Monday 21st Aug 2017 - Logistics & Supply Chain

Ethical dimension

Sustainable procurement is seen as the next greatest challenge for purchasing managers. This was a key finding of new research from the Chartered Institute of Purchasing and Supply (CIPS), with 15 per cent of purchasers globally citing sustainable procurement as their top concern.

Ethics also figured highly on the procurement practitioner’s agenda, with more than three quarters of respondents rating ethics as “extremely important” to shaping their procurement strategy.

Such findings underline the significant challenges procurement practitioners face with lengthening supply chains, soaring energy prices, ethical sourcing issues and the rising adoption of “green” policies. And yet the report seems to reflect a wider perception in business that procurement is seen as “operational” and that many in business lack an understanding of procurement. Simon Sperryn, CEO of CIPS, comments on the report that, “the profession still has a long way to go to communicate the value of strategic procurement”.

It’s true that much has still to be done to raise the profile of procurement in business. Sperryn highlights the fact that, “many organisations still withhold large parts of their external spend from the procurement professionals”. However, he points out that,

“survival through the current downturn will depend on protecting margins, so wise CEOs are investing in better procurement”.Considering the core concerns that face global organisations sourcing from distant locations, such as supply chain risk, carbon usage, ethical trading issues, and fuel costs, surely the value of strategic procurement must be becoming more evident. Perhaps, as executive decision makers ponder over how to remain competitive in tougher trading conditions while remaining true to their policies on ethical trading and the environment, they will come to understand the complex nature of procurement and the central role supply management plays in ensuring the profitability of the business.

As Sperryn says, “Supply management is not just about saving costs. It is integral to defining the business, anticipating trends, and creating the external relationships on which future success depends.”

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