The Role of Sourcing and Procurement in Sustainability Initiatives
Suppliers around the globe are evolving and now especially understand the significance of adopting sustainable practices in their business. With integrated analytics capabilities, organizations can transform suppliers into strategic partners, drive significant competitive advantage, and help achieve sustainability.
A triple bottom line — the holistic confluence of people, planet, and profitability — is mutually beneficial for companies, consumers, and talent markets alike. A World Economic Forum report noted that this virtuous cycle can increase total revenue by up to 20%, decrease costs by as much as 16%, and improve brand value by up to 30%.
Suppliers — and their ecosystems of their own suppliers — enable the success of sustainability initiatives. Organizations need to draw on the synergy of different driving forces that can help push these initiatives forward: corporate and social responsibility; strong collaboration and shared metrics; product and technical innovation; and communication that represents the company’s commitments to the market.
Failure or abandonment in their implementation risks the business’s chances for finding opportunities, getting good returns on investment (ROIs), and more importantly, elevating the perception of authenticity in the company’s commitment to sustainable practices.
A triple bottom line – sourcing and procurement in sustainability initiatives
Procurement teams in big and small companies have now access to tools to digitalize and capture data necessary to generate insights for learning new and better ways to support their stakeholder’s demands. They now have a near-real-time visibility into an ever-evolving market, which allows teams to expand their capabilities and create additional value.
Further, procurement teams are inherently well-positioned to tap into these opportunities by using analytics and by establishing, leading, and focusing on:
- Trust and transparency, which are fundamental in showing strong commitment to consumers, regulators, investors, and employees.
- Supplier partnership and expansion that are committed to sustainable outcomes while also accountable for reducing supply risks and adverse impact on revenue and integrating diverse suppliers.
- Performance excellence and shared metrics that accurately and transparently communicate commitment to sustainability and show progress and continuity.
- Sustainability and innovation initiatives in raw and packaging materials as well as business areas where waste can be significantly reduced, such as inventory management as well as warehouse and transportation operations.
How procurement analytics helps drive sustainability
To achieve a triple bottom line, organizations should adopt a comprehensive approach that orchestrates cross-functional initiatives toward one, clear outcome aligned with corporate strategy and how the business wants to be perceived.
A comprehensive strategy encompassing the integration of cross-functional data, use of integrated procurement analytics, and adoption of process and data governance is crucial to ensure valuable insights are generated. Data cannot produce the expected outcomes without a clear view into the benefits of insights and the specific actions they drive.
Learn more about our insights through our white paper, “Triple Bottom Line: The Strategic Role of Sourcing and Procurement in Sustainability Initiatives,” which explores:
- The most relevant areas that procurement teams must consider when defining sustainability targets, and where procurement can have the most impact.
- How integrated procurement analytics can help enterprises focus their efforts into moving an informed, effective business toward the triple bottom line.
- A real-life case study on how a Fortune 500 consumer-packaged goods (CPG) company used procurement analytics to enable sustainable packaging.
Importance of Sourcing and Procurement in Sustainability Initiatives
Download our white paper