Transcript Document
Responsible Supply Chain
Responsible supply chain - what is it about ?
ISSUES
social
› Responsible supply chain
management refers to the
integration of corporate
responsibility (CR) issues into
procurement practices of an
organisation.
› It can take the form of:
economic
environment
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Supplier
management
Supplier
selection
Assess
proposals
Defining
requirements
Sourcing
strategy
PROCESSES
Integration of SEE (social,
environmental and economic)
criteria across each step of the
procurement process
Fair relations with suppliers
The issues – general overview
Supplier
management
Supplier
selection
Assess
proposals
Defining
requirements
Sourcing
strategy
PROCESSES
• Compliance w/ Human Rights incl.
wages (cleaning services)
• Suppliers’ excellence on H&S
(couriers)
• Other social issues (e.g.
migrant workers, skills, diversity)
ISSUES
social
economic
environment
• Fair treatment of suppliers incl.
payment terms (all)
• Local sourcing (catering)
• Suppliers development (all)
• Bribery & Corruption (all)
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• Preference for eco-friendly goods
and services (paper)
• Suppliers’ performance:
consumption of non-renewable,
greenhouse gas & other
emissions, waste etc. (events)
› Social issues in the supply chain
refer to social conditions in which
procured goods and services are
produced
› Economic issues in the supply
chain means in this context taking
into consideration the economic
impacts of procurement strategy
on the supply market
› Environmental issues in the
supply chain refer both to
environmental conditions in which
goods and services are produced
preferment for eco-friendly goods and
services
The business case
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Business cases
Examples
Exposure to reputation risks
• Living wages issues in the supply chain
Exposure to legal risks
• Non compliance with standards related to
bribery & corruption
Exposure to operational risks
• Supplier’s failure to comply with quality
standards
Definition of business needs
• Select more efficient product / reduce
consumption
Supplier loyalty
• Become your strategic suppliers’ best
customer
Attract & retain talent
• A CR approach can make a difference in the
recruitment of experienced staff
Competitive advantages
• Both public & private sector assess suppliers
on CR, incl. supply chain issues
Internal cohesion
• Encouraging & fostering collaborative actions
in the company
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80.0%
40.0%
20.0%
LSA ?
2007 Global performance on green supply chain
100.0%
Office based companies
60.0%
Responsible Supply chain management model
› Start at Companies’ overall
strategic level to ensure
consistent objectives and
targets are set
Company’s overall strategy on CR
Responsible supply chain strategy
CR issues
mapping
Policy & targets
Category A
Category B
Organisation
management
Category C
Internal & external
reporting
Category D
Procurement plan incl. responsible sourcing strategy
› CR issues should feed strategic
sourcing analysis (processes,
spend, supply base etc.)
Selection of suppliers incl. CR criteria
Contract management
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Monitoring of CR performance
› Fully integrate CR in existing
tools and processes in order to
target comprehensively
purchasing categories
How to get started?
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Baseline
(ongoing
initiatives)
Detailed
spend
analysis
› Undertake a simple spend
analysis and define the current
baseline
Opportunities & risks mapping
› Identify key issues on your main
categories
Prioritised actions in a dedicated
action plan
› These initiatives are extremely
useful to build the big picture …
Implementation of prioritised
action
› …an ideal way to get started !
The baseline and the spend
analysis results should help you
to prioritise future action
How to get started?
› To be successful…
› Focus on easy initiatives first (i.e.
Quick wins on ‘obvious’
categories)
› Set achievable targets
Develop global
strategy
Develop case &
execute
› Liaise with internal stakeholders
and meet your top suppliers
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Initiate projects
Generate ideas
› Manage lessons and then,
increase the scope of the project
Quick win: example on fleet
› Extend selection criteria:
Fuel consumption & CO2 emissions
By sub-category of vehicles
-environmental: CO2, particles, NOx
-social (free external safety ratings based
on crash tests )
› Choose most competitive vehicles
› Work with suppliers on a long term basi
to improve data collection on vehicles
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› Results expected:
Total cost
Environmental impacts
Safety
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Towards a collaborative approach
Towards a collaborative approach
› Opportunities of collaboration
might be in the following area
LEADERSHIP
IMPLEMENTATION
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CONTINUOUS
IMPROVEMENT
?
Leadership: agree on the issues
and common standards
Implementation: share knowledge
and tools
Continuous improvement:
monitor progress and benchmark
against peer companies
› Limits - where you can not
collaborate (examples)
Exchange detailed information on
price & costs
Any perceived anti-competitive
initiative
Towards a collaborative approach
Applying sustainable procurement concepts to legal services firms
› Our indirect impacts are the most significant
› Tension between upstream and downstream impacts (perceived client
demands)
› What is a realistic scope – environmental and social impacts – given the
focus of international reporting tools and indices?
› Sustainable procurement must be embedded in decision making throughout
the supply chain: from defining need to supplier management
› Are different models required for small vs larger firms?
› How can we tap into the key drivers for suppliers: certainty and economies of
scale?
› Engagement vs exclusion
Towards a collaborative approach
Key issues/challenges faced by legal services firms
Identification, measurement & verification of
environmental and social impacts
Understanding the issues
Lack of existing systems to measure performance
Tracking & measurement is difficult
Contractual requirements
Ability to choose a lower environmental / social
impact product
Scope for influencing standards of supplier
conduct
Perceived insufficient leverage to set minimum
environmental / social standards
Reluctance to undermine relationships with
existing suppliers
Suppliers need strong consumer signals
Responsibility / Accountability
Decentralised procurement functions
Engagement with suppliers / knowledge of
sustainable procurement
Both law firms & suppliers are often inexperienced
in relation to sustainable procurement
Awareness of the ways in which their suppliers are
able to assist in relation to improving environmental
/ social performance & the process for engagement
Encouraging competition between firms on
sustainability
A perception that law firms' purchasing decisions
are driven entirely by individual client demands,
rather than by cultural and other factors
Fear of public embarrassment if a firm performs
poorly
Towards a collaborative approach
Some ideas for discussion in your workshop groups
Scope: from carbon to broader sustainability objectives, including social
issues?
LEADERSHIP
Collaborating with other industries / lobbying for regulations / education?
A common vision on sustainability for the legal services industry: what
signals do we need to send to suppliers and clients?
IMPLEMENTATION
CONTINUOUS
IMPROVEMENT
Guidance on understanding the supply chain and its most
significant impacts?
Developing best practice guides for sustainable procurement in
law firms / policies and tools to measure supplier performance?
Raising team capacity through workshops and seminars by
leaders in sustainable procurement?
Building a baseline: at what level is the legal services
industry performing? Is an index tailored to the particular
characteristics of law firms required?
Monitoring progress by setting short and long term targets
Engaging with major corporate clients as to how to improve
sustainability and client service