Why Procurement Professionals Should Be Engaged In
business solutions for a sustainable worldWBCSD Future Leaders Team (FLT) 2011Why procurement professionals should be engagedin supply chain sustainability
“The Future Leaders Team is an unparalleledlearning experience for young managers of WBCSDmember companies. They have the opportunity tounderstand the benefits of why sustainability mattersto business and to develop a solid internationaland professional network. Sustainability is complexsubject is some cases, and it is therefore crucial formultinational companies to enrich their work withother companies’ experiences through collaboration.of common challenges – across sectors – andshared best practices. Above all, they experiencedwhat is recommended here: engaging people insustainability. I am convinced that they brought backvaluable knowledge and information to their jobs.“Congratulations to Eugenia Ceballos, John Zhao,Baptiste Raymond, and to all participants of theFuture Leaders Team 2011!FLT 2011’s theme was sustainability in the supplychain, which is increasingly considered as an area ofdirect responsibility for companies. The followingreport reflects FLTs’ peer learning experienceand team work. This is not the work of experts orconsultants. Rather, the three managers from DuPontChina, Holcim and Lafarge, took this opportunityto engage with key people across functions andgeographies within their companies. In doingso, they have deepened their understandingI.1.Why procurement functionsshould be engaged insustainability for theirsupply chain:Procurement departments are at the coreof efforts to drive sustainability inthe supply chain.Supply chain sustainability can be defined as“the management of environmental, social andeconomic impacts, and the encouragement of goodgovernance practices, through the lifecycles ofgoods and services.”1The objective of supply chain sustainabilityis to create, protect and develop long-termenvironmental, social and economic value for12Definition for “supply chain sustainability” from the UnitedNations Global Compact and BSR publication “Supply ChainSustainability: A Practical Guide for Continuous Improvement”Kareen Rispal,Lafarge Senior Vice President,Sustainable Developmentand Public Affairsall stakeholders involved in bringing products andservices to market.We believe that a sustainable supply chain can drivecompetition and profit, and is a great opportunityto make a difference to companies, communitiesand the environment, beyond the scope of theiroperations. Supply chains are, first and foremost,a set of intertwined relationships betweenparticipants. Therefore, people are the key linkswithin the chain, and need to be engaged. Moreover,procurement teams have a key role to play in asustainable supply chain, because they are in chargeof managing the interaction between the company’soperations and its suppliers.2.The business case for engaging procurementdepartments around sustainability:The results of our interviews demonstrated thatin order for procurement teams to be engagedeffectively, they need to understand the businessWBCSD Future Leaders Team (FLT) 2011Why procurement professionals should be engaged in supply chain sustainability
Protect companyreputation: by doingbusiness with suppliersthat have similar socialresponsibility andenvironmental standards.case for sustainability in the supply chain. Fromour experience, the key elements to consider whenbuilding a business case for a sustainable supplychain are the following: Assure continuity of supply: by looking forsubstitutes for scarce resources, engagingsuppliers in sustainable relationships, and/oroptimizing logistics. Drive down costs andgenerate value forbusiness and society: byworking with suppliers toimprove their sustainabilityperformance. This couldresult in lower cost for thecompany, and an optimizedfootprint for the community(e.g. energy efficiencyinitiatives, sound watermanagement, increasedlabor productivity, etc.). Contribute to sustainable life-cycle of procuredgoods and services: from responsible sourcing,production, and consumption to disposal/recycling processes.The majority of these areas for a business caseare based on a risk management approach. Atthis time, we have not been able to identify otherincentives for the sustainable supply chain, such asproof of customer willingness to pay a premium forsustainably sourced products.Case studyTransportation in Sub-Saharan Africa – interview of Jean Hanoteau, Lafarge Vice Presidentfor purchasing in Sub-Saharan Africa. Context: For Lafarge in Africa, transportation costs are often extremely high, due to poorinfrastructures, long distances to fragmented markets, and little efficiency/poor maintenance ofvehicles by subcontractors and suppliers. Moreover, transportation is typically assured by localsuppliers. It represents a great risk for health – high pollution and nuisance (sound, dust, emissions,etc.) – and safety (for instance, a lot of accidents, or people injured when trucks cross villages). Project: Educate drivers, and provide on-site vehicle maintenance. Business case: Reduce health and safety risks, decrease pollution and associated nuisances,and increase the reliability of supply. By doing so, Lafarge also contributes to local economicdevelopment. Indeed, more reliable supply means longer-term contracts and more revenuefor drivers, who can expand their business. In addition, clean branded trucks, driven by driversrespectful of road safety rules, enhance the company image. Insight: Addressing recurrent, presumably procurement-specific issues can have large sustainabilityimplications. Each of those implications must be understood, and all benefits of the project shouldbe exploited.WBCSD Future Leaders Team (FLT) 2011Why procurement professionals should be engaged in supply chain sustainability3
3.So far, procurement departments have hadrelatively less exposure to sustainability:II. How to engage procurementfunctions in sustainability fortheir supply chain:According to a recent McKinsey survey,2 manycompanies are actively integrating sustainabilityprinciples into their business and across manyprocesses. The most integrated area is missionand values, followed by external communication,while the least integrated areas are supply chainmanagement and budgeting. From this study,we infer that the integration of sustainability bycompanies has been focused on principles, ratherthan processes.1.The experiences of DuPont in China andLafarge in Sub-Saharan Africa:Our interviews showed that multinational companiescan leverage their international experience andexposure in order to facilitate the engagement oftheir local procurement teams, especially via: A global vision that provides benchmarks:to help procurement teams to evaluate thesustainability of their supply chains, and therebybuild a local robust business case for supply chainsustainability.In addition, we consider that the integration ofsustainability issues into business can follow twomain channels; functional integration, or directpeople engagement. The results of this study conveythat both the functional integration of sustainabilityin supply chain management and employeeengagement in general, are lagging behind. Company-wide initiatives: measuring theecological footprint of products, optimizingglobal procurement processes in order to decreasetheir costs, introducing sustainable developmentcriteria in contracting policy, etc.Therefore, we believe that there is still muchpotential to further drive integration and increasedvalue creation, by engaging people in procurementfunctions in sustainability issues for their supplychain. From a sustainability standpoint, benefits canbe substantial, as the area of corporate responsibilitywill be pushed even further, beyond the scope ofoperations and products. An integrated approach to create virtuous cycles:multinational companies can leverage their localexposure to drive R&D efforts towards productsthat encourage more sustainable sourcing. Education and training of local procurementteams. It is worth considering having specificpersonnel in the procurement departmentto focus specifically on sustainability aspectsof sourcing, in order to drive the effortmore vigorously.Widespread integration% of respondents, n 2,956Business processes into which sustainability has been completely or mostly integrated67Mission and values2457Strategic planningExternal communications60MarketingCorporate culture59Employee engagementInternal communications58Supply chain management41Operations58Budgeting process39The online survey was in the field from July 12 to July 22 2011 andreceived responses from 3‘203 executives representing full rangeof regions, industries, tenures, company sizes and functionalspecialties. Source: McKinsey &CompanyWBCSD Future Leaders Team (FLT) 2011Why procurement professionals should be engaged in supply chain sustainability5450
A.Experience sharing: DuPont China,Beijing OfficeFirstly, companies can audit theirsuppliers on several categories related tosustainability (environmental footprint,labour practices, etc.). For example,Lafarge mandated an international auditfirm to assess the sustainability of coalmines that were supplying Lafarge inIndonesia. The objective of this auditwas to draft an action plan to ensurethat the coal mines were abiding bylocal laws, and Lafarge internal code ofconduct. Practices were assessed in sixareas; actual compliance to local lawsand standards, labour rights, health andsafety, the environment, anti-corruption,and management of suppliers andcontractors by the mines. These typesof audits are thorough, and facilitate thedeployment of action plans, because theyfollow a principled approach. However,they are also quite costly and consumemany resources, therefore making themharder for companies with a large base ofsuppliers to implement. Moreover, auditsare often carried out in reaction toa threat, as forward costs for audits maybe harder to justify. Context: China is a very competitivebusiness environment, where suppliersare struggling for survival and costcontrol. At the same time, DuPont China’sprocurement department is first andforemost, cost-oriented and qualityfocused, rather than concentrated onsustainability issues. In addition, it lacksbargaining power to require its suppliersto adopt sustainable business practices. Project: When they decided to build theirBeijing Office, DuPont China requiredthat its suppliers change their materialsand processes, to make it safer and moreenvironmentally friendly. DuPont paidthe extra cost. Business case: Increased brand andcustomer recognition for DuPont China.Its suppliers gained new experiencein developing sustainable products,resulting in increased quality of supply forDuPont China. Insights: DuPont leveraged its multinationalexperience, and brought its know-how insustainability, as well as health and safety,to the Chinese market. To be able to dothat effectively, they had to build thecapacities of the locally-hired procurementteam; by means of sustainability trainingsessions and awareness-raising. Supplierswere motivated to take an active role inthe project, because they had incentiveto expand their business. They neededto master sustainability best practices(especially across the borders of China)in order to grow.2.Involving procurement teams in assessingthe sustainability of their supply chain:The experience of DuPont in China shows us that,in order to effectively engage procurementfunctions, one has to be able to assess thesustainability of their supply chain. Companiestend to adopt three main approaches for assessment.Audits:B.Sustainable supply chains charters:A second approach, favoured by Holcim orUmicore, for example, consists of definingminimum sustainability requirementsexpected from suppliers, in alignmentwith the company’s values, and incross-functional collaboration betweencorporate sustainable development andprocurement teams. It can result in asustainable procurement charter destinedfor suppliers who must abide by it inthe contract phase, and for localprocurement teams who can assesstheir practices. For instance, Umicore’sSustainable Procurement Charteraddresses (i) environmental issues,(ii) social conditions (labour, wages,Human Rights ), (iii) fair businesspractices (corruption and competition),(iv) whether or not suppliers themselveshave a sustainable supply chain. Such anapproach is quite comprehensive, andcan contribute to building a company’sculture, reputation and brand aroundsustainability issues. However, it lacks athird party assessment of practices.WBCSD Future Leaders Team (FLT) 2011Why procurement professionals should be engaged in supply chain sustainability5
C.Scorecards:The third approach is risk-based. Incollaboration with Ecovadis, a consultancyworking with procurement departmentsto develop a scorecard approach to assesstheir supply chain sustainability, Lafargeidentified “risky families of suppliers”,from a sustainability standpoint,and concentrated its actions on those.Ecovadis’ risk-mapping tool enabledLafarge to quantitatively assess the valueadd of a sustainable supply chain and thusfacilitate internal buy-in. Similarly, Umicoreidentified 127 critical suppliers based on(i) their spending volume, (ii) their countryof operation, (iii) the kind of material theyare providing, (iv) the extent to whichthey are critical to Umicore’s productionprocess. Such an approach is likely to bevery efficient, but incomplete by nature.There is no “silver bullet” when it comesto assessing supply chain sustainability.A winning approach might combinethe ones described above, althoughsector-based approaches should alsobe considered. The latter have two keybenefits; they establish a sector standard,ensuring both credibility of the sustainabledevelopment approach and a level-playingfield for companies in that sector,and they are both cost and time efficientfor both procurement and suppliers.Indeed, multinational companies in agiven sector are likely to have manysuppliers in common, and it is unnecessaryto complete an audit several timesabout similar issues, or to assesssustainability risks twice.Experience sharing – interview of Iqbal Omar, Lafarge Algeria Logistics and Supply ChainManagement Director: Context: Doing business in Algeria is a tricky undertaking due to the relatively unstable politicalsituation, and the suppliers’ and subcontractors’ lack of capacities. Project: Lafarge’s business unit in Algeria is currently implementing a Contractor ManagementSystem. This database, including all of Lafarge’s suppliers, enables the local procurement teamnot only to monitor and verify the quality of their work, but also to identify where practices canbe improved. It spans across all issues, and includes environmental, health and safety criteria. Business case: In addition to building long-term relationships with suppliers, a contractormanagement system simplifies the bidding process, enhances the reliability and efficiency ofthe supply chain, and ensures sustainable practices from the beginning. Insight: Effective engagement of procurement teams can be achieved by embedding sustainabilitycriteria in the regular procurement process.6WBCSD Future Leaders Team (FLT) 2011Why procurement professionals should be engaged in supply chain sustainability
3. Engaging internal stakeholders:Global procurement teams need to engageprocurement departments locally, and to coordinatetheir action with corporate sustainable developmentteams; they also need to obtain the supportand sponsorship of the company’s leadership,at Executive Committee level.A.Engaging top management:A successful sustainable supply chainimplies a culture change in the company.Therefore, top management should be thefirst group engaged in the chain, becausethey steer the company culture and values.Experience sharing – Holcim: When Holcim embarked on asustainable procurement journey, its topmanagement expressed their concern withimplementation issues, and implicationsfor the business. In order to fully engagetop management, an approach wasneeded that reflects an adequate risk level,minimizing reputational risk, and ensuringsupply continuity, while allowing a smoothoperation in business units around theworld. Key challenges in doing so included: Finding the right balance between thelevel of risk accepted, versus the workloadrelated to the risk management process.B.Engaging procurement at corporate level:Corporate procurement deals with globaland regional suppliers. Often, thosesuppliers are also big corporations witha sustainable agenda. However, engagingcorporate buyers requires communicationand education on the sustainabilityimpact of the actions derived from theirglobal or regional practices. Raising theirawareness is only one face of the coin. It isimportant to provide them with processes,methods and tools to mitigate the impactof their actions (e.g. Contractual Termsand Conditions with clauses related tosustainability; Supplier Code of Conduct;Supplier Assessment ) and to involvethem in the development of a sustainableprocurement approach throughcontinuous communication.Experience sharing – Holcim and DuPontAt Holcim, training on sustainableprocurement will be the first step towardsimplementing the recently designedsustainable procurement approach.At DuPont, the sustainability department andthe procurement department are workingtogether to design a systemic approach inorder to educate and screen suppliers onsustainability issues. Defining valid global requirements at thecorporate level for all business units locatedin all countries where Holcim has presencearound the world. Defining a decision tree to decidewhether suppliers should be replaced, ora mitigation plan should be implemented,and furthermore, whether Holcim shouldbe involved in supplier development.WBCSD Future Leaders Team (FLT) 2011Why procurement professionals should be engaged in supply chain sustainability7
C.Engaging procurement at business unitlevel across regions:The biggest challenge in this corporatejourney is to engage local business unitswhom, on many occasions, feel that thecorporate function is far removed fromtheir local needs. A key success factor isto involve them in the development ofthe corporate initiative, and to incorporatetheir lessons.At Holcim, selected representative businessunits were involved to provide feedbackand share their learning in this field.They were also involved in testing andpiloting some methodologies defined forthe program. A series of interviews wereconducted with procurement officers fromselected business units across the regions,to better understand their local prioritiesin this field. Likewise, the initiative wascommunicated to all business units duringthe global procurement forum.D. In order to successfully implement a sustainablesupply chain culture in a company, a holisticapproach needs to be followed and combinedwith practical and efficient implementation. The holistic approach should be foundedon company values, and it should clearlystate company expectations with regardsto sustainability. Practical and efficient implementation mustbe founded on a business case for sustainablevalue chains, which primarily addresses riskmanagement issues. People at each step of the chain have to beengaged and educated, from top management,operations, procurement, to the suppliers. It is across-functional and cross-companies (suppliers)exercise.Measuring performance: Processes, methods and tools needs to be madeavailable to drive an efficient implementationwhich does not interfere with company operation,while ensuring sustainability requirements.Measuring the impact of the above listedengagements will determine the successof the initiative. Performance measurement systems need to be putin place, to track the level of engagement as wellas benefits delivered.It is important to develop measurementindicators that fit company v
Why procurement professionals should be engaged in supply chain sustainability 2 . sustainability for their supply chain: 1. Procurement departments are at the core of efforts to drive sustainability in the supply chain. Supply chain sustainability can be defined as “the management of environmental, so
Procurement Procedures Procurement 2.4 Procurement authority 38 2.5 Modification of individual procurement authority 38 2.5.1 Delegation of procurement authority 38 2.5.2 Delegation of procurement authority to UNFPA officers at headquarters 38 2.5.3 Delegation of procurement authority to field office managers 41
Strategic Procurement for Innovation Vassilis Tsanidis Dr.Jur f. National Expert on Innovation Procurement in the EU A. STRATEGIC PROCUREMENT –2 Innovation Procurement Green/Circular Procurement Social Procurement . 10-11-2020 2 EU Public Procurement Directives (2014/24 , 2014/25)
Procurement For GoJ purposes, Public Sector Procurement is the acquisition of goods, services and works, by any method, using public funds, and executed by the Procuring Entity or on its behalf. Procurement Contract A contract between the Procuring Entity and a Broker/Insure resulting from procurement proceedings. Procurement Officer A person with the authority to conduct procurement .
Established 2013 Yes Yes SP/ATI: Section 508 Standards Guide (posted to the ATI Procurement website) SP: EIT Procurement Plan . 1.2 Yes Request the Chancellor’s Office provide a list of PeopleSoft procurement codes that fit the EIT categories. . CSU ATI Procurement Community of Practice Monthly ATI Ad Hoc Procurement Sub Committee Bi-Weekly
in the MCC Procurement Guidance Note: MCA Non-PPG Covered (NPC) Purchases that are covered by guidance provided by the Procurement Operations Manual (POM) and Procurement . 1 The MCC Program Procurement Guidelines are based upon the World Bank’s Guidelines: Procurement Under IBRD Loans and IDA Credits and it has been adapted to reflect MCC .
E-Procurement Systems in perspective The benefits of e-Procurement have been verified by many leading companies worldwide, and e- Procurement is a significant tactic in most companies' e-Business strategies (Crook and Kumar, 2008). The consensus is that e-Procurement benefits organizations with respect to procurement cost and process
defining the term e-procurement (Vaidya, Yu, Soar & Turner, 2003). While the terms 'e-procurement' and 'e-purchasing' have been used synonymously in many jurisdictions in an attempt to prove their involvement in the e-procurement revolution (m), the term 'purchasing' has a narrower scope. E-procurement refers to the use of internet-
VOLUME 99 OCTOBER 2018 NUMBER 4 SUPPLEMENT Supplement to The American Journal of Tropical Medicine and Hygiene ANNUAL MEETING SIXTY-SEVENTH “There will be epidemics ” Malaria Cases on the Rise in Last 3 Years-2016 Ebola Out of Control-2014 Zika Spreads Worldwide-2016 Island Declares State of Emergency Over Zika Virus, Dengue Fever Outbreak-2016 EBOLA: WORLD GOES ON RED ALERT-2014 An .
