Responsible supply chain sourcing demands focus on details

04 Oct 2010

Source:  Financial TimesIt is no accident that so many of the businesses that have tended to be most conscious of their environmental performance have been those in the most customer-facing sectors writes Fiona Harvey, Environment Correspondent for the London Financial Times. These companies have strong brands they want to protect – and often correspondingly long supply chains. That can make control hard to achieve, involving not only extensive information from suppliers, but working with them to try to develop better products.  And involving the supply chain is essential.

For some companies, the process of overhauling procurement processes can be huge. José Lopez, executive vice-president of operations at Nestlé, says: “Our size and breadth mean the standards we set our suppliers are incredibly important to our business and, increasingly, our consumers.” The company drew up a set of principles for “responsible practices” across its supplier chain, he says, with a “rigorous supplier code of our own to set non-negotiable minimum standards that all our suppliers, their employees, agents and subcontractors, must meet.”

Such processes can involve exhaustive detail. In the case of Dyson the appliance maker, it extended all the way to working out the carbon impact of each component of its Airblade hand dryer – down to screws weighing 0.9g each. Many of the principles in­volved in “green sourcing” are identical to those in ordinary procurement processes, says Sukhendu Pal, managing partner, Centrix Consulting. “Green sourcing is not a departure – it’s an augmentation,” he explains. However, he adds, there are complications. “Green sourcing requires deeper insight than a traditional strategic sourcing programme, because the choices among environmentally friendly products and services can be extremely complex, and thus a network of suppliers that can provide the necessary transparency is essential.”

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