Sustainability in a supply chain is recognised at each stage of its process. Whether it is prioritizing the ethical suppliers to reducing overproduction & waste by proper supply & demand management, Sustainable Procurement services in Asia is a process of sourcing, finding, and acquiring products or services when considering environmental & social factors.
Companies have to consider various environmental impacts while sourcing materials and manufacturers have to become highly sustainable as well as supply chains should be better optimized for resilience and sustainability.
What’s sustainable procurement?
The sustainable procurement is purchasing goods & services for the business, which are environmentally friendly, responsible and ethical. This includes disposal and maintenance (where applicable) and initial purchase. The procurement decisions must benefit your customers, environment, society and even your business. Certain elements of the sustainable procurements are:
- Ensuring supply chain upholds same standards like your business
- Managing high demand for the goods & services
- Lowering negative impacts on the local communities & environment
- Managing the supplier contracts rightly
- Handling the supply chain risk efficiently, for instance, visibility & fair labour practices
Steps to the sustainable procurement
There are many companies that perform the stakeholder dialogs that reveal both the expectations and the priorities that will be used as the basis in developing the sustainability strategy as well as aligning this with company’s road map.
Your next step will be selecting which methods and tools get used for collecting & understanding the suppliers’ sustainability performance. Simple-to-use, and quantitative indicators like sustainability ratings that will be integrated in the procurement software, can accelerate as well as scale up the sustainable procurement solutions so that they will drive some real impact.
Managing the sustainability program all along your value chain indeed needs huge amount of the upfront investment however with the right strategies and tools will produce the positive ROI. The sustainable procurement initiatives decrease risk as well as magnitude of the non-compliance expenses & lower spend in the operational areas, like energy, logistics, water as well as manufacturing.
Sustainable Procurement Will Improve Share Prices
Evidence is share prices of the listed companies will increase because of two important factors:
- Respect for environment
- Responsible behavior for their stakeholders, which includes local residents & society
Thus, engaging with vulnerable sectors of our society during & after the current crisis is one factor that will help to strengthen our business value. Furthermore, the shareholders are highly committed in reminding the companies in case they stray very far from the sustainable procurement plan.
Final Words
When you have selected the suppliers, importance of having proper visibility of the supply chain will not be understated. Making sure that they source the products sustainably & they are working to reduce the environmental impact can be possible in case you manage the suppliers efficiently. Making use of supplier relationship program helps you manage any kind of risks & improve the visibility of the supplier performance. By using generated reports, you will ensure that your suppliers are doing as per the agreed standards & communicate with them straight from the supplier portal.