How Procurement Professionals can add value to business performance: sustainability and diversity

In this second in a series of articles looking at how procurement can add value to business performance, Gerard Chick, chief knowledge officer, Optimum Procurement Group examines a number of key areas where procurement professionals can make a difference. In this post he looks at sustainability and diversity.

In today’s business world, we face an array of challenges whose scope and complexity can make them intractable. Sustainability, once considered the preserve of the fervent few, has become a burning issue to all in business.

A key sustainability theme is supplier diversity as a business benefit. Suppliers have an impact on the price and quality of an organisation’s products and services. They affect efficiency and ultimately, they can affect the performance of an organisation, including its relationships with key stakeholders.

Supplier diversity programmes can benefit businesses in a number of ways. For example, engaging with suppliers who are more efficient, flexible and innovative can add value to your supply chain as well as providing you with access to new markets. They can also help businesses meet CSR objectives, improving sustainability and reducing risk.

The next generation of procurement professionals will understand the benefits of having a diverse supply chain because it will reflect the world they live in. If they’re not being asked already, in the near future, we’ll see multi-national companies being asked about their supplier diversity programmes in bids for contracts.

In our discussions with procurement professionals, there seems to be a commonly held view that giving small and medium-sized enterprises (SMEs) equal opportunity to bid for contracts will put them ahead of the game. This will be achieved by guaranteeing that their supply base is innovative and flexible and that it represents the changing face of the company’s customers.

Supply management must establish itself as the differentiator in all matters relating to sustainability by working with the business to define tomorrow’s standards. By leading on issues such as sustainability and supplier diversity, supply management will drive innovation for smart organisations through engaging small businesses or ‘green’ applications and in doing so bring competitive advantage to the business.

Supplier diversity has long been neglected as part of a source of innovation, a specific aspect of procurement’s role. Social and economic inclusion has to have equal weighting to environmental considerations. Supplier diversity is not about quotas, it is about widening the applicant pool to secure the best suppliers.

The supply base and value chain must be re-evaluated and aligned to seize competitive advantage opportunities emerging from developing supply markets. Key points to consider when it comes to checking your organisation’s sustainability credentials include:

  • Do you give SMEs equal opportunities to bid for contracts?
  • Is your supply base innovative, flexible and representative of the changing face of your customers?
  • Do you recognise and understand the benefits of having a diverse supply chain?
  • Do you have an adequate strategy regarding quality, cost and equality to ensure your reputation and avoid risk?

The goal for procurement professionals should be for supplier diversity to become a key part of your organisation’s DNA as the standard way it does business.

 

 

 

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