it would take to phase out plastic bags?

If that executive replied “I don’t know – it’s not my core responsibility – I’m about cost reduction”, then they’re probably no longer in a job!  It’s about core business, gaining market share and reputation. And translated into the public sector, this core responsibility is even more important, it’s about making the world we live in a better place. More local government bodies and elected representatives are looking at how suppliers can bring “social value” to towns and cities, above and beyond the delivery requirements of the contract.

He also talked about the role of Electronics Watch and how it brings together public authorities to monitor human rights abuses, working with the brands to develop better social responsibility and behaviour. One success story he recounted involved this kind of collaboration with suppliers over full-time students ‘forced’ as part of their vocational studies to work in electronics factories in China as a kind of internship (supported by local government to get orders fulfilled); when the manufacturers sent in their auditors, following discussions with the suppliers, the practice ceased.

So this is a story of how working together, and changing the mindset of the supply chain, can make a real difference, not only to the lives of the students but to the universities who might eventually enrol them and the businesses that will employ them. So CSR is not a nice extra, it’s the heart of what we do and that is what will lead to competitive advantage.

And in part 2 we’ll bring you the arguments against the motion – from our own Peter Smith and Mark Webb of Future Purchasing.

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