Win/Win:Taking the LeadAchieving Procurement Sustainable with the Developing World

Presented by Sue Morecroft, CIPS and Fiona Gooch, Traidcraft

Win/Win: Achieving Sustainable Procurement

Developing-country perspective

• Economic & reputational benefits

• Sourcing considerations

• Embed responsible purchasing into purchasing cycle

Win/Win: Achieving Sustainable Procurement

1. Prioritisation of categories/products within the responsible purchasing programme

2. Identification of priority issues in supply chains

3. Supplier market engagement and development of purchasing plan

4.Evaluation/shortlisting followed by PQQ/ITT/RFQ

7. Update responsible purchasing programme – Share reward good practice

6. Creation of contract & performance management against contract

5. Receipt/eval of quotes or offer/selection of preferred supplier

The purchasin

g cycle

Win/Win: Achieving Sustainable Procurement

Win/Win aims to help the buyer create strong and sustainable supplier relationships across the globe by showing how to integrate unique aspects of developing world suppliers into a company's regular purchasing activities - helping both trading partners address the issues and achieve positive business results

 

Taking the lead

Business Drivers

• Procurement must be integrated and aligned with organisational objectives

• Organizational objectives must minimize risk in the supply chain

• Procurement should be held to account for SEE objectives

Taking the lead

Case Study RC Treatt & Co Ltd

• Supplier – Segoma village, Tanzania

• Hand-pressed bitter orange oil

• Oil marketed at a premium

• Producers paid a premium for uniqueness

• Lasting benefits to local suppliers and communities

Workshop

Make buyers accountable for delivering social, labour and environmental performance/standards

• Procurement objectives should flow from strategy & should be embedded into performance measures

•Accountability makes it clear that buyers are responsible for leading the implementation of more responsible practices

• These practices must be reconciled with sourcing priorities

PRINCIPLE

WHY? HOW?

• Responsible procurement practices flow from the top down

• Make sure that buyers category managers know that they have to deliver across a range of imperatives as well as cost

• Measure and review progress against objectives

Workshop

Adopt “Balanced Scorecard” approach when setting objectives & rewarding those involved in procurement

• The recognition that cost is just one of a range of imperatives in the BS

• The range of imperatives should include those that are important to your organisation

•The sharing of complementary objectives across the organisation and across categories to ensure consistency

PRINCIPLE

WHY? HOW?

• Implement socio-economic and environmental objectives into job descriptions and appropriate performance measures

• Regular measurement and review with an appropriate reward structure

• Adopt BS approach with external suppliers

Workshop

Build robust sourcing strategies for important category areas

• Sourcing strategies are important for the future success of the organisation and its reputation•Brings focus to key priorities and mitigates against short term tactical action• Sourcing strategies must feed into business and performance objectives

PRINCIPLE

WHY? HOW?• Develop a good sourcing strategy by involving cross-functional input to gain stakeholder support for all business imperatives

• Once key priorities have been identified for important categories work with key stakeholders to build the strategy

Workshop

Manage relationships professionally

• Well managed relationships reduce risk & strengthen the flow of information & knowledge

• Co-operative working will build confidence & trust through actions

• Suppliers are encouraged to identify with local stakeholders to meet local standards

PRINCIPLE

WHY? HOW?• Link sourcing strategies, SRM and supplier development so actions are consistent & deliver longer term objectives

• Better relationships encourage suppliers to identify solutions with local stakeholders to meet stds in a locally appropriate and sustainable way

• Encourage good practice between other parties in the supply network where possible

Workshop

Encourage collective worker representation to protect individuals from exploitation

• Worker representation should be encouraged; individual workers are particularly vulnerable to exploitation

• Problematic practices can develop if workers are unable to present their concerns to the employer

• Allow individuals to “whistle blow” confidentially so providing a “safety valve of last resort”

PRINCIPLE

WHY? HOW?• Worker representation demonstrates responsible good practice and a framework/system that enables this should be implemented

• Problematic practices can result in reputational accidents that will expose buyers and other supply chain partners

• A mechanism must be implemented and monitored to ensure effectiveness

Win:Win/Taking The Lead

THANK YOU FOR YOUR TIME AND ATTENDANCE