Engaging suppliers is a vital part of any successful procurement program
David Lawrence, a supply chain sustainability and collaboration expert, chairman of the responsible sourcing initiative AIM-PROGRESS, a Board member at SEDEX, and tutor at Cambridge University, gives his thoughts in this interview with Procurement Leaders and BSR's Tara Norton.
Lawrence was asked "how do you detirmine which suppliers to engage?", Lawrence: "You look at where your main risks and opportunities are across all the sourcing categories: Who are the 20% of the suppliers that can make 80% of the difference to your risk profile, costs, and reputation? If you have a joined-up strategy, it should be pretty clear who you should talk to."
Lawrence was also asked "what tools exist to engage with suppliers about sustainability?" Lawrence: It has to be part of the tender and supplier development process, and it has to be the buyer having the conversations. Getting the sustainability person to do it doesn’t work - it has to be part of the commercial relationship. This isn’t something that you can outsource. At the same time, sustainability requirements shouldn’t be an explicit part of the negotiations on cost savings. If a supplier is disclosing information about sustainability, it needs to be about enhancing value to both businesses. For example, imagine a supplier discloses that it has an excellent energy efficiency program. The buyer might be tempted to translate that into direct cost savings, but over the long term, this serves to alienate, not engage, suppliers.
Larence gives further insite into his experience of sustainability success stories and benefits in this Key to Supplier Engagment article in Procuremenet Leaders magazine.
Lawrence was asked "how do you detirmine which suppliers to engage?", Lawrence: "You look at where your main risks and opportunities are across all the sourcing categories: Who are the 20% of the suppliers that can make 80% of the difference to your risk profile, costs, and reputation? If you have a joined-up strategy, it should be pretty clear who you should talk to."
Lawrence was also asked "what tools exist to engage with suppliers about sustainability?" Lawrence: It has to be part of the tender and supplier development process, and it has to be the buyer having the conversations. Getting the sustainability person to do it doesn’t work - it has to be part of the commercial relationship. This isn’t something that you can outsource. At the same time, sustainability requirements shouldn’t be an explicit part of the negotiations on cost savings. If a supplier is disclosing information about sustainability, it needs to be about enhancing value to both businesses. For example, imagine a supplier discloses that it has an excellent energy efficiency program. The buyer might be tempted to translate that into direct cost savings, but over the long term, this serves to alienate, not engage, suppliers.
Larence gives further insite into his experience of sustainability success stories and benefits in this Key to Supplier Engagment article in Procuremenet Leaders magazine.