Responsible Procurement from Alis Sindbjerg Hemmingsen at the Trade Extensions Event

At the recent Trade Extensions customer conference (see our previous articles here, here and here), one of the key note sessions came from Alis Sindbjerg Hemmingsen, a leading and widely recognised expert in the field of “responsible procurement”.

She has worked as a consultant and adviser for a number of years, producing some excellent material available from her website, but recently went back into the corporate world, taking up a senior procurement role with Velux, the window and blinds manufacturer. “I wanted to put my ideas into practice again in a real procurement situation”, she explained to us at the event.

She started her session by emphasising that she “is not a philanthropist”. Sustainability and responsible procurement must be integrated into the business, and should be seen as activities that are going to add value to the organisation. We don’t do this just to feel good about ourselves. Hemmingsen talked about the journey that firms make: from seeing this activity as primarily about risk avoidance, then getting into the issues around lifecycle efficiency and finally seeing this as enabling supplier innovation.

"Collaboration with suppliers on sustainability issues can foster product, service and technology innovation”, she says. She then talked about the “three I's”.

Integration – integrating responsibility for the actions connected with responsible procurement into and across the supply chain, and making sure that it is seen as everyone's responsibility within the organisation, not just a job for procurement.

Incentives – there must be something in it for suppliers. So a major branded goods firm ranks their suppliers (gold, silver, bronze, yellow, red) on sustainability issues, and the higher ranked get priority on orders and the chance to work together with the buyer on innovation and developmental activities.

Innovation – ultimately, innovation is needed both to drive better responsible procurement, but also innovation will arise from working with suppliers in this collaborative manner.

As Hannah Jones of Nike said, “Only innovation will make the difference because these issues are simply too big and complex for Nike or any one business to address on its own”.

One interesting point Hemmingsen made was around transparency. How can you innovate or assess the “responsible procurement” issues if you do not understand the product you are buying? We must have transparency in that area to make this work, and of course this transparency support good practice in many other aspects of procurement.

This linking of what might be seen as three disconnected issues (sustainability; product and supplier understanding; and supplier innovation) is fascinating. It suggests that the benefits of successful supplier relationships – SRM as you might say – go deeper and wider than might at first seem to be the case.

We'll come back to that point, and also to the second part of Hemmingsen's session, when she took us through the thinking around the Circular Economy. That was a relatively new concept for us; for instance, hearing that "from cradle to cradle" should now be the mantra rather than "cradle to grave"! We will report further on that topic shortly.

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