Digitalization causes a divide in organisations getting ahead in sustainability and those lagging behind.
This remains the same for procurement: teams still have the potential to do more and actively drive sustainable sourcing in their day-to-day processes and decision making.
Based on their own online survey with 107 procurement professionals from various industries, Archlet’s Sustainability in Sourcing & Procurement whitepaper looks at how teams can integrate sustainability metrics within sourcing processes, to see how they contribute to making holistic sourcing decisions.
Savings, digitalization and sustainability have increasingly become themes for companies to achieve in Procurement over the last year.
“Procurement as a strategic business partner can play a key role in reducing the environmental impact of organizations by integrating sustainability measures into supplier assessments and selection processes.”
What is Sustainable Sourcing and how are companies achieving it?
‘The identification and selection of the best source of supply for a good or service under consideration of environmental dimensions next to commercial aspects.’
Companies have minimum sustainable sourcing practices that are defined by targets to reduce the impact on their operations and supply chain. Data is key when it comes to sourcing, so procurement teams can use it to create category-specific goals to measure their own current environmental practices and achieve sustainable sourcing.
Challenges in measuring sustainability indicators
These are just some of the challenges teams are facing:
- Data availability
- Benefit quantification
- Supplier data validation
- Missing standards
- Laws and regulations
Stakeholders that opt for cheaper suppliers instead of sustainable options results in more frustration for businesses that are trying to achieve better business outcomes. By using sourcing applications, they can get a more holistic view of options.
How can procurement teams drive sustainable sourcing in their day-to-day activities?
Digital procurement technologies are helping organizations to integrate sustainability metrics alongside commercial, risk, diversity or performance scores in their decision making, thus making them more appealing to the wider community and potential customers. Meanwhile, advanced technologies can help bring transparency to costs and help with strategic sourcing and supplier selection processes.
- Data is king!
- Digital technologies are the way forward
- Sustainability should remain a high priority for organizations
- Break metrics down into category-specific goals to make them more achievable
- Be prepared to spend a little more: cheaper alternatives can be more expensive thus unsustainable in the long run – environmentally and for your own business