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
© 2008 BITC - All rights reserved
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)
© 2008 BITC - All rights reserved
• 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
© 2008 BITC - All rights reserved
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
at
er
&
W
Te T
M
ch ele
ul
no co
tIu
m
lo
til
gy m
iti
u
E
e
ni
H
l
ca ec s
ar
dw tio tri
ci
n
ar
ty
&
e
D
m
&
iv
Eq ed
e
R
et rsi
ai
fie uip ia
m
Fo ler
d
od s & ind ent
u
,b
s
ev up stria
er erm ls
ag
e ark
&
e
Ph
to ts
ba
ar
R
c
m
e
al co
a&
Es
Ac sp
ta
co ec
Fi te
un ia
ta lity nan
nt
s che ce
&
Ba
C mic
si
on
a
Pe c &
su ls
rs
e
l
G
on xtr
ov tan
ts
al ac
e
tiv rnm
D
&
iv
er Ho e in en
si
fie use dus t
C d s hold trie
on up
s
st
po Go
ru
ct rt S ods
io
n erv
&
ic
M es
at
er
Le Tr ials
Ae is an
ro ure sp
o
sp
ac & H rt
e
ot
&
e
D ls
ef
en
ce
as
,
© 2008 BITC
G - All rights reserved
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
© 2008 BITC - All rights reserved
Monitoring of CR performance
› Fully integrate CR in existing
tools and processes in order to
target comprehensively
purchasing categories
How to get started?
© 2008 BITC - All rights reserved
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
© 2008 BITC - All rights reserved
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
© 2008 BITC - All rights reserved
› Results expected:
Total cost
Environmental impacts
Safety
© 2008 BITC - All rights reserved
Towards a collaborative approach
Towards a collaborative approach
› Opportunities of collaboration
might be in the following area
LEADERSHIP
IMPLEMENTATION
© 2008 BITC - All rights reserved
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