1. Responsible purchases are central to CSR
Responsible purchasing is becoming an increasingly strategic point for businesses worldwide. After all, a company is only as green as its supply chain and business performance is continuously impacted by supplier conduct. Weak links and poor practices across the chain can have catastrophic and costly consequences. Companies are adopting a holistic approach to business operations and engaging suppliers in sustainable practices (starting with responsible purchases) are the cornerstones of a fully functional CSR strategy.
2. Building a sustainable supply chain: long-term payoffs but cross-cutting benefits
Sacrificing present-day gains in favour long term benefits is easier said than done and it doesn‘t help that seemingly contradictory needs and demands are at odds (the needs of your clients, your own budgetary constraints, complying with regulation, striving for innovation…). Once a company is keen on building a sustainable supply chain, the potential societal and social effects (promotion of human rights and positive working conditions, enhanced local employment and professional integration, fighting concealed work, etc.) as well as the environmental ones (improved, efficient and demand driven processes) are profound and cross-cutting.
3. Pricing as an obstacle to adopting sustainable supply-chain practices
Concerning sustainable purchases, once the time has come to negotiate a contract, pricing often remains a contentious issue between client and supplier. This, although research suggests that making the sustainable choice does not necessary equal ―spending more money‖. The pay-off is in the long-term and, is recommended, starting by subtracting negative externalities from positive ones when establishing your price can help.
4. Regulations and standards will tend towards greater integration
The ISO 20400 standard on Sustainable Procurement is currently under development. Organizations adhering to this future regulation will be proactively (and voluntarily) steering their operations towards responsible purchasing and will certify their compliance with ISO‘s definition of sustainable procurement. As companies increasingly seek to use credible, integrated benchmarks, we can certainly expect to see a streamlining and greater consolidation in regulation on sustainable procurement.
5. Timely supplier payments as the first step towards responsible business practices
Measures for a more sustainable supply chain often go against the grain of not-so-sustainable but well-established business practices, such as buying the bulk of raw materials abroad or pushing the legal limits of supplier payment deadlines. In France, for instance, while the maximum delay for payment is of 60 days, the average is closer to 72 days (generating an astounding 600 billion Euros in inter-payment credit and triggering bankruptcy for 1 in 4 SMEs). Timely supplier payments are the first step towards more responsible and sustainable purchasing practices.
6. Enhanced client-supplier relationships will work in your favour, especially if you’re a small or very small business In advancing towards an improved supply chain, the quality and nature of client-supplier relationships have a great role to play and much remains to be done in this direction. For truly sustainable partnerships (and purchases), more collaborative, balanced and mindful client supplier relationships are needed. This, however, is impossible without a team effort, where each party contributes constructively and on equal terms. The result, however, is mutually beneficial to both client and supplier. Day-to-day exchanges in the context of this enhanced associative model, could either rely on the good faith of both parts or be based on the adoption of more formal written agreements (such as a ‗Business Code of Conduct for Suppliers’).
7. Technology can support higher supply chain standards
Businesses should make an effort to embrace what technology has to offer. There are a number of software solutions, designed to help corporations make better decisions by gaining operational insight based on the input of raw data.
