Leading global excellence in procurement and supply

Sandy Duncan CIPS Yorkshire Branch

Email: yorkshire@cipsbranch.orgLinkedIn 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.Chinta

Senior Lecturer - Supply chain management

Leeds 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 s

ustainab

le mate

rial(s

)

Life c

ycle a

nalysis

Wate

r consu

mption

We d

o not mea

sure

supplie

rs' su

stainab

ility

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 mea

sures

There

is a l

ack of u

nderstan

ding by s

uppliers

about s

ustainab

le pro

ducts

There

is a l

ack of u

nderstan

ding by m

anag

emen

t about s

ustainab

le pro

ducts

There

is a l

ack of a

commonly

understood 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 Adva

nced Certi

ficate

CIPS Diploma

CIPS Adva

nced Diploma

CIPS Pro

fessio

nal Diploma

Bachelo

rs deg

ree

Masters

in Pro

curem

ent o

r Supply

Chain M

anag

emen

t

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 activi-ties; 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 People

Our VisionAn 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

bernadette.speight@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 – yorkshire@cipsbranch.orgsouthyorks@cipsbranch.org

3. Update

Your CPD

Leading global excellence in procurement and supply

Thank you

I’m off home to watch the football!