Responsible Procurement 2.0: From Compliance Management to Impact Management

I would like to inspire you on how you can take your organization from compliance management to impact management.

Lets put it clear: Compliance is key, but why not use the possibility of creating bottom-line impact and sustainable savings at the same time?

CREATING TRUE VALUE
Just like you, many Procurement Executives have become far more aware of the potential that Responsible Procurement can deliver for the bottom line. Your challenge is to understand the impact your procurement decisions have on local communities, workers, and the environment, and then take action to ensure you create a positive impact. Where did you put your foot and what does the footprint look like? The question is also: how can you create value at the same time?

TRANSPARENCY
You could consider working with your transparency. You can do that by either driving down or eliminating risks. As the world becomes more connected and we face an increasingly globalized economy, competitive forces require us to take decisions that increase our exposure to risk.

So, by ensuring that your suppliers have effective compliance programmes and robust management systems, you can protect yourself from potential supply chain disruptions or delays associated with human rights, labor, environmental and governmental practice issues relating to your suppliers.

Assessing the risks involved in the supplier base is a resource-intensive exercise. When this information is known, however, it can help manage the business risks. Minimizing business disruption in terms of environmental, social and economic impact will have a positive effect on the company’s bottom line. But it can also protect its reputation and brand value. And at the same time it can help you build your transparency.

PRODUCT LIFE CYCLE EFFICIENCY
You could also consider working with product sustainability. You can do that by looking into the value streams, the products or simply the spend categories. Identifying the environmental costs will likely drive down costs…but of course only if you realize the potential as well.

Environmental cost drivers could include energy, water, materials, refuse, transportation, emissions, and biodiversity. You could look at it from a Life Cycle approach.

CIRCULAR PROCUREMENT
The next big thing within Responsible Procurement is going to be Circular Procurement. By collaborating with suppliers on the circular principles, it will potentially foster product innovation and help create a competitive circular advantage.

Check out these older blogposts:
What is the role of procurement in the circular economy?
Circular thinking in procurement 

THE BUSINESS CASE
What can you do to support the Responsible Procurement journey in 3 easy steps?

1. What are your ambitions? In my opinion, the first thing you need to do is find out what your company's ambitions are in terms of Responsible Procurement.
2. Understand the expectations of your stakeholders. Engaging your stakeholders in the early stages of the program design can help you identify relevant standards and approaches to Responsible Procurement.
3. Talk to and involve your suppliers in the process. Your suppliers are key to your success. Find out how you will involve them in the strategy/business case process, and get them fired up. I’m sure you will get a lot of great input, which will only serve to strengthen your program.

You can also download one of my popular e-book's right here. Complimentary of course.

Responsible Procurement Excellence has specialized in helping companies around the world develop and integrate an actionable approach to Responsible Procurement. An actionable approach goes beyond compliance, has a positive effect on the reputation, raises efficiency and generates revenue. Stay connected, sign up for the newsletter.