Leading global excellence in procurement and supply
Sandy Duncan CIPS Yorkshire Branch
Email: [email protected] Group: CIPS Yorkshire BranchTwitter: @yorkshirecips #cipsyorks
Welcome to The Rose Bowl
Sustainable Procurement – are we prepared for the challenges?
Leading global excellence in procurement and supply
• Tonight’s Agenda– Welcome and Introductions 18:15– Sustainable Procurement what is it & is it important?
• A personal view from Sandy Duncan, Sourcing Manager, Lloyds Banking Group– Sustainable Procurement – are we prepared?
• Survey findings and best practice overview from Dr. Alfred Chinta, Senior Lecturer – Supply chain management & Course Leader - MSc Supply chain management, Leeds Metropolitan University
– Delivering Social Value - procurement’s role? • Sustainable Procurement, beyond just green issues - Bernadette Speight, Social Value
& Social Enterprise Development Specialist from People Help People– Q&A Session– Any Other Business– Event Close and Informal Networking 20:10
Sustainable Procurement – are we prepared for the challenges?
Leading global excellence in procurement and supply
Sustainable Procurement –What is it and is it important?
A Personal View
Leading global excellence in procurement and supply
The Big Picture – The World is Changing
Leading global excellence in procurement and supply
And Procurement Needs To Change Too
o All too often we are still seen as; transaction, cost focused and tactical
o But many have moved (or are moving) to become; more strategic, value add and embedded
o What does this mean in respect of Sustainable Procurement?
Leading global excellence in procurement and supply
My Personal View
o Value Chain – Understand the end to end process and impacts
o Strategy – Society should be placed at the centre of our thinking
o People – Good people want to work for good businesses, growing importance in attracting and retaining talent
o Reporting – Measure material things, “roughly right v’s accurately wrong”
o Key Challenges – supply chain resilience, safety/no-harm and innovation/value release – inc. Social Vlaue
The Classic SustainabilityModel
Dr.A.C.ChintaSenior Lecturer - Supply chain managementLeeds Metropolitan University
Sustainability : Are we prepared for the challenges
Why study sustainability?• Increased focus by the governments• Demand from customers• Demand from Investors• Supply chains shoulder the responsibility of implementation• Aid policy formation for training and education at Universities
and CIPS• Gauge Supply chain pressures
The Survey• Covered CIPS members in Yorkshire and Northeast• 124 responses• Collected over a 4 week period• Conducted by electronic means• Anonymous
3.Percentage of total spend on sustainable products and services
41.2
23.5
14.3
5.9
5.9
9.2
% of proc spend on sus prod and services
Don't know / Can't remember
Between 5% and 25%
Less than 5%
More than 50%
Between 26% and 50%
No answer
4. Sustainability spend in 3 years time
21%
10%
46%
10%
11%
2%
Sus spend in 3yrs time
Neither increase nor decreaseDon't knowIncreaseIncrease significantlyBlankDecrease
5.Is sustainability a part of initial Supplier evaluation
14%
35%38%
12%
2%
Initial supplier evaluation
NoYesSometimes, depending on the supplier's products and servicesBlankDon't Know
6.Is sustainability a part of your regular supplier performance reporting criteria?
31
2746
3
17
Is sustainability a part of your regular supplier performance report -ing criteria?
No
Yes
Sometimes, depending on the supplier's products and services
Don't know
No Reply
7. Which, if any, of these measures does your organisation use to assess suppliers' sustainability?
Energ
y usag
e
Carbon fo
otprint
Use of su
stainab
le mate
rial(s
)
Life cy
cle an
alysis
Water c
onsumption
We do not m
easure
suppliers'
susta
inabilit
y
Don't know
Other (plea
se sp
ecify)
0
10
20
30
40
50
60
70
8-Which, if any, of these measures does your organisation use to assess suppliers' sustainability?
8.Do your key customers require you to use sustainable suppliers / raw materials?
24
42
9
19
19
11
16-Do your key customers require you to use sustainable suppliers / raw materials?
No Some prefer it, but it's not mandatory
Don't know Yes, some of them
Blank Yes, most of them
9.To what extent do you agree or disagree with the following statements about procuring sustainable products?
It is d
ifficu
lt to lo
cate s
ustainab
le su
ppliers
It is d
ifficu
lt to as
sess s
ustainab
le meas
ures
There
is a l
ack of u
nderstan
ding by s
uppliers a
bout susta
inable
products
There
is a l
ack of u
nderstan
ding by m
anage
ment a
bout susta
inable
products
There
is a l
ack of a
commonly u
nderstood st
andard
for s
ustainab
le pro
ducts
Susta
inable
products
are o
f poor q
uality
Susta
inable
products
are n
ot a co
st-eff
ective
option05
101520253035404550
AgreeDisagreeStrongly agreeBlankStrongly DisagreeDon’t Know
10.Qualification of respondents
CIPS Certi
ficate
CIPS Advan
ced Certi
ficate
CIPS Diploma
CIPS Adva
nced Diploma
CIPS Profes
sional D
iploma
Bachelo
rs deg
ree
Masters
in Pro
curemen
t or S
upply Chain
Man
agem
ent
Masters
in an
y other
area,
including M
BA
Doctorat
e - PhD, D
BA0.00
5.00
10.00
15.00
20.00
25.00
30.00
35.00
9.68
5.65
21.77
16.13
29.0327.42
5.65
11.29
0.81% of respondents
15.What is the primary source of your training on sustainability?
24%
18%
21%
20%
9%
3%
6%
No info
CIPS training
I haven't received any sustainability training
Internal training organised in the organisation
External training by a consultant
Self Taught
University degree
17. Employees in procurement
2%
17%
15%
14%
26%
23%
2%
35-How many employees in your organisation are involved in procurement?
One2 to 56 to 1516 to 50Over 50BlankDon't Know Can't remember
26%
14%
10%7%
21%
3%
6%
1%2%
2%
2%2% 3%
Blank
Manufacturing
Public administration and defence; compulsory social security
Education
Other (please specify)
Electricity, gas, steam and air conditioning supply; water supply, sewerage, waste management and remediation activities
Human health and social work activities
Real estate activities; professional, scientific and technical activ-ities; administrative and support service activities
Accommodation and food service activities
Financial and insurance activities
Transport and storage; information and communication
Construction
Wholesale and retail trade; repair of motor vehicles and motor cycles
19-In which sector is your organisation based?
Info on the sample of respondents
• Mainly from large businesses with more than £35 million turnover
• 70% with more than 2 years of experience in procurement
• More than 70% have a sustainability policy• Mostly buyers, Supply chain managers, procurement
Directors
Key Findings of the Survey
• Most businesses have a Sustainability policy• Few small businesses have participated • However very few enforce sustainability as a
requirement for their suppliers• Many businesses do not report sustainability as part
of their procurement reports• Most respondents are full members of CIPS
Conclusions from the survey
• There is some understanding of Sustainability but it is varied
• Confusion on standards for Sustainability• CIPS and University degrees are primary source of
knowledge• Need for clearer guidelines for procurement
professionals to evaluate and select suppliers• Sustainable procurement needs significant
improvement
Challenges to procurement due to Sustainable requirements
• Lack of knowledge internally – standards, • Lack of knowledge externally in the supply chain• Setting the right targets• Keeping focus - as Sustainability is achieved over the
long term• Redesign and re-evaluate procurement strategies
Defining “sustainability”
• Sustainable development has been influentially defined as “development that meets the needs of the present without compromising the ability of future generations to meet their own needs” (WCED, 1987)
• “Sustainability can be thought of as a process, as opposed to an end-state (Parker, 2002)
• Global reporting initiative G4 guidelines provide a standard for all companies to report their sustainability initiatives
• Rauch and Newman(2008) define metrics for sustainability in four areas of emissions, water, energy and material use
Reporting Sustainability-Evidence from Supermarkets
• Tesco-Tesco knowledge hub, Overall Carbon footprint• Sainsbury-Responsible sourcing, puts all waste to positive use, difference
to community, great place to work
• Marks and spencer-19% of food products meet sustainability standard, 100% palm oil is RSPO certified, 85 clothing suppliers use energy efficient practices, 0 construction waste to landfill, 34% increase in energy efficient 68% reduction in A/c emissions
• ASDA-Reduced waste, expanded locally grown produce, support women around the world, Renewable energy, direct farm program, diversity and inclusion
• Morrison’s-Responsible sourcing, healthy lifestyles, reducing impact, colleagues, engage with communities
FMCG Companies• Unilever
– embedding sustainability– health & hygiene– improving nutrition– greenhouse gases– water use– waste & packaging– sustainable sourcing– fairness in the workplace– opportunities for women– inclusive business– sustainable living news
• P&G – Resource & Waste Summary– Energy– Waste– Emissions– Water– Compliance– Employees
• Nestle– environment impact,– nutrition health and wellness, – social impact
From awareness to implementation – How can procurement professionals respond?
• Undertake an audit of the business• Identify gaps in knowledge• Identify how sustainability will be measured and
reported – work with key stakeholders• Identify improvements to be made to procurement
processes to conform to sustainability requirements• Transfer “sustainability in procurement” knowledge
internally and externally
Sustainability model (Hogevold, Svensson, 2014)
References• Parker, H.W. (2002), “Sustainability as a process”, in Sikdar, S.K. (Ed.), Sustainable
Engineering Conference Proceedings, American Institute of Chemical Engineers Annual Meeting, November 3-8, pp. 2-12.
• G4 (2014) G4 Sustainability reporting guidelines, Available at https://www.globalreporting.org/resourcelibrary/GRIG4-Part2-Implementation-Manual.pdf, Accessed on [11-06-14]
• Forbes (2014) The World's Most Sustainable Companies Of 2014, Available at http://www.forbes.com/sites/jacquelynsmith/2014/01/22/the-worlds-most-sustainable-companies-of-2014/ Accessed on [11-06-14]
• Confino,J.(2014)Best practices in sustainability: Ford, Starbucks and more –Available at [http://www.theguardian.com/sustainable-business/blog/best-practices-sustainability-us-corporations-ceres] Accessed on [11-06-2014]
• Tesco (2013) What matters now: using our scale for good, Available at http://www.tescoplc.com/files/pdf/reports/tesco_and_society_2013_ipad.pdf , Accessed on [11-06-2014]
• Hogevold and Svensson (2012) A business sustainability model: a European case study, Journal of business and industrial marketing, 27/2, 142-151.
Bernie SpeightPeople Help People
Introducing social value
One week left to apply – Social Enterprise UK have support programme for Health – bringing CCG’s procurement & suppliers together to co-design what social value will look like and how it will be measured & evidenced in your area.
www.socialenterprise.org.uk
Support for social value
People Help PeopleOur Vision
An inclusive society where people help each other for the greater good of humanity
Our MissionHarnessing our knowledge and experience we enable people to focus their passions and talents, in collaboration with others, to achieve sustainable & positive change in society
Objectives – what you want to do Values – how you will deliver Activities – individual tasks or projects Outputs – the quantitative countable
stuff Outcomes – the qualitative stuff /
change that happens quickly Impact - longer term sustained
change
Social Value terms
Social Value
Social Value
Social Value
Why social value important?Values – Walk the Talk.Outcomes – the change you empower
Evidence – the story, testimony
Improvement and innovationAdded value / Value for money
How can you PROVE?
Social Value
Social Value
OutCOME indicators…
What has happened as a result of your actions?
What difference has it made? More qualitative… Records the change… Requires consultation with stakeholders…
Social Value
People Help People Supporting you to deliver social value
Building Social Value Programme Building Social Value Supply Chain
Programme Employee Resilience and Wellbeing
Programmes People Help People Foundation
People Help People Building Social Value – Supply Chain Programme
Enables:◦Your social value aims and objectives to be delivered on a wider reaching basis through supply chain
◦Enhanced relationships with your supply chain partners. You are supporting them and they are supporting you
◦Robust action planning and monitoring throughout the supply chain
People Help People Building Social Value – Supply Chain Programme
◦Measurement and evidence of your supply chain social value delivery
◦Statutory and regulatory requirements to be met◦Budgetary and resource challenges to be met.
No direct cost to you
Collaborative approach enables enhanced community engagement of your organisation. You are supporting all stakeholders in your community
People Help People www.peoplehelppeople.co.uk
T: 0113 217 2705M: 07850163488
facebook.com/peoplehelppeepstwitter - @PeopleHelpPeeps
Leading global excellence in procurement and supply
Question Time
Leading global excellence in procurement and supply
Finally, The Usual Reminders2. Maintain your ‘MyCIPS’ Profile
http://www.cips.org
1. Join Our LinkedIn Group
http://www.linkedin.com/groups
4. Keep in Touch with your branch Email – [email protected]@cipsbranch.org
3. Update
Your CPD
Leading global excellence in procurement and supply
Thank you
I’m off home to watch the football!