November 02, 2022 | Procurement Strategy Blogs
When it comes to sustainability in procurement, most companies are still struggling to get past first base.
While the idea of creating a green and sustainable supply chain is now well understood, few companies have managed to make it an everyday part of their operations.
There’s a huge amount of untapped potential when it comes to using procurement as a way of reducing costs and environmental impact while also creating new business opportunities.
In this article, we explore some of the benefits of sourcing more sustainably, as well as some simple steps you can take to begin integrating these principles into your procurement operations.
There are many everyday benefits of sourcing more sustainably. Perhaps the most obvious is cost savings.
If your company purchases a significant portion of its goods or services from other providers, it can often be possible to source some of these items from sustainable suppliers at a lower cost than from non-sustainable providers.
When you’re working with a supplier who shares your values in terms of sustainability, you’re able to negotiate much more easily. Sustainable procurement isn’t regulated at the same level as the supply chain, so it’s often possible to simply make it part of your terms and conditions when you’re selecting suppliers.
There are also significant cost savings to be reaped on the environmental side of things. Few companies have managed to get past the first base of sustainable procurement, where they focus on cost savings.
By sourcing more sustainably, you can significantly reduce your company’s harmful carbon footprint, while also improving your brand image.
All these things come together to create a virtuous circle that will keep improving your company’s bottom line over time.
One of the biggest misconceptions about sustainable procurement is that it’s prohibitively expensive. In fact, by making it part of your purchasing process, you actually have the opportunity to save money.
While it may not be possible to completely cut out the costs associated with sourcing from sustainable providers, it is often possible to negotiate better terms, particularly for smaller purchases.
In addition to this, many sustainability initiatives can help you reduce your overall costs. When you’re sourcing materials or services that will be used in future production, you can often negotiate a much better deal with suppliers that are willing to sell on the promise that you’ll pass those savings on to your customers.
You can also use the services of eco-innovators, sustainability-focused providers that are willing to share the cost savings they generate by making their production processes more environmentally friendly.
By sourcing as much as possible from sustainable providers, you can establish a reputation for working with sustainable partners. This can be a great way to build new business relationships, particularly if you’re targeting customers that are also interested in sourcing sustainably.
By making sustainability an important part of your procurement policies, you’re also able to encourage your existing suppliers to operate more sustainably. This can be a great way to help them reduce their costs and improve their sustainability credentials at the same time. If your company is already doing this, it can be a good idea to make it public.
By publishing your sustainable procurement policies, you’re sending out a clear message to all existing and potential suppliers that your company is serious about sustainability.
The most obvious benefit of sourcing more sustainably is that it helps to reduce your company’s environmental footprint.
By sourcing from suppliers who use less energy or produce fewer CO2 emissions in their production processes, you can reduce your company’s carbon footprint.
Sourcing from sustainable providers, whenever possible, provides an opportunity to build new business relationships with other companies that share your values. This can be a great way to promote your brand and forge strategic partnerships with suppliers that can help you to drive your business forward.
By making sustainability an important part of your procurement policies, you’re also able to help your existing suppliers to promote your brand and forge strategic partnerships with other companies that share your values.
One of the most important things you can do to encourage sustainable practices throughout your company is to create a culture of continuous improvement.
Encourage suppliers to look for ways to make their production processes more environmentally friendly.
By creating this culture of continuous improvement, you’re able to make your company more efficient at every level. This can help you to reduce your overall costs and to improve your sustainability credentials at the same time.
Sustainable procurement can have a real impact on your business’s bottom line. However, this isn’t just about sourcing ethically; it’s also about making smart strategic choices. Additionally, this requires a culture of continuous improvement and close collaboration with suppliers.