Year of supply chain

We keep hearing from clients that this is the year they really need to start focusing on sustainable procurement and getting a grip on their supply chain. With more examples in the news such as the European horsemeat scandal, the reputational risk suppliers can pose to a company is painfully clear.

The recent Carbon Disclosure Project Supply Chain Report found that as major companies are improving their own performance, their supply chains are falling farther behind. Only 40% of the suppliers asked to participate by their customers even bothered to return their survey, and of those only 38% reported having any target for carbon emission reductions. This demonstrates a need for significant engagement and capacity building through the supply chain to ensure risks are managed.

Many companies were taken by surprise last year at the new questions in the Dow Jones Sustainability Index. Suddenly, companies are being rated on such questions as:

  • What ESG objectives have been identified in your Supply Chain Management strategy and how are these integrated in your supplier selection process? and
  • Please indicate which KPIs your company uses to monitor the sustainability performance of its tier 1 suppliers.

And that’s just the start for the corporate reporting team – the Global Reporting Index will be releasing its new G4 version in June, including all-new supply chain management disclosures and requirement for full value chain materiality assessments.

Even if your organisation does not report to DJSI or GRI, sustainable supply chain management is likely high on your agenda. Perhaps, like many procurement managers, you have been given a KPI on sustainability but have been busy with more pressing projects.

Often, this is due to a lack of resources – we can help! ECO-Buy has over 12 years of experience advising on sustainable procurement systems and supply chain management, and with our recent merger with Net Balance to become Australia’s largest supply chain consulting firm, we have even more capacity and expertise to lend you a hand.

I had considered calling this article the ‘year of sustainable procurement’, but I think most organisations have actually put the basic structures and systems in place. This year is time instead to delve more deeply, and get a handle on the real issues and opportunities lying in their supply chain.

Depending on your progress, we can provide assistance implementing a supply chain policy and strategy, supplier code of conduct or questionnaire, undertaking a supply chain risk assessment, developing evaluation methodology for tenders, establishing a supplier engagement program, and capacity building. If this is an area you need help in, contact ecobuy@ecobuy.org.au or call 03 8641 6442 begin_of_the_skype_highlighting03 8641 6442 FREE end_of_the_skype_highlighting.