An Integrated Approach To Sustainable Procurement

sustainable-procurement

Procurement is simply the process by which an organisation goes about acquiring goods and services. Unsurprisingly, the emphasis within most procurement departments is on price and quality.

Most large businesses go through a five stage procurement process to maximise these benefits.

Firstly, a sourcing decision is made by someone in the business. This person contacts the procurement department to initiate a Request for Information (RfI) procedure.

The RfI is used as a filter to identify a shortlist of potential suppliers who are then invited to pitch for the contract based on a detailed specification. Proposals are assessed against selection criteria before a purchasing decision is made.

The process is tempered by factors including the level of strategic importance of the purchase, supply and demand constraints and purchasing economies of scale.

More recently, other factors such as sustainability have come to feature prominently on the procurement agenda – leading to the term sustainable procurement.

Sustainable Procurement

Sustainable procurement was initially seen as a public policy initiative. Although there is no agreed definition for sustainable procurement, in essence the term takes into account both financial as well as socio-economic and environmental factors in making a purchasing decision.

Nowadays, many public and private sector organisations practice sustainable procurement; albeit at differing levels of success. Amongst organisations that have adopted sustainable procurement principles the barriers to implementation are similar.

Key Barriers

  • Short vs. long-term cost: Price premiums for sustainable goods and services are often measured against short-term budget targets which don’t internalise long-term ‘total’ costs
  • Setting a standard: Establishing criteria that are challenging yet balanced can prove difficult. Overly taxing criteria tend to constrain purchasing options; whereas basic measures lack integrity and are seen internally and externally as mere ‘tick box’ exercises
  • Prioritisation and focus: For organisations procuring thousands of goods and services; knowing where and what to focus on is a challenge

An Integrated Approach

An integrated approach to sustainable procurement is key to successful implementation. Each stage of the procurement process should be reviewed and a set of specific tools, guides and processes developed to ensure consistency.

  • Sourcing decision: The most sustainable decision is not to buy at all – it is also the most economically beneficial. The sourcing decision should be well founded on a qualified need. Practical alternatives to purchasing should be considered; such as rental, reuse, sharing, temporary use and future use
  • Supplier shortlist (RfI): General sustainability criteria should be incorporated across all supplier selection procedures. At a minimum, policy evidence, standard compliance and legal history should be investigated
  • Specification (RfP) and Assessment: Shortlisted suppliers should be scored against sustainability measures that are specific to the product or service being procured. Areas for consideration include raw materials, manufacture, transport, use, disposal, total life cost, labour standards and wider social impacts
  • Supplier engagement: Suppliers should be engaged at an early stage to help drive continual improvement. An approach which is collaborative and supportive and not intimidating or threatening is key to success

Focus and Fit

Focus initially on a prioritised list of high impact goods and services.

Often these goods and services map conveniently with an organisation’s key suppliers and therefore existing engagement can be reinforced through the implementation of sustainability principles.

Sustainable procurement requires effective collaboration between the procurement department and the wider business.

The implementation of sustainability principles should seamlessly align with broader business objectives.

About the Author Jess Nielsen

Jess has spent years travelling the world full-time. Nothing else comes close to the reaches of this emotive activity...

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