2014 Global SRM Research Report - Customer of choice

STATE OF FLUX

2014 GLOBAL SRM RESEARCH REPORT

ARTICLE 197

W O R K I N G more COLLABORATIVELY with S U P P L I E R S

ADVANCING the RESPONSIBLE PROCUREMENT approach

Taking responsibility for the impact of your own operations is no longer enough. The world demands more of you and your company.

GUEST ARTICLE BY

Alis Sindbjerg Hemmingsen, Founder of Responsible Procurement Excellence.

responsibleprocurement.dk

CREATING VALUE THE RESPONSIBLE WAY

You are now also held accountable for much of what goes on in your supply chain. Fromworking conditions to corruption and the environmental impact of your supply chain, your procurement of products and services is under scrutiny. UNDERSTAND YOUR IMPACT The challenge is to understand the impact your procurement decisions have on local communities, workers and the environment. And then take action to make sure you create a positive impact. At the end of the day, that is what responsible procurement is all about. If you plan it well, it can promote sustainability, provide you with cost savings, and protect and enhance your brand. Responsible procurement can have a fundamental strategic and operational impact. It can promote competitiveness and innovation. Responsible procurement is a strategic tool, which can help minimise your company’s negative impact on people, societies and the environment. At the same time, it canmaintain or enhance value for customers, business partners and shareholders.

Some companies see responsible procurement as pure risk management and use it for compliance purposes. The strategic and operational impact is then, typically, medium to high. Although it might mitigate the operational risk, responsible procurement is also about increasing a company’s profit, improving strategic supplier relationships, strengthening the brand while remaining vigilant towards competitors, and revolutionising the procurement strategy. In order to work more strategically and collaboratively with suppliers, it is essential that procurement organisations start thinking about impact management instead of only compliance management. The question is: how can procurement create an approach to responsible procurement that is actionable and goes beyond compliance?