05 February, 2012

sustainable procurement

In the last few weeks, the Australian Sustainable Business Group (ASBG) in Qld has a drive on to assist members to embed “sustainability” in supply chains.

One good way to encourage supplier industry transformation is through 'forward commitment procurement'.

In theory, one engages with suppliers early (well before the product or service is required) to discuss with them one’s requirements & objectives. This then gives them time to properly understand what one wants & allows the market to consider modifications to their products/services/business to provide a more appropriate product/service (that is more likely to win the tender).

For example, one might let the market know that one will favourably consider environmentally labeled products.

This would give suppliers time to consider modifying their processes & getting products certified under an appropriate scheme.

The British Standard BS 8903:2010 Principles and Framework for Procuring Sustainably is very useful.

The Australian Procurement & Construction Council (APCC) also has some good publications.

This arrangement creates several rewards for both the Supplier and the end-user. In brief...

Advantages for Suppliers:

· Get to spend time marketing the products early, before their production runs commence;

· They may receive some payment early, which helps with cash flow;

· Have an opportunity to get to know the end-users.

Advantages for end users:

· more customisation of products to meet the end users specific needs;

· better integration of manufacturing with installations & commissioning;

· Develop a relationship with the supplier and an understanding of manufacturing processes and/or service delivery.

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