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Category: ESG

  • Striking a Balance: Why Procurement Should Prioritise Supplier Relationships and Sustainability

    Striking a Balance: Why Procurement Should Prioritise Supplier Relationships and Sustainability

    In today’s hyper-competitive market, businesses are under constant pressure to cut costs and maximise profitability. This often forces procurement professionals to prioritise short-term gains over long-term benefits. After all, reducing expenses directly impacts the bottom line and can be a pretty tempting strategy to demonstrate immediate results to internal and external stakeholders. 

    However, focusing solely on cost savings neglects the broader implications of procurement decisions on building positive, trusting relationships with suppliers and stakeholders as well as honouring a commitment to the environment and reducing carbon footprint. Read on to discover why procurement should prioritise supplier relationships and sustainability over profitability. 

    It strengthens bonds throughout the supply chain

    Supplier relationships are the backbone of a resilient and successful supply chain. Strong partnerships built on trust, communication and mutual respect not only ensure a steady supply of goods and services but also foster innovation and agility. 

    When procurement teams prioritise cost savings at the expense of supplier relationships, it risks jeopardising these crucial, and often hard-earned alliances. Suppliers may feel undervalued or exploited, which could lead to deteriorating quality, delivery delays, or even serious disruptions in the supply chain. It also negatively impacts day-to-day working relationships and reduces job satisfaction. In the long run, such consequences can far outweigh the initial cost savings, resulting in increased expenses, low employee morale and a damaged reputation. 

    It helps reduce the environmental impact

    Sustainability is now one of the most important goals in modern business practices. As environmental concerns intensify and regulatory scrutiny tightens, companies are rightly under pressure to minimise their carbon footprint and embrace sustainable practices throughout their operations – including across the end-to-end supply chain. Procurement can play a pivotal role in driving sustainability initiatives by ensuring they select suppliers that adhere to strict ethical and environmental standards. Ignoring sustainability in favour of cost savings not only undermines corporate responsibility but exposes businesses to reputational risks and legal liabilities. Which leads us neatly into the next section…

    It strengthens compliance and governance

    Honouring governance and compliance responsibilities is another critical aspect that procurement must pay attention to. In an increasingly interconnected world, businesses are subject to a raft of regulations and ethical guidelines governing supply chain practices. Failure to comply with these regulations can result in costly fines, legal battles and irreparable damage to brand reputation. By prioritising supplier relationships and sustainability, procurement demonstrates a meaningful commitment to upholding ethical standards and mitigating compliance risks.

    Furthermore, fostering a culture of collaboration and transparency within the supply chain enhances that all-important employee satisfaction and morale. When procurement shows they value relationships over short-term cost savings, it cultivates a sense of purpose and shared responsibility among employees. This, in turn, fosters greater engagement, productivity and loyalty, driving long-term success and organisational resilience. It also helps ensure you attract and retain top talent – more on this at the end of the article. 

    Adhering to government regulations on sustainability is a legal obligation and a strategic imperative. As governments worldwide enact stricter environmental policies and regulations, businesses that fail to adapt risk being left behind. Procurement must proactively seek out suppliers who prioritise sustainability and environmental stewardship to ensure compliance with evolving regulatory requirements.

    Building enduring relationships with suppliers fosters trust and collaboration, laying a strong foundation for mutual growth and success. By prioritising supplier relationships and sustainability, procurement can unlock new opportunities for innovation, efficiency and value creation. In the long term, these initiatives not only result in cost savings but also contribute to a more resilient, ethical and sustainable business ecosystem.

    Building the right procurement and supply chain for sustainable success

    We mentioned the importance of developing a positive workplace culture to attract the top procurement and supply chain talent to your business and ensure they remain loyal. If you’re looking to grow your team we would love to help. With access to an unrivalled pool of top-tier procurement and supply chain talent across the UK and around the world, we can provide you with the skills and expertise you need to thrive. Contact us today to learn more about how we can help you build a team that ensures you stay ahead of the competition. 

  • 5 easy ways to make your business more sustainable

    5 easy ways to make your business more sustainable

    Procurement and supply chain managers can play a critical role in ensuring their businesses operate sustainably. By prioritising sustainability in procurement and supply chain practices you can reduce the environmental impact of your operations, create more resilient and responsible supply chains and improve your bottom line. In this article, we’ll discuss five easy ways you can make your businesses more sustainable in 2023 and beyond.

    • Source sustainable products

    One of the most effective ways to reduce the environmental impact of your business is by sourcing sustainable products. Sustainable products are made using environmentally friendly practices and materials and are designed to minimise waste and reduce the use of resources like energy and water. 

    Procurement and supply chain managers can work with their suppliers to identify sustainable products and incorporate them into their operations. Additionally, by prioritising sustainable products, managers can encourage their suppliers to adopt more sustainable practices, which can have a ripple effect throughout the supply chain.

    • Work with companies that have strong sustainability credentials

    Another way to make your business more sustainable is to work with companies that have strong sustainability credentials. When evaluating potential suppliers consider factors like the supplier’s environmental impact, their use of renewable energy and their commitment to reducing waste. By working with suppliers that prioritise sustainability, managers can create a more sustainable supply chain and help drive positive change across the industry.

    • Work towards environmental certifications

    Many businesses are pursuing environmental certifications like ISO 14001, which demonstrate a commitment to reducing environmental impact and improving sustainability. Procurement and supply chain managers can play a key role in helping their businesses achieve these certifications by working with suppliers to ensure they meet the necessary environmental standards. Additionally, managers can incorporate sustainability criteria into their supplier evaluations and contract negotiations, which can incentivise suppliers to adopt more sustainable practices.

    • Make use of energy-saving technology

    One of the easiest ways to reduce your business’s environmental impact is to make use of energy-saving technology. For example, energy-efficient lighting, heating, and cooling systems can significantly reduce energy consumption and lower costs. Additionally, by implementing energy-saving technologies like Smart building management systems and renewable energy sources, businesses can reduce their reliance on fossil fuels and minimise their carbon footprint.

    • Reduce waste

    Finally, one of the most effective ways to make your business more sustainable is to reduce waste. This can involve everything from optimising packaging and shipping practices to implementing recycling programs and composting initiatives. Procurement and supply chain managers can work with their suppliers to reduce waste throughout the supply chain. They can also evaluate their internal processes to identify areas where waste can be reduced.

    Getting started – setting goals and monitoring progress

    While these five strategies can help procurement and supply chain managers make their businesses more sustainable, it’s important to remember that sustainability is an ongoing process. To ensure continued progress, it’s important to set goals and monitor progress over time. This can involve tracking key sustainability metrics like energy consumption, waste reduction, and greenhouse gas emissions and sharing this information with stakeholders across the business. Additionally, 

    We hope these tips for becoming more sustainable in 2023 and beyond have been useful and have given you some inspiration on how to make the next steps. In addition to following the above guidance, it’s important for managers to get their team on board with sustainability initiatives, providing training and education to help employees understand the importance of sustainability and how they can contribute to the effort.

    Many businesses find that having expertise in-house can significantly boost their sustainability strategy. If you want to find out more about upskilling or growing your workforce, talk to our team today. We have access to the top talent in procurement and supply chain, including people with sustainability expertise. Get in touch, we’d love to help! 

  • Which KPIs to set for sustainability

    Which KPIs to set for sustainability

    Which KPIs to set for sustainability 

    By 2023 large companies in the UK will be required to show they have detailed public plans for moving towards a low-carbon future. This requirement is in line with the UK’s 2050 net-zero target.

    If your business has not established the right key performance indicators (KPIs) for measuring your sustainability strategy, now is the time to do so. If you are a small company you may not come under the Government’s remit but this exercise is still very important. We are all responsible for looking after our planet and reducing our impact on it, after all. 

    Here are some of the sustainability KPIs you should consider tracking in 2022 and beyond. 

    Supply chain waste

    This is a natural place to start for the supply chain and procurement sector! Alongside the environmental impact of production and internal operations, businesses need to factor in KPIs for supply chain miles. This includes identifying opportunities for reducing emissions and waste in logistics and investing in electric or alternatively-powered vehicles. 

    As part of your broader efforts to reduce the carbon footprint, you could also extend your goals to working with partners that are making meaningful efforts to reduce their own waste. If you feel your suppliers could be doing more to minimise their environmental impact, why not work with them to introduce and implement initiatives to reduce emissions and learn from one another’s experiences and best practices? 

    Carbon footprint

    This is one of the most important KPIs for reporting your efforts. This is mainly because it is an objective that most people are aware of; so when you are communicating your performance to the general public, customers or stakeholders your carbon footprint measurements are likely to grab their attention. 

    Your KPIs need to be tracked across three scopes of greenhouse gases:

    • Scope 1: Greenhouse gases that come directly from sources controlled or owned by the organisation. Company vehicles and facilities, for example.
    • Scope 2: Greenhouse gases that come from indirect use. Examples include heating and cooling, and electricity. 
    • Scope 3: Greenhouse gases that come from purchased goods and services. This could include logistics and transportation, the end-of-life treatment of sold products, and waste generated in operations.

    The aim here is to be at least net zero and, where possible, carbon negative. This means that the company removes more carbon than it emits. 

    Energy consumption

    Tracking your energy consumption business-wide can reveal some very effective, actionable tactics for decreasing emissions and controlling costs. Monitoring energy consumption used to be a time-consuming resource-intensive activity, but access to digital tools has significantly improved the effectiveness and accuracy of tracking energy usage. The Industrial Internet of Things (IIoT), also known as Industry 4.0 uses smart sensors, actuators and real-time analytics to capture and analyse data. The data insights help businesses to respond to problems and identify inefficiencies and solutions. 

    Sectors such as manufacturing can benefit greatly from IIoT. For example, businesses will have far better visibility and control over product quality, energy management, asset tracking, supply chain traceability, and supply chain efficiency. I

    IIoT and other machine learning and AI technologies all help business leaders to make better decisions and drive greater efficiencies which should impact positively on energy consumption and the wider sustainability program.

    Load density 

    Monitoring load density helps to ensure you are optimising the transportation of products and services so you are moving the maximum amount of goods every time. If you find your load density tends to be at the lower end of the scale, you could consider sharing vehicle space with other companies. This approach should mean that you mitigate your impact on the environment and benefit from cost savings as well. 

    Water use

    Tracking water usage is one of the many sustainability tasks that can be done better with IIoT. For example, you can install moisture sensors around buildings to detect leaks. Once the sensors have collected data and sent it back to the Cloud for analysis, a smart valve will automatically shut off the water. Another example is smart metering where businesses can remote program automatic commands to open and close water supply and mitigate the impact of floods and water waste.

    We hope this article has given you some ideas about which sustainability KPIs you should track across your business. There are many others out there including social impact and recycling rates, both of which will also benefit from the use of emerging technologies such as AI, IIoT and Machine Learning. 

    To ensure you are optimising the use of these technologies you need to have the right talent on board. If you are interested in digitally transforming your business and want access to the top candidates in procurement and supply chain, get in touch. We would love to help. 

  • How cloud procurement is transforming the supply chain

    How cloud procurement is transforming the supply chain

    Cloud computing is by no means the new kid on the block. But its technology and reach continue to evolve and it is becoming more and more integrated into the supply chain world. 

    The key advantage of working in the cloud is that all your data, software and services operate via the internet rather than locally on your computer. So, it’s a far superior solution for collaboration and process efficiencies, which are central to supply chain success. As is security, which the cloud has in abundance. Let’s take a look at how cloud procurement is transforming the supply chain. 

    The cloud creates an agile supply chain 

    The need for the procurement and supply chain sector to become more agile and to accelerate toward digital transformation became all too clear during the pandemic and continues to reverberate throughout the sector. Using cloud technology means companies can adjust and adapt their computing resources and deploy new applications far more quickly than with legacy systems. 

    The cloud offers transparency

    Transparency and visibility of the end-to-end supply chain are critical, not only to deliver streamlined, efficient and economically-viable business operations but also for maintaining consumer and supplier confidence. As with system agility, this visibility means business leaders can make faster decisions based on up-to-date intelligence and mitigate potential risks. Responding to changes and fluctuations in the market is far easier and decisions should be better informed. 

    The cloud improves supply chain efficiency

    Now, more than ever, supply chain leaders need to be able to coordinate every element across the supply chain. This cannot be done without optimising performance and process efficiencies and ensuring effective collaboration, internally and externally. Networked processes, such as that delivered by the cloud offers this and more. This is clear in the findings of Accenture’s 2022 survey which revealed that 41% of all executives said the desire to increase supply chain efficiency was a top-three reason for migrating their supply chains to the cloud.

    The cloud helps business control costs

    In fact, the aforementioned research by Accenture revealed that executives on average attributed their cloud use to a 26% increase in demand forecast accuracy, a 16% reduction in supply chain operating costs and a 5% increase in revenue growth and profitability.

      

    The cloud helps businesses with their ESG strategy and framework. 

    Working in the cloud helps ensure business processes and activities are transparent which is a key element in achieving ESG (environmental, social and governance) goals. End-to-end visibility also helps businesses to reduce environmental impact and increase regulatory compliance. Accenture’s study showed that around half of executives said the cloud has helped them successfully increase resiliency (52%) and sustainability (48%).

    These are just some of the reasons why the cloud is transforming the supply chain sector. As procurement and supply chain recruitment specialists we aren’t the right people to give guidance on the best way to create a cloud network or how to optimise its deployment. We do know, however, that if you and your business are to succeed in this brave new cloud-based world you will need the right people in your team to make it happen. 

    The supply chain sector has been a little slow moving towards digital transformation but that must change. AI technologies, Big Data, cloud computing, cybersecurity and other digital and analytics skills are critical to supply chain success. And that means attracting and engaging the top talent with the skills to implement, manage and optimise these systems and tools. 

    If you want to digitally transform your team, contact us today. We have access to the brightest stars in procurement and supply chain and we would love to help. 

  • How to put ESG goals on your business agenda

    How to put ESG goals on your business agenda

    Good corporate governance, a robust program to reduce the impact on the environment and a proven commitment to social good should be top priorities for all procurement and supply chain businesses. Developing an effective ESG strategy helps ensure you are on the right track.

    This article will talk you through the benefits of setting ESG goals and why they matter. We’ll also offer some guidance on setting up and implementing your ESG strategy. Let’s get started. 

    What is ESG? 

    ESG (Environmental, Social and Governance) refers to the set of standards used to measure and benchmark a business’s impact on society and the environment. Brands of all shapes and sizes use ESG planning and goals to demonstrate transparency and accountability, both internally and externally. 

    Why is ESG important? 

    Developing and implementing an ESG strategy is vital as it provides a framework for businesses to identify the strategic goals and operational activities that will enable them to measure their impact on the world and the people that live in it. ESG reporting also helps investors to identify opportunities in companies that are environmentally and ethically sound. 

    ESG is important for all companies, regardless of size and sector. Rather than focusing their business reporting on profit and market share, ESG goals ensure that companies take the impact they have on the environment and society into account. Business leaders can then use this important data and insights to create meaningful improvements. 

    The key benefits of ESG

    ESG offers a variety of benefits for procurement and supply chain businesses. Here are five of the key advantages of developing an ESG program. 

    Your business is more attractive to lenders, investors and supply chain prospects

    Investors are increasingly seeking out businesses that have strong social and environmental credentials. In fact, according to the Confederation of British Industry (CBI), two-thirds of investors take ESG factors into account when investing in a company. 

    You get a competitive advantage

    Today’s consumers want to align themselves with transparent businesses that can prove they are ethical. If brands can demonstrate accountability they can build that all-important trust with their audience and gain a competitive advantage. 

    You can control and reduce costs

    Implementing an effective ESG program enables businesses to track energy and water consumption, raw material usage, waste shipping and treatment costs and their overall carbon footprint. This helps identify opportunities for operational efficiencies, better risk management, improvements in cost management and more. All of which have the potential to make significant impacts on procurement and supply chain costs. ESG can also help business leaders to innovate and identify ways in which automation or digital transformation can assist with process efficiencies. 

    You can attract and retain top talent

    The best procurement and supply chain candidates want to work with businesses with good values and ethics, particularly Millennials and younger people. Demonstrating a robust commitment to the environment and social good indicates that you are a business that is honest and prioritises wellbeing. Today’s candidates are looking for more than a paycheck. They want a workplace where they will feel valued, where they know that management shares their beliefs and values. 

    It’s equally important when it comes to retaining employees. A recent survey by Bupa shows that over half (52%) of UK adults would stay longer in a role than they otherwise might with a company that had made ESG commitments and also recommend it to others as a good place to work.

    How to develop and implement an ESG strategy

    The exact strategy and goals you put in place for your ESG initiatives will depend on the size of your business and the sector you operate in. It will also be affected by the risks you are exposed to and your business’s current performance in sustainability, social impact and governance initiatives. 

    Here are some tips to get you started. 

    Define your goals and objectives

    Gather your stakeholders and identify what you want to achieve from implementing an ESG program. Think about the benefits we have listed above, and what your priorities are. Keep the goals fairly broad to start with; you can consider them in more granular detail once you start to flesh out your plan and strategy and assign responsibilities. 

    Where possible, try to include stakeholders from several business areas and levels of responsibility. Senior management may not be available at this stage but they should be kept aware of the progress of the plan and be 100% on board with all objectives and activities. 

    Conduct a materiality assessment and analysis

    With your goals in place, it’s time to carry out a materiality assessment to see which issues and challenges are affecting your business performance as well as your stakeholders. This will require careful analysis of both internal and external operational data, looking specifically at your environmental and social impact. Where possible, it’s also useful to benchmark your business against competitors. You can use this information to decide what your priorities are in both the short and long term. 

    If this is the first time you have conducted a materiality assessment or you want to make sure you are working to best practices, take a look at ESG’s Seven Steps for Conducting a Materiality Assessment.

    Set objectives and goals

    Create a gap analysis, documenting where your business is and where it needs to be. Analyse the different programs, initiatives, policies and metrics that you have in place currently and work out what is working and what needs improvement. 

    Think about how you can meaningfully assess and report on your objectives and who your audiences are. Find a balance between achievable and overly-ambitious goals and present them to senior management and stakeholders.

    Develop a roadmap 

    This is where your ESG strategy starts coming to life. Create a framework outlining your company’s current situation, aspirations and objectives. You can then develop a roadmap around this framework including a realistic phased approach, benchmarks, timelines and responsibilities along every step of the way. You should also clearly indicate how you will monitor progress. 

    Make sure you have complete buy-in from all stakeholders and colleagues before moving on to the next step. 

    Create an action plan

    Return to your objectives and ascertain the expected outcomes and who will be responsible for what and when. As with any complex project, communication is key. Set up regular meetings between relevant stakeholders that correspond with the milestones and benchmarks you have put in place. These meetings are an opportunity to report on progress, adjust timelines and make sure everyone is adhering to best practices. 

    Set up and implement reporting processes

    Regular reporting is critical to your ESG strategy. You will need to demonstrate to all stakeholders, particularly senior management that your plan continues to be aligned with the business objectives and they will want to see a comprehensive analysis of your progress and results. 

    When your ESG strategy is bedded in you might want to consider communicating elements of your program in your annual reports, internal newsletters and marketing campaigns. 

    Don’t forget that your ESG strategy will continue to change and evolve. Revisit it with relevant stakeholders regularly, making sure you keep sight of goals and objectives. Keep checking in on what your competitors and peers are doing too and keep abreast of developments in the ESG sector so you can stay one step ahead of the curve.