COVID-19 has created a ripple effect of disruption through supply chains across the world, causing many companies to assess their weak spots and reevaluate their operations to ensure future resiliency and continuity.
Rebounding from the current crisis with more solid resilience is itself creating immense value. Forward-thinking companies are looking a step further, perhaps with the climate crisis clearly in view. They are leveraging sustainability and purpose – with an upside creating long-term value across a wide range of business levers, from competitive differentiation, grow sales revenue, supplier innovation to support future circular business models, talent recruitment and retention.
Procurement’s Key Role in Turning Purpose into Profit
With momentum growing toward stakeholder capitalism, businesses have made a greater commitment to sustainable purpose through reducing emissions of greenhouse gas, limiting plastic use, providing decent working conditions and more. The recent COVID-19 pandemic has brought risk mitigation and resiliency top-of-mind – and we’re seeing clear proof points that sustainable procurement is the answer.
SIG is always asking our event attendees, current and future members, and readers about their current issues and concerns. I have been tracking and analyzing their responses for almost 10 years now. While cost savings and value-add remain consistent and strong priorities, there's no doubt many are very concerned about meeting pandemic-related needs.
We are blessed to have a community of thought leaders and generous, experienced professionals who are willing to share their experiences and describe their wins.
We offer the following resources in your quest for COVID-19 related items specific to sourcing, procurement, and workforce management. SIG members can continue to search for related articles here.
In the resources listed here, you can learn how to set up crow's nest and a war chest, hear how Sprint/T-Mobile are managing the crisis using AI for their spend analytics, specific procurement best practices for today's market, how technology enhances continuity in your workforce and what happens if and when this is "all over." Plus, so much more.
In previous blogs, SIG has covered the basic concept of sustainability, including an overview of its various dimensions. In this post, I will touch on the role that sourcing professionals can have in meeting corporate sustainability goals.
Why should sourcing have a role?
Sourcing is uniquely positioned to contribute to meeting a corporation's sustainability goals because sourcing typically has expertise in:
Creating alignment to corporate goals
Building frameworks to measure success
Researching market conditions and supplier capabilities
Conducting strategic negotiations
Designing innovative methods for value creation
Ranking the priorities of stakeholders with supplier offerings
Identifying risk and mitigating responsibly
The reduction in costs after implementing a sustainability program can exceed the costs of implementation – in other words, you’re spending money up front but in the long run, you save more than you spend. For example, if an organization were to target the spend category of corporate services and facilities management (FM), capital may be invested in working with a supplier to install a new system that reduces energy consumption at the company's North American headquarters, but in the long run, the reduction in energy costs saves the company money – which of course, can then be reinvested.
In this example, procurement and sourcing are uniquely positioned to make this happen. Most likely Sourcing negotiated the original FM contract, understands the innovative capabilities of suppliers, has heard many recent pitches on new products, and is adept at performing the analysis that proves an investment can have a significant return in hard costs, and even soft costs.
Mary Zampino, Vice President – Content, Research & Analytics
What is the Sustainable Procurement Pledge and how did come about?
The Sustainable Procurement Pledge (#SPP) was born out of passion and is driven by a shared sense of responsibility. #SPP addresses people, not organizations. We are ultimately the ones who constitute organizations and who are making daily decisions in our workplaces. The biggest lever to have a positive impact is therefore with us! #SPP primarily addresses those who are connected to the Procurement function, procurement professionals, academics and students, but does not exclude anyone outside this area of activity. Those who feel concerned by the #SPP messages can start and join right away!
The idea was ignited by the Global Climate Strike on September 20, 2019. Adults and children, from all walks of life, made a clear statement and we were reminded about our prime responsibility: to leave our home, our ONE planet, in the same condition as it was entrusted us.
There are many great and profound sustainability initiatives already. They typically involve companies, governments, institutions and top leaders. However, we rarely see initiatives that address individuals. And yet, we all have the power to make impactful everyday decisions and gradually change the world. We fundamentally believe that many small changes ultimately lead to a big change?
2019 was an amazing year for sourcing. We witnessed greatness as the Future of Sourcing Awards showcased some of the most innovative projects, individuals and teamwork the sourcing industry has seen. The pages ofFuture of Sourcing, SIG's sourcing and procurement thought leadership publication, gave great insight into trends and best practices of the year as well. Below are the top articles of 2019 from Future of Sourcing that you don't want to miss. I hope these give you inspiration and motivation to innovate processes and implement change inside your organization in 2020.
How Digital Technology Will Transform Talent Acquisition
Today, intelligent automation and machine learning are boosting productivity and optimizing a wide range of back-office operations. How are these emerging technologies changing the way we find talent? Helen Castor gives us some insight.
America’s love affair with e-cigarettes evaporated quickly as millions of users were recently confronted with unnerving news—their vapes could actually contain toxic chemicals powerful enough to be deadly.
The CDC issued words of caution on September 27, “Anyone who uses an e-cigarette or vaping product should not buy these products off the street.” The sentiment is clear—consumers need to avoid e-cigs from potentially shadowy manufacturers and distributors fed by an unregulated supply chain.
Duty to the Consumer
E-cig manufacturers have a responsibility to pinpoint precisely what in their products is harmful, just as distributers must be confident they are only carrying reputable items that are sourced through a responsible supply chain. Many vaping products have been found to contain illegal synthetic marijuana, even when consumers believed they were buying THC-free products such as CBD pods.
In an industry as young and unregulated as e-cigs, it’s not surprising an unknown health consequence was lurking on the horizon. Consumers had no idea what ingredients or manufacturers to be wary of because no one yet knew there was a concrete hazard.
Liz Mantovani, CSP, CSMP, C3PRMP, Director of Operations, SIG
When Barry Kull was going through the recruitment process at Novo Nordisk, his son was diagnosed with diabetes. Walking into his meeting, Kull was apprehensive about mentioning his son’s diagnosis, but when the conversation went such, Kull brought up it up. He was glad he did. “When I mentioned my son’s diagnosis, the CFO’s body language and energy absolutely changed. He leaned into the conversation and was genuinely curious about my son. He told me how Novo Nordisk addresses challenges that adolescent type 1’s encounter.” Kull realized that the executives at Novo Nordisk care. He is now proud to represent a company that, throughout the organization, empathizes with its customers.
Finding Suppliers That Care
Kull doesn’t expect suppliers to care as much as Novo Nordisk, but he expects them to understand why they care so much. He expects the suppliers to lead, to anticipate and to push their thinking. Kull believes that all procurement professionals should have supply partners that are good people with strong ethics.
The Cooperative Ecosystem
A cooperative ecosystem is a combination of different partners and suppliers that bring their own set of values to the table. The partners and suppliers work together to solve a specific problem or to create an opportunity.
In the context of launching a new pharmaceutical brand, the following is Kull’s (paraphrased) list of potential partners and suppliers that might be part of a brand-viable ecosystem:
SIG University student Moath Alswaidan enrolled in the Certified Sourcing Professional (CSP) program and works at Mitsubishi Heavy Industries – MHPS Saudi Arabia. He shares what he’s learned in the program and how his team plans to implement best practices in supplier performance management.
Supplier performance management is one of the most important areas in sourcing and supply chain management and I feel fortunate to have worked on both the sell side and buy side of the table. Most of the sourcing process requires much effort from both sides until the work is awarded to the supplier. Supplier selling teams spend time and effort to prepare to negotiate a proposal that best fits the buyer. At the same time, the buyer team needs to put the same effort in searching and selecting the best proposal for their organization. It is a waste if the agreement doesn't last due to the lack of supplier performance management.
The supplier performance management process begins by selecting the team from both the buyer and supplier organization. The mission is to translate the contract into the operation language and identify the measurement and monitoring criteria. This task is called transition. The team should have enough knowledge of the business and the scope of work defined in the contract. The transition process requires a joint effort from the transition team and may also require the support of other teams in the organization. The transition process is considered a change from an existing state to the desired state. Therefore, it is recommended to adapt to Lewin's Change Management Model: Unfreeze, Change and Refreeze.
Moath Alswaidan, Supply Chain Manager, Mitsubishi Heavy Industries – MHPS Saudi Arabia
Artificial Intelligence is the topic of many business conversations where often the fantasy is of intelligent robots doing more work with less time and resources. Not all of the promises related to AI are unfounded. Read this eBook to learn how AI’s potential can transform procurement.
Future of Sourcing continues the "Women in Global Sourcing series" with Tracy Scheid. Tracy is the Vice President of Operations at Workspend. She is a strategic and results-oriented leader with over 30 years of experience aligning business goals with talent acquisition strategies.
Kelly Bengston is Senior Vice President, Chief Procurement Officer at Starbucks. Kelly is responsible for enhancing Starbucks enterprise-wide functional strategic sourcing and supplier relationships, creating consistent global sourcing processes, developing a sourcing talent management program and building a values-based approach to working with suppliers across all categories of the business.
Kelly has held numerous leadership positions during her 8-plus years with Starbucks. Most recently, Kelly served as Vice President of Starbucks Global Supply Chain’s Strategy & Deployment team, a new team created under Kelly to support Starbucks supply chain’s aspirations of becoming digitized, strategically aligning resources against priorities and building capabilities through long-term capacity planning and supply chain intelligence.
Prior to joining Starbucks, Kelly gained broad experience in packaging, product development, manufacturing, and project management at Macy’s, Bensussen Deutsch, Cranium and Hasbro. She enjoys running, traveling, and spending time with her family. Her favorite Starbucks beverage is Nitro Cold Brew.
Can you share a little more about your day-to-day role and responsibilities as the Chief Procurement Officer for Starbucks?
I am fortunate to have an amazing job, working for an amazing company. My day-to-day is filled with connecting with great partners and suppliers to deliver products and services to our stores and customers.