Last week, Supply Excellence contributor Kris Colby reported from the Sourcing Interests Group’s regional conference that sustainable supply strategies are not just a passing fad. After rubbing elbows with sourcing and supply management executives from some of the world’s largest manufacturing and retail companies, Kris came away with this conclusion: “world class sourcing organizations are devoting significant attention to plotting a strategy that balances both the economic needs of the company and the green demands of their leadership, employees, shareholders and customers.”
Yet, while companies may have come around to the idea that environmentally responsible supply strategies can be good for both the environment and good for business, many still struggle with how to get started down the path to sustainability. Aberdeen Group’s latest CPO Agenda study offers some valuable guidance on this issue. (Download a complimentary copy of this report here.)
In the report, Aberdeen profiles how one mid-market materials manufacturer launched and grew its sustainable procurement program. Like many companies, the mid-market manufacturer began its sustainability program with a focus on internal operations, recycling items like paper, ink, toner cartridges, and waste oil. The company used this experience to develop a methodology for calculating the impact and return of sustainable initiatives to total costs.
Aberdeen says the manufacturer now includes a “standard set of questions for suppliers in the RFI/RFP stage” — especially for its core spending categories like metals, paints, chemicals, and energy.
The company’s global supply chain director gives the following advice for other companies considering hopping the green supply bandwagon:
- Attach every dollar sign to every initiative to let people know about the savings involved.
- Remember to calculate and communicate the lower procurement costs as well as the avoided disposal costs.
- Communicate with suppliers to get insights into where opportunities exist to cut costs.
- Track savings for your firm and for your suppliers.
- Deeply analyze the entire product lifecycle and associate supply chain.
Sage advice for starting a sustainability program at companies of any size.
