Auditel Consultant:
Stephen Gaubert

How to develop a Sustainable Procurement Strategy

22 Jan 2010 | Filed under: Cost Management, Cost Reduction, Sustainability

The ongoing debate about Climate Change runs the risk of masking the underlying case for us to think carefully about the impact of the decisions we make in the way we operate and manage our businesses. For large and small organisations developing a CSR Policy (Corporate and Social Responsibility) is the first step. A key element of that policy is looking at what we buy and how procurement can be more sustainable.

Sustainable Procurement is an approach to buying products and services that takes into account the economic, environmental and social impacts of what you buy; it involves an entire lifecycle perspective, and ensures that you use your purchasing power to promote the productive use of resources and materials.

Whatever the size of your business you need a Procurement Strategy – consider what you want to achieve, why are you doing it, how important is a sustainable procurement policy to you, your business and your customers? Agree targets, priorities and responsibilities. For each purchase that you make there are 3 key steps:

1. First of all look at the needs. Examine exactly what is required and why it needs to be purchased. Adopt the 3 Rs:

Reduce – can we use less by being more efficient?
Reuse – can we repeatedly use something rather than buying new each time (the simple paper-clip rather than a staple machine says it all)?
Recycle – can our purchases or products be recycled effectively at the end of their life?

Agree the selection criteria – including the balance between quality, cost and sustainability.

2. Secondly, identify suppliers who have a compatible approach. Ask of your suppliers key questions such as their commitment to reducing their carbon footprint, the source of their raw materials, and the initiatives they are taking. Award new contracts on the basis of value for money and whole life costing, not the lowest initial price.

3. Thirdly, you need to monitor the performance of your suppliers to ensure that they are following the commitments that they made; hold regular process reviews to encourage continuous improvement and innovation.

For your strategy to work you need to identify clear benefits to your business:

Better able to manage risk – legislation is continually setting new obligations and standards
Reduce costs through the improved efficiency of processes and equipment and a reduction in waste
Improve your corporate profile – customers are becoming more demanding
Finally you will be able to keep ahead of your competitors – sustainability will be a key differentiator for your customers.

Adopting a Sustainable Procurement Strategy is not difficult – it is all about developing a common-sense approach to purchasing, keeping in mind the overall impact of your decisions on our environment.

This article was based on a Presentation to Environmental Population on October 20^th, 2009 by Stephen Gaubert of Auditel who works with businesses to develop and implement their key procurement requirements. Contact details: email – stephen.gaubert@auditel.co.uk; call – 020 8482 1370/07785 340 280; website – www.auditel.co.uk/stephengaubert.